Buffering the Pharma Brand: Restoring Reputation, Rebuilding Trust (A panel discussion)

Financial Times
FT Global Pharmaceuticals & Biotechnology Conference 2013, December 3, 2013

With recent surveys revealing pharmaceutical companies now ranking in trust perceptions below producers of spirits and tobacco, and physicians basing prescribing decisions as much on brands as on products, the need for pharmaceutical companies to understand and address the factors contributing to poor reputation has never been greater. How can pharma companies restore reputation and increase trust?

Marijn Dekkers, Chairman of the Board of Management, Bayer:

India for us was an unusual situation. Our patent was not questioned. I mean, other companies patents are questioned. In our case. the Indian government said, “No, no, your patent is valid.” – and this is a product for kidney and liver cancer – “Your patent is valid. We just think that you charge too much, and because you charge too much you have to do a mandatory license to a generic company in India that is now going to make this drug and sell it, and on that low price that they will sell it for, you will get six percent royalty.” And that was a government decision. So, we had a patent, but somebody else is allowed to make this product, and because there is not enough access to this product for poor Indians. I don’t know if you have ever been to India. There are a lot of poor Indians obviously, and the hospitals aren’t that close by (laughs) where they live. So we found that this was extremely politically motivated and essentially, I would say, theft of the Indian government of a capability of a company that has patented and therefore a patent right. So, now is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market – let’s be honest – we developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product. But, you know, the risk in these situations is always spillover. A generic Indian company is now going to sell this product, in South Africa, and then in New Zealand, you never know how this is going to spill over. That puts the whole industry, and the patent right of an industry, at risk.

https://www.ft-live.com/ft-events/ft-global-pharmaceuticals-biotechnology-conference-2013/sessions/buffering-the-pharma-brand-restoring-reputation-rebuilding-trust-panel

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‘We didn’t make this medicine for Indians… we made it for western patients who can afford it’: Pharmaceutical chief tries to stop India replicating its cancer treatment 

By Daily Mail Reporter
Mail Online, January 24, 2014

The CEO of phamaceutical giant Bayer has sparked fury after announcing one of the firm’s drugs was for ‘western patients who can afford it’.

Marijn Dekkers made the inflammatory comments after the Indian company Natco Pharma Ltd. were granted a government licence to produce a copy of Bayer’s cancer drug Nexavar which they will sell for 97 per cent less than the original product.

Under Indian law the government grants compulsory licenses to domestic firms to produce copies of drugs if the original isn’t available locally at a reasonable price, regardless of whether they are under patent.

Mr Deekers, who has previously described India’s patent laws as ‘essentially theft’, said: ‘We did not develop this medicine for Indians. We developed it for western patients who can afford it.’

Nexavar, which is also known as Sorafenib, has been approved for the treatment of kidney cancer, advanced liver cancer (hepatocellular carcinoma), and thyroid cancers that are resistant to radioactive iodine treatment.

Currently a kidney cancer patient would pay $96,000 (£58,000) for a year’s course of the Bayer-made drug. However the cost of the Natco version would be around $2,800 (£1,700).

http://www.dailymail.co.uk/news/article-2545360/Pharmaceutical-chief-tries-stop-India-replicating-cancer-treatment.html

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Does Pharma Only Develop Drugs For Those Who Can Pay?

By John LaMattina
Forbes, December 5, 2013

At the Financial Times Global Pharmaceutical & Biotech Conference this week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western patients that can afford it. That’s a pretty provocative comment. At a time when Pharma’s reputation is suffering, Dekkers’ comment does not help matters. Rather, it reinforces the notion that Big Pharma is only interested in profits and those in need are out of luck when it comes to life saving medicines.

Reader Comments:

Marijn Dekkers:

John,

You write that I could have been more circumspect with my remarks.

I regret that what was a quick response from me within the framework of a panel discussion at the recent FT Pharma conference has come across in a different way as it was meant by myself. It could not be more opposite to what I want and we do at Bayer.

Let me confirm that Bayer as a company wants to improve people’s health and quality of life with innovative therapies and we would like all people to share the fruits of medical progress, regardless of their origins or income.

However, I was particularly frustrated by the Indian government’s decision, to not protect a patent on Nexavar that was given to us by the Indian patent authority. This was a unique event against Bayer’s intellectual property. But as you know best, the protection of our IP is so vital to our ability to fund and advance new innovations to help address some of the worst diseases in the world such as cancer.

I am very passionate about our ability to innovate and in the open and candid discussion at the conference, as I was expressing my fundamental frustrations, I should have made this more clear.

However, I remain firm that there is no excuse for any country to weaken the intellectual property rights. Without new medicines people in developing countries – as well as those in the more prosperous countries – ultimately will all suffer. Bayer, like any other private company, needs a sufficient return on investment to allow for future research and therefore innovation. Generic manufacturers have a critical role to play – but generic companies do not invest in researching and developing and therefore don’t ever bring any new innovative cures and treatments. Not for the developing nor the developed markets!

Marijn Dekkers

Chairman of the Board of Management of Bayer AG

And…

Dr David Hill, Chief Executive

World Innovation Foundation

It should be quite clear now that big pharma is ‘only’ interested in vast profits and basically has no empathy with humankind other than it being an immense cash-cow for them. Their actions and out-of-court settlements speak volumes and where history cannot lie.

For the major drug companies throughout the world are continually being found out for criminal and fraudulent activity in order to sell their pharmaceuticals. Not me saying this but the world’s media coverage and the out-of-court agreements that they have settled and where in the past 5 years alone fines in excess of $17 billion have been agreed between authorities and the big drug companies. These include but where they are not a fully exhaustive list of examples,

$2.2 billion and $2.5 billion by J&J (2013),

£3 billion by GSK (2012),

$762 million by Amgen (2012),

$1.5 billion by Abbott (2012),

$95 million by Boehringer Ingelheim (2012),

$109 million by Sanofi-Aventis (2012),

$950 million by Merck (2011),

$520 million by AstraZeneca (2010),

$750 million by GSK (2010),

$423 million by Novartis (2010),

$460 million by Allergan (2010),

$2.3 billion by Pfizer (2009),

$1.42 billion by Eli Lilly (2009)

and $425 million by Cephalon (2008) – Source for all from the US ‘Department of Justice’ and reinforced by Wikipedia listing. Note also that all of these actions had criminal activity as part of their respective settlements. But because these huge global concerns make so much money out of selling drugs, these fines have apparently now become an in-built expense in the corporate cost of their drugs. Indeed in GSK’s 2012 case in the USA, nearly $30 billion was sold and where it was estimate that even after the $3 billion fine was deducted, a profit of $11 billion was made.

Therefore it certainly appears that the accepted corporate environment that these giant corporations have structured internally for themselves has created these illegal activities and where it is of their own making and not predominantly the countries that they operate within – but I have to say though, that it does help if there is government and internal corruption to boot. But possibly the biggest sadness to date has to come out yet in India where over 20,000 of the poorest children in the world (between the ages of 10 and 14) have been used as human guinea pigs for Big Pharma – http://www.bbc.co.uk/news/magazine-20136654 . Indeed over the past seven years, nearly 2,000 trials have taken place in the country and the number of deaths increased from 288 in 2008 to 637 in 2009 to 668 in 2010, before falling to 438 deaths in 2011, the latest figures available. Therefore the drive for corporate profits has a very dark side to it and everyone should be fully aware of this fact. Apparently this is not a problem for big pharma and where vast profits and greed rise above human life itself. Governments just have to get to grips with these huge corporations and fine then not just a small percentage of their profits but all the estimated total profit. That is the only way that they will ever alter their corporate mind-set and strategic blue-print.

http://www.forbes.com/sites/johnlamattina/2013/12/05/does-pharma-only-develop-drugs-for-those-who-can-pay/

About The World Innovation Foundation:: http://www.thewif.org.uk/wif.php?xy=1440&pl=macintel

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NICE (National Institute for Health and Care Excellence)

Results for Sorafenib (Nexavar):

NICE does not recommend sorafenib for people with advanced hepatocellular carcinoma. Sorafenib does not provide enough benefit to patients to justify its high cost, even when special considerations were applied, so NICE did not recommend it.

Bevacizumab, sorafenib and temsirolimus are not recommended as first drug treatments for people with advanced and/or metastatic renal cell carcinoma. Sorafenib and sunitinib are not recommended as second drug treatments for people with advanced and/or metastatic renal cell carcinoma.

http://www.nice.org.uk/Search.do?x=-987&y=-75&searchText=Sorafenib&newsearch=true

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MSF response to Bayer CEO statement that medicines developed only for western patients

By Dr Manica Balasegaram, Executive Director, Médecins Sans Frontières Access Campaign
Médecins Sans Frontières (Doctors Without Borders), January 23, 2014

The Bayer CEO going on record to say that they did not develop a cancer medicine for Indians but only for ‘western patients who can afford it’ sums up everything that is wrong with the multinational pharmaceutical industry. Bayer is effectively admitting that the drugs they develop are deliberately going to be rationed to the wealthiest patients.

This is a side-effect of the way drugs are developed today.  Pharmaceutical companies are singularly focused on profit and so aggressively push for patents and high drug prices. Diseases that don’t promise a profit are neglected, and patients who can’t afford to pay are cut out of the picture. Drug companies claim to care about global health needs, but their track record says otherwise.

It doesn’t have to be this way. Medical innovation can be incentivised differently, and research paid for in ways that deliver drugs but without high prices that exclude millions of people from access.  Instead of being part of the problem, drug companies should work to be part of the solution and change the dire state of medical research and development today.

http://www.msfaccess.org/content/msf-response-bayer-ceo-statement-medicines-developed-only-western-patients

Comment:

By Don McCanne, M.D.

Bayer Chairman Marijn Dekkers wants to be honest with us when he tells us that Nexavar (sorafenib), an expensive drug for certain liver and kidney cancers, was developed for Western patients who can afford it, but not for poor people such as much of the population of India. Should markets be the controlling factor?

Today’s New York Times reviewed the 2014 Rolls-Royce Wraith, a spectacular two-door sedan available for $372,324, with the $12,925 option of a headliner with 1,340 LEDs that provides the ambiance of a night sky filled with stars. Transportation is an important public policy issue, but, I dare say, the sale of a Rolls-Royce should be left to market dynamics. http://www.nytimes.com/2014/01/26/automobiles/autoreviews/the-ecstasy-of-excess-the-agony-of-the-sticker.html

What about health care? Should it be left to markets? Let’s look at the corporate market mentality in the case of Bayer’s Nexavar. It was not developed for all patients with hepatocellular or renal cell carcinoma; it was developed only for those who could afford it. It was developed for private markets, not for public health. It was intended that it be priced near the maximum that the market would bear, rather than being priced based on costs plus fair profits. The fear and grief of cancer patients are used to leverage higher market prices for oncology drugs. Thus the price of Nexavar was set at $96,000 – a price at which Bayer decided that there was a large enough market of wealthy individuals with these cancers who would willingly pay that amount.

Should the government intervene when drug pricing prevents access for most patients? India thinks so. Bayer could, but won’t, produce the drugs for a much fairer price (since they didn’t design it for the poor people of India). So India is licensing generics, while honoring Bayer’s patent by giving them a six percent royalty for nothing other than owning the patent.

In the United States, we have decided to leave much of the pricing of drugs to the market, except for government programs such as the VA and Medicaid. Although insurers and pharmacy benefit managers do some negotiating, they are still part of the marketplace, and they are very weak negotiators at that. Thus we pay much higher prices for prescription drugs than do all other nations.

There is another point to be made when using the example of Nexavar. England’s NICE evaluates the benefits and costs of various therapeutic measures, and they have decided that this drug is not recommended for either advanced hepatocellular carcinoma or advanced renal cell carcinoma. So why would anyone want to be treated with this medication? One report submitted to NICE showed that Nexavar “on average improves overall survival by 83 days” for hepatocellular carcinoma with Grade A liver function, but “available evidence does not indicate that it delays symptom progression or improves quality of life.” Prolonging life at well over $1000 per day might be worth it to some even if symptoms progress anyway and quality of life does not improve. http://www.journalslibrary.nihr.ac.uk/__data/assets/pdf_file/0009/65295/FullReport-hta14Suppl1-03.pdf

The British and the Indians seem to understand the issues better. Maybe someday we will too, but not until we get a better grasp on the proper role of markets and the government. Markets will get you a Rolls-Royce or 83 days of poor quality life, if you can afford it. The government would get all of us the health care that we really need, if only we would change our politics to make it happen.

But that Rolls… with its 624 horsepower 6.6-liter twin-turbo V12, you can go from a standstill to 60 miles per hour in only 4.4 seconds… an American dream! (Forget about the American nightmare of our health care system.)

Hospital Chain Said to Scheme to Inflate Bills

By Julie Creswell and Reed Abelson

The New York Times, January 23, 2014

Health Management Associates, a for-profit hospital chain based in Naples, Fla., kept tabs on an internal strategy that regulators and others say was intended to increase admissions, regardless of whether a patient needed hospital care, and pressure the doctors who worked at the hospital.

This month, the Justice Department said it had joined eight separate whistle-blower lawsuits against H.M.A. in six states. The lawsuits describe a wide-ranging strategy that is said to have relied on a mix of sophisticated software systems, financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid.

For H.M.A., the timing could not be worse. Shareholders recently approved the planned $7.6 billion acquisition of the company by Community Health Systems, which will create the nation’s second-largest for-profit hospital chain by revenue, with more than 200 facilities.

Federal regulators have multiple investigations into questionable hospital admissions, procedures and billings at many hospital systems, including the country’s largest, HCA. Community Health Systems, the Franklin, Tenn., company from which H.M.A. hired its former chief executive in 2008, faces similar accusations that it inappropriately increased admissions. 

The practice of medicine is moving more rapidly than ever from decision-making by individual doctors toward control by corporate interests. The transformation is being fueled by the emergence of large hospital systems that include groups of physicians employed by hospitals and others, and new technologies that closely monitor care.

The last year has been particularly tumultuous for H.M.A., starting with the announced departure of Mr. Newsome (chief executive), a battle for control of the board with Glenview Capital Management, the hedge fund founded by Lawrence M. Robbins, and the announcement of the acquisition by Community Health Systems.

When H.M.A. announced the Justice Department’s involvement in the lawsuits, investors and analysts shrugged, and the stocks for both companies involved in the merger barely budged.

Sheryl R. Skolnick, who follows health care for CRT Capital, recently wrote in a note to investors, “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist for companies whose stocks typically soar when executives push the profit envelope. Only if the penalty is at least $500 million, Ms. Skolnick said, are corporations likely to find the cost a deterrent.

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A Giant Hospital Chain Is Blazing a Profit Trail

By Julie Creswell and Reed Abelson

The New York Times, August 14, 2012

During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived.

In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.

The big winners have been three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.

Among the secrets to HCA’s success: It figured out how to get more revenue from private insurance companies, patients and Medicare by billing much more aggressively for its services than ever before.

Many doctors interviewed at various HCA facilities said they had felt increased pressure to focus on profits under the private equity ownership. “Their profits are going through the roof, but, unfortunately, it’s occurring at the expense of patients,” said Dr. Abraham Awwad, a kidney specialist in St. Petersburg, Fla.

Some of HCA’s tactics are now under scrutiny by the Justice Department (2012).

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PRLOG

October 7, 2013

An investigation on behalf of investors in shares of HCA Holdings Inc (NYSE:HCA) was announced concerning whether certain HCA Holdings officers and directors possibly breached their fiduciary duties in connection with certain statements.

http://www.prlog.org/12222266-hca-holdings-inc-nysehca-long-term-stockholder-investigation-over-potential-wrongdoing.html

Comment:

By Don McCanne, M.D.

What is the primary purpose of a hospital? Isn’t it to meet the health care needs of patients that require more care than can be readily provided outside of the hospital? Not according to the expanding for-profit hospital chains. It is to make as much money as possible for the investors, even if that means using patients as economic tools to enhance revenues.

This is not a new problem. In 2003, HCA paid the largest health care fraud settlement in U.S. history – $1.7 billion. http://www.justice.gov/opa/pr/2003/June/03_civ_386.htm

This is why the PNHP model of single payer reform includes not only publicly-administered and publicly-financed health care for everyone, it also includes a conversion of the for-profit health care delivery system to nonprofit.

We need a health care system whose sole mission is to take care of patients, not investors.

Hospital Chain Said to Scheme to Inflate Bills

By Julie Creswell and Reed Abelson

The New York Times, January 23, 2014

Health Management Associates, a for-profit hospital chain based in Naples, Fla., kept tabs on an internal strategy that regulators and others say was intended to increase admissions, regardless of whether a patient needed hospital care, and pressure the doctors who worked at the hospital.

This month, the Justice Department said it had joined eight separate whistle-blower lawsuits against H.M.A. in six states. The lawsuits describe a wide-ranging strategy that is said to have relied on a mix of sophisticated software systems, financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid.

For H.M.A., the timing could not be worse. Shareholders recently approved the planned $7.6 billion acquisition of the company by Community Health Systems, which will create the nation’s second-largest for-profit hospital chain by revenue, with more than 200 facilities.

Federal regulators have multiple investigations into questionable hospital admissions, procedures and billings at many hospital systems, including the country’s largest, HCA. Community Health Systems, the Franklin, Tenn., company from which H.M.A. hired its former chief executive in 2008, faces similar accusations that it inappropriately increased admissions.

The practice of medicine is moving more rapidly than ever from decision-making by individual doctors toward control by corporate interests. The transformation is being fueled by the emergence of large hospital systems that include groups of physicians employed by hospitals and others, and new technologies that closely monitor care.

The last year has been particularly tumultuous for H.M.A., starting with the announced departure of Mr. Newsome (chief executive), a battle for control of the board with Glenview Capital Management, the hedge fund founded by Lawrence M. Robbins, and the announcement of the acquisition by Community Health Systems.

When H.M.A. announced the Justice Department’s involvement in the lawsuits, investors and analysts shrugged, and the stocks for both companies involved in the merger barely budged.

Sheryl R. Skolnick, who follows health care for CRT Capital, recently wrote in a note to investors, “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist for companies whose stocks typically soar when executives push the profit envelope. Only if the penalty is at least $500 million, Ms. Skolnick said, are corporations likely to find the cost a deterrent.

http://www.nytimes.com/2014/01/24/business/hospital-chain-said-to-scheme…

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A Giant Hospital Chain Is Blazing a Profit Trail

By Julie Creswell and Reed Abelson

The New York Times, August 14, 2012

During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived.

In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.

The big winners have been three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.

Among the secrets to HCA’s success: It figured out how to get more revenue from private insurance companies, patients and Medicare by billing much more aggressively for its services than ever before.

Many doctors interviewed at various HCA facilities said they had felt increased pressure to focus on profits under the private equity ownership. “Their profits are going through the roof, but, unfortunately, it’s occurring at the expense of patients,” said Dr. Abraham Awwad, a kidney specialist in St. Petersburg, Fla.

Some of HCA’s tactics are now under scrutiny by the Justice Department (2012).

http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-crea…

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PRLOG

October 7, 2013

An investigation on behalf of investors in shares of HCA Holdings Inc (NYSE:HCA) was announced concerning whether certain HCA Holdings officers and directors possibly breached their fiduciary duties in connection with certain statements.

http://www.prlog.org/12222266-hca-holdings-inc-nysehca-long-term-stockho…

What is the primary purpose of a hospital? Isn’t it to meet the health care needs of patients that require more care than can be readily provided outside of the hospital? Not according to the expanding for-profit hospital chains. It is to make as much money as possible for the investors, even if that means using patients as economic tools to enhance revenues.

This is not a new problem. In 2003, HCA paid the largest health care fraud settlement in U.S. history – $1.7 billion. http://www.justice.gov/opa/pr/2003/June/03_civ_386.htm

This is why the PNHP model of single payer reform includes not only publicly-administered and publicly-financed health care for everyone, it also includes a conversion of the for-profit health care delivery system to nonprofit.

We need a health care system whose sole mission is to take care of patients, not investors.

The Better Care, Lower Cost Act

Senator Ron Wyden

January 15, 2014

Medicare is not doing enough to take care of chronically ill patients, and the limitations of the fee-for-service system inhibit a needed focus on these patients and their needs. This is critically important because most Medicare enrollees suffer from multiple chronic conditions and account for almost all of its costs.

Our Solution:

The Wyden-Isakson-Paulsen-Welch Better Care, Lower Cost Act removes the barriers that prevent Medicare providers from building on existing successful delivery models, and provides a framework for encouraging innovative chronic care delivery across the country. Specifically, the bill:

Provides Critical Support for Providers

To support providers and plans wanting to actively engage and care for this population, this proposal: does not include any form of the attribution rule, encourages specialized team-based care with rewards for improving patient’s outcomes, uses telemedicine and knowledge networks to increase access in rural areas, and includes vital case management services proven to increase medical compliance.

Focuses on the Unique Needs of Medicare Enrollees

To help transition Medicare from a program that simply treats sickness to one that promotes wellness, this proposal identifies the patients most in need and provides them with better care before becoming the most acutely and persistently ill. To improve standards of care for Medicare enrollees, the bill provides for changes to medical school curricula in order to better respond to the evolving needs of the chronically ill.

Ends Geographic Disparities in Integrated Care

This proposal creates incentives for higher quality, lower cost Medicare coverage nationwide that is open to Medicare beneficiaries regardless of income or place of residence. With a “Better Care Plan” (BCP) designation, a state-licensed and certified provider may practice at the top of his/her license, removing barriers to care that currently exist in parts of the country with provider shortages.

Pays for a Medicare Program Taxpayers Want and Beneficiaries Need

In response to the need to move away from fee-for-service, this proposal makes BCP providers and plans fully responsible for the cost, care and outcomes of their enrolled patients, and directs CMS to determine spending based on the experience of similar patients that are not enrolled in a BCP.

http://www.wyden.senate.gov/chroniccare

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Wyden Plan May Be Vision For Future Medicare Reforms

By Mary Agnes Carey

Kaiser Health News, January 21, 2014

Sen. Ron Wyden, the Oregon Democrat widely expected to be the next Senate Finance Committee chairman, last week led a bipartisan group of lawmakers, health care experts and seniors’ advocates backing a plan to better coordinate care given to Medicare beneficiaries.

The proposal is part of the ongoing health policy conversation over shifting Medicare away from paying per service provided to paying for the quality of that care.

Health insurers and providers who want to specialize in chronic care would receive a set amount of money to care for patients and would be responsible for the cost, care and outcomes of their enrolled patients.

It’s unclear what happens next. Elements of the bill may be included in legislation to repeal and replace Medicare’s “sustainable growth rate,” the formula used to pay Medicare physicians.  Maybe the legislation will be attached to another bill or pass on its own. Even if it goes nowhere, it may well be the pathway to Congress finding consensus on Medicare changes in the future.

Reader response: Don McCanne

Before you come to any conclusions, read the actual bill. Google “S.1932 – Better Care, Lower Cost Act”

From the Act: “The qualified BCP (Better Care Program) shall be accountable for the quality, cost, and overall care of enrolled BCP eligible individuals and agree to be at financial risk for that enrolled population.”

Much of the rest of the legislation involves efforts to define the nature of the Better Care Program provider teams, the patient populations, their risks, and how to establish capitation rates that will reduce spending while increasing quality. Such efforts would be administratively intensive and not very effective.

Primary care already plays a very important role in providing chronic care. Our efforts would be better directed to reinforcing the primary care infrastructure. Fragmenting Medicare’s risk and shifting it to the providers might be therapeutic for the federal budget, but it places the providers in conflict with their patients over who will come out ahead – the exact opposite of what we want in our health care system.

http://capsules.kaiserhealthnews.org/index.php/2014/01/wyden-plan-may-be-vision-of-future-medicare-reforms/#more-25372

Comment:

By Don McCanne, M.D.

S.1932, the Better Care, Lower Cost Act, is important since the concept is being considered as an offset to the cancellation of the accrued deficits related to the sustainable growth rate (SGR), which is a flawed formula for adjusting Medicare payments. Congress has given itself a three month window to enact an SGR fix. This is apt to slip through as attention is directed to celebrating SGR relief while ignoring the actual SGR fix.

The bill can be accessed at congress.gov. It is somewhat complex, which is not a surprise since it empirically segregates chronic care patients and then sets up an administratively complex “Medicare Better Care Program” that “promotes accountability and better care management for chronically ill patient populations and coordinates items and services under parts A, B, and D, while encouraging investment in infrastructure and redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations.”

Although vague, the program seems to set up a variation of an accountable care organization, with bundling of services, while transferring financial risk to the providers so that they, in essence, also serve as the insurers. The wasteful administrative complexity and the perversity of the incentives alone should cause us to question this concept. As if caring for a patient with multiple chronic disorders wasn’t enough, we need yet additional government rules and bureaucratic oversight of an artificial chronic care construct that seems to be designed primarily to shift risk from the government to the providers?

We do need an improved Medicare that would serve all of us well as a single payer program, but this certainly isn’t it.