Why healthcare providers merge?

Scaling Care: An analysis of the structural, social and symbolic dimensions of scale in healthcare

The specific answer to this question depends on the context. However, if you think about the Netherlands, then you'll find the reply in chapter 1 of this book and as a journal article.

Scale is used to achieve political and organizational goals. In these developments, policy makers, executives and other actors have high expectations of the relation between (changes in) scale and positive outcomes, like quality and efficiency of care. To meet the expectations, they ‘upscale’ and ‘downscale’ the organization and provision of care on both organizational and geographical scales. However, the outcomes of these policies and strategies turn out to be uncertain and contested.

The autors conducted a survey with healthcare managers and show their results:

Of the five categories of merger motives, healthcare executives most often mention the category related to healthcare provision (n=107; 69 per cent). This indicates that executives regard merger as an instrument to change the organization and delivery of healthcare services. By realising a broader/more specialized range of services or by providing services to new groups of patients, they seem to aim at attracting new patients and/or offer more or better services to their existing patients. Almost equally frequently mentioned is the category of motives related to strengthening the market or bargaining position.

Sounds obvious. Measurement according to opinions finally get that, opinions. That's why I'm concerned about Delphi questionnaires. The opposite approach is to get data and check the hypothesis. Have a look at this book: Quantitative Techniques for Competition and Antitrust Analysis and you'll understand why this quantitative approach is as relevant as difficult to implement.The final answer is still open for a new estimate and discussion.

PS. What's going on in UK NHS? Peter Roderick gives us some clues. (25 years of marketisation in a short article). More details, here.

How universal is universal coverage?

An analysis of perceived access to health care in Europe:How universal is universal coverage?

Two different realities are intertwined: healthcare access right and needs-based access. The first is widely acknowledged in European countries, the second depends on the specific measurement of geographic (and financial) barriers to healthcare providers.
An article in Health Policy sheds some light on the issue. And its results are compelling:

Despite clear commitments to move towards universal health coverage in Europe, our results suggest that there remains significant heterogeneity among individuals in terms of their perceptions of access to care across and within countries. Overall, we find that the poorest groups are still the most likely to feel they will be unable to accesscare if they need it. In some countries however, differences in the probabilities of perceiving access barriers between low and high-income individuals are relatively small. This insinuates that rationing mechanisms that affect all income groups, such as low quality care and long waiting times may serve as important barriers.

PS. There is no clear pattern between out of pocket expenditure as a percentage of total health expenditure, and the predicted probability of perceived inability to access care:

MABS in history of medicine

The Lock and Key of Medicine Monoclonal Antibodies and the Transformation of Healthcare

While reading FT this summer I came across an article quoting a unique book on history of monoclonal antibodies (MABS). Right now there are more than 30 drugs in the market based on hybridoma technology that was created in 1975.
The birth of MABS is explained with full details, how the creators finally didn't patented it and why, the difficulties for research in an unconnected world, etc... An exciting story that is worth reading. Right now, it would be completely different, commercialization of research and medicine has raised considerably.

That a British company spearheaded the first marketing of Mabs, a technology devised in a British laboratory by an émigré Argentinian scientist with his German colleague, highlights the international nature of biotechnology commercialization. Sera- Lab’s venture to sell Mabs took place in the midst of the excitement generated by the founding of Genentech in 1976. The emergence of Genentech, which had been set up
to market recombinant DNA products, galvanized numerous alliances among academics, entrepreneurs, and venture capitalists to launch new companies to commercialize biotechnology. Most of the early enterprises set up in the wake of Genentech’s birth were dedicated to exploiting recombinant DNA for the mass production of natural products such as interferon and insulin for drugs. But the early germination of the modern biotechnology industry did not rest solely on recombinant DNA. By the 1970s a number of pioneering companies were developing Mab products, including Sera- Lab and two startups: Hybritech in San Diego and Centocor in Philadelphia. Entrepreneurs who risked entry into the field had no guarantee of success and were entering totally uncharted
territory. Such individuals faced major fi nancial, personal, professional, and regulatory challenges as well as a great deal of hostility, pessimism, and litigation.

Milstein with Köhler at the time of their receiving the Nobel Prize in 1984 together with Nils Jerne.

Mabs have had their strongest therapeutic impact in the field of cancer. The first Mab to reach the market for cancer was edrecolomab (Panorex), which was granted German regulatory approval in 1995 for the treatment of postoperative colorectal cancer. Developed by Centocor in partnership with the Wistar Institute, it was withdrawn in 2001 because of its poor effi cacy in comparison with other drugs. Since 1997, however, the U.S. Food and Drug Administration (FDA) has approved twelve Mab drugs for cancer treatment, including rituximab (Rituxan), approved in 1998 for the treatment of non- Hodgkin’s lymphoma. By 2012 there were over 160 candidates in clinical trials for cancer, with seventy of them in phase III trials, the stage before a drug is submitted for regulatory approval.

Mabs have enabled the identification and characterization of cancerous tumors previously difficult to detect and diff erentiate from other tumors, thereby providing a better understanding of cancer. They have also opened a path to more personalized medical treatment. Trastuzumab (Herceptin), for example, was specifically developed to target HER2/neu, a protein overexpressed by tumors found in 25 percent of newly diagnosed breast- cancer patients

Alcohol and health

Alcohol consumption and cardiovascular disease, cancer, injury, admission to hospital, and mortality: a prospective cohort study

The relationship between alcohol intake and health is a complex one. A recent article in The Lancet tries to disentangle the causes and consequences:

The amount, type, and pattern of alcohol consumption can have differing associations with health outcomes. For example, low–moderate regular intake of alcohol is associated with reduced risk of myocardial infarction, whereas heavy episodic drinking is associated with sudden cardiac death.6 Risk of injury increases with extent of intoxication, whereas risk of cancer is related to the amount consumed over time.

In a study of 114.970 participants from 12 countries on the relationship between alcohol and its impact on certain diseases has allowed to understand that geographic location plays a relevant role, beyond the type of alcohol consumption. These are the results:




In summary, the study shows that current drinking is not associated with a net health benefit. We confirm that high intake is associated with increased risk of mortality, cancer, and injury. A serious alert for spirit drinkers and a key message for an updated public health strategy. Have a look at the UK example.

Disposable income trends

From: EU Statistics and book.

Healthy longevity

Health at a Glance 2015

Every year OECD updates health database. The latest one was released yesterday. Japan, Spain and Switzerland are at the top of life expectancy at birth with 83 years. However,  in healthy life expectancy at 65,Switzerland is in the 9th position, and Spain in the 13th. Why is this so?. The priority on quality of life should increase.

Physicians' quality: incentives and information

In the USA, the Affordable Care Act requires the federal government to post information about physician performance and quality of care on a public website. The recent experience of public and private initiatives has been reviewed in a Health Affairs Brief. If you want to know the implications and details on how to make information accessible for citizens, this is a key document to read.

• By 2019 doctors who treat Medicare beneficiaries must choose between two options—enroll in a program called the merit-based incentive payment system or sign up to be part of an alternative payment model.
• The merit-based incentive payment system will adapt and combine multiple programs —PQRS, the EHR meaningful-use program, and the value-based payment modifier initiative—into one.
• Doctors opting for the merit-based incentive payment system must report quality-of-care measures to CMS. How is to be determined, but CMS likely will use an upgraded PQRS reporting system.
• Physicians will be scored on four components of care: quality (30 percent); resource
use (30 percent); meaningful use of EHRs (25 percent); and practice improvement  activities (15 percent).
• Physicians choosing the alternative payment model path would have to be part of an integrated health system, join an ACO.

Sounds interesting. Incentives and information altogether, a hint for other health insurance markets on what to do about it.

Owners and managers in state owned firms

Governance issues are at the center of current debates in public and private firms. Unfortunately, too often as a cosmetic perspective. The roots of the problem are left for another day. Let me give an example. Recently, a hospital selected its CEO by a unique procedure: asking the physicians about the right candidate (at least this is what has been published in the press).
Selecting the right leadership for a firm is the most relevant issue for any board of directors. However, in this case, they will have only one candidate coming from a proposal of professional employees of the firm. The board will confirm their option, for sure, otherwise it will boost a huge crisis.
The worst approach to selecting leadership is to confound participation with governance. In state owned firms, the governance belongs to elected politicians (of course they delegate to appropriate professionals selected for the board). The ownership is public, and citizens are represented through politicians. That's it.
In this unique case, politicians or their delegates have been supplanted by professional employees. This is a biased way to understand governance functions in state owned firms, and somebody should review it in depth before this approach is converted into a trend for other hospitals. Here you'll find the roadmap.