A successful implementation of a bad idea

Since 2012 it hasn't been posible to know the price of new drugs funded by NHS. The government considers that they are confidential. This is a clear example of what exactly means transparency and the application of the rule of law. Meanwhile a new strategy has been put into place. Without public prices, the government has decided to set budget ceilings for several innovative drugs: pertuzumab, ivakaftor, telaprevir/simeprevir, abiraterona, pirfenidona y ruxolitinib. And the last one is new drugs for hepatitis C, defined as "therapeutic group" not as a specific molecule. Following this strategy there is a proposal to extend such a model of budget ceilings by ATC, therapeutic classification.
This is really a bad idea that is already being implemented. As you know sometimes there are good ideas badly implemented, and therefore criticized. But in this case, it is a bad idea with a scrupulous implementation. Some officials consider that if they set a budget ceiling, all decisions will be taken  to fit in with it. Clinical decisions follow a different path, not the mechanical and administrative way officials are used to.
The measure represents a tough hit to economic evaluation, because in the next future the government will not be any longer interested in it. Why? Their only concern is about the budget ceiling, the value doesn't matter. A missed opportunity for the development of priority setting under a rational scheme. Health economists should react to such a big mistake.
The saddest  issue is that nobody knows what will happen when the budget ceiling is surpassed. This will be the job for the next government, nobody cares about it right now. Democracy and rule of law are only words subject to interpretation.

PS. All the details about hepatitis C controversy at Boletín AES.

PS. Understanding the foundations of confidential drug pricing, in Forbes.

PS. Explained at Health Affairs:

International Best Practices For Negotiating 'Reimbursement Contracts' With Price Rebates From Pharmaceutical Companies

By: Morgan, Steven; Daw, Jamie; Thomson, Paige

HEALTH AFFAIRS  Volume: 32   Issue: 4   Pages: 771-777   Published: APR 2013

 Abstract

Reimbursement contracts, in which health insurers receive rebates from drug manufacturers instead of paying the transparent list price, are becoming increasingly common worldwide. Through interviews with policy makers in nine high-income countries, we describe the use of these contracts around the globe and identify related policy challenges and best practices. Of the nine countries surveyed, the majority routinely use confidential reimbursement contracts. This alternative to drug coverage at list prices offers benefits but is not without challenges. Payers face increased administrative costs, difficulties enforcing contracts, and reduced information about prices paid by others. Among the best practices identified, policy makers recommend establishing clear and consistent processes for negotiating contracts with relatively simple rebate structures and transparency to the public about the existence, purpose, and type of reimbursement contracts in place. Policy makers should also work to address undesirable price disparities within their countries and internationally, which may occur as a result of this new pricing paradigm.

What clinicians do and why they do it

The Nature of Clinical Medicine. The return of the clinician

Nowadays, technology pervades media and our live. This is a good moment to rethink the basics, the foundations of medicine, its values and goals. Eric Cassell contributes decisively to this aim with his new book, a must read at least for physicians and all professionals related with medicine.
Health economists should be aware of better understanding  about the goals of medicine and purposes of physicians. They reflect the true "production function".
Here is a brief summary of the book and afterwards its goals and purposes:

Clinical medicine, as a thinking discipline, is concerned not only with what clinicians do, but why. When physicians act in medicine they have some purpose or goal in mind. What they actually do and how they go about it is in the service of their purposes and their goals. Such goals cover a wide range of topics centering on patients, the doctor-patient relationship, the acts of doctoring patients, and the goals involved in being a physician among other physicians working within the institutions of medicine.

The Nature of Clinical Medicine takes its direction from a catalog of goals of medicine that range from the expected diagnosis and treatment of diseases to wider concerns for patients, for physicians, and for medicine itself. The chapters are specific in teaching the kinds of knowledge that clinicians require in order to be able to achieve these goals. The central focus of the clinician and of this book is the patient. According to Eric Cassell, everything else, including the disease, is secondary.

Summary of the Goals of Medicine

A. Patient-centered goals

1. Save life.
2. Prolong life.
3. Cure disease.
4. Prevent suffering.
5. Relieve suffering.
6. Do no harm.
7. Protect the patient from danger.
8. Do not frighten the patient.
9. Relieve the patient’s fears.
10. Make the patient better in the patient’s terms.
11. Do nothing unnecessary (or more than necessary). B. Goals related to the physician–patient relationship
12. Develop and maintain a good relationship.
13. Be trustworthy.
14. Tell the truth.
15. Be reliable.
16. Be constant.
17. Be there when needed.
18. Make a difference.

C. Goals related directly to doctoring the patient

19. Make a diagnosis (where pertinent make a tissue diagnosis).
20. Decide what the problem is.
21. Obtain the necessary information.
22. Make sense of the case (in pathophysiological, anatomical, psychological, and social terms).
23. Decide the correct treatment and its timing.

D. Goals related to being a physician among other physicians

24. Seek and maintain comprehensive knowledge.
25. Maintain the standards of medicine.
26. See that things are done right.
27. Protect the patient from bad medicine and incompetent physicians.
28. Behave in a proper, doctorly manner.
29. Look good to other physicians and the patient and family.
30. Avoid error.
31. Avoid blame.
32. Maintain relationships with peers.
33. Stay alive in the institution (hospital or medical school) and community

The relationship between purposes or goals and values (p.166). Five kind of goals:

1. Specific obligations to other people or institutions—patients, other caregivers, or the hospital
2. Responses to rights that everybody has, for example, the right to refuse treatment, or to freedom from assault or coercion.
3. Purposes based in what might be called utility. Things pursued because of the benefit to the patient, or the avoidance of injury. Also purposes directed at general benefit, like the advance of medical knowledge.
4. Purposes related to what might be called self-development values. Here, there is intrinsic value in acquiring a particular piece of knowledge or skill because it is believed to be part of the general good if even one person has special knowledge. The goal of acquiring a particular knowledge or ability lies in this arena of values.
5. Purposes related to one’s own project in life, like becoming a good clinician apart from, for example, the acquisition of a specific skill  or the general advance of medical knowledge

Tapering mechanisms for hospital payment

Tapering payments in hospitals

In Germany, payment to hospitals is based on DRGs. This means that there are some estimateas of specific relative weights and an expected volume of cases. The base rate is the pivotal element of the system. Health insurers want to avoid any surprise on their budget ceilings. Therefore some criteria in paying hospitals is the key to accomplish the budget. And what they do is the following:

Any increase in activity volume (based on the case-mix) compared to year t-1 within the range of negotiated volumes for year t is reimbursed at rate tapered by 25% (rate in force in 2013 and 2014) 

The tapering criteria is also known in our country as marginal payments, the amount that it is paid beyond a certain ceiling of discharges or visits.
Tapering is always controversial, because it may be applied to volume or to the costs (through shrinking the base rate). In both situations it is difficult to have a clear verdict of wether there is too much suplier induced demand, or just an epidemic (?).
Therefore if appropriateness criteria are not in place, the result can be anything but the fair: penalising efficient hospitals or incentivising waste.
I have always been concerned about marginal payments. A recent OECD report on this topic describes current practices and puts some caution in its application. As far as this is the first report that informs us about these practices, I specially recommend it to those officials reponsible for the issue.

PS. OECD Graph of the month. Slowdown in health spending in Europe has affected all spending categories, particularly pharmaceuticals and prevention

Variations in Health Care in just one infographic

From King's Fund

PS. WHO on cesarean section rates.

Physician self-referral: a call for action

Physician Self-referral: Regulation by Exceptions

In 2002 a new agreement was published in internal medicine reviews on Medical Professionalism in the New Millennium: A Physician Charter. Some years ago I posted the same issue. Today, I would like to highlight three points again:

• Commitment to professional responsibilities. As members of a profession, physicians are expected to work collaboratively to maximize patient care, be respectful of one another, and participate in the processes of self-regulation, including remediation and discipline of members who have failed to meet professional standards. The profession should also define and organize the educational and standard-setting process for current and future members. Physicians have both individual and collective obligations to participate in these processes. These obligations include engaging in internal assessment and accepting external scrutiny of all aspects of their professional performance.

• Commitment to maintaining trust by managing conflicts of interest. Medical professionals and their organizations have many opportunities to compromise their professional responsibilities by pursuing private gain or personal advantage. Such compromises are especially threatening in the pursuit of personal or organizational interactions with for-profit industries, including medical equipment manufacturers, insurance companies, and pharmaceutical firms. Physicians have an obligation to recognize, disclose to the general public, and deal with conflicts of interest that arise in the course of their professional duties and activities. Relationships between industry and opinion leaders should be disclosed, especially when the latter determine the criteria for conducting and reporting clinical trials, writing editorials or therapeutic guidelines, or serving as editors of scientific journals

• Commitment to maintaining appropriate relations with patients. Given the inherent vulnerability and dependency of patients, certain relationships between physicians and patients must be avoided. In particular, physicians should never exploit patients for any sexual advantage, personal financial gain, or other private purpose.

 After reading JAMA article on physician self-referrals in US, definitely I have to say that this principles are far to be applied. The size of the resources coming from self-referrals is continously increasing despite the existing regulation for decades. The article puts a lot of expectations on changing the payment system, from fee-for-service towards value-based payments to curb the situation. I'm not so confident on this tool, because its implementation is far from optimal.
Anyway this is a difficult issue, and the same happens to dual practice in general. Some weeks ago a new resolution on how to handle conflicts of interest between public and private care was released. Two different concerns appear on my mind. The first is when any patient that decides to start a private treatment, then there is no option to go back to the public sector. He rejects explicitly public coverage. This statement may be appropriate for those patients on public waiting lists, but its application to other situations may be fuzzy. The second relates to information by the healthcare faciliy to patients about benefits and rights. I'm uncertain about how this can be applied without biases, without interference of physicians. My suggestion would be to use more transparent and centralised ways to inform patients through internet.
Unfortunately what I missed is precisely any regulation on physician self-referrals, the core of the problem. This affects publicly funded -in case of dual practice- and private care. Somebody should have a clear position on that. In my opinion, it should start by physicians associations. Self-regulation is a better starting point than any ban on this practice. As you may deduct easily, the general application of the former physician charter would solve this issue.

This is unsustainable

Demystifying Sustainability

My position is clear and I have said it several times before: the use of the term sustainability is misleading. From an economics point of view, the term should be "dynamic efficiency", keyed by Schumpeter long time ago. However an environmentalist term entered into our language and now we can't disentangle what it really means. That's why initially it is welcome a new book on this topic written by an environmentalist that beyond the concept it focuses on the solutions in these issues:

1 Worldview, ethics, values and ideologies
2 Redesigning ourselves to enable change
3 Population
4 Consumerism and the growth economy
5 Solving climate change
6 Appropriate technology: a renewable future
7 Reducing poverty and inequality
8 Education and communication
9 The politics of it all!

For each issue you'll find what you can do. Unfortunately, there are too many issues to be covered in only one book without any reference to incentives and dynamic efficiency or market design...

Finally it says

Can we demystify ‘sustainability’?
Yes we can, we can demystify ‘sustainability’. The key step is to accept reality, accept the gravity of our predicament, roll back denial, and rapidly put in place the solution frameworks covered above.

Sounds a little bit naïf again. Nature and social behaviour are more complex to be solved this way. A simple recipe is not enough. A better transdisciplinary understanding is needed. I'll continue to refrain from the use of term sustainability.

PS. What is really unsustainaible-irrrrrrresistible is precisely what happened yesterday in our Parliament on this topic.  An horrendous example of an outdated political style. Citizens are demanding to tackle real problems, not more political shows. The future of population health policy starts with consensus. Again, my position is clear. If you don't understand exactly what I mean, have a look at this excellent book by Neil Postman:

Public Health Priorities

Start Well, Live Better: A Manifesto for the Public’s Health. London: UK Faculty of Public Health, 2014

These are the 12 suggested priorities for public health in UK for the next 5 years:

Give every child a good start in life

• Give all babies the best possible start in life by implementing the recommendations of the 1001 Critical Days cross-party report
• Help children and young people develop essential life skills and make Personal, Social, Health and Economic, and Sex and Relationship Education a statutory duty in all schools

• Promote healthy, active lifestyles in children and young people by reinstating at least 2 h per week of physical activity in all schools

Introduce good laws to prevent bad health and save lives

• Protect our children by stopping the marketing of foods high in sugar, salt and fat before the 9 pm watershed on TV, and tighten the regulations for online marketing
• Introduce a 20% duty on sugar-sweetened beverages as an important measure to tackle obesity and dental
• caries—particularly in children
• Tackle alcohol-related harm by introducing a minimum unit price for alcohol of at least 50 p per unit of alcohol sold
• Save lives through the rapid implementation of standardised tobacco packaging
• Set 20 m.p.h. as the maximum speed limit in built-up areas to cut road deaths and injuries, and reduce inequalities

Help people live healthier lives

• Enable people to achieve a good quality of life, health and wellbeing—give everyone in paid employment and training a ‘living wage’
• Reaffirm commitment to universal healthcare system, free at the point of use, funded by general taxation

Take national action to tackle a global problem

• Invest in public transport and active transport to promote good health, and reduce our impact on climate change
• Implement a cross-national approach to meet climate change targets, including a rapid move to 100% renewables and a zero-carbon energy system

As you can see, many similar things with our PINSAP, the Health Policy Consensus and Health Plan. However, after yesterday news the pending issue of our public health is mainly alcohol abuse. We should focus on what works to reduce alcohol and addictive substance abuse. And first of all, we need to understand the foundations and best approaches to the problem. I would suggest you have a look at this book and specially this one:

PS. Binge drinking 'costing UK taxpayers £4.9bn'  Does anybody know how much does it cost here???

PS. In Spain, publicly funded health expenditure reached 64.150 million € in 2012,the amount for financial system bailout was 101.283 million € (p.24). Don't forget it: these are the priorities.

Healthcare satisfaction guaranteed

La veu de la ciutadania: Com la percepció de la ciutadania es vincula a la millora dels serveis sanitaris i el sistema de salut de Catalunya

In Exit, Voice, and Loyalty (1970), the book written by Albert O. Hirschman, you finally understand that the ultimatum that confronts consumers in the face of deteriorating quality of goods is either “exit” or “voice”. Exit is equivalent to the invisible hand of markets in Adam Smith. The greater the availability of exit, the less likely voice will be used. However, loyalty may modulate the final impact. Loyal members become especially devoted to the organization's success when their voice will be heard and that they can reform it.
Under mandatory publicly funded health insurance, the role of voice is specially relevant to fulfill citizens expectations. The efforts to measure patient satisfaction provide precise information on this issue. Now you can find an excellent report that summarises recent trends under a strict methodology.
The results (from p.65) are clear: currently the levels of satisfaction with public health services are higher than at the begining of the crisis. I have already posted about the same before, however what you'll find today as headlines in the newspapers is exactly the opposite. Journalism ethics is not currently in its best days. As citizens we deserve better consideration.
Fortunately, internet allows to bypass journalists ("exit" in Hirshman words), though it requires a dose of extra effort and only a minor part of the population is prone to assume it.
If healthcare satisfaction is rising, as it is, then no need for exit, citizens will remain loyal.

PS. In case of severe disease, voluntary health insured members would use private services in 32% of cases, while public sevices in 39% of cases. P.9 of the barometer.

PS. Journalism ethics: Seek Truth and Report It

Piketty's nuances

After selling 1.5 million books, now Piketty says:

The way in which I perceive the relationship between r>g and inequality is often not well captured in the discussion that has surrounded my book. For example, I do not view r>g as the only or even the primary tool for considering changes in income and wealth in the twentieth century, or for forecasting the path of inequality in the twenty-first century. Institutional changes and political shocks— which to a large extent can be viewed as endogenous to the inequality and development process itself—played a major role in the past, and it will probably be the same in the future.

His obsession with taxation remains:

In my book, I propose a simple rule of thumb to think about optimal wealth tax rates. Namely, one should adapt the tax ratesto the observed speed at which the different wealth groups are rising over time.

One of the main conclusions of my research is indeed that there is substantial uncertainty about how far income and wealth inequality might rise in the twenty-first century, and that we need more financial transparency and better information about income and wealth dynamics, so that we can adapt our policies and institutions to a changing environment. This might require better international fiscal coordination, which is difficult but by no means impossible.

Why is he focusing strictly on taxation, while admitting that institutional changes and political shocks play a major role?

So what?. Maybe the inequality explanation lies on housing wealth... and not on the return on capital. Anyway, the profitability from the book -for Piketty- is huge, and the solutions remain uncertain.

PS: WSJ, The economist,

PS. From the last Sistema Nacional de Salud report p.170:
"Extremadura con 9,5% de gasto sanitario público sobre el PIB, junto con Cantabria con 8,3% y Murcia con 7,9% fueron las comunidades autónomas que presentaron en el año 2012 el porcentaje más elevado. En el extremo opuesto se encontraba Madrid con el 4,1% de gasto sanitario público sobre el PIB y Cataluña con 4,9."
These are facts, not opinions. Now you can understand why we want to leave from this state soon,  double of public budget over GDP under the same taxation system!. Unacceptable. Good bye!

The tragedy of commonsense morality

Moral Tribes: Emotion, Reason, and the Gap Between Us and Them

The suggestion by Joshua Green in his book "Moral Tribes" is to put our gut reactions aside, and rely on our utilitarian moral compass for direction. There are two fundamental moral problems. Me versus Us is the basic problem of cooperation. Our brains solve this problem primarily with emotion and thanks to these automatic settings, we succeed in this controversy. However complex moral problems are about the latter, Us versus Them,-between tribes, not within tribes-.

The morality concept:

 Morality is a set of psychological adaptations that allow otherwise selfish individuals to reap the benefits of cooperation

The fact:

Two moral tragedies threaten human well-being. The original tragedy is the Tragedy of the Commons. This is a tragedy of selfishness, a failure of individuals to put Us ahead of Me. Morality is nature’s solution to this problem. The new tragedy, the modern tragedy, is the Tragedy of Commonsense Morality, the problem of life on the new pastures. Here morality is undoubtedly part of the solution, but it’s also part of the problem. In the modern tragedy, the very same moral thinking that enables cooperation within groups undermines cooperation between groups. Within each tribe, the herders of the new pastures are bound together by their moral ideals. But the tribes themselves are divided by their moral ideals. This is unfortunate, but it should come as no surprise, given the conclusion of the last section: Morality did not evolve to promote universal cooperation. On the contrary, it evolved as a device for successful intergroup competition. In other words, morality evolved to avert the Tragedy of the Commons, but it did not evolve to avert the Tragedy of Commonsense Morality.

This is a very interesting and intricate book that requires rereading. There are strong implications for health economics. His recommendations, to be discussed (some day), are the following ones:

The six rules for modern herders:

• 1. In the face of moral controversy, consult but do not trust, your instincts.
• 2. Rights are not for making arguments; they are for ending arguments
• 3. Focus on the facts and make others do the same
• 4. Beware of biased fairness
• 5. Use common currency
• 6. Give

PS. You may apply his arguments to the current political nightmare, and it fits perfectly.

The identified person bias

Identified versus Statistical Lives: An Interdisciplinary Perspective

The concept:

The identified person bias: A greater inclination to assist (and avoid harming) persons and groups identified as those at high risk of great harm than to assist (and avoid harming) persons and groups who will suffer (or already suffer) similar harm but are not identified (as yet).

 The issues:

1. When precisely does the identified person bias arise? And what exactly does it consist in? For example, is it simply a matter of a very human response to the vivid human faces of people with personal stories, in the hospital ward or on TV screens? Is it something that arises only when the risks are known, only under strict  uncertainty, or regardless of how much we can specify the risk? Does that bias arise only when few victims are involved?
2. What, if anything, might justify giving priority to identified persons at risk?
3. What would be the practical implications for law, public health, medicine, and the environment of accepting the priority given to identified persons, or of forsaking it—if we could successfully do so?

The book, a must read:

 

PS. Former post on the same topic.

PS.  Harvard events of interest.

Don't think of privatization

Let's do a little thought experiment today.

Close your eyes. Imagine a privatized healthcare consortium as vividly as you can. It is clear! Is it? There are private owners. Or seems to be some officials geting dividends?

Now, I want you to NOT think about privatization. Think of anything else but privatisation. Try it for a few minutes.

What are you thinking of? How many times did the privatization issue cross your mind? Quite a few times, right?

Now, close your eyes again and try to think about what you did for today? Who you met? Where you went? Anything interesting happened when you were traveling? What did you eat for breakfast/lunch? Try it for a few minutes.

How many times did you think of privatization? None? Maybe once or twice especially since I asked this question?

This is an exercise that shows that suppressing your thoughts in your mind doesn't really work. When we try not to think about something and try to suppress it, our minds keep going back to the same thoughts. This is a well known experiment from Wegner et al. (Wegner, D. M., Schneider, D. J., Carter, S. R., & White, T. L. (1987). Paradoxical effects of thoughts suppression. Journal of Personality and Social Psychology, 53, 5–13). As you know, I could also refer to Lakoff mental frames and its: Don't think of an elephant for different evolutive and modern cognitive perspective, but I've done it before.
If you combine deception -about the concept of privatization- and the difficulty of suppressing your thoughts, you'll get the current health policy mess. Distraction is a strategic move that has alleged political profits. For sure, the whole population only receive the losses from such strategy. We have been installed in this paradigm for many years: the privatization devil is here and there, although there is no shareholder getting any dividend. Fortunately, the world stands beyond spaguetti western films. Ownership has impact on efficiency but depends on the context, sometimes public incentives prevail over private ones, and sometimes is the opposite.
If all these sounds weird to you, have a look at our last Parliament resolution and you'll find the astonishing agreement of all parties against the current ruling party on one issue that doesn't exists: a public consortium privatised!!!. If it is public, as it is, can't be private if the owner is the government, as it is. Disappointing, shameful.
I'm really sad that in my country public representatives play with fire in such a way. I just want to say today, that I'm available for those deputies interested in a free private lecture on organizational economics, on what ownership is and what it means for efficiency. Just give me a call or send me an email.

A relaxing cup of café con leche

Genetic testing: a knotty problem

Food and Drug Administration. Optimizing FDA's regulatory oversight of next generation sequencing diagnostic tests — preliminary discussion paper

Cutting the Gordian Helix — Regulating Genomic Testing in the Era of Precision Medicine

"Scientific progress alone won't guarantee that the public reaps the full benefits of precision medicine, an achievement that will also require advancing the nation's regulatory frameworks"

This strong statement reflects a wider concern on the implementation of precision medicine or stratified medicine. I have commented before on this issue, the NEJM article of this week clarifies the last attempt by FDA to shed some light and a specific approach to disentangle the current challenges. FDA has submitted a document for comments just to start a new era of regulation in health, a "collaborative framework" for creating reliable databases of genes and genetic variants underlying disease, and provide a "safe harbor" for the interpretation of genomic tests.
This is exactly the right direction. As long as, information is a public good, genetic testing -clinical validity and utility- should be provided only by the regulator.  Professionals and citizens need to trust in precision medicine and avoid snake-oil sellers.
Having said that, today I'm more concerned than yesterday on how our government is delaying to start such effort. Today is one more day lost.

Dufy at Thyssen Museum right now

PS. Somebody should think twice about the style of health policy debates in public TV.

In favour of consumer protection

Can Consumers Make Affordable Care Affordable? The Value of Choice Architecture

Healthcare.gov 3.0 — Behavioral Economics and Insurance Exchanges

Recently Google has entered in the insurance comparisons market. Right now is available for car insurance and health insurance could be the next step. This business model changes the search costs and has strong impact over current sales channels. Understanding the salient features of health coverage for any citizen, should require that government regulates the right conditions for consumer protection. If insurancee companies pay the comparison site, as google says, is there any change on how information is shown according to the amount paid?. Have a look at the Peter Ubel et al. article at NEJM or at the PLOS one, and you'll be convinced that the potential for manipulation is huge.
Therefore, if this is so, there is a role for protecting consumers against well designed biases in comparison sites.