Since the election several people have asked what are your thoughts on the future. So here goes.
President Obama
First, from a national perspective we can not underestimate the importance of electing Barak Obama to the role of President of the United States. His election is truly a Cinderella story come true.
Overall President Obama’s message of “Change that Makes a Difference” and “Yes We Can” attitude is exactly what the country needs to bring us out of the malay of the past several years. One can never underestimate the value of leadership and inspiration, and Barak has what I would consider the skills, desire and ability to bring this together.
In addition to his leadership style, we have already seen a tremendous global respect for his leadership as witnessed in the huge rallies he held this summer in Europe.
For the past few years there has been tremendous gridlock in the way government works and helps people. I am hopeful that this will change for the better.
When he enters the office on January 20th, 2009 he will be faced with tremendous challenges including the economy and the wars in Iraq and Afghanistan.
It has been clear from his initial speeches and his advisors comments that reforming healthcare will be front and center in his economic plans.
Healthcare
The Obama plan in its overview is simple in that it looks to provide healthcare for all, lower costs, and greater emphasis on public health. This will come at a price, and savings in one place that may be lost in another. As we saw with Medicare, cost projections made by politicians are often wishful thinking. This legislation will probably be taken up in 2nd or 3rd quarter of 09, and will be introduced by a series of “town hall meetings” during that time.
Prescriptions
Ensuring access to affordable healthcare to all Americans will increase the number of overall prescriptions written. This will come at a cost of direct price negotiation between industry and the government, thereby driving down the sales per unit cost. In addition, his call for re-importation of prescription drugs from other countries will also work to draw down prices but with direct negotiation re-importation will probably be a wash. So in the end, my prediction is that we will see more prescriptions, fewer procedures and lower drug and device prices. This may pan out to be a revenue neutral event.
I think we will also see a move to drive down insurance costs which will result in lower prices of drugs and a push towards expanded use of generic drugs.
Moratorium on DTC
As part of a healthcare reform package we will probably see a two – three year moratorium for Direct to Consumer Advertising of newly approved drugs. This is to ensure that side effects are further flushed out before the public advertising barrage takes place.
Transparency
Transparency will also be an issue. It is touched on in the current Obama plan. It is an integral part of the recently released Senator Finance Committee Chairman’s Max Baucus’s plan. Transparency not only for payments to physicians but to everyone involved in the healthcare supply chain, including: allied health, hospitals, medical societies, CME providers. There is also interest in publishing information on hospital ownership, which potentially may lead to a ban on physician owned hospitals.
The transparency debate has moved to a very integral part of the major discussions.
The Obama plan will require hospitals and providers to collect and publicly report measures of health care costs and quality, including data on medical errors, nurse staffing ratios, hospital-acquired infections, and disparities in care and costs. Health plans will be required to disclose the percentage of premiums that goes to paying for patient care versus administrative costs.
So, as you can see transparency will be seen throughout the entire system.
My concern with transparency is that payments for services will be misconstrued as gifts and result in a culture of fear for those who work with industry. This information will be used by “researchers” to bolster plaintiff lawsuits, write unflattering articles, and justification to pass even more restrictive laws.
Hopefully in the end, this move towards transparency will help to alleviate the culture of miss-trust that has developed over the years between all parties in the healthcare system.
FDA
For a lot of reasons the FDA has been a broken agency. We have seen many problems at the agency not the least of which is failing to meet their deadlines to approve or disapprove drugs. The FDA has been wildly criticized for failing to ensure the safety of our food and drugs and for failing to enforce their rules around marketing.
The FDA will emerge as a key agency in the next administration, with tougher enforcement, greater emphasis on safety and we may see a return to focusing on drug approvals. One needs to remember that despite the controversy that David Kessler, MD, Clinton’s FDA Commissioner, brought to the agency, he ran a very tight ship at FDA and we saw a great increase in the number of drug approvals during his tenure.
Picking an FDA commissioner follows the selection of the HHS Secretary, so a selection probably won’t be made until sometime first or second quarter in 09. We then deal with the confirmation process which could take a while. So we are looking at the end of 09 before we see any significant changes at the agency.
Congress
Some investigations will increase and others will disappear. Investigations around NIH, and FDA will drop off the radar six months into the next administration. This is because there is no longer the need in congress to embarrass the administration, the case no longer needs to be made that the administration is doing a bad job and if you hire us we will do better. Investigations around Associations, Physicians and Universities will increase largely because some members of congress have seen the press coverage that comes from starting these investigations.
Congress will also be front and center for any healthcare debate as witnessed by the release this week of the Baucus healthcare plan. Look for congress to come out in front with as many changes to the healthcare system as they think they can get away with.
CME
As manufactures discontinue spending on promotional items and deal with declining overall budgets from patent expirations, corporations will put greater emphasis toward providing educational value for physicians and patients. As a result there may be more resources available for quality education.
The emphasis on reducing expenditures in healthcare and the hyper regulatory environment, means that we need to closely review our current practices and ask ourselves how do educate the increasing number of healthcare providers at a cost/per provider that is less than we are currently spending. What economies of scale can we create and how can we work together to see real change in healthcare providers practices.
Look for greater emphasis on education that makes a difference, more regulations and more transparency.
As President Obama has promised, we will see change. In our industry, this will not be without challenges but hopefully the changes will make a positive difference for patients.