While reading the latest HA, I've picked this article that intends to focus on implementation issues: how to improve health. A short statement:
The stratified approach to the Triple Aim described in this article includes three phases. A planning phase would involve conducting an opportunity analysis, developing predictive models and impactibility (also known as intervenability) models.
More details in the article. Formerly in this blog, I've explained more or less the same. For instance, have a look at a post of last year on risk prediction in a population . We do need to focus on the basics using the most appropriate tools. This is what the article does, and what we have to do.
Publicly funded health expenditure reached 9,162m € in 2012, although the initial budget was 8,756m €. Therefore, the size of the budget deviation was 406m €(10% of total public deficit, health care is 38% of total public budget), and we have to remember that in 2011 the deviation was 582m€ .
Let's say it differently, in 2012 we have roughly accomplished the budget of 2011 (!) , or being more precise we have reduced the 2011 budget in 26 million .
The most interesting figure is always the per capita expenditure, in 2012 the final number is 1,205 € per inhabitant. A reduction of 2 € if we compare to 2011 budget (p. 45), or 77€ per capita of cutbacks in current terms.
The level of expenditure is right now close to what we were spending 5 years ago. Surprisingly, the size of population also went back to the figure of 5 years ago.(!)
Meanwhile, citizens wonder if there is a limit in the shrinking trend. The rumor these days is that the 2013 budget may be reduced by 9%. I can't imagine that this is possible to accomplish in 6 months, given that we have reduced 12% in two years(!!!).
And finally, don't forget that we are in a country that only 43% of our taxes come back, the remaining amount we'll retrieve it the day that we all agree in the creation of a new state. Then we'll not discuss again about cutbacks in the health budget, because we'll decide how much to devote to health services with our taxes.
Some months ago, a WP blog hightlighted a paper by Boldrin and Levine with a straightforward title. Now you can read it at the Journal of Economic Perspectives. The summary is in the first paragraph:
The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the “patent puzzle”: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure.
A risky statement unless there is a clear support from research. However, once you continue reading you'll have arguments to be convinced about it. The impact on pharmaceutical industry is analysed in detail:
There are four things that should be born in mind in thinking about the role of patents in the pharmaceutical industry. First, patents are just one piece of a set of complicated regulations that include requirements for clinical testing and disclosure, along with grants of market exclusivity that function alongside patents. Second, it is widely believed that in the absence of legal protections, generics would hit the market side by side with the originals. This assumption is presumably based on the observation that when patents expire, generics enter immediately. However, this overlooks the fact that the generic manufacturers have had more than a decade to reverse-engineer the product, study the market, and set up production lines. Lanjouw’s (1998) study of India prior to the recent introduction of pharmaceutical patents there indicates that it takes closer to four years to bring a product to market after the original is introduced—in other words, the fifi rst-mover advantage in pharmaceuticals is larger than is ordinarily imagined. Third, much development of pharmaceutical products is done outside the private sector; in Boldrin and Levine (2008b), we provide some details. Finally, the current system is not working well: as Grootendorst, Hollis, Levine, Pogge, and Edwards (2011) point out, the most notable current feature of pharmaceutical innovation is the huge “drought” in the development of new products.
And the proposal is a controversial one:
we could either treat Stage II and III clinical trials as public goods (where the task would be financed by National Institutes of Health, who would accept bids from firms to carry out this work) or by allowing the commercialization of new drugs—at regulated prices equal to the economic costs of drugs—if they satisfy the Food and Drug Administration requirements for safety even if they do not yet satisfy the current (overly demanding) requisites for proving efficacy.
The last sentence sounds far from what should be a "fair" regulatory process in pharmaceuticals. Anyway, it seems that we have entered in a new perspective on patents and more scholars will be supporting it in the future. I'm close to this perspective, but the details are important, as usual.
This is exacty what medical devices regulation in EU needs: a full overhaul. The weaknesess of current process have been on the press for the case of breast implants. But this is only an extreme case that has shown the failures and conflicts of interest.
Carlos Campillo article in Health Policy shows clearly the details and examples of the current mess.
In Europe, the first step should be to understand thefull extent of the problem and bring it to public attention.Comprehensive, reliable and constantly updated registriescould play an important role in this endeavor. Secondly,all the improvement measures described in connectionwith both sides of the problem (assessment, appraisal andapproval, on the one hand, and postmarketing on the other)should be urgently implemented. The fact that we already know what these measures are would delegitimize any delay in implementation.
A clear alert for any politician with eyes to read.
The end of life is obviously a difficult period. In such context, health care decisions have to be taken and our brain may not be able to perform as it should.
Most seriously ill patients value comfort and dignity over life extension, but routine care often leads to treatment oriented toward extending life. Deviating from this life-extending norm requires that someone actively request or suggest doing so.Specifying one’s goals of care in the living will component of an advance directive provides patients with an opportunity to counter this tendency. However, the text and structure of commonly used advance directives carry some of the same implicit biases that tend to favor life extension in the absence of advance directives.
Halpern et al. show that people are strongly influenced by default options in advanced directives. Without default, 66% prefer confort over life extension. With a default option, 77% prefer not to extend life, even after reconsideration and being informed over the default.
Food for thought. Behavioral economics is paving the way for new understanding of choices that involve large amount of resources.
The case of Tecfidera deserves a short comment. Imagine a drug for psoriasis, its active ingredient -dimethyl fumarate- modulates the immune system. The drug has been on the german market since the 90's. Right now you can buy this active ingredient at a reasonable price: $56.20 per 1000 grams. Imagine a company that "buys a license" to extend the indication of this active ingredient into multiple sclerosis. The result is a drug recently approved by FDA and sold at a "fair" price of $54,900 per patient per year (!). With this amount of money we can buy roughly a tonne of dimethyl fumarate per patient per year. Does this make any sense? Is there anybody stopping this madness?
I'm strongly convinced that strong patent rights spur innovation. In the case of genetics and biomarkers, the impact is even stronger. The Supreme Court has to decide over the Myriad case next April 15th and it is really crucial to follow what will be the definite resolution about genetic patents (at least in US). You'll find a good summary at FT.
The verdict is relevant for society as a whole. The access to new biotech benefits will be cheaper if resolution is finally against patenting. Of course, biotech industry has great concerns about it. But the problem is not on biotech, is on expectations that Wall Street has created. It is again, Wall Street vs. Society, a well known fight. Don't forget, the issue is not about patents. It is about ownership rights that spureously create and distort the economy.
PS. You'll find more previous posts on the same topic, here, there and everywhere.
To evergreen or not to evergreen, that is the question. The lawsuit in India against Novartis has ended with a verdict that imatinib failed in the tests of invention and patentability. A serious verdict, because it is an alert for any potential company interested in evergreening as strategy for patent extension.In this specific case, the costs of evergreening have outweighted the benefits.
I'll avoid any discussion about the ruling, I'll take it as given. I would only suggest to have a look at the remarkable history of gleevec. Unfortunately, the size of public funds involved in the research doesn't appear. It would be great to know it.
Right now I am not able to disentangle the rationale about the threats of the pharmaceutical firm about cancelling the supply of new drugs into this market. It's a mistake, in my opinion. I'll check how they explain it as a CSR strategy.in the next annual report.
Luigi Zingales has written a salient chapter on a book on preventing regulatory capture. His focus is not on the regulator, he describes the capture of economists by business interests. A reading of the whole article is required. I highlight this statement:
Most academic economists are very honest people, who chose their career because they were motivated by noble goals, like the quest for the truth and “making the world a better place”. Yet, the same can be said for the regulators. So why academic economists think that the regulators are generally captured, while they cannot stand even the thought that this might happen to one of them? This time we are different?
Those that have seen "Inside Job" may remember quite well good examples of such situations: academics serving on boards close to the revolving door and forgetting the theory and its implications for a while.
Is there a need to change "choice architecture" to adopt healthy behaviours?. From behavioral economics perspective, the answer is yes. However, the doubt is over how it should be done. The lead article on HealthcarePapers is about pushing healthy behaviours. I'm not a fan of financial incentives for these issues. The article hightlights pros and cons, a good review for any newcomer to the field.
From all the comments, Pierre-Gerlier Forest poses a difficult trade-off between the role of the democracy and "nudging" by experts. Unfortunately, he gives no answer and waits for pragmatic improvements.Meanwhile, have a look at this article: beyond nudges, "tools for a choice architecture".
Early this morning on the radio this was the statement: "We live in a country in a desperate situation". The reason is that the rule for public expenditure is tied to a fiscal deficit of 0.7% and unless this figure is relaxed this means a cutback of 4,500 million euros. (1,800 million in health expenditure).
This is nonsense, a threat to citizens health. A country that only receives 57 euros out of 100 of taxes, can't cut its health expenditure again. As citizens, we are currently subject to threats and blackmailing with our money. The first thing to do is not to accept such rules. It's an issue of dignity.
Enough is enough, the day to say goodbye is closer.
PS. Now the neighbouring government is threatening us with no subsidies for transplants while retains our taxes.
PS. You can listen to the radio to confirm what I'm saying.
This is the case of voluntary health insurance. Amid the current downturn, in 2012 there was an increase in the number of members (2.04%) and premiums (6.09%). This data confirms previous trends although it reduces its strength. The market serves 1.9 m members and generates €1,300 m in premiums (close to 8% of health expenditure). The trend towards collectivization is consolidating again. Right now close to 45% of premiums come from group insurance due to tax-breaks that only to apply to such policies. The key question then is not regarding the growth of that market, we have to ask ourselves if such growth is in the right direction towards a more competitive and efficient market. My impression is that information asymmetries and current incentives (tax rebates) need to be rebuilt. Let's leave it here for today.
PS. Yesterday I attended at the conference on economic and legal dimensions of independence:
PS. Extracted from Vilaweb: Message to the elites: independence is viable and inevitable The Wilson Initiative at Cercle d'Economia explains the arguments for a own state 'The independence movement goes from bottom to top, from the street to the Circle. And the role of the elite is to provide what is inevitable. There is vibration, there is anxiety ... But we have to make an effort to allow this to happen. " This is the message that Professor Boix has sent on behalf of the Wilson Initiative to representatives of the country's economic and political elites that assembled at the Economic Circle to hear the arguments of this group of distinguished academics . They have appeared amid great excitement and deploying all arguments to show an audience traditionally reluctant to independence process, that is feasible and necessary. Savings of 1,800 euros per person per year The own state is an opportunity, said Jaume Ventura, who presented figures on the balance between the cost and expense to have a state and maintain their structure. 'He says that if we want exactly replicate the structure in Spain that would cost us 383 euros per person per year. And that, assuming we want to maintain the same embassy as many guns and so on. ' This would be the cost per head, said Ventura. But, eliminating the annual fiscal deficit of Catalonia would provide € 16,000 million. 'The Catalans pay 2,251 euros per person per year in excess of contribution to Spain. After paying 100 euros in taxes, only 57 are spent in Catalonia. Why do we pay that extra money? Not because lower pensions than in Spain. The unemployment benefit is also the same. The explanation is that the deficit is not reversed in Catalonia infrastructure. We have the lowest public capital stock ' What could we do with this after saving 1,868 euros? "With a third of the money we could stop the budget cuts, with 1,868 of these would spend $ 500 to be the sixth country with more investment in education, and 550 euros per person per year, we would be the third country in Europe in investment in research and development.
Listen to Lizz Right while waiting for the next concert in Barcelona.
The strict focus on carrots and sticks in the design of physician incentives may contribute to unintended results. Have a look at NEJM and you'll find an outstanding article that puts the stuff in the right place:
Using incentives both effectively and ethically requires a shift away from a simple, one-lever model that relies on tradition, self-interest, or emotional responses to reward participants for a desired action (or punish them with financial loss or shame for an undesired one). Such an approach risks alienating physicians and other personnel. Rather, the challenge is to cultivate consensus on an organization’s shared purpose and put that orientation into action through performance measurement and use of the other types of incentives.
However, having said that, we know that the introduction of performance measures may be easier than to create a shared-purpose orientation on the organization (i.e. "an organizational commitment to the triple aim of improved patient outcomes, better population health and efficient costs"). Therefore, there is a need to guarantee "ethical conditions" under any pay-for-performance (P4P) scheme. Although I agree absolutely in this approach, the precondition is a consensus in the whole organization, from the top (board of directors) to the bottom (employees) and I'm uncertain about how to build and create such consensus in the current environment. Anyway, such uncertainty should not prevent efforts in this direction.
PS. On the HA blog you'll find the same topic and the same conclusion, by Dan Arieli and Stephie Woolhandler:
None can doubt health care’s grave quality deficits and cost excesses. As remedy, P4P suggests manipulating greed, a fuel that’s powered exponential growth in productivity
in the overall economy. But Adam Smith, who first recognized greed’s
awesome power, was also a moral philosopher who believed that commodity
production required a parallel public service economy driven by social
duty.
Sadly, greed has caused many of the worst abuses within the current
system. Injecting different monetary incentives into health care can
certainly change it, but not necessarily in the ways that policy makers
would plan, much less hope for.
From the WEF report last year on non communicable diseases, I retrieve the size of worlwide health expenditure in 2009:
World expenditure on health in 2009 totalled US$ 5.1 trillion (US$ 754 per capita)13, of
which 61% was spent by public entities. The vast majority of this expenditure (US$ 4.4 trillion) took place in high-income countries, where spending per capita was US$ 3,971 and the share of public spending was 62% of the total. At the other end of the spectrum, low-income countries spent an average of US$ 21 per capita, of which 42% was supplied by public entities.
Increasing the return on health investments requires a solid assessment of the efficiency and effectiveness of spending. Such an assessment faces three main methodological challenges.
The first is to verify that the evidence of efficiency gains and improvements in health obtained through better use of healthcare budgets remains valid when different definitions of health outcomes are used. A major problem is that much of the evidence focuses on crude measurements such as life expectancy, failing to consider the quality of the years of life gained. This is more clearly brought out by concepts such as Disability Adjusted Life Years (DALY), or Healthy Life Years (HLY).
The second challenge is to disentangle the relative influence of health systems on health outcomes from the impact of other determinants of population health, especially living and working conditions, income, education and the most common lifestyle-related risk factors
The third is the time lags between policy changes and their impact on health outcomes, a problem that may involve ‘false savings’ because they may lead to increased costs or other unintended consequences in the long term.
Further assessment of the efficiency of health systems therefore requires a refined analytical framework, structured along three axes:
(1) the definition of sound, reliable indicator(s) of health outcomes, building on the existing European Community Health Indicators,
(2) a better understanding of the effects of health systems on health outcomes, as distinct from the impacts on health of other factors such as health determinants and lifestyles, and
(3) a better understanding of the mechanisms, and therefore the timing, of how health policies affect health outcomes.
