Death, taxes and fiscal deficit

Benjamin Franklin said: "The only things certain in life are death and taxes.". If he had lived here, he would have added "fiscal deficit" in its quote. And this is a constant since 1986, 8,1% of our GDP disappears and doesn't returns in services or infrastructures. And somebody is still interested in this money to use it for their preferences, and not for the tax-payers.
Yesterday we knew again that fiscal deficit was 16,543 million euros, a 8,5% of GDP of 2011. After 25 years, the accumulated amount of fiscal deficit is 306.267 million euros!!!. Can you imagine what represents this figure for a country of 7,5 million inhabitants?
Every year the fiscal deficit is equal to the sum of health, education and welfare expenditures. As far as a country can't survive with such bleeding, I'm convinced that we'll not discuss it again. Let's put it simply, time to say goodbye has arrived because it is socially unacceptable such discrimination and unfair relationship. Only one fourth of the fiscal deficit in one year would stop recent public budget cuts. The answer is only one: Goodbye.

Healthcare value chain, again

Redefining global health-care delivery

A remake of what you may already know has been published as article in The Lancet. It could be good as a reminder but something else is needed. The authors recognise:

Many individual elements we have described will be familiar to global health scholars and practitioners. Many lessons have been learned in discrete areas. What we lack is a true field. We need a clearing-house for information about programme design, best practices, lessons learned, synergies, policy constraints, environmental determinants, and other elements of global health-care delivery. In an age of information, the collection of data can run seamlessly from bedside to seminar room and back to the field.

 I'm uncertain about the outcome of such proposal. The details are so important and difficult to capture that the challenge is huge. On the other hand, I suggest to have a look at this Mckinsey Quarterly article that focus on the opposite: against benchmarking. After reading it, you'll notice that competition pressure in IT may not fit exactly with health care industry, and the message may not apply as straightforwarding.
Anyway, we need an evaluation effort to understand those strategies that are able to deliver more value. Now it's time.

PS. I wrote an earlier post about Porter et al.

Aprés tout (4)

An updated release of public health expenditure data has just been published. In 2011, the expenditure on health was 1,330 € per capita, you can check p.9 of the report. Total decentralised public expenditure: 10,120 m €, percentage of GDP: 5.1%. Why are these figures so different from my previous post with official data?
Now it seems that the deficit in 2011 was 932 m€ - a 10.1% budget deviation-, while formerly a lower figure was announced:586 m€. If it is a mistake, somebody has to fix it, otherwise it will remain in the statistics for the future. If it is true, then we have to ask why it was published incorrectly. Was it misinterpretation, negligence or making -up?

PS. Beware, this data comes from outside. Anyway, somebody has to confirm or dismiss it.

PS. Is it sustainable a public health expenditure variation from 4.4% of GDP to 9.9% of GDP between geographic areas with the same tax regime?

Wired Health

Eric Topol information into action, Wired Health conference


Eric Topol: Information into Action at Wired Health from WIRED on FORA.tv

Economics of genomics

The Economics of Genomic Medicine - Workshop Summary

Just imagine for a while that you are concerned about economic implications of genomics and you invite a distinguished professor of genetic medicine - James Evans- to the introduction of a workshop at IOM. Instead of more is better, he sends a cautious message to the audience. And beyond the potential and valuable applications for those that are already ill,  he openly critizises the current trend towards the use of genetic tests for the healthy:

Assessing the risk of common diseases through whole genome analysis of a healthy person has received the most attention, but this attention “is somewhat misplaced,” Evans said. Currently, assessment of genetic risk alleles has “rather feeble predictive power” because the increased risks tend to be small. “From a clinical standpoint I don’t know what to do with patients who are at a 1.3 relative risk for colon cancer,” said Evans. “Am I going to hurt them by doing more intensive screening, or am I going to help them?”

"I know what almost everybody in this room is going to die of,” said Evans. “We are going to die of heart disease or cancer. . . . We are all at high risk for these maladies regardless of our [genomically determined] risk. And many at decreased risk for heart disease will still die of heart disease. So we are all going to benefit from interventions that lower heart disease. We don’t really need to target people. It doesn’t do anyone much good to tweak our estimation of an individual’s relative risk for common diseases which we are all at high absolute risk of developing anyway."

 “The old adage that an elephant for a nickel is only a bargain if you have a nickel and you need an elephant applies here. I am not sure most of us need that elephant. Even if free, perceived low cost is an illusion, because the misapplication of medical tests—and make no mistake, whole genome sequencing is a medical test—is very expensive,”

A clear message for geneto-enthusiasts and marketeers. Cost-effectiveness of genetic testing starts with assessing if they are effective. If not, any economic analysis is useless . This is obvious, but we do need to repeat it, just in case.

PS. Must read, Reinhardt's blog.

PS. A report to understand the financial markets' mess and why recovery is far by now.

The right rate

International Variations in a Selected Number of Surgical Procedures

If you want to be astonished by the huge variation on the rate of surgical procedures in OECD countries, have a look at this report. It is difficult to find arguments for such a huge differences in health care. The key statement:

The data presented here provide contemporary assessments of the size of the clinical margins of uncertainty for the procedures studied. These may also in part be a consequence of varying legal constraints, methods of payment, availability of cover and patient preferences. They therefore provide basic evidence for research priorities in an increasingly evidence-based medicine paradigm. The only way to make proper judgements on the optimal level for a particular procedure is to have national longitudinal data linking individuals’ treatment (and deliberate withholding of treatment) to outcomes. Such data do not exist in most countries. This is a critical deficiency in health service delivery, which means current policy on which procedures to fund, for whom, is formulated in circumstances based more upon local custom and scientific tradition than empirical effectiveness data.

Meanwhile you can add this report to the folders with the Atlas VPM that you may already know.

Tackling obesity

Integrating Educational, Environmental, and Behavioral Economic Strategies May Improve the  Effectiveness of Obesity Interventions

On top of the priorities for the improvement of public health, obesity deserves a place. However, the tools and decisions to slice its impact on health are still dubious. A recent article may help to put together different approaches:

Obesity is a multifactorial problem impacted by access to foods (supply) and food choices (demand). Neighborhood environments constrain the food choices available to individuals, while complex dietary decisions are driven by taste, cost, nutrition, convenience, and weight concerns. The complex nature of dietary choices therefore requires informed educational approaches that are strategically combined with guided nudges, and environmental interventions that improve access to promote healthier eating. Moreover, multi-institutional  collaborations will likely be necessary to address the obesity epidemic.

Since a multi-institutional approach is needed, somebody has to lead this effort. Is the government able to do it?. If so, don't delay it.

PS. Let me suggest also this Lancet article, my key reference up to now with the OECD one and its update.

The stratified approach

How Health Systems Could Avert 'Triple Fail' Events That Are Harmful, Are Costly,And Result In Poor Patient Satisfaction 

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.

Aprés tout (3)

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.

PS. Video: Our politicians in the Parliament, a review of health policy in 2012.

PS. Today at 19:30 h. free broadcast of GET2013:  Genomics in the Practice of Medicine

PS. Otherwise at 22:00 h you may be interested in:  Genetics in Hollywood: Inspiring Writers and Producers to Create Storylines that Improve Health Worldwide 

PS. Recovery room from cutbacks: Must listen to Ben l'Oncle

Against patents

The case against patents

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.

Full overhaul needed

A full-fledged overhaul is needed for a risk and value-based regulation of medical devices in Europe


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.

PS. On non-profit boards

Paving the way

Default Options In Advance Directives Influence How Patients Set Goals For End-Of-Life Care

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.

Evergreening (2)

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?

PS. Don't forget my previous post on the same topic.

PS. Why is this information false?. The answer in this post.

Countdown

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.

PS. Uwe Reinhardt on healthcare prices, must read, as usual.