Tuesday, January 20, 2009

Inaugural Reflections

Listening to President Obama speak this morning, I was struck by the tone of his inaugural address, more somber and subdued than the rhetorical tour de force many had expected. In fact, his speech was in keeping with the serious tone he adopted in Chicago, the evening he won the election. His over-arching theme was individual and collective responsibility, "the price and promise of citizenship," as he put it. And he emphasized both the need to make tough choices and to resist the impulse to serve narrow interests. This has implications for healthcare, an issue he numbered among the great challenges facing the United States, along with two wars and the economic crisis. For the central problems in our healthcare system—47 million uninsured, inconsistent quality, runaway spending—reflect failures of responsibility and lack of political will to make hard choices. As much as any issue, foreign or domestic, coming to grips with healthcare will test Obama's leadership and whether he can break with the past or merely reframe old problems in a new administration. Ultimately his success in governing may depend on his ability to inspire the levels of idealism that served him so well in his campaign for the presidency.

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Monday, January 19, 2009

Healthcare Reform: Lessons from Abroad

In a remarkably thoughtful and lucid essay, Atul Gwande, a Boston cancer surgeon, surveys national health systems in other industrialized democracies and examines how they came into being. Outside the United States, from Britain to Australia, national systems guarantee medical coverage for all citizens. And while far from perfect, each is popular and successful in providing care. From country to country, however, the circumstances that led to universal coverage were quite different. In Britain, for example, government assumed an increasing role in managing physicians and hospitals as a result of German bombing and massive relocation of citizens to the countryside. Gwande explains that the NHS was not the result of ideology or social architecture. The National Health Service (NHS), formally established in 1948, essentially institutionalized a government-managed system already put in place by the war.

Borrowing from economics, Gwande suggests that our healthcare system, like so many other industries and institutions, is “path-dependent.” That is, choices made in the past – e.g. to subsidize private health insurance purchased by employers – strongly influence today’s alternatives. In designing a program to cover the uninsured, control costs and improve quality, “we’ll inevitably want to build on the institutions we already have,” Gwande writes. “That precept sounds as if it would severely limit our choices. But our health-care system has been a hodgepodge for so long that we actually have experience with all kinds of systems. The truth is that American health care has been more flotilla than ship.” Beyond employer-sponsored private insurance, there is Medicare, Medicaid, the Veterans Administration as well as the Federal Employees Health Benefits Program. Each could be modified to expand coverage to new groups.

Gwande concludes by describing how his home state of Massachusetts has achieved nearly universal coverage (97.4 percent) by building on its existing system, mandating coverage and providing subsidies for low-income people. And while his patients sometimes used to forgo needed care in the past, “for the past year, I haven’t had a single Massachusetts patient who has had to ask how much the necessary tests will cost; not one who has told me he needed to put off his cancer operation until he found a job that provided insurance coverage. And that’s a remarkable change: a glimpse of American health care without the routine cruelty.”

To read Gwande’s essay in The New Yorker, click here.

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Friday, January 16, 2009

Obama and the Trial Lawyers -- What to Expect

At first glance, the election of Barack Obama, an attorney who was president of the Harvard Law Review and who taught constitutional law at the University of Chicago, would seem promising for the trial bar. Plus, Vice President-elect Joe Biden has a long record in the Senate as a friend of plaintiffs' attorneys. With solid Democratic majorities in both houses of congress, some fear, America's inclination to litigate could quickly worsen.

Even so, there are some encouraging signs. In Obama's book, The Audacity of Hope, he suggests that the benefits of regulation must be weighed against its costs. Moreover, the transition team has announced that Obama plans to appoint Cass Sunstein, his former Chicago colleague who recently moved to Harvard as the Felix Frankfurter professor of law, to head the Office of Information and Regulatory Affairs in the new administration. This is a key job in determining the president's approach to regulatory policy, and Sunstein's appointment sends a positive signal. Sunstein's most recent book is Nudge: Improving Decisions about Health, Wealth, and Happiness (2008), co-authored by economist William Thaler. The book elaborates the theory of libertarian paternalism and applies the field of behavioral economics to law. The central concept is that institutions can maintain people's freedom of choice while also guiding their decisions in directions that improve their lives. The classic example is that when employers offer employees a 401(K) plan, most people will participate if the default option is opt-in rather than opt-out. Sunstein and Thaler argue that "people often make poor choices - and look back at them with bafflement! We do this because as human beings, we all are susceptible to a wide array of routine biases that can lead to an equally wide array of embarrassing blunders in education, personal finance, health care, mortgages and credit cards, happiness, and even the planet itself." Though he is often classified as a liberal, Sunstein supported the nomination of Chief Justice John Roberts to the Supreme Court, and during his years at University of Chicago occasionally found himself allied with conservatives. Like Obama, he may prove to be a centrist and pragmatist.

To read about Sunstein's views of Obama, whom he calls "A Visionary Minimalist," click here.

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Friday, January 9, 2009

Patents and Drugs: Is the Present System Working?

The pharmaceutical industry is frequently singled out as the prime example of a successful U.S. patent system. But Benjamin Roin, a junior faculty member at Harvard Law School, argues a different view. To his way of thinking, the most basic standards of patent law -- that inventions can only be patented if the are novel and non-obvious -- undermine the development of new drugs. This is because much or most of the cost of producing a new pharmaceutical product derives from a long and costly regulatory process: series of clinical trials demanded by the U.S. Food and Drug Administration (FDA). Without FDA approval, a new drug is not eligible for marketing. So, unlike other industries in which novelty and non-obviousness make sense, in drug development such requirements "bear little relationship to the social value of those drugs or the need for a patent to motivate their development."

If, for example, academic scientists publish their research findings about a compound, it may be considered no longer novel, whether or not the scientists had any idea how it could be used as a drug. Without a strong patent, manufacturers are reluctant to invest hundreds of millions in clinical studies, knowing that a generic company could duplicate their product as soon as it was proven successful. "Congress can easily avoid this problem," writes Roin, "by ensuring that the successful completion of the FDA's rigorous clinical trial process is rewarded with a lengthy exclusivity period enforced by the FDA."

His argument, that the way to address inadequacies in the patent system with respect to drugs is not to rewrite intellectual property law, but rather for Congress to change FDA regulation to provide longer periods of data exclusivity, commensurate with the cost of complying with the regulatory process, is suggestive for the issue of follow-on biologics.

To read Roin's paper, click here.

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Life Sciences in the Obama Administration: A Perspective on Harold Varmus

On December 26, President-elect Obama announced his team of science and technology advisors, including MIT geneticist Eric Lander and Harold Varmus, president of Memorial Sloan Kettering, former Director of the National Institutes of Health (NIH) and a co-recipient (along with J. Michael Bishop) of the 1989 Nobel Prize in Physiology or Medicine for discovery of the cellular origin of retroviral oncogenes. These appointments signal a fresh political perspective on scientific advice. Announcing his selections, Obama said that promoting science goes beyond providing resources, that it is also about promoting free inquiry and listening to what scientists have to say, “especially when it is inconvenient." Varmus is out with a new book in February, The Art and Politics of Science, which chronicles his experiences at NIH. Of particular interest is his discussion of how research priorities are set and the ongoing tension between political and scientific interests. "One of my first exposures to this problem occurred soon after I arrived at the NIH," Varmus writes, "when I received a call from my own former congresswoman, Nancy Pelosi, asking me to add $50 million to the budget for AIDS research." He declined "as politely as I could," but knew that Rep. Pelosi's position on the House Appropriations Committee made her a power to contend with. To read an excerpt in The New Scientist, click here.

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Wednesday, January 7, 2009

CBO’s Magnum Opus: Healthcare and Insurance Reform

Just before Christmas, the Congressional Budget Office (CBO) issued two volumes that focus on healthcare: Key Issues in Analyzing Major Health Insurance Proposals and Budget Options, Volume 1: Health Care. These documents expand CBO’s previous work on health insurance and healthcare financing and, as CBO Director Peter Orszag writes in his blog, “are intended to assist the Congress as it contemplates possible changes– both large and small– to federal health programs and the nation’s health insurance and health care systems.” While these new volumes make no recommendations, Orszag has been named by President-elect Obama to lead the Office of Management and Budget, so the substance of his work at CBO will gain momentum in the new administration.

The two documents do not make for light reading. The volume on health insurance http://www.cbo.gov/doc.cfm?index=9924 covers the public and private insurance markets as well as funding, benefit design and financial incentives for patients and providers. If there is an implicit argument, it is that the present fee-for-service system of paying physicians is incapable of reining in costs. What should replace it to align providers’ incentives with efficiency and better cost management remains unclear.

The volume on budget options http://www.cbo.gov/doc.cfm?index=9925 contains 115 specific items. Its chapter headings provide an overview:

  • The private health insurance market
  • The tax treatment of insurance
  • Changing the availability of health insurance through existing federal programs
  • The quality and efficiency of healthcare
  • Geographic variation in spending for Medicare
  • Paying for Medicare services
  • Financing and paying for services in Medicaid and SCHIP
  • Premiums and cost sharing in federal health programs
  • Long-term care
  • Health behavior and health promotion
  • Closing the gap between Medicare’s spending and receipts.

To read Peter Orszag’s blog, click here.

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Big Question 2009: What Will Change Everything

Beginning several years ago, John Brockman, the digital impresario and creator of the website www.edge.org, has started off each New Year by posing what he calls “the World Question.” Respondents run the gamut from physicist Freeman Dyson to novelist Ian McEwan. This year’s question is, “What will change everything? What game-changing scientific ideas and developments do you expect to live to see?”

Many responses focus on breakthroughs in the life sciences. Psychologist Steven Pinker, for example, after saying that predicting the future is impossible, suggests that personal genomics will transform medicine, as it expands beyond physiology to explain “temperament and cognition.” Neuroscientists talk about developments from direct, brain-to-brain communication of feelings and thoughts, to electrical brain stimulation to manage mood disorders, to cryonic suspension of brains.

Not surprisingly, one of the grandest ideas comes from J. Craig Venter, who writes: “We can start with digitised genetic information and four bottles of chemicals and write new software of life to direct organisms to do processes that are desperately needed, like create renewable biofuels and recycle carbon dioxide. As we learn from 3.5 billion years of evolution we will convert billions of years into decades and change not only conceptually how we view life but life itself.”

The contributors are alphabetized. To browse through them, or find a particular person, click here.

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Marcia Angell Zeros in on Conflicts of Interest

Marcia Angell, author of The Truth About the Drug Companies: How They Deceive Us and What to Do About It (2004), has just published her latest polemic in the January 12 issue of the New York Review of Books. The influence of pharmaceutical manufacturers has become so profound and pervasive, she writes, that “it is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines.” This is a conclusion she reached “slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine.”

While Angell is hard on drug companies for over-promoting their products, and inventing new disorders to stimulate demand for their treatments, she is even harder on the medical profession. In a capitalist economy, after all, companies are responsible for increasing shareholder value. But “physicians, medical schools, and professional organizations have no such excuse, since their only fiduciary responsibility is to patients.” To her way of thinking, doctors and academic medical centers should never take money from industry, beyond the direct cost of research projects. Nuance and ambiguity do not figure into her view of the world. Money corrupts; there are no benign conflicts of interest.

She maintains that the present controversies surrounding relationships among industry, physicians and medical schools – stirred by Sen. Charles Grassley and others in Congress – are creating a crisis of confidence in the integrity of American medicine. Unless the medical profession endeavors to “put and end to this corruption . . . the government will step in and impose regulation.” Still, most of us would agree with her conclusion: “No one in medicine wants that.”


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