iLoveBenefits: Industry News Blog

Majority of Physicians Accepted Pharma Payments in 2014

I was under the impression that this practice had ceased??

ProPublica recently conducted an analysis on the relationship between physician prescribing practices and money received from pharmaceutical companies in 2014. Here are some key findings from the report:

  • Nearly 90% of cardiologists received payments from a drug or device company in 2014.
  • 7 in 10 internists and family practitioners received payments from a drug or device company in 2014.
  • Nationally, about 3 in 4 doctors across five common specialties received at least one payment in 2014.
  • Nevada has the highest proportion (90.3%) of doctors who received payments in 2014.
  • Internists who received no payments had an average brand-name prescribing rate of about 20%.
  • Internists who received more than $5,000/year prescribed brand-name drugs 30% of the time.

Source: NPR, March 17, 2016

The health care business model is changing

According to a recent report, 18% of physicians have changed their business models to provide certain services. Within that group, those services include the following:

  • Virtual technology: 51%
  • One-stop shopping: 41%
  • Behaviorial health services: 24%
  • Pharmacist services: 19%
  • House calls: 17%
  • Group visits: 9%
  • Other: 11%

Source: “Kaiser Health Tracking Poll: February 2016,” The Henry J. Kaiser Family Foundation, February 25, 2016,

Plan design: first dollar coverage – better health, but at what cost?

The University of Michigan’s Center for Value-Based Insurance Design released a new white paper by Michael Chernew, Stephen Parente, Mark Fendrick, and others, which suggests that allowing high deductible plans to start covering a broader range of preventive services without cost sharing could result in higher premiums, but better health outcomes and cost savings over time.  “A potential solution – allowing HSA-eligible HDHPs to provide first-dollar coverage for targeted, evidence-based, secondary preventive services that prevent chronic disease progression and related complications – can improve patient-centered outcomes, add efficiency to medical spending, and enhance HDHP attractiveness.”

Does this improve outcomes or provide incremental revenue?

Is point-of-care ultrasound the new stethoscope?
A new paper espouses the benefits of hand-held ultrasound devices over the iconic stethoscope, arguing the convenience and power of ultrasound will improve diagnosis. Writing in the journal Global Heart, Drs. Jagat Narula and Bret Nelson of the Mount Sinai School of Medicine question why sonography isn’t used more widely. However, Dr. Reid Blackwelder, president of the American Academy of Family Physicians, says the stethoscope remains valuable and warns wider use of sonography could bring additional costs — both for equipment and the tests that might follow the initial assessment. CBS News (1/24), (1/23), USA Today (1/24)

So, I am not against advances, but is there evidence that the outcomes are better than with a stethoscope? I know it will be more expensive. The article talks about it leading to more tests, too.

On the other hand, how about personal medicine and getting these devices as apps with sophisticated computer software that links to a ‘benchmark’ database to inform patients of potential next steps? Does that lower the number of office visits and procedures vs. putting the technology only in the hands of the clinician?

There is a reason why hospitals are ill prepared to take on financial risk . . .

Perhaps if hospitals actually understood their real cost of production. Perhaps if health care providers truly understood their cost structures. Maybe then they might be able to reconstruct their business models and take on a higher quality lower cost model where they could actually manage risk they understood.

Survey: Hospitals ill-prepared for financial risk

Few hospitals interested in becoming ACOs are ready to take on financial risk, according to a Commonwealth Fund survey of nearly 1,700 hospitals. ACOs are pursuing models that let them share in any savings they achieve, without losing money if they fail to cut costs. This is likely to continue: Only one in five indicated they were using data to predict which patients are most likely to be in poor health and need more services–a significant gap in their ability to manage risk, lead author Anne-Marie Audet tells Kaiser Health News. (Kaiser Health NewsCommonwealth Fund issue brief)

The Business of Healthcare – Cash Management

HHS rule on e-funds transfers could save $9B in admin costs
An HHS rule set to appear in the Federal Register on Friday implements operating standards for electronic funds transfers and remittance advice transactions by health care providers. The new rule, along with EFT guidelines adopted by HHS in January, is expected to save the U.S. health care system up to $9 billion in administrative expenses over 10 years. Healthcare Informatics online (8/8)

Prices Are Driving Health Spending Growth – Overall Costs are Growing Slower

So, health care costs are growing slower – see the data in the next paragraph. It is now the prices that are driving the growth. Not too long ago it was the utilization rate that was driving the cost. That leaves one to wonder whether there is a natural flow of increases to health care that will occur. If not by utilization, then by unit cost. I wonder what the economists would say?

Per capita spending on inpatient and outpatient facilities, professional procedures, and prescriptions drugs for people under age 65 with private, employer-sponsored health insurance rose 3.3% in 2010, following increases in 2008 (6.0%) and 2009 (5.8%), according to a new report.

Source: “First-Ever Report Using Health Plans’ Claims Data from Nation’s Largest Private Insurers Shows Prices Are Driving Health Spending Growth,” Health Care Cost Institute Press Release, May 21, 2012,

High deductible plans – at what cost

A Rand analysis published in the latest edition of Health Affairs found that consumer-directed health plans, which aim to encourage prudent health care spending through high deductibles, have the potential slow the growth of health care spending.  But those savings may come at the expense of needed care, the group concluded .

So what they are likely saying is more study is needed AND it is going to take some time for us to have a definitive answer… hmmm.

Health care inflation from the physician’s point of view

Percent of Physicians Who Think Certain Health Cost Drivers Have A Lot/Some Influence On Overall Health Care Costs

Cost Driver


Consumer behavior such as unhealthy lifestyles that can lead to obesity


Defensive medicine


Insurance company administrative costs


Hospital costs


Prescription drugs


End of life care where extreme measures are taken to extend life for a short period of time


New technologies and equipment


Government regulation


Payment incentives that reward volume instead of performance


Fraud in the system


Overutilization of surgery


Source: Physician perspectives about health care reform and the future of the medical profession, Deloitte Center for Health Solutions, December 2011

Socioeconomic status predictor if rural hospital utilization

Low-income adults ages 18 to 64 accounted for 56 percent of the 8 million visits made to rural hospital emergency departments in 2008.  [Source: Agency for Healthcare Research and Quality, HCUP, Statistical Brief #116: Emergency Department Visits in Rural and Non-Rural Community Hospitals, 2008.]

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