Government and Regulations

CHICAGO – Health care data theft represents a far greater threat than theft of credit card, financial, and banking information.

The reasons are simple: stolen health care records have a longer shelf life and offer a higher payout on the black market, James Trainor, deputy assistant director of the Federal Bureau of Investigation’s Cyber Division, said at the annual meeting of the Healthcare Information Management Systems Society.

Patrice Wendling/Frontline Medical News

When credit cards are stolen it’s pretty easy to identify the information on cyber crime forums and compensate for loss, so the value of that stolen credit card or bank record has a certain shelf life. For health care records, it’s harder to identify where those stolen records may end up and as such it creates a greater challenge for law enforcement.

The opportunity to exploit and monetize stolen health care data for various forms of fraud such as identity, Medicaid, tax, medical device, and pharmaceutical fraud increases the value at which they can be sold online.

“Actually, it’s one of the primary reasons why criminal organizations go after health care records,” Mr. Trainor said.

Not surprisingly, the FBI rates health care data theft as a Tier 1 priority, capable of causing “catastrophic or severe harm.”

And the problem is growing. Two years ago, a significant cyber intrusion occurred every 2 weeks; now it happens every 2-3 days.

“The pace is growing rapidly, the volume of data that’s being [stolen] is substantially increasing, and it just requires a much more robust response across the U.S. government and private sector,” said Mr. Trainor, who helped investigate the December 2014 Sony cyber attack.

Some of the unique challenges to the health care sector are the use of legacy computer systems, “bring your own device” policies, and increased volume of data following the transition to electronic health records, and stolen protected health information isn’t readily discovered, he said. The range, size, and capability of IT infrastructure varies dramatically as do the funding and resources needed to keep up with the rapidly changing IT field.

Other challenges include video conferencing systems, digital video systems used for consultations and remote procedures, and Internet-connected medical devices such as insulin pumps, pacemakers, and MRI machines, said Kevin Hemsley, a project manager at the Idaho National Laboratory supporting the Department of Homeland Security’s Industrial Control Systems Computer Emergency Response Team.

Patrice Wendling/Frontline Medical News

While providers love the ability to use the Internet to control and monitor devices, ingrained security mechanisms can be minimal. This makes for low-hanging fruit for thieves who can enter the system and even lock up an otherwise safe device.

Mr. Hemsley noted that a 2014 report by the Internet security and training firm SANS found that 33% of malicious traffic passed through or was transmitted from VPN applications and devices versus 16% from firewalls, 7% from routers, and 3% from enterprise network controllers.

“One of the messages here is to look at cyber security as being more than HIPPA, it’s patient safety,” he said.

Both experts advised physicians and other health care providers to update their privacy and security software frequently. Available resources include the FBI’s 24-hour CyWatch (855-292-3937/[email protected]), Cyber Task Force (with 56 local field offices), and for individuals, the Internet Crime Complaint Center (www.ic3.gov).

Speedy communication with officials following a data breech is important not just to get the institution’s system back up and running, but it allows officials to identify data footprints left by hackers before they are destroyed, Mr. Trainor said.

In two of the three recent high profile health care cyber attacks involving Community Health Systems (4.5 million accounts), Anthem Blue Cross Blue Shield (78 million records), and Premera Blue Cross (11 million consumers), the institutions contacted the FBI, but in one unnamed case, the FBI had to make the call, he pointed out.

[email protected]

CHICAGO – Health care data theft represents a far greater threat than theft of credit card, financial, and banking information.

The reasons are simple: stolen health care records have a longer shelf life and offer a higher payout on the black market, James Trainor, deputy assistant director of the Federal Bureau of Investigation’s Cyber Division, said at the annual meeting of the Healthcare Information Management Systems Society.

Patrice Wendling/Frontline Medical News

When credit cards are stolen it’s pretty easy to identify the information on cyber crime forums and compensate for loss, so the value of that stolen credit card or bank record has a certain shelf life. For health care records, it’s harder to identify where those stolen records may end up and as such it creates a greater challenge for law enforcement.

The opportunity to exploit and monetize stolen health care data for various forms of fraud such as identity, Medicaid, tax, medical device, and pharmaceutical fraud increases the value at which they can be sold online.

“Actually, it’s one of the primary reasons why criminal organizations go after health care records,” Mr. Trainor said.

Not surprisingly, the FBI rates health care data theft as a Tier 1 priority, capable of causing “catastrophic or severe harm.”

And the problem is growing. Two years ago, a significant cyber intrusion occurred every 2 weeks; now it happens every 2-3 days.

“The pace is growing rapidly, the volume of data that’s being [stolen] is substantially increasing, and it just requires a much more robust response across the U.S. government and private sector,” said Mr. Trainor, who helped investigate the December 2014 Sony cyber attack.

Some of the unique challenges to the health care sector are the use of legacy computer systems, “bring your own device” policies, and increased volume of data following the transition to electronic health records, and stolen protected health information isn’t readily discovered, he said. The range, size, and capability of IT infrastructure varies dramatically as do the funding and resources needed to keep up with the rapidly changing IT field.

Other challenges include video conferencing systems, digital video systems used for consultations and remote procedures, and Internet-connected medical devices such as insulin pumps, pacemakers, and MRI machines, said Kevin Hemsley, a project manager at the Idaho National Laboratory supporting the Department of Homeland Security’s Industrial Control Systems Computer Emergency Response Team.

Patrice Wendling/Frontline Medical News

While providers love the ability to use the Internet to control and monitor devices, ingrained security mechanisms can be minimal. This makes for low-hanging fruit for thieves who can enter the system and even lock up an otherwise safe device.

Mr. Hemsley noted that a 2014 report by the Internet security and training firm SANS found that 33% of malicious traffic passed through or was transmitted from VPN applications and devices versus 16% from firewalls, 7% from routers, and 3% from enterprise network controllers.

“One of the messages here is to look at cyber security as being more than HIPPA, it’s patient safety,” he said.

Both experts advised physicians and other health care providers to update their privacy and security software frequently. Available resources include the FBI’s 24-hour CyWatch (855-292-3937/[email protected]), Cyber Task Force (with 56 local field offices), and for individuals, the Internet Crime Complaint Center (www.ic3.gov).

Speedy communication with officials following a data breech is important not just to get the institution’s system back up and running, but it allows officials to identify data footprints left by hackers before they are destroyed, Mr. Trainor said.

In two of the three recent high profile health care cyber attacks involving Community Health Systems (4.5 million accounts), Anthem Blue Cross Blue Shield (78 million records), and Premera Blue Cross (11 million consumers), the institutions contacted the FBI, but in one unnamed case, the FBI had to make the call, he pointed out.

[email protected]

CHICAGO – Health care data theft represents a far greater threat than theft of credit card, financial, and banking information.

The reasons are simple: stolen health care records have a longer shelf life and offer a higher payout on the black market, James Trainor, deputy assistant director of the Federal Bureau of Investigation’s Cyber Division, said at the annual meeting of the Healthcare Information Management Systems Society.

Patrice Wendling/Frontline Medical News

When credit cards are stolen it’s pretty easy to identify the information on cyber crime forums and compensate for loss, so the value of that stolen credit card or bank record has a certain shelf life. For health care records, it’s harder to identify where those stolen records may end up and as such it creates a greater challenge for law enforcement.

The opportunity to exploit and monetize stolen health care data for various forms of fraud such as identity, Medicaid, tax, medical device, and pharmaceutical fraud increases the value at which they can be sold online.

“Actually, it’s one of the primary reasons why criminal organizations go after health care records,” Mr. Trainor said.

Not surprisingly, the FBI rates health care data theft as a Tier 1 priority, capable of causing “catastrophic or severe harm.”

And the problem is growing. Two years ago, a significant cyber intrusion occurred every 2 weeks; now it happens every 2-3 days.

“The pace is growing rapidly, the volume of data that’s being [stolen] is substantially increasing, and it just requires a much more robust response across the U.S. government and private sector,” said Mr. Trainor, who helped investigate the December 2014 Sony cyber attack.

Some of the unique challenges to the health care sector are the use of legacy computer systems, “bring your own device” policies, and increased volume of data following the transition to electronic health records, and stolen protected health information isn’t readily discovered, he said. The range, size, and capability of IT infrastructure varies dramatically as do the funding and resources needed to keep up with the rapidly changing IT field.

Other challenges include video conferencing systems, digital video systems used for consultations and remote procedures, and Internet-connected medical devices such as insulin pumps, pacemakers, and MRI machines, said Kevin Hemsley, a project manager at the Idaho National Laboratory supporting the Department of Homeland Security’s Industrial Control Systems Computer Emergency Response Team.

Patrice Wendling/Frontline Medical News

While providers love the ability to use the Internet to control and monitor devices, ingrained security mechanisms can be minimal. This makes for low-hanging fruit for thieves who can enter the system and even lock up an otherwise safe device.

Mr. Hemsley noted that a 2014 report by the Internet security and training firm SANS found that 33% of malicious traffic passed through or was transmitted from VPN applications and devices versus 16% from firewalls, 7% from routers, and 3% from enterprise network controllers.

“One of the messages here is to look at cyber security as being more than HIPPA, it’s patient safety,” he said.

Both experts advised physicians and other health care providers to update their privacy and security software frequently. Available resources include the FBI’s 24-hour CyWatch (855-292-3937/[email protected]), Cyber Task Force (with 56 local field offices), and for individuals, the Internet Crime Complaint Center (www.ic3.gov).

Speedy communication with officials following a data breech is important not just to get the institution’s system back up and running, but it allows officials to identify data footprints left by hackers before they are destroyed, Mr. Trainor said.

In two of the three recent high profile health care cyber attacks involving Community Health Systems (4.5 million accounts), Anthem Blue Cross Blue Shield (78 million records), and Premera Blue Cross (11 million consumers), the institutions contacted the FBI, but in one unnamed case, the FBI had to make the call, he pointed out.

[email protected]

The IHS denied funding for outsourced care 82% of the time last fiscal year, an investigation by KJRH, the NBC-affiliated news station in Tulsa, Oklahoma, revealed. The news team traced the problem to lack of staff. Claremore Hospital in Oklahoma, for instance, had 3 vacant full-time surgeon positions and at the time of the story, just 1 full-time surgeon and 1 temporary surgeon. Fewer surgeons lead to more outsourcing, but outsourced care is more expensive and may often be denied, the news team found.

Related: New Leadership at IHS as McSwain Replaces Roubideaux

When the news team reported the staffing shortage to Rep. Tom Cole (R-OK), he said he would look further into the “penny-wise, pound-foolish” decisions. He added that filling the positions would be more cost effective. According to Rep. Cole, the IHS has had a serious funding shortage for decades, though he has been able to increase funding by 39%. More needs to be done, he admits, saying he was currently working on legislation that would further increase funding.

Related: IHS Hiring More Veterans

Rep. Cole is a member of the Chickasaw Nation and one of only two Native Americans serving in the U.S. House of Representatives.

The IHS denied funding for outsourced care 82% of the time last fiscal year, an investigation by KJRH, the NBC-affiliated news station in Tulsa, Oklahoma, revealed. The news team traced the problem to lack of staff. Claremore Hospital in Oklahoma, for instance, had 3 vacant full-time surgeon positions and at the time of the story, just 1 full-time surgeon and 1 temporary surgeon. Fewer surgeons lead to more outsourcing, but outsourced care is more expensive and may often be denied, the news team found.

Related: New Leadership at IHS as McSwain Replaces Roubideaux

When the news team reported the staffing shortage to Rep. Tom Cole (R-OK), he said he would look further into the “penny-wise, pound-foolish” decisions. He added that filling the positions would be more cost effective. According to Rep. Cole, the IHS has had a serious funding shortage for decades, though he has been able to increase funding by 39%. More needs to be done, he admits, saying he was currently working on legislation that would further increase funding.

Related: IHS Hiring More Veterans

Rep. Cole is a member of the Chickasaw Nation and one of only two Native Americans serving in the U.S. House of Representatives.

The IHS denied funding for outsourced care 82% of the time last fiscal year, an investigation by KJRH, the NBC-affiliated news station in Tulsa, Oklahoma, revealed. The news team traced the problem to lack of staff. Claremore Hospital in Oklahoma, for instance, had 3 vacant full-time surgeon positions and at the time of the story, just 1 full-time surgeon and 1 temporary surgeon. Fewer surgeons lead to more outsourcing, but outsourced care is more expensive and may often be denied, the news team found.

Related: New Leadership at IHS as McSwain Replaces Roubideaux

When the news team reported the staffing shortage to Rep. Tom Cole (R-OK), he said he would look further into the “penny-wise, pound-foolish” decisions. He added that filling the positions would be more cost effective. According to Rep. Cole, the IHS has had a serious funding shortage for decades, though he has been able to increase funding by 39%. More needs to be done, he admits, saying he was currently working on legislation that would further increase funding.

Related: IHS Hiring More Veterans

Rep. Cole is a member of the Chickasaw Nation and one of only two Native Americans serving in the U.S. House of Representatives.

The Senate passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, April 14 by a vote of 92-8.

The bill matches the language that the House passed by an overwhelming majority on March 26 and clears the way for the White House to permanently end the practice of temporary “doc fix” patches necessitated by the Medicare Sustainable Growth Rate formula.

President Obama signed the bill into law April 16.

The bill also extends funding for the Children’s Health Insurance Program for 2 years.

A number of amendments, including attempts to reauthorize CHIP for 4 years and to enforce pay-as-you-go rules that require the bill be fully offset, did not gain the necessary 60 votes for adoption.

The latest cut, a 21% reduction to Medicare physician payments went into effect on April 1, but the Centers for Medicare & Medicaid Services has been holding off on paying claims in anticipation of the bill’s passage. The agency had planned to pay the difference of the claims retroactively if there was a further delay in the passage.

*This article was updated April 17, 2015.

[email protected]

The Senate passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, April 14 by a vote of 92-8.

The bill matches the language that the House passed by an overwhelming majority on March 26 and clears the way for the White House to permanently end the practice of temporary “doc fix” patches necessitated by the Medicare Sustainable Growth Rate formula.

President Obama signed the bill into law April 16.

The bill also extends funding for the Children’s Health Insurance Program for 2 years.

A number of amendments, including attempts to reauthorize CHIP for 4 years and to enforce pay-as-you-go rules that require the bill be fully offset, did not gain the necessary 60 votes for adoption.

The latest cut, a 21% reduction to Medicare physician payments went into effect on April 1, but the Centers for Medicare & Medicaid Services has been holding off on paying claims in anticipation of the bill’s passage. The agency had planned to pay the difference of the claims retroactively if there was a further delay in the passage.

*This article was updated April 17, 2015.

[email protected]

The Senate passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, April 14 by a vote of 92-8.

The bill matches the language that the House passed by an overwhelming majority on March 26 and clears the way for the White House to permanently end the practice of temporary “doc fix” patches necessitated by the Medicare Sustainable Growth Rate formula.

President Obama signed the bill into law April 16.

The bill also extends funding for the Children’s Health Insurance Program for 2 years.

A number of amendments, including attempts to reauthorize CHIP for 4 years and to enforce pay-as-you-go rules that require the bill be fully offset, did not gain the necessary 60 votes for adoption.

The latest cut, a 21% reduction to Medicare physician payments went into effect on April 1, but the Centers for Medicare & Medicaid Services has been holding off on paying claims in anticipation of the bill’s passage. The agency had planned to pay the difference of the claims retroactively if there was a further delay in the passage.

*This article was updated April 17, 2015.

[email protected]

Despite being billed as a permanent solution to the annual threat of Medicare payment cuts to physicians, a bill repealing the Sustainable Growth Rate formula will not ensure adequate physician payments in the long term, according to actuaries at the Centers for Medicare & Medicaid Services.

In an April 9 report outlining the effect of the Medicare Access and CHIP Reauthorization Act (H.R. 2), the CMS Office of the Actuary said it anticipates “that physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter.

thinkstockphotos.com

“Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2,” the report’s authors noted.

The actuarial report attributes the long-term issues to a number of the bill’s provisions. First, it notes the expiration in 2025 of updates totaling $500 million per year and a 5% annual bonus, which will result in a payment reduction for most physicians.

Second, “this bill specifies the physician payment update amounts for all years in the future, and these amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report warned. That will result in payments that will be inadequate when rates of inflation are higher or when price updates are not enough to cover cost increases.

Compared with costs under current law, the CMS actuaries estimated the legislation’s net cost to the federal government from 2015 through 2025 would be $102.8 billion.

The SGR repeal bill, which also reauthorizes the Children’s Health Insurance Program for 2 more years, passed in the House March 26 with overwhelming bipartisan support. The bill is expected to pass the Senate after members return April 13 from their spring recess.

[email protected]

Despite being billed as a permanent solution to the annual threat of Medicare payment cuts to physicians, a bill repealing the Sustainable Growth Rate formula will not ensure adequate physician payments in the long term, according to actuaries at the Centers for Medicare & Medicaid Services.

In an April 9 report outlining the effect of the Medicare Access and CHIP Reauthorization Act (H.R. 2), the CMS Office of the Actuary said it anticipates “that physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter.

thinkstockphotos.com

“Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2,” the report’s authors noted.

The actuarial report attributes the long-term issues to a number of the bill’s provisions. First, it notes the expiration in 2025 of updates totaling $500 million per year and a 5% annual bonus, which will result in a payment reduction for most physicians.

Second, “this bill specifies the physician payment update amounts for all years in the future, and these amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report warned. That will result in payments that will be inadequate when rates of inflation are higher or when price updates are not enough to cover cost increases.

Compared with costs under current law, the CMS actuaries estimated the legislation’s net cost to the federal government from 2015 through 2025 would be $102.8 billion.

The SGR repeal bill, which also reauthorizes the Children’s Health Insurance Program for 2 more years, passed in the House March 26 with overwhelming bipartisan support. The bill is expected to pass the Senate after members return April 13 from their spring recess.

[email protected]

Despite being billed as a permanent solution to the annual threat of Medicare payment cuts to physicians, a bill repealing the Sustainable Growth Rate formula will not ensure adequate physician payments in the long term, according to actuaries at the Centers for Medicare & Medicaid Services.

In an April 9 report outlining the effect of the Medicare Access and CHIP Reauthorization Act (H.R. 2), the CMS Office of the Actuary said it anticipates “that physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter.

thinkstockphotos.com

“Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2,” the report’s authors noted.

The actuarial report attributes the long-term issues to a number of the bill’s provisions. First, it notes the expiration in 2025 of updates totaling $500 million per year and a 5% annual bonus, which will result in a payment reduction for most physicians.

Second, “this bill specifies the physician payment update amounts for all years in the future, and these amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report warned. That will result in payments that will be inadequate when rates of inflation are higher or when price updates are not enough to cover cost increases.

Compared with costs under current law, the CMS actuaries estimated the legislation’s net cost to the federal government from 2015 through 2025 would be $102.8 billion.

The SGR repeal bill, which also reauthorizes the Children’s Health Insurance Program for 2 more years, passed in the House March 26 with overwhelming bipartisan support. The bill is expected to pass the Senate after members return April 13 from their spring recess.

[email protected]

In 2011, Eugene Declercq, PhD, of Boston University School of Public Health, found that 56% of U.S. counties had no certified nurse midwives; 46% had no obstetricians/gynecologists (OB/GYNs); and 40% had neither providing direct patient care. But a bill introduced in Congress on March 3, 2015, could help rectify that.

Related: Maternal Morbidity: Higher Risk for Minorities

The bill, Improving Access to Maternity Care Act of 2015 (S. 628, H.R. 1209), was introduced by Sen. Mark Kirk (R-IL), Sen. Tammy Baldwin (D-WI), Rep. Michael Burgess (R-TX), and Rep. Lois Capps (D-CA) and would establish a health professional shortage area designation for maternity care services, similar to designations that exist for primary care, dental, and mental health services. Currently, OB/GYNs are recognized under the primary care shortage designation, which fails to adequately address shortages in maternity care, according to Sen. Baldwin’s March 3, 2015, statement.

Related: Acute Upper Abdominal Pain in Early Pregnancy

The new designation would allow the Health Resources and Services Administration to deploy the National Health Service Corps to fill critical shortages, allowing valuable resources to be directed to areas of greatest need, according to Ginger Breedlove, PhD, CNM, APRN, FACNM, president of the American College of Nurse-Midwives.

Related: Overprescription of Opioids in Women of Childbearing Age

“By expanding access to maternity care professionals,” Dr. Breedlove said, “we can reduce extremely high maternity care costs in the U.S. by ensuring that all women can receive supportive prenatal and delivery services.”

In 2011, Eugene Declercq, PhD, of Boston University School of Public Health, found that 56% of U.S. counties had no certified nurse midwives; 46% had no obstetricians/gynecologists (OB/GYNs); and 40% had neither providing direct patient care. But a bill introduced in Congress on March 3, 2015, could help rectify that.

Related: Maternal Morbidity: Higher Risk for Minorities

The bill, Improving Access to Maternity Care Act of 2015 (S. 628, H.R. 1209), was introduced by Sen. Mark Kirk (R-IL), Sen. Tammy Baldwin (D-WI), Rep. Michael Burgess (R-TX), and Rep. Lois Capps (D-CA) and would establish a health professional shortage area designation for maternity care services, similar to designations that exist for primary care, dental, and mental health services. Currently, OB/GYNs are recognized under the primary care shortage designation, which fails to adequately address shortages in maternity care, according to Sen. Baldwin’s March 3, 2015, statement.

Related: Acute Upper Abdominal Pain in Early Pregnancy

The new designation would allow the Health Resources and Services Administration to deploy the National Health Service Corps to fill critical shortages, allowing valuable resources to be directed to areas of greatest need, according to Ginger Breedlove, PhD, CNM, APRN, FACNM, president of the American College of Nurse-Midwives.

Related: Overprescription of Opioids in Women of Childbearing Age

“By expanding access to maternity care professionals,” Dr. Breedlove said, “we can reduce extremely high maternity care costs in the U.S. by ensuring that all women can receive supportive prenatal and delivery services.”

In 2011, Eugene Declercq, PhD, of Boston University School of Public Health, found that 56% of U.S. counties had no certified nurse midwives; 46% had no obstetricians/gynecologists (OB/GYNs); and 40% had neither providing direct patient care. But a bill introduced in Congress on March 3, 2015, could help rectify that.

Related: Maternal Morbidity: Higher Risk for Minorities

The bill, Improving Access to Maternity Care Act of 2015 (S. 628, H.R. 1209), was introduced by Sen. Mark Kirk (R-IL), Sen. Tammy Baldwin (D-WI), Rep. Michael Burgess (R-TX), and Rep. Lois Capps (D-CA) and would establish a health professional shortage area designation for maternity care services, similar to designations that exist for primary care, dental, and mental health services. Currently, OB/GYNs are recognized under the primary care shortage designation, which fails to adequately address shortages in maternity care, according to Sen. Baldwin’s March 3, 2015, statement.

Related: Acute Upper Abdominal Pain in Early Pregnancy

The new designation would allow the Health Resources and Services Administration to deploy the National Health Service Corps to fill critical shortages, allowing valuable resources to be directed to areas of greatest need, according to Ginger Breedlove, PhD, CNM, APRN, FACNM, president of the American College of Nurse-Midwives.

Related: Overprescription of Opioids in Women of Childbearing Age

“By expanding access to maternity care professionals,” Dr. Breedlove said, “we can reduce extremely high maternity care costs in the U.S. by ensuring that all women can receive supportive prenatal and delivery services.”

High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

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High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

[email protected]

High-cost advances in diagnosis and treatment are entering medicine each and every month. As Medicare turns 50 this year, how can the program – with its growing number of beneficiaries and their advancing age – cope with the onslaught?

“When we look at the price of something in health care, very often we just look at one bucket,” Amy Miller, Ph.D., executive vice president at the Personalized Medicine Coalition, said in an interview. “We look at the drug bucket or we look at the diagnostic bucket or we look at the hospital bucket or the doctor visit bucket, but when we are talking about the targeted therapy that is more or less known to work for a particular patient with a particular condition, we need to think about the price more broadly. We need to think about the systemic cost savings of getting that drug to the right patient the first time, without failing first on other drugs.”

For some high-priced drugs, that appears to be the case. Take for example the direct-acting antiviral agents (DAA) recently approved to treat hepatitis C (HCV) infection.

“If you have a drug like [sofosbuvir], which is extremely expensive at face value, it may not have such a big long-term effect because [sofosbuvir] is a cure,” said Dr. Soeren Mattke, senior scientist in RAND Corp. in Boston. “So if you take patients with hepatitis C that have a certain trajectory of spending over the next decade or so – treatment, liver transplantation, and the like – it basically wipes out the infection. In the long run, even though the drug is very, very expensive, it may not be such a bad deal for Medicare.”

And while some physicians would like to see these new DAAs prescribed to all appropriate patients with HCV, even they acknowledge that the high price tag can be fiscally constraining in the long run and can handle some restrictions to ease the financial burden.

“If you have a 70-year-old patient who has no evidence of any liver fibrosis and they have lived with hepatitis C for 30 or 40 years, I don’t think it’s unreasonable to suggest that maybe they wait for their therapy until an even less expensive option comes along,” said Dr. Sean Koppe, director of hepatology at University of Illinois at Chicago. “I think if the payer is going to be a little bit restrictive but still allow us to treat the majority of our patients who are showing some signs of fibrosis, I wouldn’t be too bothered by that approach.”

Oncology, another area where high-priced treatments are prevalent, is not as cut and dried in terms of medical outcomes as HCV.

“Some of the oncology drugs [have a cost of] $50,000-$60,000 per treatment course, but you extend life expectancy of a terminal cancer patient by weeks,” Dr. Mattke said. “So while you are looking at this drug, and they cost practically the same [as some DAAs], the impact is quite different.”

But one bright spot that can potentially help alleviate pricing pressures is the growing emphasis on personalized or precision medicine.

“When we talk about a high-priced therapeutic, we have to remember that not too long ago, when a drug came to market, it was marketed to everyone with a particular condition,” Dr. Miller said. “But when [crizotinib] hit the market, it only treated 4% of those with non–small-cell lung cancer initially based on its approved label.”

Identifying the right users will be key to moderating the impact of high-priced therapeutics.

“But if diagnostics aren’t adequately covered or reimbursed or if a particular therapy is on a higher tier or there’s more risk for the physician, giving that drug to a patient, even if diagnostics indicate it’s the right one, then the models might not work,” Dr. Miller said, adding that she is “encouraged” that the federal government is talking about more active use of precision medicine.

But, according to Dr. Mattke, there are pitfalls to precision medicine, too.

“If personalized medicine means that you are able to design a drug that targets the very specific molecular [structure] of a particular cancer and reverses it, this could be a very, very expensive drug, but it could be totally worth it,” he said. “If personalized medicine means there’s a highly differentiated range of drugs out there that all are so-so effective, you may end up with some marginally valuable drugs at extremely high prices, and yet force Medicare to pay for it because they cannot take cost into consideration.”

When it comes to costly medications and treatments, Medicare’s fee-for-service design isn’t helping either.

“We have a payment system that works through a third party payer, so the person who needs the care is not usually the person who is paying for the care,” said Dr. Jeffery Ward, an oncologist who serves on the clinical practice committee of the American Society of Clinical Oncology. “Prices and the fees are set based on what you do. I don’t get paid better for doing a good job than I would get for doing a cruddy job. [Once,] that served medicine and Medicare well, but now we have a health care crisis.”

Dr. Ward added that incentives are misaligned in a manner that rewards doctors for choosing more expensive drugs and procedures for their patients.

As oncologists, “we are going to have get over our addiction to [being compensated on the] margin on drugs,” Dr. Ward said. “We’re going to have to be able to develop a system and have faith in a system that will pay us fairly for what we do instead of paying us based on what drugs we choose.”

However, Dr. Steven Allen, who chairs the American Society of Hematology committee on practice, said that he doesn’t believe that is a key issue.

“I think you are really only referring to a very small percentage of physicians,” Dr. Allen said. “I think the vast majority of physicians do what’s right for their patients. ... They will choose the best drug for their patients regardless of the reimbursement the physician may receive given that drug.”

Dr. Ward said that to address the need to cover these potent, high-cost treatments, “I think what Medicare is going to have to do at its 50th birthday is figure out how to begin to reward physicians for doing the right thing and for providing quality care instead of simply paying for quantity.”

The federal government is moving in that direction. In January, Health and Human Services Secretary Sylvia Burwell announced a new goal for Medicare: Fifty percent of all payments should be value based by 2018 (N. Engl. J. Med. 2015;372:897-9 [doi 10.1056.NEJMp1500445]). But what exactly does value mean? While that point is debated on a broad scale, one thing that is obvious is that it will require a culture shift on a many levels.

[email protected]