Preventable Disease and Healthcare Costs

Recently, I wrote about the relationship between unhealthy behavior and healthcare costs at a macro level.

There is an excellent article appearing in the The Seattle Post Intelligencer by Dan Richman which provides insights into the micro economic impact a properly structured health risk assessment, wellness and care management program can have on an employers health insurance premiums.

Health insurance aims to spread the cost of care among an entire insured group. But 10 percent of the U.S. population generates between 70 percent and 80 percent of health care costs, through large claims from serious illnesses such as cancer, strokes, diabetes and heart disease.

That means the other 90 percent of the population is paying a share of the costs disproportionate to its consumption of health care. But 70 percent of cancer, 71 percent of cardiovascular disease and 92 percent of adult-onset diabetes can be avoided if people change their behavior, said ClearPoint managing partner Kevin Overbey, citing journals of occupational medicine.

A popular hypothesis states that if 30 percent of people improved their diets, simply moved about more and dealt better with stress, health care costs could be reduced 24 percent per year nationwide, he said.

The right Group Guy can impact your costs as Kevin is doing in Seattle. Nice work.

Rx Plan Design & Diabetes

An interesting story from The Chicago Tribune on employers eliminating co-pays for diabetes medications is here.

After years of raising co-payments and deductibles for prescription pharmaceuticals, some employers are taking an unorthodox approach to lowering health-care costs in an experimental program by -- get this -- paying for diabetes drugs and consultations.

For patients the savings could amount to $2,000 a year.

If the program proves successful it could be expanded to include other common diseases and chronic conditions such as asthma, depression or arthritis and extended beyond its one-year pilot phase, according to the Midwest Business Group on Health, a Chicago-based coalition of employers that is coordinating the program.

Nationally, more than 30 employer groups are rolling out similar programs this year in cities including Milwaukee, Pittsburgh and Los Angeles.

I have written on the Black Hole of STD as well as Lowering Rx Co-pays to reduce costs so here is a related item which focuses on the connection.

Results from a model project launched in 1997 by the city of Asheville, N.C., show a 50 percent reduction in sick days and no worker's compensation claims filed by the diabetes patients in the program between 1997 and 2003.

Asheville has expanded its program to people with asthma and high blood pressure.

So far, Chicago-area employers Pactiv Corp., the City of Naperville and the Jewish Federation of Metropolitan Chicago have agreed to participate in the program.

"Employers are beginning to realize that cost-shifting by itself will not change behaviors," said Larry Boress, chief executive of the Midwest Business Group on Health. "This is not just an isolated incentive where you are giving away trinkets or dollars but is part of a change in employee-benefits strategy to move people away from an entitlement mentality. The idea is that in order to change employee behavior and change the attitude in the way employees manage their health, employers are moving to value-based benefit designs."

Direct and indirect costs of diabetes to the U.S. health-care system are more than $130 billion a year, including emergency room visits, extended hospital stays and absenteeism, the Chicago group said, citing national studies. Some 20 million people have diabetes, including 600,000 in Chicago.

The Cost of Unhealthy Behavior: Got Wellness?

Here is an interview of Dr Steven Aldana conducted by WELCOA president Dr David Hunnicut.

Some of the key points are;

1. Sedentary Lifestyles account for 15% OF ALL HEALTHCARE COSTS and only 20-25% of the population achieves the recommended 30 minutes of daily physical activity
   
2. The total healthcare costs associated with a male 24 year old tobacco user are $220,000 which breaks down to a healthcare cost of $40 per pack of cigarettes of paid for by someone besides the smoker. 23% OF AMERICANS USE TOBACCO.
   
3. Obesity accounts for 12% of healthcare costs and 67% of the US population is either overweight or obese today.
4. Factoring in preventable health conditions aside from smoking you have an additional 40% of healthcare costs.
5. For those without an actuarial background we now have 70% of healthcare costs tied directly to lifestyle decisions. Physical Inactivity, Diet, Tobacco Use and preventable disease.
   
6. 70% OF deaths in America are attributable to strokes, heart attacks, diabetes and cancer which are all influenced very significantly by diet.

This week the media is reporting Consumer Driven Healthplans are getting a lukewarm reception from employees provided with alternative plans. What a shocker. Lets see, 80% do not get enough exercise, 23% smoke, 67% are overweight and or obese.

We have seen the enemy and its us.

Follow the Money at The FDA

Very interesting documentary about the FDA's funding sources in Pharma done by Gary Null of The Nutrition Institute of America is available here. The video is 90 minutes long and features very significant insights on the lack of institutional safety oversight the FDA provides.

video documentary features contributions of respectful professionals, such as FDA scientist Dr. David J. Graham, who addressed the prescription of Vioxx (a very dangerous drug presently withdrawn from the market) before the US Senate Finance Committee and firmly believes the FDA is "letting people down".

Here is more from the interview transcript available here

MANETTE: Dr. Graham, it's truly a pleasure to have the opportunity to interview you. Let me begin by asking you how long you've been with the FDA and what your current position is?

DR. GRAHAM: I've been with the FDA for 20 years. I'm currently the Associate Director for Science and Medicine in the Office of Drug Safety. That's my official job. But when I'm here today I'm speaking in my private capacity on my own time, and I do not represent the FDA. We can be pretty certain that the FDA would not agree with most of what I have to say. So with those disclaimers you know everything is okay.

MANETTE: On November 23, 2004 PBS Online News Hour Program you were quoted as making the following statement. “I would argue that the FDA as currently configured is incapable of protecting America against another Vioxx. Simply put, FDA and the Center for Drug Evaluation Research (CDER) are broken.” Since you've made that statement, has anything changed within the FDA to fix what's broken and, if not, how serious is the problem that we're dealing with here?

DR. GRAHAM: Since November, when I appeared before the Senate Finance Committee and announced to the world that the FDA was incapable of protecting America from unsafe drugs or from another Vioxx, very little has changed on the surface and substantively nothing has changed. The structural problems that exist within the FDA, where the people who approve the drugs are also the ones who oversee the post marketing regulation of the drug, remain unchanged. The people who approve a drug when they see that there is a safety problem with it are very reluctant to do anything about it because it will reflect badly on them. They continue to let the damage occur. America is just as at risk now, as it was in November, as it was two years ago, and as it was five years ago.

MANETTE: In that same PBS program, you were also quoted saying, “The organizational structure within the CDER is currently geared towards the review and approval of new drugs. When a serious safety issue arises at post marketing, the immediate reaction is almost always one of denial, rejection and heat. They approved the drugs, so there can't possibly be anything wrong with it. This is an inherent conflict of interest.” Based on what you're saying it appears that the FDA is responsible for protecting the interests of pharmaceutical companies and not the American people. Do you believe the FDA can protect the public from dangerous drugs?

DR. GRAHAM: As currently configured, the FDA is not able to adequately protect the American public. It's more interested in protecting the interests of industry. It views industry as its client, and the client is someone whose interest you represent. Unfortunately, that is the way the FDA is currently structured. Within the Center for Drug Evaluation and Research about 80 percent of the resources are geared towards the approval of new drugs and 20 percent is for everything else. Drug safety is about five percent. The “gorilla in the living room” is new drugs and approval. Congress has not only created that structure, they have also worsened that structure through the PDUFA, the Prescription Drug User Fee Act, by which drug companies pay money to the FDA so they will review and approve its drug. So you have that conflict as well.

Drug Pushers on Capitol Hill

By M. Asif Ismail
Data analysis by Helena Bengtsson

WASHINGTON, April 1, 2007 — Manufacturers of pharmaceuticals, medical devices and other health products spent nearly $182 million on federal lobbying from January 2005 through June 2006, a Center for Public Integrity study of disclosure records shows.

Interested observers will also want to consider what all this purchased based on the timeline prepared in conjunction with the study abovewhich is available here.

Here is but one sample of pure red meat in 2002;

2002

The Best Pharmaceuticals for Children Act is signed into law. It extends "pediatric exclusivity" provision of the FDA Modernization Act of 1997 that gives prescription drug makers an additional six months of patent protection during which generic drugs cannot be sold, in exchange for the manufacturer conducting studies of the drug's effects in children. The Congressional Budget Office estimates that, in the long run, prices for prescription drugs will increase as a result of the bill.

Trade Act of 2002 (H.R.3009) passed. The Act makes intellectual property rights and the elimination of regulatory practices (such as price controls) negotiating objectives in trade agreements.

Prescription Drug Users Fee Act renewed. Included in the legislation are industry requests to speed up product reviews and use third-party advisors recommended by the companies to assess products.

Greater Access to Affordable Pharmaceuticals Act is defeated. The Act would have weakened patent restrictions on pharmaceuticals, making way for more generic drugs.

Money Talks.

Interdependent Benefits Need An Integrated View

Aetna (NYSE:AET) today announced that employee assistance services will be a standard part of the servicing of fully insured health plans for all small group employers.


Here is a very useful study of Depression in the workplace--warning funded by Pharma--so make sure you have therapuetic infusion baked into your Rx & DM plan design.

Lowering Rx Co-pays Produces Big Savings

If your company has been increasing co-pays on prescription drugs in order to offset steadily rising pharmacy costs you may wish to consider how Blockbuster was successful in reducing pharmacy costs by over 33.5% by lowering co-pays and adopting a 4 tiered approach as noted here.

Lowering or eliminating co-pays for low cost or OTC generics while raising brand co-pays can produce dramatic results by raising your overall generic utilization rate while at the same time lowering your pharmacy trend to a negative number.

But do not allow your pharmacy claim data to languish on some PBM rep or pharmacy consultants hard drive. There is meaningful and compelling data there which can be mined to provide a prospective picture of your "at risk population to become a chronic "whose behavior needs further modification beyond just the pharmacy co-pay if your strategic objectives of controling benefit costs are to be achieved. You need analysis from someone with an understanding of your overall objectives in benefits as well as deep practical experience in arriving at proper plan design recommendations in your other benefit offerings--Medical, Dental, STD, LTD, Behavioral & EAP to allow the data from your pharmacy claims to impact all of your benefit offerings. You need an integrated view.

One of the observations on the health care space in the last 3-5 years I would make is that employers who have adopted consumer driven long term strategies have a much greater appreciation of the interdependence of their benefit offerings than many of the intermediaries who serve them. You see many intermediaries are transaction oriented, they are historically project or account acquisition driven. Essentially, at many consulting firms you have a partially extroverted actuary functioning as a relationship manager who trots out subject matter experts for absence management, disease management, disability management, behavioral & EAP and Pharmacy. The problem with such a business model is it does not lend itself to integrating thought leadership very well across product lines. No offense to actuaries but communication has never been what one could refer to as a group strength. If you take offense at that statement perhaps you should scan this proof statement (Its a letter from The American Academy of Actuaries on the lessons learned from the 1st year under Medicare Part D) and comment below on the salient points below. Do tell. There will be a prize for the best comment or barring that anyone who can finish and still talk.

The point is mining data will provide useful data. Putting that data together to arrive at appropriate plan design changes across multiple products requires the application of both plan design and cross- product expertise. Since most actuaries are so specialized-health, life, disability, pensions, good luck with that as the person with that skill set in America works for themself, especially if they are an actuary, because they can.