Birds or Pigs; The Swines Have It?

We’ve had a lot of stories the past several days about the swine flu outbreak in Mexico and smaller groupings of confirmed cases in New York, California and elsewhere in the United States.   There has been years of discussion on the H5N1, so called avian flu, pandemic risks.  We all remember the impact of SARS.  And we’ve been rocked, recently, by what some have tagged a ‘depression’ but all of noted as the largest economic downturn since The Great Depression.  The losses associated with this ‘Great Recession’ are still playing out.

But I was wondering — what if the Swine Flu became a pandemic at this time?  All indication (including the CDC site) indicate that aside from some serious implications for Mexico City’s public health, the cases in the United States have been mild, with no hospitalizations.  The 1918 flu pandemic that took 20m lives world-wide, however, is the standard modern example of potential personal and economic costs of a flu pandemic.  Not to minimize the terrible pain and suffering that such a pandemic would cause by putting an economic slant on it– but I was wondering what might be the economic impact to our already tottering United States economy if a pandemic struck.

So I took a look at a study the CDC had commissioned in 1999.  It showed the potential U.S. economic impact of a pandemic.   The CDC used this as a way to assist the public policy discussion in light of strategies regarding flu immunization — i.e., which immunization policy could provide the best net value in the case of flu pandemics of differing severity.   It’s beyond this post (or its author) to analyze the article and it’s conclusions.  But I thought the numbers were notable and summarize the potential economic exposure (without vaccination).  And, of course, this looks at U.S. exposure only.  A pandemic would have a far reach.  Look how quickly in this age of easy travel the virus spread from Mexico to the United States and even potentially exposed the President of the United States during his trip.  From the CDC’s study:

Without large-scale immunization, the estimates of the total economic impact in the United States of an influenza pandemic ranged from $71.3 billion (5th percentile = $35.4 billion; 95th percentile = $107.0 billion) (gross attack rate of 15%) to $166.5 billion (5th percentile = $82.6 billion; 95th percentile = $249.6 billion) (gross attack rate of 35%) (Table 6). At any given attack rate, loss of life accounted for approximately 83% of all economic losses. Outpatients, persons ill but not seeking medical care, and inpatients accounted for approximately 8%, 6%, and 3%, respectively, of all economic losses (Table 6) (Appendix II).

* * * *

If it cost $21 to vaccinate a person and the effective coverage were 40%, net savings to society would result from vaccinating all age and risk groups (Figure 2). However, vaccinating certain age and risk groups rather than others would produce higher net returns. For example, vaccinating patients ages 20 to 64 years of age not at high risk would produce higher net returns than vaccinating patients ages 65 years of age and older who are at high risk (Figure 2). At a cost of $62 per vaccinee and gross attack rates of less than 25%, vaccinating populations at high risk would still generate positive returns (Figure 2). However, vaccinating populations not at high risk would result in a net loss (Figure 2).

via The Economic Impact of Pandemic Influenza in the United States: Priorities for Intervention.

There’s also an interesting Congressional Budget Office (CBO) assessment (and see generally the goverment web page)  of possible economic effects of an avian flu pandemic.  That study concludes that a pandemic involving a highly virulent flu strain (such as the one that caused the pandemic in 1918) could produce an impact worldwide similar in depth and duration to an average postwar recession in the United States — but citing studies ranging from a .5% to 6% decrease in GDP.  Query, of course, what impact if such a pandemic hit during an ongoing recession.

Filed under: Comparative Effectiveness Rearch, Health Law, Personal Posts, Pharmacy, Risk Management, Economics, Health Law, Lindedin, Public Health

Healthcare Economist · Think Aloud: A tool for experimental economists

In his Healthcare Economist Blog, Jason Shafrin discusses a new paper that asks the the pressing economic question:  are individuals rational (in face of some pretty kooky decisions that people sometimes make).  He reviews a recent study that asks participants to “talk outloud” when they make a decision.  And, as it turns out, maybe we are rational, but the assumptions that we bring to the table are kooky.  He gives some examples from the study.   It’s a good lesson for those doing such research (are my assumptions the same as potentially idosyncratic assumptions of my test group?).  And also a psychological question for the rest of us — what is “rational” is often based upon the baseline assumptions that people bring to the table.  Maybe it’s there that the rational decision-maker model breaks down.  Ryan, Watson, and Entwistle (2009) ”Rationalising the irrational: a think aloud study of discrete choice experiment responses” Health Economics, v18(3):321-336.

via Healthcare Economist · Think Aloud: A tool for experimental economists.

Filed under: Health Law, Personal Posts, Risk Management, Economics, Finance

Health Law Reporter – Economy Increases False Claims Risk, Requiring Greater Focus on Compliance

In the most recent BNA Health Law Reporter, Health Law Reporter. 18 HLR 387, there was an article opining that harder economic times increases FCA qui tam and, in general, healthcare compliance risks.  I found the following notable summary of reasons that compliance programs do not work as well as intended (taken from the BNA article, which, in turn takes from a February 11, 2009 presentation to the AHLA by Patrick S. Coffey, Chris J. Mollet, University of Illinois at Chicago, and Linda A. Wawzenski, assistant U.S. attorney for the Northern District of Illinois):

• Compliance is not a business priority;

• Programs do not operate as written and do not focus on heading off claims;

• Employee training is dull and ineffective;

• There is a lack of ongoing and meaningful risk assessment;

• Hotlines are not sufficiently promoted;

• Employees do not trust the compliance commitment so do not report concerns, while managers do not understand why this is so;

• Significant enforcement settlements are ignored or quickly forgotten;

• Organizations are not prepared to handle internal investigations and routinely mishandle internal reports;

• Disgruntled employees are dismissed and whistleblowers are not protected; and

• Difficult economic times are allowed to undercut compliance efforts.

Filed under: AKS, CMP, Compliance Programs, Fraud and Abuse, Health Law, Physician Self Referral/Stark, Risk Management, Health Law

Stanford Medical School to Disclose More About Industry Comp – Health Blog – WSJ

According to the April 1, 2009 WSJ Health Care Blog, Standford is to publicly disclose on its web-site those of its medical school faculty receiving industry money greater than $5,000 — although specific amounts will not be disclosed.

Stanford University’s medical school said today it expects to post an online list by the end of the summer showing its staff members who received payments, royalties, stock grants and other compensation topping $5,000 in 2008. Companies providing the compensation to each staff member on the list will be identified but the dollar amounts staffers received above $5,000 won’t be included. Among the targets of the Grassley’s investigations was Alan Schatzberg, who chairs Stanford’s psychiatry department.

via Stanford Medical School to Disclose More About Industry Comp – Health Blog – WSJ.

Filed under: Conflicts of Interest, Health Law, Reform, Risk Management, Conflicts of Interest, Health, Health Law

The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”

On the Healthcare Blog, Rober Wachter analyzes the recent NEJM report on hospital readmissions, the related NEJM article on whether bundling payments could solve this and the Obama administration’s healthcare reform plan that requires significant savings regarding post-discharge healthcare in order to effect Medicare savings.  The New York Times also published an article on this April 1, 2009.

Wachter writes:

[T]he DRG system created a big black hole, and it is time to fill it. It’s called the post-discharge period. And one large part of the detritus emerging from that hole is readmissions. You probably saw this week’s NEJM study by Stephen Jencks (a former Medicare official and now a Baltimore-based consultant), and my pals Mark Williams and Eric Coleman, of Northwestern and Colorado, respectively. The study found that 20% of Medicare patients are readmitted within a month of discharge, and one-third return within 90 days. Even more remarkably, by a year out more than half of patients (56%) discharged from an acute care hospital are re-hospitalized. The authors estimate that the cost of preventable readmissions was $17 billion in 2004 (the study year), which would make it more like $25 billion today.

via The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”.

Wachter also summarizes some interesting points of the study:

Like so many things in healthcare, there was striking geographic variation in readmission rates – from a low of 13% in Idaho to 23% in Washington, D.C.

There were also variations by DRG, with the highest readmission rates in patients with heart failure, psychosis, vascular and cardiac surgery, and COPD – pointing the way toward targeted interventions.

More than half the patients readmitted within 30 days appeared not to have had an outpatient visit between hospital discharge and readmission, perhaps another target for intervention.

Most (70%) surgical patients who are readmitted come back for a medical diagnosis such as pneumonia or UTI.

Approximately 30% of readmitted patients come back to a different hospital, so hospitals will underestimate the extent of their readmission problem by looking solely at their own bounce-backs.

via The Health Care Blog: “Mr. Obama, Tear Down These (Hospital) Walls”.

Wachter continues and and discusses why this is becoming critical (healthcare reform/savings dollars) and the health system’s current state as it relates to discharge planning/readmissions:

The Obama budget plan depends on figuring this out. The budget, which aims to save $300 billion (which used to seem like a lot of money) in Medicare/Medicaid costs over the next decade, includes a projected $26 billion in savings from “driving down hospital readmission rates for Medicare patients” …The manifestations of this myopic focus on hospitalization as the unit of analysis can be seen in the paucity of attention that hospitals give post-discharge care. Studies have chronicled a litany of post-discharge disasters…In other words, when it comes to post-discharge care, we suck…Despite powerful literature that shows that simple interventions – like post-discharge phone calls or the use of a transitions coach – can lead to impressive improvements in post-discharge care and decreased readmission and return-to-ED rates, few hospitals have put these interventions in place.

Wacther then makes an observation concerning financial efforts to address the system’s performance in this area:

Harvard’s Arnie Epstein reviews the policy initiatives addressing readmissions – including those that are here today (publishing readmission rates on the Web) and those being actively discussed (financial penalties to hospitals with high readmission rates). But the Cool Kid on the Payment Block is “bundling” – aggregating  payments for doctors and hospitals for a period of time after an illness (an “episode of care”) in an effort to create accountable integrated entities that will improve care across the continuum (the entities somehow have to split up the spoils between hospitals, hospitalists, SNFs, primary care docs, specialists, care coordinators… Have fun with that). Epstein’s verdict: worthy of pilot studies, but “the likelihood that [bundling] will prove to be a successful model is still uncertain.”

He recognizes the challenges, and the laments, of hospitals, that have difficulties in controlling other healthcare provider’s post-discharge data.  Why, hospitals ask, can you hold us responsible if we are not in control of this.

I would also put on the table that if the government goes this route, query if it makes any sense to maintain Medicare CoP restrictions on promotion of hospital/health system owned and controlled providers — such as those exist for home health.

He observes that there are tools ready out there to assist hospitals in this area, including those developed through the Society of Hospital Medicine and its “splendid” Project Boost.

Finally, he observes that “I, like you, don’t know where the money will come from for all of this.”   I tend to disagree.  I pretty much know where (most of) the money will come from — where the largest portion of the Medicare premium dollar comes from — inpatient admissions.   Get ready!

Filed under: Comparative Effectiveness Rearch, Health Law, Medicare, Payment, Quality Reporting, Reform, Risk Management, Economics, Finance, Health, Health Law

Authors of Psychiatric Guidelines Get Funding from Drug Makers – Health Blog – WSJ

The WSJ Health Blog reports a significant portion of those writing the APA’s treatment guidelines have financial ties to industry.

[A]mong 20 authors of the guidelines for treatment of depression, dipolar disorder and schizophrenia, 18 had at least one financial tie to a drug maker, and 12 had ties in at least three categories, such as consulting, research grants, speaking fees or stock ownership.The guidelines are a powerful influence on the way doctors treat patients. This week, big-name docs argued in a JAMA paper that medical specialty groups, which put out the guidelines, should tightly limit their funding from industry. (Drug trade group PhRMA responded that industry funding helps doctors obtain important medical information.) Earlier this year, amid news that many heart-disease guidelines aren’t backed up by rigorous scientific testing, an editorial in JAMA argued that guidelines “often have become marketing tools for device and pharmaceutical manufacturers.”

via Authors of Psychiatric Guidelines Get Funding from Drug Makers – Health Blog – WSJ.

In the referenced Boston Globe article one of the authors Dr. Roy Perlis, after noting that the guidelines in his area promote generics and non-pharmeceutical interventions states:

“My job is to find better treatments for my patients. These are awful illnesses. People really suffer,” he said. “And the people who are most responsible for developing new treatments right now are the pharmaceutical companies. What is being lost in all this is that if I didn’t work with them, I couldn’t do my job as a scientist – the part of my job that says we have people who are suffering that need new treatments.”

Filed under: Conflicts of Interest, Health Law, Pharmacy, Reform, Risk Management, Conflicts of Interest, Economics, Health, Health Law

Colwell v. HHS, 9th Cir.

Colwell v. HHS, 9th Cir., No. 05-55450, 3/18/09

In a March 18, 2009 decision, a federal court refused to rule on whether, by issuing “Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons” is a violation of the Administrative Procedure Act.  The court refused to entertain the claim, finding that it was not yet ripe as HHS had not used it for enforcement.   In general the APA requires rules to follow a public commentary process.  A summary can be found in the Health Law Reporter, 18 HLR 408.

Filed under: Health Law, Primary Care, Risk Management, Health Law

The Washington Independent » Rick Scott on His Health Care Record

The NY Times did an article on Mr. Rick Scott recently. Also of note, The Washington Independent interviewed Rick Scott on March 31, 2009.  You’ll recall him as the ousted CEO of Columbia/HCA after their trillion dollar fraud settlement with the federal government.  He’s back in the headlines as a ‘conservative’ voice against a potential Obama healthcare reform initiative.  I note only due to his comments on Columbia/HCA at the time.

RICK SCOTT: There’s no grudge. First off, if you go back and look at what we accomplished at Columbia/HCA, it was the lowest prices and best outcomes. I left and nothing happened to me. I can’t do anything about what people want to complain about. But if you look at what we’re doing, we’re doing the right things.

TWI: What, specifically?

RICK SCOTT: If you go look at Solantic [which Scott co-founded in 2001], we have transparency on prices, we’re dramatically less expensive than everyone else and we have a great service. Or go back and look at Columbia, look at all the objective measures. Go look at joint commission, accommodation, at accreditation. If you look at the top 100 hospitals, we started with less than seven percent of them. My last year, we had 27 percent of those hospitals. If you look at my management team, all of my management team went on and ran hospital companies.

TWI: People can still say, “Look, this was the guy who resigned in the biggest fraud settlement in American history.”

RICK SCOTT: But, you know, we were the biggest company. If you go back and look at the hospital industry, and the whole health care industry since the mid-1990s, it was basically constantly going through investigations. Great institutions, like ours, paid fines. It was too bad.

via The Washington Independent » Rick Scott on His Health Care Record.

Filed under: AKS, CMP, Drug Policy, Executive Compensation, Health Law, Reform, Risk Management, Economics, Health, Health Law

Healthcare Economist · Comparison of Pharmacists and Primary Care Providers as Immunizers

In his Healthcare Economist blog, Jason Shafrin writes about a recent paper he wrote with John Fontanesi, Jan Hirsch, Sarah Lorentz, and Debra Bowers and had published in American Journal of Pharmaceutical Benefits.  The paper (which I have not reviewed) analyzes the efficacy and quality of immunizations as provided in primary care offices and pharmacies in California.  The abstact is below and observes that from a consistency, cost and productivity stand point, pharmacies might be a better alternative. 

This study examines the potential role of “alternative community immunizers,” specifically pharmacists, in providing immunization services. A convenience sampling of almost 700 adults eligible for vaccinations was taken from 15 ambulatory care settings and 11 pharmacies in San Diego, California between 2006 and 2008. The results of the study found that patient characteristics and beliefs were similar between primary care and pharmacies, but pharmacies proved more consistent in following safety protocols; had lower unit costs; and were more efficient, with greater productivity. We conclude that pharmacies combine the best immunization practices of routine scheduled primary care visits and mass influenza vaccination clinics, but gaps still exist in pharmacies’ ability to effectively transmit immunization records securely and provider willingness to embrace these “alternative immunizers.“

via Healthcare Economist · Comparison of Pharmacists and Primary Care Providers as Immunizers.

Filed under: Comparative Effectiveness Rearch, Drug Policy, Health Law, Pharmacy, Primary Care, Quality Reporting, Reform, Risk Management, Economics, Health, Health Law

30 years for company founder in $1.7 billion Ohio fraud – Business – cleveland.com

The Cleveland Plain Dealer reports on March 27, 2009:

A federal judge on Friday sentenced the founder of a failed health-care financing company to 30 years in prison for his role as “puppet master” in what prosecutors called the biggest fraud on record at a privately held company in the United States.*** National Century offered financing to small hospitals, nursing homes and other health-care providers by purchasing their accounts receivable, usually for 80 or 90 cents on the dollar, so they wouldn’t have to wait for insurance payments. National Century then collected the full amount of the payments. The company raised the money to fund its business by selling bonds to investors. Prosecutors said National Century executives authorized millions in unsecured loans to health-care providers, then misled investors about the loans.  As the money owed to the company mounted, National Century declared bankruptcy in November 2002 after the FBI raided its offices. Since then, at least nine former executives have been convicted of corporate fraud. The government originally alleged proceeds of the fraud topped $1.9 billion, a figure Squires said Friday had been reduced to $1.7 billion. He said investors’ total losses were around $2.8 billion. At its height the company employed more than 300 people, most of them in the Columbus area. Executives made millions, with Poulsen alone earning more than $9.1 million between 1996 and 2002, according to the government.

via 30 years for company founder in $1.7 billion Ohio fraud – Business – cleveland.com.

Filed under: Fraud and Abuse, Health Law, Risk Management, Economics, Health Law

Mass. Department of Public Health report details Beth Israel surgery in which doctor fell asleep – The Boston Globe

Interesting article in the March 25, 2009 Boston Globe concerning a physician at Beth Isreal Deaconess Hospital in Boston.  The physician had a history of drug and alcohol abuse, came into the OR in the morning noticeably tired and “wobbly”, fell asleep during a second surgery and abruptly left prior to finishing another — which took seven hours rather than the estimated 90 minutes.   The surgeon had since been fired and suspended by the board of medicine.  The hospital faced a damaging report by the Department of Public Health.  The scenario shows how difficult it can be in organizations to immediately address impaired and disruptive practitioners.

Mass. Department of Public Health report details Beth Israel surgery in which doctor fell asleep – The Boston Globe.

Filed under: Disruptive Physicians, Health Law, Malpractice, Risk Management, Health Law, Malpractice