Safety vs price in the generic drug market: metformin

OBJECTIVES

Generic medications represent 90% of prescriptions in the US market and provide a tremendous financial benefit for patients. Recently, multiple generic drugs have been recalled due to the presence of carcinogens, predominantly N-nitrosodimethylamine (NDMA), including an extensive recall of extended-release (ER) metformin products in 2020.

STUDY DESIGN

Primary pharmaceutical quality testing and database analysis.

METHODS

We tested marketed metformin immediate-release (IR) and ER tablets from a wide sample of generic manufacturers for the presence of carcinogenic impurities NDMA and N,N-dimethylformamide (DMF). We examined the association of level of impurity with drug price and the impact of the 2020 FDA recalls on unit price and prescription fill rate.

RESULTS

Postrecall NDMA levels were significantly lower in metformin ER samples (standardized mean difference = -2.0; P = .01); however, we found continued presence of carcinogens above the FDA threshold in 2 of 30 IR samples (6.67%). Overall, the presence of contaminant levels was not significantly associated with price for either IR (NDMA: R2 = 0.142; P = .981; DMF: R2 = 0.382; P = .436) or ER (NDMA: R2 = 0.124; P = .142; DMF: R2 = 0.199; P = .073) samples. Despite recalls, metformin ER prescription fills increased by 8.9% while unit price decreased by 19.61% (P < .05).

CONCLUSIONS

Recalls of metformin ER medications were effective in lowering NDMA levels below the FDA threshold; however, some samples of generic metformin still contained carcinogens even after FDA-announced recalls. The absence of any correlation with price indicates that potentially safer products are available on the market for the same price as poorer-quality products.

Place of Death Before and During the COVID-19 Pandemic

This quality improvement study examines the national and ongoing impact of the COVID-19 pandemic with the place of death among individuals in the US.

AI Alone Will Not Reduce the Administrative Burden of Health Care

This Viewpoint considers AI’s limits in solving the medical billing quagmire and argues that standardizing health insurance claim forms and simplifying billing must occur before AI can shoulder the load.

Time From Authorization by the US Food and Drug Administration to Medicare Coverage for Novel Technologies

Importance

A wide variety of novel medical diagnostics and devices are determined safe and effective by the US Food and Drug Administration (FDA) each year, but to our knowledge the literature lacks evidence documenting how long it takes to establish new Medicare coverage for these technologies.

Objective

To measure time from FDA authorization to at least nominal Medicare coverage for technologies requiring a new reimbursement pathway.

Design, Setting, and Participants

In this cross-sectional study, public databases were used to associate each technology to billing codes, determine the effective date of each code and Medicare coverage decisions, and stratify by the maturity of the Medicare coverage. At least nominal coverage was defined as achievement of explicit coverage milestones through a national coverage determination, local coverage determinations by Medicare administrative contractors, or by implicit coverage aligned to a new billing code. Characterization by product type (acute treatment, chronic or ongoing treatment, diagnostic assay, and diagnostic device), manufacturer size, and evidence level were assessed for association with coverage achievement. The study included new product applications authorized by the FDA through the premarket approval pathway, the de novo pathway, or with breakthrough designation in the 510(k) pathway from January 1, 2016, to December 31, 2019. Data analysis took place between May 1, 2022, and December 31, 2022.

Main Outcome Measurement

Time from FDA authorization to the first coverage milestone.

Results

Among 281 identified technologies in the total sample, 64 (23%) were deemed novel technologies based on the absence of coverage determinations and/or the use of temporary or miscellaneous billing codes. Twenty-eight of 64 technologies (44%) successfully achieved explicit or implicit coverage following FDA authorization. The median time to at least nominal coverage for the analysis cohort was 5.7 years (90% CI, 4.4-NA years). Analysis of time-to-coverage data highlighted company size (log-rank P<.001) and product type (log-rank P = .01) as significant covariates associated with coverage achievement. No association was observed for technologies with level 1 evidence at FDA authorization and subsequent coverage milestone achievement (log-rank P = .40).

Conclusions and Relevance

In this cross-sectional study of 64 novel technologies, only 28 (44%) achieved coverage milestones over the study timeline. The several-year period observed to establish at least nominal coverage suggests existing coverage processes may affect timely reimbursement of new technologies.

Engaging Medicare Beneficiaries in Coverage Choices

This Viewpoint discusses the recently announced monthly Medicare Part B premium hike and the limited role beneficiaries play in decisions about their coverage, and proposes ways to engage Medicare beneficiaries in program decisions.

Randomized Clinical Trial to Evaluate an Atrial Fibrillation Stroke Prevention Shared Decision-Making Pathway

Background Oral anticoagulation reduces stroke and disability in atrial fibrillation (AF) but is underused. We evaluated the effects of a novel patient-clinician shared decision-making (SDM) tool in reducing oral anticoagulation patient's decisional conflict as compared with usual care. Methods and Results We designed and evaluated a new digital decision aid in a multicenter, randomized, comparative effectiveness trial, ENHANCE-AF (Engaging Patients to Help Achieve Increased Patient Choice and Engagement for AF Stroke Prevention). The digital AF shared decision-making toolkit was developed using patient-centered design with clear health communication principles (eg, meaningful images, limited text). Available in English and Spanish, the toolkit included the following: (1) a brief animated video; (2) interactive questions with answers; (3) a quiz to check on understanding; (4) a worksheet to be used by the patient during the encounter; and (5) an online guide for clinicians. The study population included English or Spanish speakers with nonvalvular AF and a CHA2DS2-VASc stroke score ≥1 for men or ≥2 for women. Participants were randomized in a 1:1 ratio to either usual care or the shared decision-making toolkit. The primary end point was the validated 16-item Decision Conflict Scale at 1 month. Secondary outcomes included Decision Conflict Scale at 6 months and the 10-item Decision Regret Scale at 1 and 6 months as well as a weighted average of Mann-Whitney U-statistics for both the Decision Conflict Scale and the Decision Regret Scale. A total of 1001 participants were enrolled and followed at 5 different sites in the United States between December 18, 2019, and August 17, 2022. The mean patient age was 69±10 years (40% women, 16.9% Black, 4.5% Hispanic, 3.6% Asian), and 50% of participants had CHA2DS2-VASc scores ≥3 (men) or ≥4 (women). The primary end point at 1 month showed a clinically meaningful reduction in decisional conflict: a 7-point difference in median scores between the 2 arms (16.4 versus 9.4; Mann-Whitney U-statistics=0.550; P=0.007). For the secondary end point of 1-month Decision Regret Scale, the difference in median scores between arms was 5 points in the direction of less decisional regret (P=0.078). The treatment effects lessened over time: at 6 months the difference in medians was 4.7 points for Decision Conflict Scale (P=0.060) and 0 points for Decision Regret Scale (P=0.35). Conclusions Implementation of a novel shared decision-making toolkit (afibguide.com; afibguide.com/clinician) achieved significantly lower decisional conflict compared with usual care in patients with AF. Registration URL: https://www.clinicaltrials.gov; Unique identifier: NCT04096781.

Maintaining Health Care Innovations After the Pandemic

This Viewpoint discusses evaluating and perhaps extending the record of successful innovation arising from the COVID-19 pandemic.

Are Patient Satisfaction Instruments Harming Both Patients and Physicians?

In this Viewpoint, Richman and Schulman argue that patient satisfaction surveys may not actually reflect clinical performance or assist efforts to improve patient experience and are not useful tools to measure physician performance.

A data-driven quality-score system for rating drug products and its implications for the health care industry

The quality of drug products in the United States has been a matter of growing concern. Buyers and payers of pharmaceuticals have limited insight into measures of drug-product quality. Therefore, a quality-score system driven by data collection is proposed to differentiate between the qualities of drug products produced by different manufacturers. The quality scores derived using this proposed system would be based upon public regulatory data and independently-derived chemical data. A workflow for integrating the system into procurement decisions within health care organizations is also suggested. The implementation of such a quality-score system would benefit health care organizations by including the consideration of the quality of products while also considering price as a part of the drug procurement process. Such a system would also benefit the U.S. health care industry by bringing accountability and transparency into the drug supply chain and incentivizing manufacturers to place an increased emphasis on the quality and safety of their drug products.

The Rise and Potential of Physician Unions

This Viewpoint discusses the potential increase in physician unions as a way to deal with conflicts between large hospital systems and physicians, as well as how such unions may be able to provide individual employment benefits but have limited impact on higher governance concerns.

Billing And Insurance-Related Administrative Costs: A Cross-National Analysis

Billing and insurance-related costs are a significant source of wasteful health care spending in Organization for Economic Cooperation and Development nations, but these administrative burdens vary across national systems. We executed a microlevel accounting of these costs in different national settings at six provider locations in five nations (Australia, Canada, Germany, the Netherlands, and Singapore) that supplements our prior study measuring the costs in the US. We found that billing and insurance-related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted). We created a taxonomy of billing and insurance-related activities (eligibility, coding, submission, and rework) that was applied to data from the six sites and allows cross-national comparisons. Higher costs in the US and Australia are attributed to high coding costs. Much of the savings achieved in some nations is attributable to assigning tasks to people in lower-skill job categories, although most of the savings are due to more efficient billing and insurance-related processes. Some nations also reduce these costs by offering financial counseling to patients before treatment. Our microlevel approach can identify specific cost drivers and reveal national billing features that reduce coding costs. It illustrates a valuable pathway for future research in understanding and mitigating administrative costs in health care.

New Medicare Technology Add-On Payment Could Be Used As A Market Support Mechanism To Accelerate Antibiotic Innovation

Despite growing antibiotic resistance, the clinical drug development pipeline for antibiotics has been sparse largely because of an unsustainable business model. We illustrate three models to accelerate antibiotic development, using Medicare new technology add-on payments as a market support mechanism. The first two models subsidize drug development for Medicare beneficiaries, and the third model applies a payment for every patient with a resistant infection to essentially create a funding pool. We found that the reimbursement required to sustain research and development would range from $637 to $121,365, depending on the payment model and the incidence of the resistant infection in question. With a $300 million public research subsidy, the payment for an antibiotic would drop to between $273 and $10,396 per course. Our market support model could increase the likelihood of attracting private investment for antibiotic development.

Reducing administrative costs in US health care: Assessing single payer and its alternatives

OBJECTIVE

Excess administrative costs in the US health care system are routinely referenced as a justification for comprehensive reform. While there is agreement that these costs are too high, there is little understanding of what generates administrative costs and what policy options might mitigate them.

DATA SOURCES

Literature review and national utilization and expenditure data.

STUDY DESIGN

We developed a simulation model of physician billing and insurance-related (BIR) costs to estimate how certain policy reforms would generate savings. Our model is based on structural elements of the payment process in the United States and considers each provider's number of health plan contracts, the number of features in each health plan, the clinical and nonclinical processes required to submit a bill for payment, and the compliance costs associated with medical billing.

DATA EXTRACTION

For several types of visits, we estimated fixed and variable costs of the billing process. We used the model to estimate the BIR costs at a national level under a variety of policy scenarios, including variations of a single payer "Medicare-for-All" model that extends fee-for-service Medicare to the entire population and policy efforts to reduce administrative costs in a multi-payer model. We conducted sensitivity analyses of a wide variety of model parameters.

PRINCIPAL FINDINGS

Our model estimates that national BIR costs are reduced between 33% and 53% in Medicare-for-All style single-payer models and between 27% and 63% in various multi-payer models. Under a wide range of assumptions and sensitivity analyses, standardizing contracts generates larger savings with less variance than savings from single-payer strategies.

CONCLUSION

Although moving toward a single-payer system will reduce BIR costs, certain reforms to payer-provider contracts could generate at least as many administrative cost savings without radically reforming the entire health system. BIR costs can be meaningfully reduced without abandoning a multi-payer system.

Assessment of Electronic Health Record Use Between US and Non-US Health Systems

Importance

Understanding how the electronic health record (EHR) system changes clinician work, productivity, and well-being is critical. Little is known regarding global variation in patterns of use.

Objective

To provide insights into which EHR activities clinicians spend their time doing, the EHR tools they use, the system messages they receive, and the amount of time they spend using the EHR after hours.

Design, Setting, and Participants

This cross-sectional study analyzed the deidentified metadata of ambulatory care health systems in the US, Canada, Northern Europe, Western Europe, the Middle East, and Oceania from January 1, 2019, to August 31, 2019. All of these organizations used the EHR software from Epic Systems and represented most of Epic Systems's ambulatory customer base. The sample included all clinicians with scheduled patient appointments, such as physicians and advanced practice practitioners.

Exposures

Clinician EHR use was tracked by deidentified and aggregated metadata across a variety of clinical activities.

Main Outcomes and Measures

Descriptive statistics for clinician EHR use included time spent on clinical activities, note documentation (as measured by the percentage of characters in the note generated by automated or manual data entry source), messages received, and time spent after hours.

Results

A total of 371 health systems were included in the sample, of which 348 (93.8%) were located in the US and 23 (6.2%) were located in other countries. US clinicians spent more time per day actively using the EHR compared with non-US clinicians (mean time, 90.2 minutes vs 59.1 minutes; P < .001). In addition, US clinicians vs non-US clinicians spent significantly more time performing 4 clinical activities: notes (40.7 minutes vs 30.7 minutes; P < .001), orders (19.5 minutes vs 8.75 minutes; P < .001), in-basket messages (12.5 minutes vs 4.80 minutes; P < .001), and clinical review (17.6 minutes vs 14.8 minutes; P = .01). Clinicians in the US composed more automated note text than their non-US counterparts (77.5% vs 60.8% of note text; P < .001) and received statistically significantly more messages per day (33.8 vs 12.8; P < .001). Furthermore, US clinicians used the EHR for a longer time after hours, logging in 26.5 minutes per day vs 19.5 minutes per day for non-US clinicians (P = .01). The median US clinician spent as much time actively using the EHR per day (90.1 minutes) as a non-US clinician in the 99th percentile of active EHR use time per day (90.7 minutes) in the sample. These results persisted after controlling for organizational characteristics, including structure, type, size, and daily patient volume.

Conclusions and Relevance

This study found that US clinicians compared with their non-US counterparts spent substantially more time actively using the EHR for a wide range of clinical activities or tasks. This finding suggests that US clinicians have a greater EHR burden that may be associated with nontechnical factors, which policy makers and health system leaders should consider when addressing clinician wellness.

Benchmarking the Cost-Effectiveness of Interventions Delaying Diabetes: A Simulation Study Based on NAVIGATOR Data

OBJECTIVE

To estimate using the UK Prospective Diabetes Study Outcomes Model Version 2 (UKPDS-OM2) the impact of delaying type 2 diabetes onset on costs and quality-adjusted life expectancy using trial participants who developed diabetes in the NAVIGATOR (Nateglinide And Valsartan in Impaired Glucose Tolerance Outcomes Research) study.

RESEARCH DESIGN AND METHODS

We simulated the impact of delaying diabetes onset by 1-9 years, utilizing data from the 3,058 of 9,306 NAVIGATOR trial participants who developed type 2 diabetes. Costs and utility weights associated with diabetes and diabetes-related complications were obtained for the U.S. and U.K. settings, with costs expressed in 2017 values. We estimated discounted lifetime costs and quality-adjusted life years (QALYs) with 95% CIs.

RESULTS

Gains in QALYs increased from 0.02 (U.S. setting, 95% CI 0.01, 0.03) to 0.15 (U.S. setting, 95% CI 0.10, 0.21) as the imposed time to diabetes onset was increased from 1 to 9 years, respectively. Savings in complication costs increased from $1,388 (95% CI $1,092, $1,669) for a 1-year delay to $8,437 (95% CI $6,611, $10,197) for a delay of 9 years. Interventions costing up to $567-$2,680 and £201-£947 per year would be cost-effective at $100,000 per QALY and £20,000 per QALY thresholds in the U.S. and U.K., respectively, as the modeled delay in diabetes onset was increased from 1 to 9 years.

CONCLUSIONS

Simulating a hypothetical diabetes-delaying intervention provides guidance concerning the maximum cost and minimum delay in diabetes onset needed to be cost-effective. These results can inform the ongoing debate about diabetes prevention strategies and the design of future intervention studies.

Challenges In Ensuring The Quality Of Generic Medicines

A refill of a generic attention deficit hyperactivity disorder prescription leads to new side effects and raises questions about the quality of generic drugs.

Does the Implantable Cardioverter-Defibrillator Benefit Vary With the Estimated Proportional Risk of Sudden Death in Heart Failure Patients?

BACKGROUND

Prediction of which heart failure patients are most likely to die of sudden death vs. non-sudden death is an important factor in determining who will benefit the most from an ICD.

OBJECTIVE

We developed the Seattle Proportional Risk Model (SPRM) to estimate the proportion of total mortality due to sudden death. We prospectively validated the model in HF-ACTION and tested whether the ICD benefit varied with the SPRM.

METHODS

Among 2331 patients enrolled, 1947 patients were retained for analysis over a median follow-up of 2.5 years. The SPRM was calculated using age, gender, diabetes, BMI, SBP, EF, NYHA, sodium, creatinine, and digoxin use.

RESULTS

ICD use (ICD or CRT-D) was present prior to death in 1204 patients (62%). SPRM was predictive of sudden death vs. non-sudden death in those without an ICD (P=0.002). The hazard ratio representing ICD versus no ICD was 0.63 for all-cause mortality (P=0.0002). The ICD benefit varied with the SPRM for all-cause mortality (P=0.001), with a greater benefit in those with a higher conditional probability of sudden death.

CONCLUSIONS

In an ambulatory NYHA II-IV HF population and EF ≤35%, the SPRM was predictive of the proportional risk of sudden vs. non-sudden death. ICDs were associated with a decreased risk of all-cause mortality by 37% and the ICD benefit varied with the SPRM. The SPRM may have utility in risk stratifying patients for a primary prevention ICD.

Workforce Cost Model for Expanding Congenital and Rheumatic Heart Disease Services in Kenya

BACKGROUND

Cardiovascular disease is the number one global killer, with over three quarters of these deaths arising from the populations of low- and middle-income countries (LMICs). Addressing the burden of cardiovascular disease in LMICs must include medical and surgical services for these patients. In this article, we model the needs and costs to scale up the cardiac provider workforce in Kenya, which can be adapted to other LMICs based on country-specific workforce hours and workforce salaries.

METHODS

Using published epidemiological reports from sub-Saharan Africa, we structured the model based on the expected disease burden of congenital and rheumatic disease in a simulated 1,000-person population. Services modeled include clinic visits, echocardiograms, diagnostic cardiac catheterizations, interventional catheterizations, and heart surgery. Costs were modeled based on Kenyan public sector salaries. After scaling the model, we created a sensitivity analysis of change in service duration and salaries.

RESULTS

Based on a 1,000-person Kenyan population, we estimate that 2.5 heart surgeries will be needed every year, with a corresponding annual workforce cost of US$526. Including accompanying services of clinic visits, echocardiograms, and both diagnostic and interventional cardiac catheterizations, the total annual workforce cost is US$899. Based on estimated productive hours for public sector workforce, 196 full-time equivalent cardiac surgeons will be needed for the entire population of Kenya (2017 figure).

CONCLUSIONS

We present a model for appropriate cardiovascular service staffing based on disease burden and workforce costs. This model can be scaled up as needed to plan for local capacity building.

The relationship between pharmacy benefit managers (PBMs) and the cost of therapies in the US pharmaceutical market: A policy primer for clinicians

Pharmaceutical benefit managers (PBMs) are playing an increasingly important role in establishing access to pharmaceutical products for patients. PBMs set retail prices for pharmaceutical products, negotiate "rebates" from manufacturers based on total sales volume of products, and achieve several types of postsale price concessions and payments from pharmacies. All of these activities describe a complex flow of funds that has not been transparent to clinicians or to patients. In this article, we describe these terms and processes to better understand how pharmaceutical products are financed in the United States. In 2016, US pharmaceutical manufacturers reported gross pharmaceutical sales of $462 billion and net pharmaceutical sales of $318 billion. The difference between gross and net sales is largely due to the different "payments" from manufacturers to PBMs and other intermediaries in the marketplace. We examine the flow of funds through the US pharmaceutical distribution system over time using data from the annual reports of 13 major pharmaceutical manufacturers for the period 2011-2016. Overall, we find that net revenues for our sample of firms grew by an average of 2.7% annually between 2011 and 2016, whereas rebates and other payments increased by 15% annually over the same period. Our examination of the pharmaceutical market reveals the enormous scale of payments from pharmaceutical manufacturers to intermediaries. We observed that these payments have been growing disproportionally to manufacturer net income over the past 5 years. We also found a lack of transparency regarding the flow of funds through intermediaries. This entire marketplace is now the subject of intense public debate.

Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System

Importance

Administrative costs in the US health care system are an important component of total health care spending, and a substantial proportion of these costs are attributable to billing and insurance-related activities.

Objective

To examine and estimate the administrative costs associated with physician billing activities in a large academic health care system with a certified electronic health record system.

Design, Setting, and Participants

This study used time-driven activity-based costing. Interviews were conducted with 27 health system administrators and 34 physicians in 2016 and 2017 to construct a process map charting the path of an insurance claim through the revenue cycle management process. These data were used to calculate the cost for each major billing and insurance-related activity and were aggregated to estimate the health system's total cost of processing an insurance claim.

Exposures

Estimated time required to perform billing and insurance-related activities, based on interviews with management personnel and physicians.

Main Outcomes and Measures

Estimated billing and insurance-related costs for 5 types of patient encounters: primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, and inpatient surgical procedures.

Results

Estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for a discharged emergency department visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgical procedure, and 100 minutes and $215.10 for an inpatient surgical procedure. Of these totals, time and costs for activities carried out by physicians were estimated at a median of 3 minutes or $6.36 for a primary care visit, 3 minutes or $10.97 for an emergency department visit, 5 minutes or $13.29 for a general inpatient stay, 15 minutes or $51.20 for an ambulatory surgical procedure, and 15 minutes or $51.20 for an inpatient surgical procedure. Of professional revenue, professional billing costs were estimated to represent 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures.

Conclusions and Relevance

In a time-driven activity-based costing study in a large academic health care system with a certified electronic health record system, the estimated costs of billing and insurance-related activities ranged from $20 for a primary care visit to $215 for an inpatient surgical procedure. Knowledge of how specific billing and insurance-related activities contribute to administrative costs may help inform policy solutions to reduce these expenses.

Modeling the Potential Economic Impact of the Medicare Comprehensive Care for Joint Replacement Episode-Based Payment Model

BACKGROUND

The Medicare program has initiated Comprehensive Care for Joint Replacement (CJR), a bundled payment mandate for lower extremity joint replacements. We sought to determine the degree to which hospitals will invest in care redesign in response to CJR, and to project its economic impacts.

METHODS

We defined 4 potential hospital management strategies to address CJR: no action, light care management, heavy care management, and heavy care management with contracting. For each of 798 hospitals included in CJR, we used hospital-specific volume, cost, and quality data to determine the hospital's economically dominant strategy. We aggregated data to assess the percentage of hospitals pursuing each strategy; savings to the health care system; and costs and percentages of CJR-derived revenues gained or lost for Medicare, hospitals, and postacute care facilities.

RESULTS

In the model, 83.1% of hospitals (range 55.0%-100.0%) were expected to take no action in response to CJR, and 16.1% of hospitals (range 0.0%-45.0%) were expected to pursue heavy care management with contracting. Overall, CJR is projected to reduce health care expenditures by 0.5% (range 0.0%-4.1%) or $14 million (range $0-$119 million). Medicare is expected to save 2.2% (range 2.2%-2.2%), hospitals are projected to lose 3.7% (range 4.7% loss to 3.8% gain), and postacute care facilities are expected to lose 6.5% (range 0.0%-12.8%). Hospital administrative costs are projected to increase by $63 million (range $0-$148 million).

CONCLUSION

CJR is projected to have a negligible impact on total health care expenditures for lower extremity joint replacements. Further research will be required to assess the actual care management strategies adopted by CJR hospitals.

Trends in hospital-physician integration in medical oncology

OBJECTIVES

Hospitals have rapidly acquired medical oncology practices in recent years. Experts disagree as to whether these trends are related to oncology-specific market factors or reflect a general trend of hospital-physician integration. The objective of this study was to compare the prevalence, geographic variation, and trends in physicians billing from hospital outpatient departments in medical oncology with other specialties.

STUDY DESIGN

Retrospective analysis of Medicare claims data for 2012 and 2013.

METHODS

We calculated the proportion of physicians and practitioners in the 15 highest-volume specialties who billed the majority of evaluation and management visits from hospital outpatient departments in each year, nationally and by state.

RESULTS

We included 338,998 and 352,321 providers in 2012 and 2013, respectively, of whom 9715 and 9969 were medical oncologists. Among the 15 specialties examined, medical oncology had the highest proportion of hospital outpatient department billing in 2012 and 2013 (35.0% and 38.3%, respectively). Medical oncology also experienced the greatest absolute change (3.3%) between the years, followed by thoracic surgery (2.4%) and cardiology (2.0%). There was marked state-level variation, with the proportion of medical oncologists based in hospital outpatient departments ranging from 0% in Nevada to 100% in Idaho.

CONCLUSIONS

Hospital-physician integration has been more pronounced in medical oncology than in other high-volume specialties and is increasing at a faster rate. Policy makers should take these findings into consideration, particularly with respect to recent proposals that may continue to fuel these trends.

Barriers to Achieving Economies of Scale in Analysis of EHR Data. A Cautionary Tale

Signed in 2009, the Health Information Technology for Economic and Clinical Health Act infused $28 billion of federal funds to accelerate adoption of electronic health records (EHRs). Yet, EHRs have produced mixed results and have even raised concern that the current technology ecosystem stifles innovation. We describe the development process and report initial outcomes of a chronic kidney disease analytics application that identifies high-risk patients for nephrology referral. The cost to validate and integrate the analytics application into clinical workflow was $217,138. Despite the success of the program, redundant development and validation efforts will require $38.8 million to scale the application across all multihospital systems in the nation. We address the shortcomings of current technology investments and distill insights from the technology industry. To yield a return on technology investments, we propose policy changes that address the underlying issues now being imposed on the system by an ineffective technology business model.

Battling the chargemaster: a simple remedy to balance billing for unavoidable out-of-network care

OBJECTIVES

To develop an effective legal mechanism to combat chargemaster abuses and to facilitate price transparency.

STUDY DESIGN

Applying legal doctrines to out-of-network (OON) billing disputes.

METHODS

We reviewed rudimentary contract law and examined the law's handling of contracts where prices have not been specified in advance. These cases are the controlling authority to guide courts, handling of surprise and OON billing problems. We then compared legal remedies that correct OON billing abuses to prevailing legislative and regulatory approaches.

RESULTS

Our analysis suggests that providers have no legal authority to collect chargemaster rates from surprise and OON billing abuses. A proper application of contract law can end such abuses and would facilitate superior pricing incentives to other strategies designed to end balance billing disputes.

CONCLUSIONS

Chargemaster rates on uninsured and OON patients impose significant financial burdens on the vulnerable, distort medical prices, and inflate healthcare costs. Applying rudimentary contract law to these practices offers a solution that is simpler and more effective than other administrative and legislative schemes recently adopted in several states. It will prevent providers from hiding behind a convoluted hospital pricing system, encourage the development of attractive narrow-network insurance products, and shield urgently sick individuals from the dread of medical predation. Patients and payers should know that they are under no obligation to pay surprise bills containing chargemaster rates, and state attorneys general can use the law to prevent providers from pursuing chargemaster-related collection efforts against patients.

The impact of specialty pharmaceuticals as drivers of health care costs

The pharmaceutical industry is shifting its focus from blockbuster small molecules to specialty pharmaceuticals. Specialty pharmaceuticals are novel drugs and biologic agents that require special handling and ongoing monitoring, are administered by injection or infusion, and are sold in the marketplace by a small number of distributors. They are frequently identified by having a cost to payers and patients of $600 or more per treatment. The total costs of the new agents are likely to have a substantial impact on overall health care costs and on patients during the next decade, unless steps are taken to align competing interests. We examine the economic and policy issues related to specialty pharmaceuticals, taking care to consider the impact on patients. We assess the role of cost-sharing provisions, legislation that is promoting realignment within the market, the role of biosimilars in price competition, and the potential for novel drug development paradigms to help bend the cost curve. The economic aspects of this analysis highlight the need for a far-reaching discussion of potential novel approaches to innovation pathways in our quest for both affordability and new technology.

Can Prospect Theory Explain Risk-Seeking Behavior by Terminally Ill Patients?

Patients with life-threatening conditions sometimes appear to make risky treatment decisions as their condition declines, contradicting the risk-averse behavior predicted by expected utility theory. Prospect theory accommodates such decisions by describing how individuals evaluate outcomes relative to a reference point and how they exhibit risk-seeking behavior over losses relative to that point. The authors show that a patient’s reference point for his or her health is a key factor in determining which treatment option the patient selects, and they examine under what circumstances the more risky option is selected. The authors argue that patients’ reference points may take time to adjust following a change in diagnosis, with implications for predicting under what circumstances a patient may select experimental or conventional therapies or select no treatment.

An Exploration of Relative Health Stock in Advanced Cancer Patients

Objective. The authors sought to empirically test whether relative health stock, a measure of patients’ sense of loss in their health due to illness, influences the treatment decisions of patients facing life-threatening conditions. Specifically, they estimated the effect of relative health stock on advanced cancer patients’ decisions to participate in phase I clinical trials. Method. A multicenter study was conducted to survey 328 advanced cancer patients who were offered the opportunity to participate in phase I trials. The authors asked patients to estimate the probabilities of therapeutic benefits and toxicity, their relative health stock, risk preference, and the importance of quality of life. Results. Controlling for health-related quality of life, an increase in relative health stock by 10 percentage points reduced the odds of choosing to participate in a phase I trial by 16% (odds ratio = 0.84, 95% confidence interval = 0.72, 0.97). Conclusion. Relative health stock affects advanced cancer patients’ treatment decisions.

Zoledronic acid versus pamidronate as palliative therapy in cancer patients: A Canadian time and motion analysis

Pamidronate was an important advance in the palliative treatment of patients with cancer. However, pamidronate must be infused over at least 2 hours in most patients. Zoledronic acid represents the next-generation bisphosphonate with a potential for improved efficacy in the palliative care setting. One important advantage of zoledronic acid is that it can be administered over a 15-minute infusion. To measure the overall efficiency of zoledronic acid as compared with pamidronate in the outpatient setting, a USA microcosting model was adapted to Canadian inputs.

Time and motion data were collected from six patients being treated with zoledronic acid or pamidronate in three USA outpatient cancer clinics. Resource use and time impact on outpatient clinical staff were reanalyzed using Canadian cost estimates. This included the evaluation of fixed, variable, and labour costs obtained from Canadian sources. The manufacturer provided drug costs. The base case analysis assumed a 5300-ft2 out-patient chemotherapy clinic with eight infusion chairs designated for bisphosphonate administration in the province of Ontario.

Mean treatment times in the original USA data collected were 2 hours, 52 minutes for pamidro-nate, and 1 hour, 6 minutes for zoledronic acid (a difference of 1 hour, 46 minutes). In the Canadian version of the microcosting model, the overall treatment cost was Can$673 for pamidronate and Can$682 for zoledronic acid (2001 Canadian dollars). Findings suggest that the shorter zoledronic acid infusion time would allow an additional 27 bisphosphonate patients to be treated per day. Alternatively, approximately one additional hour of chair time could be made available with each zoledonic acid infusion. Sensitivity analyses revealed that (a) the base case results were consistent when geographic region was varied, and (b) the shorter the infusion time for zoledronic acid relative to pamidronate, the lesser the cost difference and more patients could be treated daily.

In conclusion, zoledronic acid may enhance the overall efficiency of outpatient chemotherapy clinics by reducing patient waiting time for bisphosphonate administration. These benefits would be obtained at an incremental cost of Can$9 per infusion.

Costs and Outcomes Among Hemodialysis-Dependent Patients With Methicillin-Resistant or Methicillin-SusceptibleStaphylococcus aureusBacteremia

Objective:

Comorbid conditions have complicated previous analyses of the consequences of methicillin resistance for costs and outcomes ofStaphylococcus aureusbacteremia. We compared costs and outcomes of methicillin resistance in patients withS. aureusbacteremia and a single chronic condition.

Design, Setting, and Patients:

We conducted a prospective cohort study of hemodialysis-dependent patients with end-stage renal disease andS. aureusbacteremia hospitalized between July 1996 and August 2001. We used propensity scores to reduce bias when comparing patients with methicillin-resistant (MRSA) and methicillin-susceptible (MSSA)S. aureusbacteremia. Outcome measures were resource use, direct medical costs, and clinical outcomes at 12 weeks after initial hospitalization.

Results:

Fifty-four patients (37.8%) had MRSA and 89 patients (62.2%) had MSSA. Compared with patients with MSSA bacteremia, patients with MRSA bacteremia were more likely to have acquired the infection while hospitalized for another condition (27.8% vs 12.4%;P= .02). To attribute all inpatient costs toS. aureusbacteremia, we limited the analysis to 105 patients admitted for suspectedS. aureusbacteremia from a community setting. Adjusted costs were higher for MRSA bacteremia for the initial hospitalization ($21,251 vs $13,978;P= .012) and after 12 weeks ($25,518 vs $17,354;P= .015). At 12 weeks, patients with MRSA bacteremia were more likely to die (adjusted odds ratio, 5.4; 95% confidence interval, 1.5 to 18.7) than were patients with MSSA bacteremia.

Conclusions:

Community-dwelling, hemodialysis-dependent patients hospitalized with MRSA bacteremia face a higher mortality risk, longer hospital stays, and higher inpatient costs than do patients with MSSA bacteremia.

Patient Preferences for Features of Health Care Delivery Systems: A Discrete Choice Experiment

OBJECTIVE

To estimate the relative importance of organizational-, procedural-, and interpersonal-level features of health care delivery systems from the patient perspective.

DATA SOURCES/STUDY SETTING

We designed four discrete choice experiments (DCEs) to measure patient preferences for 21 health system attributes. Participants were recruited through the online patient portal of a large health system. We analyzed the DCE data using random effects logit models.

DATA COLLECTION/EXTRACTION METHODS

DCEs were performed in which respondents were provided with descriptions of alternative scenarios and asked to indicate which scenario they prefer. Respondents were randomly assigned to one of the three possible health scenarios (current health, new lung cancer diagnosis, or diabetes) and asked to complete 15 choice tasks. Each choice task included an annual out-of-pocket cost attribute.

PRINCIPAL FINDINGS

A total of 3,900 respondents completed the survey. The out-of-pocket cost attribute was considered the most important across the four different DCEs. Following the cost attribute, trust and respect, multidisciplinary care, and shared decision making were judged as most important. The relative importance of out-of-pocket cost was consistently lower in the hypothetical context of a new lung cancer diagnosis compared with diabetes or the patient's current health.

CONCLUSIONS

This study demonstrates the complexity of patient decision making processes regarding features of health care delivery systems. Our findings suggest the importance of these features may change as a function of an individual's medical conditions.