Why the Affordable Care Act fails, and why we really can’t do anything about it. (It’s not Obama’s fault)

The real reason is…. regulation, or lack thereof. The Affordable Care Act, in my opinion, is Obama’s attempt at trying to mitigate the rising cost of healthcare. I’m guessing he was hoping that with more people insured, the insurance companies may work more effectively with care providers like hospitals and doctors to cut down the costs. The reality though is the exact opposite is happening. Insurance companies are gaining more power, while providing less benefits. How can this be?

No matter what industry you look at, at the end of the day, it’s a business. While hospital organizations and big Pharma look to make a profit, they dump most of their money back into their projects and R&D. Insurance and third party payers however don’t really provide any other service than insurance. They only seek to expand their profits. Therefore, they are in the business to gain as much profit while spending as little as possible. Unlike other healthcare provider services, they don’t care about the best treatment for the patient, they care about the baseline.

What I mean by that is they are completely evidence based. Unlike doctors who are willing to risk a new experimental therapy because they believe the benefit outweighs the risk, the insurance company does not inherently like risk. For the insurance company, they run statistical models on therapies and medications to see what the effectiveness of said therapy will be across the wide range of patients. I often get frustrated patients asking me why their medication isn’t covered and to run it through the insurance thinking that the roadblock to their therapy is me. When I tell them the truth sometimes it’s almost like an epiphany to them. So what is the difference is between pharmacies and insurance companies? The difference is doctors, pharmacists, nurses, anyone that actually sees you face to face to help you with your health and well being will treat you as an individual. The insurance company does not. In essence, what I mean is that to the insurance company, you are not a person, you are a number. Sure we can get you that therapy we’ve been wanting to give you all along, but that takes stacks of extra paperwork, many phone calls, as well as time waiting for some supposed “clinician” to assess the situation and make a decision. What that really means is they have to check to see if you’ve followed their step therapy procedure and have done all previous therapies so that there is no choice but for them to cover this therapy. By the time we have finished this process, the patient has had to wait weeks to months without their treatment or medication.

So how did we get here? The point where, before explaining the situation patients automatically thought everything was covered and that we, as healthcare professionals, are the bad guys, when really the situation is reversed? Well in my opinion it’s two reasons. The first is people don’t read the fine print anymore, and the second is that the insurance companies have effective marketing, which is so effective because of the first reason. I’ve noticed the vast majority of people do not read the fine print on their insurance plans. This is most evident during the time of Medicare open enrollment. Part of the reason that Walgreens offers Medicare D price comparisons is that we know people need someone to explain the plans to them. I can tell you personally that over 80% of all the patients I have counseled on Medicare D prescription plans had absolutely no idea about the beginning deductible or the coverage gap. The biggest reasons for that are because they either trusted the Medicare representative over the phone that they had nothing to worry about, or had someone enroll them in the plan without spending time looking at the details, or just didn’t read the plan specifics themselves. The other problem is the patients see our faces on a daily basis and not that of the insurance, so naturally they will assume we are at fault for their insurance problems since we are the only face they see. Insurance companies are back end if you will while we are front end. We, the healthcare providers know there is a problem, yet we can do very little without the help of the patients. The truth is that we healthcare professionals care about YOU, the patient. The insurance companies only care about how little they need to spend on you. They claim they have the patient’s best interests at heart, but how is that true when they don’t consider you an individual, and only want you to get the “standard” treatment?

Is there a solution to this crisis? Possibly, but the path is long and difficult, as there will no doubt be lobbying upon lobbying by the insurance companies. I’m not a proponent for governmental regulation, as I believe personally the government is about as effective as using gas to put out a fire, but what can potentially make a difference is to evolve the healthcare system in a manner that adapts to the third party payer system. What I mean specifically is to increase the number of studies and trials on new medication in order to generate that evidence based medicine. With this method, we can challenge their decision making process by providing clinical documentation that the newer or riskier therapies can generate a more significant result. To take it one step further, with the advancements in gene therapy as well as biotech companies, we may potentially develop the ability to sample patients genetics and test their cells in-vitro first to see if the therapy will yield a positive result. In this way we can both individualize care, as well as provide to the third party payers irrefutable evidence that this patient should indeed receive the newer therapy.

Also, once we’ve fixed the issue with third-party payers, we can then reduce the charges to the patient as well as the third-party payers. For years medical organizations have charged seemingly high prices to the insurance, and the insurance re-negotiating to a smaller sum, due largely to the fact that insurance companies were refusing to reimburse for treatment. If we can offer more data to show that this treatment is the best suited for the patient, the insurance company will cover it, the hospital can reduce the costs since the insurance is willing to cover the treatment, and the patients can get the most effective treatment while having reduced expenses.

Why the Affordable Care Act fails, and why we really can’t do anything about it. (It’s not Obama’s fault)

Opinion requested: Should regulatory bodies be strengthened as individual agencies?

My answer? No. I believe the most effective way to regulate is to create a single agency designed to help create laws and regulate all healthcare organizations, from pharmacy, to hospital, to long term care facilities. Creating one regulatory body would not only allow for more efficient adoption of new policies, it would also be much easier to later unify the various sectors together in the forthcoming technology age. My reasoning is this: too many regulating bodies creates too much confusion. Just take a look at our current healthcare regulation. If you look at just pharmacy, each pharmaceutical business is first regulated by the federal government, ie. FDA and DEA, before then subsequently being regulated by the individual state boards of pharmacy. When it comes down to the states, state laws on pharmacy cannot be more lenient than a federal law, it CAN ONLY be more specific than federal law. So then you have to ask yourself, why doesn’t the federal law just become more clear and efficient?

Now some may argue that because each state is run differently and operates under different circumstances (ie. drivers for that state’s revenue), each state should thus be it’s own regulating body. Well yes I would agree for general business, but when we are talking about healthcare, it’s not the business we need to focus on, but the quality of care. The minimum standard for care should not be a variable, but an established baseline across the board. So then why not just have the federal government regulate all of healthcare? Not only would there be a faster adoption rate for any new policies or procedures, instead of wallowing around waiting for the states to come up with an approval or a law more specific, we would also reduce the number of potential errors that occur from misinterpretation of the federal guidelines, or not noticing the more strict modifications placed by the state. What’s more, the states base their own regulations off the federal statutes anyway, so why not just create a system that works for every state? This regulatory model would benefit all industries in the sector, including more importantly hospital.

Hospital regulation is, in effect, a mess because there are numerous organizations that regulate hospital organizations. Besides federal and state regulations from the Centers of Medicare and Medicaid Services (CMS), there are also private organizations each offering accreditation or prestige associated with an award from said respective organization. One of the largest of the private organizations, the Joint Commission for Accreditation of Hospital Organization (TJC or JCAHO), has almost 5,000 hospitals and almost 10,000 other healthcare facilities participating. The other two include the Healthcare Facilities Accreditation Program (HFAP) and Det Norske Veritas Healthcare, Inc (DNV). All three regulating bodies have been given “deeming authority” by CMS. What I notice when I look at how these organizations work, is our government has effectively given authority to these private organizations to essentially do it’s job for them. What’s more, each accrediting body requires annual fees to be paid to the organization by each hospital organization. Hospitals looking to get accreditation from any of these organizations have to, in essence, pay to play. Annul fees are on average about $11,000 per year for TJC and $25,000 and $23,100 on average yearly for HFAP and DNV respectively. Those are only the top three organizations, I haven’t included the numerous local accreditation organizations, such as the California Hospital Association, and smaller national organizations such as the American Hospital Association, all of which offer similar accreditation.

So what does that all mean? It means if we allow individual agencies to have more authority, we will only create mass confusion. What we need is only one regulatory agency per industry, for the entire sector. With just one agency having authority, we reduce the chaos of having multiple policies and accreditation. Yes, I think accreditation is important, because that creates a drive for the hospital to constantly improve upon itself, or at the bare minimum, continue operating at an established baseline for patient safety and effective care. However, having too many different options for accreditation creates confusion for both patients and policy makers. Which organization creates better policies, or focuses on improving patient care the most? In my opinion, rather than creating a whole new system, we should roll these existing organizations into CMS, and allow that newly created branch to continue regulating the industry as a unified collective. We continue to allow accreditation but establish varying grades for each organization. After all, one of the biggest reasons for having an accreditation is to be able to be listed as providers with CMS. Well, why do we need multiple organizations handing out accreditation for approval of healthcare providers for CMS? Why not just streamline the process and just have one organization?

Opinion requested: Should regulatory bodies be strengthened as individual agencies?

Opinion requested: Should new drugs always be compared not just with placebos but with old drugs for the same conditions?

While I agree this would make determining drugs more effective for treating patients, this process will likely never happen. As it stands now, most clinical trials for investigational drugs are not designed to evaluate if the new drug is going to be more effective or safer than a previous drug, but only to prove that the agent being tested will work for the disease/condition the company is applying for. It’s real purpose is making sure any adverse effects or reactions are not severe enough that it would overstep the risk vs benefit comparison. We have to keep in mind that the FDA drug approval process is really nothing more than the government stepping in to say, “Hey, does this drug do what it says? But above all, can it harm or kill people?” The FDA is essentially a reactionary regulating body. Prior to the establishment of the Food Drug and Cosmetics Act (FDCA), which gave the FDA the power it has now, they had little to no regulatory power. The passage of the FDCA itself was largely due to the sulfanilomide disaster during that time.

Also, let’s look at who is actually paying for these clinical trials. There are grants and foundations here and there that help with mitigating some costs, but largely they are funded by the pharmaceutical companies. Costs for running clinical trials generally range from millions to tens of millions, and since the companies have a vested stake in the result of their product being successful, the data they want has to be as convincing as possible that their agent works. That’s the reason that most of the studies are going to compare to placebo, and not an API. There are definitely some trials that do compare active ingredients, called active-treatment concurrent control studies, but if you think about it from a financial standpoint, a pharma company will generally avoid those sorts of trials unless pre-clinical or Phase I testing has shown great promise. To be asking those companies to compare a potential pipeline agent is like asking a trader to only invest in high risk stocks.

This current system isn’t exactly efficient, nor does it really benefit the general population. The industry landscape is changing however, since we are moving into the direction of outcomes based medicine. With the fall of the patent cliff and fewer drugs in the pipelines, pharmaceutical companies are hard pressed to recover that lost profit. One way we can combat the rising power of third-party payer is to prove that their current brands or pipeline drugs are more effective than existing therapies. If we can replace the existing “gold standard” with a a newer agent, then everyone wins. However, for a pharmaceutical company to shift focus from their existing drug development phase to this new method requires substantial risk. In my opinion, if an industry giant were to take this leap of faith, and others follow, we may be able to both improve the quality of care for patients, while also create a potential new revenue stream. There are two ways to deal with the rising power of third-party payers: fight them and delay the inevitable, or find a way to use that changing landscape towards your benefit by changing your existing structure to work with the new dynamic.

Opinion requested: Should new drugs always be compared not just with placebos but with old drugs for the same conditions?