Friday, October 31, 2014


It is quite relevant what's going on with value based pricing by NICE. Recent documents are raising greater controversy and a blog post asks if this is the end of the proposal. Today I suggest you have a look at James Raftery contribution to understand the moment (at least in the UK). No politician is interested in such issues.

Wednesday, October 29, 2014

Le projet de loi

PROJET DE LOI relatif à la santé

Je regarde le communiqué de presse que la ministre française a préparé pour la présentation de la nouvelle loi et je vois qu'ils ont un long chemin à parcourir, que bon nombre des mesures proposées, nous avons déjà réalisées il y a quelques années et d'autres récemment. Je pense aussi que certaines questions ne sont pas par une loi, nous les avons faites ici avec un plan de santé. Il est bon de voir ce qu'ils font au-delà des Pyrénées, et confirme également que les différences sont significatives dans l'organisation de soins de santé et son financement. Cette loi maintient ces differences.

Thursday, October 23, 2014

Efficient health labor markets

Economic, Demographic, and Epidemiological Transitions and the Future of Health Labor Markets

Last April a new working group for human resources strategy in the WHO was created with the following subgroups:
1. Economic, Demographic, and Epidemiological Transitions and the Future of Health Labor Markets
2. Transformative Education
3. HRH Data, Measurement of Impact
4. Positioning of and Accountability for HRH in the Post
5. Public Sector Stewardship/Leadership for Health Systems
6. Addressing Special Needs of LMICs and Fragile States
7. Performance/Quality/ Productivity/Regulation
8. Non-health professionals
The first report has been released recently and it is helpful because:
Summarizes the analysis of available data and studies on health sector employment, taking into consideration the macroeconomic, demographic and epidemiological factors, and the greater mobility of health workforce in a globalizing labor market. Specifically, this paper draws on the key findings from the three background studies that have been commissioned to address the following issues.
1. Examine the macroeconomic context and evidence on the extent to which employment in the health sector contributes to overall economic growth and to productive employment and the general trends in the health labor market 
2. Forecast the health workforce supply and demand to 2030, based on a the estimation of HRH needed to provide essential health services to the population (assuming no change in technology or service delivery model), and the size of health workforce that countries can feasibly produce and employ based on their economic capacities and outlook .
3. Review the trends and impact of globalization and mobility of health workers on national policies on health workforce
Although I'm not a supporter of "wishful thinking" forecasting, I understand that some effort should be made in this direction. WHO is making it with a global perspective, and each country should do its homework. Is there anybody nearby working on that?.
Demand and supply should meet and reach a long-term equilibrium. Regulatory conditions and incentives should be reviewed to achieve better efficiency. This is a precondition for an efficient health system.

PS. Three decades ago I read Marta Harnecker book "The Basic Concepts of Historical Materialism". Then, I could understand the difference between nacionalization and socialization of means of production that Lenin proposed a century ago, and why nationalization was not enough to achieve his political goals. Marx and Lenin forgot the relationship between ownership and efficiency, about how incentives really work. History provides relevant lessons about this oblivion and we should avoid going back in time.

Wednesday, October 22, 2014

Fasten seat belts (3)

In former posts I have argued that pharmaceutical pricing is forging a new trend. The summary is in this figure (US prices):

The latest FDA approved drug is Harvoni, for hepatitis C. This new drug will compete with Sovaldi, the best drug launch ever made by the same manufacturer, 9.000 million $ in sales in 9 months.
The soaring costs of drugs is also affecting the generics market in US. Have a look at this blog.
As far as the economy is not growing at the same pace, new resources are needed and this may come from reductions on current drug benefits (price or quantity) or less expenditures in non-pharmaceutical goods. Otherwise the option is to delay access. Is this an option for cost-effective therapies?

Monday, October 20, 2014

A milestone for health insurance reform

INFORME Estudio y Propuesta de un Nuevo Marco Jurídico para el Sistema Privado de Salud

If you look at health care financing in OECD countries you'll find an outlier: Chile. This is the country with the largest private financing, 47%. The reason behind such a number is the current system of ISAPRE coverage. A clear explanation of the current situation is shown in this presentation by Camilo Cid, the chairman of the commission for a review of the private health system.
The new chilean government created a commission to get recommendations about what to do with ISAPREs, and the result was that this report was released some days ago.
The trend is clear, opt-out from a single pool is not an option for the future. The Netherlands made the same reform in 2009, Germany constrained its possibilities, and now Chile has decided exactly the same. If there is only a single pool for financing health, this exactly means that the role of the market is going to change at the same time. Insurance price-competition vanishes, and the profit motive is under close scrutiny. Let's see what happens. All this recommendations should be included in the legislation. Anyway, the report is a milestone for the next health reform in Chile. An excellent reference for anyone interested in this topic. Good job.

PS. Values and economic crisis, a report. Have a look at this slide p.31, impressive. Is it possible?

Manuel Castro at Galeria Barnadas 

Tuesday, October 14, 2014

A healthy recession?

WSJ headlines announce a new economic slowdown. Concerns about the current state of worlwide economy and the financial sector are growing again. A special report by The Economist talks about the third great wave:
A third great wave of invention and economic disruption, set off by advances in computing and information and communication technology (ICT) in the late 20th century, promises to deliver a similar mixture of social stress and economic transformation. It is driven by a handful of technologies—including machine intelligence, the ubiquitous web and advanced robotics—capable of delivering many remarkable innovations: unmanned vehicles; pilotless drones; machines that can instantly translate hundreds of languages; mobile technology that eliminates the distance between doctor and patient, teacher and student. Whether the digital revolution will bring mass job creation to make up for its mass job destruction remains to be seen.
Some years ago  I explained how Iceland economic crisis had no negative effect on health. Now we can confirm the impact in our country in a new report and presentation. The quick answer is that unemployment and poverty have a clear impact on health. As far as the crisis implies raising both determinants, then the result is clear: poor and unemployed population are the target to monitor and improve health. You can discuss over the trend of one specific indicator or its significance. That's a minor issue. In general, average longevity and health is improving, although average doesn't mean everybody. The only way to have a good answer is a cohort study with microdata. I think that somebody should start doing it now, it's crucial.
This report is the best exercise one can do to introduce some common sense in any debate about the crisis and its impact on health: go to the facts and data. Therefore, if somebody talks about negative effects of the crisis on health, now you have to be precise, there is a selective impact.
Some months ago, I considered that what we need is a continuous monitoring of health status in any situation. As far as nobody knows if we are still in crisis, or how many years it will take to recover, monitoring is the right word.
My impression is that we had a crisis in 2008 and a new economic model has emerged. The current situation is unstable, uncertain and unpredictable. That's why the WSJ has anounced a new slowdown today. It's not a crisis, it's a new slowdown (again).

Monday, October 13, 2014

The role of Public Service Mutuals


Let's start with the concept:
Public Service Mutuals are organisations which:
1. have left the public sector (also known as ‘spinning out’), and
2. continue to deliver public services, and
3. in which employee control plays a significant role in their operation.
This is exactly the same as"Entitats de Base Associativa" for Primary Care (p.38 of this journal). Only 3% of all primary care teams follow such model after 18 years (11 out of 369). Only 2 new firms were created in the last decade. It seems that there are some constraints on their development but hardly anybody is working to remove such barriers and others are creating new ones. I have always considered that this model fits perfectly with the engagement of the health professionals in the system instead of being civil servants.
In the UK, the taskforce created to analyse the situation has set up clear recommendations for the future (p.29). Maybe, right now we should replicate something similar that could reverse the trend.

PS. Another report from the King's Fund.

PS. Excellent documentary on ebola outbreak, yesterday at TV3 30 minuts, you can watch it until October 19th.

Thursday, October 9, 2014

Regulation and low-value care

Swimming against the Current — What Might Work to Reduce Low-Value Care?

While reading this NEJM article on strategies to reduce low value care, I was wondering why the author has not included any regulatory tool. He explains demand and supply side strategies, as usual, and forgets the crucial role of government. It says:
Public acceptance of a role for policy in reducing the use of low value care in the United States is tenuous but increasing with growing awareness of the burden that health care spending places on federal and state budgets and with patients’ increasing exposure to health care costs.
This is a fact or an opinion of the author?. It is not an argument to avoid a key instrument widely recognised by scholars. An appropriate regulatory role is crucial to provide information and signaling the value of health benefits. No regulation or bad quality regulation contributes to a perfectly designed and costly mess.

Wednesday, October 8, 2014

Fasten seat belts (2)

Let me ask you a question: Do you agree that your government spends 12% of the pharmaceutical budget in a new drug? I understand that if the answer is yes, you also agree to reduce 12% of current expenditures in patented drugs, reducing quantity, price or the benefit. Otherwise you have to explain clearly where to find 12% of additional resources.
This is what is happening in the UK NHS on new Hepatitis C drug. Have a look at this site for the details. And by now the decision is that it is "prohibitive" and "unaffordable".
Last Sunday CBS 60 minutes broadcasted an interesting report on "eye popping" cost of cancer drugs. I suggest you spend 15 minutes of your time watching it:

Don't miss the details on "financial toxicity" as WSJ highlights. How this can be true?
Nearby, new drug benefits are approved without any known cost-effectiveness-budget impact consideration. This is an example of  alleged "responsive government".

PS. My former post on the same issue.

PS. On bribes, again.

PS. Today this blog has reached the 100.000 visits. That's excellent!!!. I really appreciate your interest in my posts.

Monday, October 6, 2014

The seven damaging dilemmas

Rock, Paper, Scissors: Game Theory in Everyday Life

Let me pick the seven deadly social dilemmas from this book:
• Prisonner Dilemma, when communication between two people is not possible and this prevents any cooperation that would end in mutual profit.
• The Tragedy of the Commons, which is logically equivalent to a series of Prisoner’s Dilemmas played out between different pairs of people in a group.
• The Free Rider problem (a variant of the Tragedy of the Commons), which arises when people take advantage of a community resource without contributing to it.
• Chicken (also known as Brinkmanship), in which each side tries to push the other as close to the edge as they can, with each hoping that the other will back down first. It can arise in situations ranging from someone trying to push into a line of traffic to confrontations between nations that could lead to war, and that sometimes do.
• The Volunteer’s Dilemma, in which someone must make a sacrifice on behalf of the group, but if no one does, then everyone loses out. Each person hopes that someone else
will be the one to make the sacrifice, which could be as trivial as making the effort to put the garbage out or as dramatic as one person sacrificing his or her life to save others.
• The Battle of the Sexes, in which two people have different preferences, such as a husband who wants to go to a ball game while his wife would prefer to go to a movie. The catch is that each would rather share the other’s company than pursue their own preference alone.
• Stag Hunt, in which cooperation between members of a group gives them a good chance of success in a risky, highreturn venture, but an individual can win a guaranteed but lower reward by breaking the cooperation and going it alone.
Think for a similar situations in recent cases in close politics and health policy and management. For sure the improvement on the final resolution is related with this statement:
Cooperation would lead to the best overall outcome in all of these cases, but Nash’s trap (which is now called a Nash equilibrium) draws us by the logic of our own self-interest into a situation in which at least one of the parties fares worse but from which they can’t escape without faring worse still.
And if this is so, what then must we do?
  • Changing Our Attitudes: If we came to believe that it was immoral to cheat on cooperation, for example, that would obviously help to resolve many social dilemmas.
  • Benevolent Authority: Relying on an external authority to enforce cooperation and fair play.
  • Self-Enforcing Strategies: Developing strategies that carry their own enforcement so there is no incentive to cheat on cooperation once it has been established. 
And if this is so, how can we implement it?
And so on... 

Thursday, October 2, 2014

Fasten seat belts

We have entered into an unknown new world: drug prices -for innovative drugs- are on track to disappear. The NHS has agreed a cap on expenditure for a hepatitis C (sofobusvir) new drug in €125m without disclosing the unit price. Some people may consider it an opaque strategy in times that politicians claim transparency.
In my opinion, such a situation allows to understand better that the pharmaceutical market for innovative drugs is mostly a monopsony (one buyer) in a monopoly (one seller), it is not a competitive market - and this is what I have always considered. Therefore, resource allocation is the result of a bargaining between both parties, and the unit price is irrelevant. The buyer wants to maximize health,  the seller is maximizing income, this is exactly the struggle.
The key question is: How much is NHS willing to pay for better health?. As far as  the budget is limited, the number of treatments times the price is not the right way to proceed to maximize health under constrained resources.
Any government has to set priorities for expenditure according to expected health value created. This information should be public. In any case, when a new drug is available the government should clearly define which benefits are cancelled and which are acceptable. A responsible minister can't  agree new expenditures without any budget.
Therefore, innovative pharmaceutical market is not really a market -right now is clear- and governments should set priorities according to resources available -right now is also clear that they haven't done it-.
Fasten seat belts, we are entering into trying times without any political compass-gps. Citizens are expecting something different. I still remember when Victor Fuchs told long time ago: usually health economists discuss incremental cost-effectiveness in limited marginal terms, the real issue appears when such an amount is enormous. The case of hepatitis C is the example of such a situation, and only health policy and deliberative democracy are the tools to confront it. Unfortunately, this was not the strategy applied nearby.

PS. Catalonia in contention, at Harvard Political Review. Must read, if you are interested on what's going on. Otherwise, try Bloomberg op-ed or LAtimes.

PS. Reading Francesc-Marc Alvaro op-ed I always learn something.

PS. Rating catalans' well-being by OECD.

Ricard Molina. Muntaner-Velódromo. Galeria Barnadas