Schwitzer health news blog

Numbing news on rising health care costs

Are we getting numb to news about rising health care costs? I saw very little pickup of either of the following stories this week:

In the Los Angeles Times, *Workers' Health Insurance Costs Soar*:

Workers with job-based coverage for their families saw earnings rise 3% from 2001 to 2005, while their health insurance premium contribution increased 30%, according to the study by researchers at the State Health Access Data Assistance Center at the University of Minnesota. The average cost nationally of family coverage during the period increased nearly $2,500, to $10,728 from $8,281.

On a Chicago Tribune blog, " Ouch! Health Costs Rise as the Economy Falters":

Slightly more than 1 in 4 Americans (28 percent) report that the recent economic downturn has caused "serious problems" paying for medical care and insurance, according to a new survey by the Kaiser Family Foundation, a California policy group. It’s the third most frequent type of problem people are encountering, behind problems paying for gas (44 percent) and getting a raise or a good paying job (29 percent).

In a separate study, also released by the Kaiser Foundation, researchers at the Urban Institute are estimating that a 1 percent rise in the national unemployment rate would throw 1.1 million Americans into the ranks of the uninsured.

Current estimates put the number of people without health care coverage at around 47 million.

That’s what happens during a recession: People lose jobs and job growth stalls. Also, more people end up turning to state programs such as Medicaid or SCHIP (the State Children’s Health Insurance Plan) for health care coverage.

In turn, that puts states in a bind because state revenues drop when unemployment rises (and businesses, by definition, aren’t doing as well). Combine expanded need for public programs with reduced revenues and you have a difficult situation.

Layer on top of that expanding budget deficits in the states and you have a very, very difficult situation.

Drug ads should tell you the cost

A South Carolina physician states in a letter to the editor in this week's BMJ:

"Practising in the United States, I am well acquainted with direct to consumer advertising of prescription drugs. I suggest (and have suggested in the past to the Food and Drug Administration) that if such advertising is allowed, it should be mandatory for the manufacturer to state the typical cost of a course of treatment with the drug. My own experience of the $600 (£300; {euro}385) treatment for onychomycosis was that this information could save a great deal of time in explaining to the patient why the drug is not covered by their insurance. It could also prevent a whole unnecessary discussion in the first place as patients quite readily recognise that the cost is out of proportion to their problem."

Onychomycosis is toenail fungus. You know the ads.

Medicare to pick up tab for more heart scans

Earlier this week, Merrill Goozner may have given us the spot-on scary political reality when he put his touch on the story of Medicare approving new payments for expensive heart scans. Excerpt:

I suspect there will be a lot more of these decisions over the next nine months as Bush administration appointees hoping to line up their next jobs grant top-of-the-wish-list favors to special interests.

The New York Times website reported Wednesday that the Center for Medicare and Medicaid Services has reversed a proposed policy to cut off paying for heart scans, which can cost $600 or more. The preliminary decision announced last December found no clinical evidence that heart scans identify heart disease any better than other non-invasive procedures, like a stress test. According to the paper:

Medicare’s initial proposal, which would have ended payment for the scans unless the patients were enrolled in studies to determine the technology’s effectiveness, had met with fierce resistance from the doctors who perform these scans and the companies that make the equipment. They strongly defended the use of these scans as an important alternative to traditional angiography. ...

Lobbying by docs and equipment makers. Pay first, evidence later. It's the American way.

How much will we spend for so modest a benefit?

A great letter to the editor appeared in the Wall Street Journal yesterday:

I am still trying to recover from the Food and Drug Administration's recent decision to go against its advisory panel's recommendation and approve Avastin to treat advanced breast cancer ("Genentech Clears Hurdle on Cancer Drug Avastin," Leading the News, Feb. 23).

Although Avastin is ushering in a new wave of "targeted" cancer therapies, which minimize the gut-wrenching side-effects that many of us previously endured with our cancer treatment, the cost to our health-care system is astronomical. What is the true cost of this drug? While the average charge a provider may pay for Avastin may be $7,700 a month, it certainly isn't what a patient is billed. My experience in reviewing hundreds of medical claims involving Avastin shows that the average monthly patient charge when given in an oncologist's office is closer to $18,000 a month, while many hospitals charge more than $35,000 a month. With 38,000 American women eligible for this drug and an average treatment of six months, we suddenly have several billion dollars added to our annual health-care tab.

If the FDA has been given the power to make decisions that have such huge ramifications, it must be accountable for the cost-benefit ratio of these decisions. In this case, a study showed there was no survival benefit yet the cost will be billions of dollars per year. Is there any wonder why our health-care expenditures are expected to double to over $4 trillion within 10 years?

Peter S. Dumich, M.D.
Augusta, Ga.

Four related stories in one day – impact of the drug ad assault

In an interesting piece of work, MIT’s Dan Ariely reports on research that suggests that people given identical pills receive greater pain relief from the one they think costs more. He says this might explain why people lack confidence in generic pills and believe that more expensive brand name equivalents work better.

Meantime, Reuters reports that generic drug use may have slowed the growth of U.S. prescription drug costs last year to its lowest level in more than a decade.

However, USA Today reports that drug ads are pushing more Americans to ask their doctors about drugs that are advertised. And, as a result, more docs are then recommending prescriptions.

And the Associated Press reports:

“In a David vs. Goliath battle, Pennsylvania is among a handful of states trying _ with modest results at best - to counter the pharmaceutical industry's multibillion-dollar marketing and cut costs for prescription-aid programs for senior citizens, who are bombarded with "ask your doctor" advertising.”

Health care spending more than $4 trillion by 2017?

I get the Health Behavior News Digest from the Center for the Advancement of Health.

Two adjacent items in today's digest caught my eye.

An Associated Press story: Spending on Health to Rise Dramatically. "By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects."

And then a Bloomberg story: Cosmetic Surgery Losing Stigma for U.S. Men, Rises 17% in 2007. "American men, favoring Botox injections and liposuction, underwent 17 percent more cosmetic procedures in 2007 to more than 1 million treatments, according to the American Society for Aesthetic Plastic Surgery."

Hmmm. Anybody else see a connection between the kinds of trends reflected in the Bloomberg story being a significant piece of the pie that's blowing up in the AP story? Not hard to find: there are connections like this every day in the news.

Breast cancer advocate: Patients lose, drug company wins

The FDA overruled its expert advisory panel and approved the drug Avastin for breast cancer. On his Pharmalot.com blog, Ed Silverman writes that this could mark a major shift in FDA standards for evaluating cancer drugs. He writes:

"At issue was whether slowing tumor growth - known as progression-free survival - for an additional 5-1/2 months in metastatic breast cancer merits approval, even though Avastin wasn’t shown to extend life. The question, of course, resonates far beyond any one drug as the agency grapples with increasingly vocal cancer patients and their advocates, who insist any benefit is important.

For drugmakers, the approval is an important signal, because it can be expensive to conduct the lengthy trials needed to prove a drug can extend life. The approval also bolsters an industry tactic called label expansion, which is used to squeeze additional revenue out of a medication. In the case of Avastin, which is already approved to treat colon and lung cancer, Genentech may reap an additional $1.3 billion a year in revenue.

The FDA’s decision may now open the door for other cancer meds to be approved if studies find the meds can shrink tumors, although some docs worry patients may not really benefit. “If FDA sets a precedent of approving a drug based on progression free survival, people are afraid they may stop looking at survival as the most important endpoint,” Kay Dickersin, director of the Center for Clinical Trials at Johns Hopkins University, tells the Associated Press.

“The FDA has lowered the bar on the approval of breast cancer therapies. At a time when many questions are being raised about how the FDA approves drugs for market, today’s decision is a victory for drug companies, but not for patients,” Breast Cancer Action executive director Barbara Brenner says in a statement headlined ‘Patients Lose, Genentech Wins.’ "

The Wall Street Journal reports that "Avastin costs about $7,700 a month, or $84,700 for an average 11-month course for breast cancer. However, with FDA approval, Genentech will enact a $55,000-a-year price cap." And the Journal further quotes Brenner about the debate over rising prices of biotech treatments. She said, "Where we're talking about the cost of health care, biologics are the elephant in the room."

Health care costs and the nation's long term budget outlook

Congressional Budget Office director Peter Orszag gave his long-term budget outlook to a congressional budget committee this week.

For anyone with a pulse, there was nothing surprising in the report:

"...rising costs for health care and the aging of the U.S. population will cause federal spending to grow rapidly. If federal revenues as a share of gross domestic product (GDP) remain at their current level, that rise in spending will eventually cause future budget deficits to become unsustainable."

A better read may be Orszag's November report, The Long-Term Outlook for Health Care Spending.

Overdose: too many doctors

Shannon Brownlee, in the December 2007 issue of The Atlantic Monthly (subscription required for full text) writes about what she calls "the health care crisis no candidate is addressing." She posits that we may have too many doctors in this country. Excerpts:

"Some experts would even go so far as to suggest we need fewer doctors, not more. Elliott Fisher, a physician and researcher at the Center for Evaluative Clinical Sciences at Dartmouth Medical School, quipped at a recent gathering at the Institute of Medicine, "If we sent 30 percent of the doctors in this country to Africa, we might raise the level of health on both continents." ...

As for the rising number of physicians being trained, the remedy is simple: Turn the spigot back off, or at least close it part way. The groups now calling for more physicians should come up with better evidence that all those new doctors are not going to simply drive up costs."

More on the medical arms race syndrome

In his regular e-mail newsletter and commentary, former U.S. Senator David Durenberger writes:

FDA approval of Abbott Lab's new drug-coated stent called Xience means there will now be four large corporate competitors in a relatively small field selling Taxus from Boston Scientific, Cypher from J and J, Endeavor from Medtronic, and a version of the Xience stent called Promus from Boston Scientific (with a drug coating different from Taxus). Multiply those products by thousands of sales persons in the cardiac market and the answer is a gradual expansion of the now $2 billion a year market for stents in this country. Since insurance payments go to hospitals who have financial incentives to encourage the heart surgery in which the stent is implaced, and surgical fees to surgeons who do them, the definition of "medical necessity" is determined by the surgeon's judgment and by the device supply market, not necessarily by the appropriateness nor by the cost-effectiveness of a particular surgery or stent.

Lipitor ad/pr campaign to battle generic competition

This weekend, the New York Times had a terrific story on Pfizer's battle to pump life into Lipitor to stave off generic competition. Excerpt:

"It is shaping up to be the biggest shift yet to a generic drug, potentially saving the nation $2 billion a year or more in prescription costs.

And scientists and doctors say that for most of the 16 million people in America who take drugs to reduce cholesterol, the low-priced alternative will work as well as the name-brand medicine — Lipitor, which is made by Pfizer and is the nation’s most widely prescribed drug.

While Lipitor itself is not available as a generic, a very similar drug made by Merck, Zocor, lost its patent protection last year. The generic version of Zocor, simvastatin, is now much cheaper than Lipitor, leading insurers to press doctors and patients to switch.

But Pfizer is not letting its flagship drug go down without a fight.

The company has mounted a campaign that includes advertisements, lobbying efforts and a paid speaking tour by a former secretary of the federal Department of Health and Human Services. Pfizer is also promoting a study — whose findings many experts are questioning — that concluded that British patients who switched to simvastatin had more heart attacks and deaths than those who remained on Lipitor.

The Lipitor battle has become a test of the pharmaceutical industry’s ability to defend name brands, even as insurers, patients and doctors seek to whittle the nation’s $270 billion annual prescription drug bill by using generic alternatives whenever possible."

The Wall Street Journal's Health Blog quips that the ad campaign featuring artificial heart inventor Robert Jarvik makes him "nearly as ubiquitous as Verizon’s Test Man."

Overspending on medical overtreatment

See Consumer Reports' list of the 10 most overused medical tests and treatments. Synopsis:

BACK SURGERY

HEARTBURN SURGERY

PROSTATE TREATMENTS

IMPLANTED DEFIBRILLATORS

CORONARY STENTS

CESAREAN SECTIONS

WHOLE-BODY SCREENS

HIGH-TECH ANGIOGRAPHY

HIGH-TECH MAMMOGRAPHY

VIRTUAL COLONOSCOPY

You can quibble with the list, but you can't help but commend CR for raising public awareness about the medical arms race. And this list is just part of a broader special section on overspending on overtreatment.

Health insurance premium pain level increasing

The Kaiser Family Foundation’s annual study of employer-based health care insurance has a mixed message this year.

While the 6.1% jump in the average family premium is smaller than in recent years, the average annual total premium cost for family coverage is $12,106 – much more than a minimum wage earner bring home in a year. And the average annual worker contribution for that family coverage is now $3,281 – double what it was just seven years ago.

Kaiser president Drew Altman said, “Even if the rate of increase is lower, the pain level is actually higher.”

Thailand does what U.S. can't: play hardball with Pharma

Thailand - little Thailand - has stood up to drug companies in ways the U.S. has not or will not. Read today's Wall Street Journal story.

But the U.S. - even with changes in Congress - can't muster the courage to even negotiate drug prices for Medicare. As Paul Krugman wrote in the New York Times:

"... The political news over the last few days has been grim. ...The Senate failed to end debate on a bill — in effect, killing it — that would have allowed Medicare to negotiate over drug prices. ...[I]n spite of overwhelming public support..., 42 senators, all Republicans, voted no."

Guess the drug lobby isn't as strong in Thailand.

Medicare not getting best bang for taxpayer buck

The U.S. Senate today will consider a bill that would correct one of the most short-sighted clauses of any legislation ever passed in this country - the part of the Medicare Part D legislation that kept the government from negotiating the best prices for the drugs now being sold to seniors.

A Star Tribune editorial summarizes some of the folly of the current law:

"When the Department of Veterans Affairs buys prescription drugs for veterans, it negotiates discounts from drug manufacturers. When Medicaid buys drugs on behalf of poor families, it demands the lowest available price. Yet when Congress added a prescription drug benefit to Medicare in 2003, it specifically banned the government agency from negotiating discounts on behalf of senior citizens and taxpayers.

That was an egregious and bizarre decision, and Congress should reverse it as soon as possible. ....

It is the biggest new federal entitlement since the Great Society, and it is costing billions of dollars in borrowed money. The least Congress can do is let Medicare get the best bang for the taxpayer's buck."

Women penalized in "consumer-driven" health plans?

The AP reports on a new Harvard study that suggests that high-deductible, so-called "consumer-driven" health plans may drive women to have to pay more than men. Excerpt:

High-deductible, consumer-driven health insurance plans often wind up being an unfair burden to women, a study says, largely because women need many routine medical exams that quickly add up.

The median expense for men under 45 in these plans was less than $500, but for women it was more than $1,200, according to the study by Harvard Medical School researchers.

They also found that only a third of insured men in that age group spent more than $1,050 in annual medical costs, while 55 percent of women did.

"High-deductible plans punish women for having breasts and uteruses and having babies," said Dr. Steffie Woolhandler, the study's lead author.

"When an employer switches all his employees into a consumer-driven health plan, it's the same as giving all the women a $1,000 pay cut, on average, because women on average have $1,000 more in health costs than men," she said.

Docs dig deeper to fight insurer review of imaging tests

In a followup story, the Minneapolis Star Tribune reports that "the Minnesota Medical Association on Wednesday asked regulators to pull the plug on Medica's controversial program to curb the use of high-tech diagnostic imaging.

Doctors say that consulting HealthHelp 'is a waste of energy, time and money,' and increases health care costs."

This cat-fight (or CAT scan-fight, along with MRI- and PET-scan fight) is worth following.

How many high-priced robots and scanners can we afford?

The cover story of Minnesota Medicine is “The Medical Arms race: how many high-priced robots and scanners can we afford?”

Excerpt: “How many children’s hospitals, heart centers, bariatric centers, robotic surgery systems, PET scanners, MRI scanners, and so on does a given population area need to serve its genuine health care requirements, as opposed to the maximum convenience of patients or the economic interests of physicians and hospitals?

‘In any other industry,’ Durenberger says, ‘when someone invents something new, market mechanisms determine whether it catches on and to what extent.’ For instance, if someone invents a video game, ‘there is a market that tells you this is something that X number of people want and are willing to pay X dollars for. That analogy applies practically everywhere except in health care.’ “

Doctors decry scan approval oversight

The explosion in the use of diagnostic imaging - particularly high-tech, high cost scans such as CT, MRI and PET scans - has led to many questons about appropriateness of all these scans. I've blogged about some of these concerns as recently as last week.

In Minnesota, the Medica health plan claims that 15 to 20 percent of the scans it pays for are not appropriate for the condition being treated, according to a story in the Star Tribune.

But the real news the paper reports is that three insurers have begun (or will soon) to require third-party review by an outside evaluator of all requests for such high tech scans. And doctors don't like it.

The paper reports: "In a letter obtained by the Star Tribune, the 11,000-member Minnesota Medical Association (MMA) asserts that the new third-party consultation places a burden on patients and clinics alike and will 'interfere with the patient-physician relationship. Physicians throughout Minnesota, whether practicing in urban or rural, primary care or specialty, large or small group practices, along with health care leaders in the community, agree this is the wrong direction to take,' said the letter."

This is an important issue.

Why, for example are there something like 20 CT or MRI machines within a two-mile radius of one medical center in metropolitan Minneapolis?

Who says all of those machines are needed? Who knows if all the scans are warranted? And who pays when those machines go unused?

Some may claim that insurers are denying appropriate care, but I think they're asking legitimate questions that may answer some of the questions above.

U.S. health care now 16% of GDP

A column in the Wall Street Journal (subscription required) reminds us of the growing percentage of the gross domestic product that health care spending represents. It states:

"When it comes to managing its citizens' health, the U.S. is a model of inefficiency.

Now, Washington and state capitals are promising to refocus on the problem, and Bank of America strategist Joseph Quinlan says the payoff could be huge. Bringing health-care spending down to the same percentage of GDP as in France, for instance, could arguably free up $600 billion a year."

Gee, how would that be spent? On another surge? Or on meaningful health care reform?

MRI kickbacks

On this blog, we've followed stories that show how doctors' referral arrangements to MRI and CT scanning centers may make them rich while possibly violating the law. And we advised: "Think about that the next time you see a news story or an ad promoting the latest CT, MRI or PET scanner in your community. Follow the money. And then start to question whether all the scans are necessary."

Last week, the Wall Stree Journal (subscription required) reported on a whistleblower lawsuit that "details a widespread scheme among Chicago-area MRI operators to win referrals from doctors by allegedly signing the doctors to phony equipment lease deals that result in the physicians getting a kickback when they order scans for patients. ... The lawsuit strikes at an increasingly common arrangement between magnetic-resonance-imaging centers and doctors that is blamed for helping to fuel a staggering increase in the number of medical imaging tests done each year in the U.S."

This is a story worth following - in Illinois and across the country.

My furrowed brow over wrinkle fillers

The FDA has approved another wrinkle filler, and the Wall Street Journal (subscription required) reports that it has touched off competing claims from makers of other wrinkle fillers.

An exec of the new product's company says his product "will cost a patient roughly $850 a year versus $2,400 for comparable enhancement" with another product.

I hope for two things regarding this story:

1. My insurance company doesn't cover these "treatments."
2. There is no one in my insurance pool who asks for or pursues these "treatments."

I will not smile if my premiums go up because lots of people ask for these products (or lots of doctors recommend them) to "temporarily correct smile lines." Maybe a frown is appropriate in this case.

Profit and Questions on Prostate Cancer Therapy

The New York Times reports on a trend of urologists purchasing I.M.R.T. radiation therapy equipment, and suggests that the expanded use may due to the fact that doctors can make much higher profit using this technology than doing surgery. I.M.R.T.stands for intensity modulated radiation therapy. The Times reports, “Critics see a potential conflict of interest on the part of urologists, the specialists who typically help prostate patients choose a course of treatment. The critics say that urologists who can profit from the new form of therapy may be less likely to recommend other proven approaches, which for some older men can involve forgoing treatment altogether. …But because there is little research directly comparing I.M.R.T. with the other treatments, there is little consensus among urologists about which approach is best. … The one certainty about I.M.R.T. is that for doctors who own the technology, it can be much more lucrative than alternative treatments. Medicare and other insurers typically pay urologists only $2,000 or less for performing surgery to remove the prostate or for implanting radioactive seeds. The insurers say the much higher I.M.R.T. payments, which in some cases exceed $50,000, are based on the technology’s cost.”

Wouldn’t it be interesting to hear the “shared decision-making” discussion between physician and patient when IMRT is brought up as the recommended treatment option?

Brits say Herceptin will force rationining

As discussed earlier on this blog, the United Kingdom has an agency that does health care cost-effectiveness analysis – at a level and in a way unlike anything done by the U.S. government. That UK agency is called NICE – the National Institute for Health and Clinical Excellence. The BMJ recently published a commentary about NICE’s recommendation of the use of the new breast cancer drug Herceptin. The commentary, “How much will Herceptin really cost?”, points out some of the limited evidence of effectiveness for Herceptin. “Although the three published trials showed a statistically significant improvement in rates of recurrence, as yet, only one has shown a benefit in survival.” And the authors say the real cost of Herceptin will be borne by other patients whose treatment has to be dropped to balance the books. The authors write, “Nobody has suggested what treatments we cut in favor of Herceptin – not the media, medical advocates of the drug, the courts who upheld patient appeals, or NICE. … Political pressure, patient advocacy and media hyperbole should not determine who is treated and what they are treated with.” They predict that Herceptin may not be the last controversial case of “rationing by media.”

I marvel at the contrast between nations. In the U.S. we don't tend to have these kinds of discussions. Everything seems to get approved. Everything is advertised on TV drug ads. Politicians always wave in the direction of discussing health care reform at election time. But we never seem to have the public and social policy discussion about limited resources. Yet we have 47-million uninsured and a clearly tiered health care delivery system. Benign neglect.

Administration refuses to negotiate Medicare drug prices

We've written about Democrats' intention to address the Medicare drug benefit legislation prohibiting the feds from seeking better drug deals.

But the New York Times published a piece this week quoting administration officials saying they would not budge on the issue.

Health & Human Services secretary Michael Leavitt told the Times he did not want the power to negotiate drug prices. “I don’t believe I can do a better job than an efficient market,” he said.

“We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government,” Mr. Leavitt said. “A robust marketplace with a lot of competitors has driven down prices. It’s the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task.”

To continue on the current course belies the reality that the U.S. is one of the few "super powers" that does not have its government negotiate drug prices. And there are many American consumers who are not entranced by the "magic of the market" that Leavitt levitates about.

If only health care reform issues mattered

As Americans go to the polls today, I'm going to reflect on several items recently in the news.

Headline: "Americans Upset With Rising Health Costs". Excerpt: "Due to rising costs, Americans are falling behind in savings and struggling to handle even basic expenses, which over time has had a significant impact on their confidence in the health care system."

Headline: "Consumer Unease With U.S. Health Care Grows". Excerpt: "The U.S. health care system — touted as providing the best medical care in the world — is becoming more precarious to most Americans, who are rattled by rising costs, questions about quality and fears about the future. 'If you can afford it, it's the best health care system in the world, but, increasingly, people aren't able to afford it.' "

(Note: on the first day I visited the USA today website to read this story, it appeared alongside ads for a sleeping pill drug, a toenail fungus drug, and a new diet "as seen on 60 MInutes." Does anyone see a link between the two stories listed above, and the fact that the U.S. is one of only two countries in the world that allows direct-to-consumer prescription drug advertising?)

Headline: "U.S. Lags in Several Areas of Health Care, Study Finds". Excerpt: "The United States trails other countries in adopting electronic medical records and computerized systems to remind patients about follow-up care, prompt physicians to give patients test results and warn of potentially harmful drug interactions. It found that primary care doctors in America were less likely to have financial incentives to improve the quality of the care they provide. 'Although the U.S. pays more for health care than any other country, we are under-investing in our primary care system.' "

It's a shame that in these midterm elections, politicians didn't spend more time on the meat of these issues, instead of dragging us through more Mark Foley, more John Kerry gaffes, and an unprecedented assault on our psyche with attack ads. There is so much that could be done and needs to be done.

Eli Lilly not lily-white on Xigris promotion?

Three doctors at the National Institutes of Health, in an article in this week's New England Journal of Medicine, criticize the Eli Lilly drug company for its promotion of the expensive sepsis drug Xigris.

The doctors claim that Lilly manipulated treatment guidelines to give Xigris the upper hand over older, cheaper and equally effective treatments.

The authors wrote: "To improve sales of (Xigris) in 2002, Lilly hired Belsito and Company, a public relations firm, to develop and help implement a three-pronged marketing strategy. First, the product's sales were to be supported by marketing initiatives targeted to physicians and the medical trade media. Second, because (Xigris) was relatively expensive, word would be spread that the drug was being rationed and physicians were being "systematically forced" to decide who would live and who would die. As part of this effort, Lilly provided a group of physicians and bioethicists with a $1.8 million grant to form the Values, Ethics, and Rationing in Critical Care (VERICC) Task Force, purportedly to address ethical issues raised by rationing in the intensive care unit. Finally, the Surviving Sepsis Campaign was established, in theory to raise awareness of severe sepsis and generate momentum toward the development of treatment guidelines."

Eventually the efforts of that ~$2 million task force led to treatment guidelines, as the New York Times reports, "that rated Xigris more highly than older treatments for which clinical trials treating sepsis had never been conducted."

The Times also reports that "Xigris, which costs about $8,000 for a four-day course of treatment, generated controversy even before federal regulators approved it in November 2001. To win approval, Lilly presented results from a clinical trial that showed that Xigris reduced the risk of death in sepsis patients to 25 percent, down from 31 percent with older treatments. But the details of the data from the trial left many scientists who reviewed it unconvinced of Xigris’s efficacy. Half of the 20 scientists who reviewed the drug for a Food and Drug Administration advisory committee hearing in October 2001 said the agency should not approve the drug without more data. A month later, the F.D.A. approved Xigris, but warned that its use should be limited to the sickest patients, where it appeared to have the greatest efficacy."

But then came the guidelines to boost use of Xigris.

The NEJM authors conclude: "The challenges involved in producing first-rate guidelines and performance standards are only exacerbated by the intrusion of marketing strategies masquerading as evidence-based medicine."

Just say "NO" to drug reps

Last week the San Jose Mercury News reported, "The halls of Stanford University Hospital and Clinics will be just a little bit quieter today, the first day of a new ban on drug and device sales people bearing gifts, gratuities and unsolicited advice."

The story touches on this trend at Kaiser Medical Group, Yale, Penn and elsewhere.

One Kaiser exec says in the story, "The amount of waste created by the marketing activities of these companies is borne by patients.''

WSJ "Health-Care Goldmines" series

The Wall Street Journal today published (subscription required) the fourth in a series of articles on middlemen striking it rich in the health care marketplace.

This one is a gem. Excerpt: "For years, a little-known unit of publishing giant Hearst Corp. called First DataBank has played a powerful role in determining what Americans pay for prescription drugs. First DataBank doesn't buy or sell drugs -- it publishes lists of drug prices. Health plans and state Medicaid programs use those prices as a benchmark in determining what they pay pharmacies.

If the benchmark goes up, so do costs for these payers. That's what happened in 2002, when First DataBank suddenly made broad revisions to its key published list. The new prices had the effect of fattening the profits of pharmacies, out of the view of patients and companies who pay for the soaring cost of health care."

What we don't know about U.S. health care is killing us - or our personal bottom lines.

Milwaukee editor says media must pay more attention to health care crisis

The editor of Milwaukee Magazine writes: "Perhaps the most under-covered issue in the Milwaukee metro area is the cost of healthcare. Medical costs are killing this community in both public and private sectors.

I don’t claim to have any solutions to this crisis. But it’s a safe bet nothing will happen until more attention is paid to the issue. And the media can help make that happen." (my emphasis added)

Health care spending outpaces workers' wages

A new study by the Center for Studying Health System (HSC) change shows that "health spending growth continued to outpace overall economic growth in 2005." Excerpts of the HSC news release:

"Health care spending continues to grow at a much faster rate than workers' income, making health insurance less affordable to more and more people, especially low-to-moderate wage workers and their employers," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

"Over time, premium increases cannot be lower than underlying cost trends, without benefits shrinking," Ginsburg said. "So major relief from the financial burden of rapidly rising premiums does not appear to be on the horizon, and the premium trend is unlikely to continue to decline in the coming years."

U.S. Spends Most But Gets Mediocre Health Care

Here's a followup to last week's ridiculous New York Times column arguing that the U.S. doesn't need to restrain health care spending. Read the Reuters story that reports what we've heard before: "The United States spends far more on health care than any other country but gets only mediocre care in return for its investment."

NYT column off the mark on health care spending

David Leonhardt's "Economix" column in the New York Times yesterday argues that we don't need to restrain health care costs. He writes, "we often imagine that the costs and benefits are unrelated, that we can somehow have 2006 health care at 1950 (or even 1999) prices. We think of health care as if it were gasoline, a product whose price and quality have nothing to do with each other."

The column is, perhaps, an example of how you can't plunk an economist down in the health care industry and expect him to make sense of it. The column is blind to some of the hard data-driven realities of the U.S. marketplace.

2006 health care is not a hallmark of quality. As Dartmouth's Jack Wennberg has established over more than 30 years of research, there are wide, unexplained variations in the way medicine is practiced in this country, driving him to say, "In U.S. healthcare, geography is destiny."

Elliott Fisher of Dartmouth has shown that more is not always better in health care - that high-spending areas may have worse outcomes than low-spending areas.

Former U.S. Senator David Durenberger (R-Minn.) is eloquent on the point that we don't know what we're buying in health care.

So Leonhardt's argument that "an affluent society should devote an ever-growing share of its resources to the health of its citizens" is simplistic. Why encourage more spending in an arena of uncertain quality, where more is not better, where we don't know the value of what we're getting now for our unprecedented 15% of the GNP in health care???

Medicare drug "doughnut hole" swallows seniors

"Every time somebody in Washington says what a wonderful benefit this is, I think they have to look a little closer."

That's what a consumer says in a Washington Post story about the millions of older Americans who are now hitting the "doughnut hole" in Medicare drug coverage. That means they've spent through the first wave of coverage are now in a hole wherein they must pay the full cost of prescription drugs - or stop taking them.

The Post reports: "Some seniors knew nothing of the coverage gap until they were hit with a bigger drug bill, advocates say.

Nine months into the program, as more and more seniors reach the threshold that puts them in the gap, many see it as a headache -- or worse."

Employer headaches from "consumer-driven" health plans

The Wall Street Journal (subscription required) today profiles one employer's experience with high-deductible health insurance plans ("consumer-driven" as marketing folks like to call them) for his employees. The story reflects some of the good and some of the bad from this concept.

From WSJ: "The new strategy has motivated some workers to research what they are paying for medical care. One found an over-the-counter replacement for a more expensive brand-name heartburn drug. That is good news for Nick Bond, who runs the business and had suspected some employees were overusing medical care because they didn't have to pay for much of it themselves.

Mr. Bond's experience suggests that although information about the price and quality of health care remains sketchy, the president's push to make the health-care market more like the market for other services can change consumers' behavior. However, some managers have to turn themselves into instant experts both on health care and on the law. Mr. Bond knows about a transmission rebuilder's heartburn, a technician's blood-pressure medication and a visit to the emergency room by a mechanic's daughter. If he uses health information in firing or demoting an employee -- or is perceived to do so -- he might be in for a lawsuit."

AARP - a prescription drug power broker

From former U.S. Senator David Durenberger’s Sept. 21 newsletter from the National Institute of Health Policy:

“AARP just launched a $500,000 advertising campaign to persuade Congress to allow Americans to buy prescription drugs in Canada. This is the same AARP that helped Republicans in 2003 pass Medicare reform legislation to provide a prescription drug benefit, but to prohibit Medicare from negotiating drug prices for Americans. This suggests it is AARP’s policy to require 26 million Canadians to do for Americans what they won’t allow 42 million Americans to do for themselves.

We do know now that one thing that drives AARP insurance policy is the Insurance Trust – separate from its policy board – which decides which insurance carrier will offer official AARP Medicare Supplemental and related products. UnitedHealth Group (UHG) owned that franchise before and after passage of the MMA, which gave the company a huge advantage over its rivals in the first year’s competition for Pt. D and Medicare Advantage plans. The same will hold true in the future unless someone in leadership at AARP insists on giving AARP member beneficiaries a choice of AARP- endorsed products. ….

No matter which way you look at it, the costs of prescription drugs are rising. AARP reported this week that the cost of the 200 most commonly-prescribed drugs for seniors has risen by an average of 6%. That’s twice the cost of living adjustment in Social Security. Plus the Medicare Pt. B and Pt. D drug co-pays are rising too. Considering the annual income of the aged and disabled with ongoing medication needs, these cost increases are painful."

What do we get for what we pay in health care?

Last week's New England Journal of Medicine article postulating that the U.S. is getting quite a bargain from what's it's spending on health care garnered a lot of news coverage.

(This despite the fact that the authors said, "The rising cost of healthcare has been the source of a lot of saber-rattling in the media and the public square, without anyone seriously analyzing and discussing the benefits gained. But the dramatic increase in life expectancy that we've seen over the last decades shows that rising medical costs have been largely justified.")

Well, journalist Merrill Goozner did some analysis of his own, in a blog entry entitled, "Paying for an Aston-Martin, Getting A Ford." He concludes: "But studies like (this) can only serve to distract attention from the fact that our fractured and inefficient health care system, plagued by high administrative overhead, delivers worse outcomes than most other advanced industrial nations despite imposing far higher costs."

Americans ask "Why can't we get drugs from Canada?"

A Wall Street Journal online/Harris Interactive poll shows that two-thirds of Americans strongly believe a law prohibiting pharmaceutical imports from Canada and other countries is intended to protect drug-company profits. Only 9% feel strongly that it helps protect Americans from potentially harmful drugs.

Other poll results:

"80% of Americans favor allowing people to import prescription drugs from Canada and other countries if they are much less expensive there.

More than three-quarters of those polled said they believe confiscating drugs at the Canadian border jeopardizes the health of some Americans, compared with 15% who disagree. And 84% of those surveyed said they agree with making it legal to import drugs from Canada if they are approved and vetted by that country's drug regulatory agency, Health Canada, compared with 9% who disagree."

Drop in HMO enrollment

A story on the web by Minnesota Public Radio explains how Minnesotans' enrollment in HMOs dropped last year to its lowest point in 20 years. And this was the place that for years had the greatest penetration of HMO enrollment in the country.

But the key in the story is that this may not be a good thing, that it may be a sign of employer cost-cutting.

One observer in the story says, "They're trying to wring every dollar out of the health care expenditure that they can. And by moving to indemnity and self-funded plans, the employers have flexibility to design their own plans, where in the fully insured HMO model the coverage is really mandated in state law."

And a University of Minnesota economist says, "The risk with that is that if there is any major downturn in the economy as there was at the beginning of the 90s, you could see much less coverage from some of those employers."

It will never happen in this country

The Independent of London reports that the British health watchdog group with the ironic acronym of NICE (National Institute for Health and Clinical Excellence) has ruled that the goverment won't pay for Avastin (bevacizumab) and Erbitux (cetuximab) for treating advanced bowel cancer, saying the drugs were not cost-effective.

It will never happen in this country and I can already hear the great shouts of vested interests crying, "Hooray, and it never should happen."

But we don't have a NICE in this country. And past attempts in this country to discuss, weigh the evidence for, and perhaps even reject coverage for new technologies including drugs have often been ambushed by special interests.

Indeed, the British NICE decision is already being attacked by some.

But NICE ruled on the evidence, with a spokesperson concluding: "Although bevacizumab does show some increased benefit over standard treatment, the appraisal committee was not persuaded that it was cost- effective in the treatment of metastatic colorectal cancer. The evidence available on cetuximab does not compare it with current standard treatment and therefore we are not able to assess whether it is any better than existing treatments or whether the National Health Service could justify spending money on the drug."

With the U.S. outspending any other country in the world on health care, yet with some outcomes that are worse than those in much poorer countries, we don't have a cost-effectiveness watchdog like NICE.

Maybe it would be a nice idea.

Seniors slamming into Medicare drug doughnut hole

The Minneapolis Star Tribune had an important story about seniors with Medicare drug coverage already hitting the "doughnut hole" in their coverage.

The paper reports: "Millions of Americans are nearing that gap. Nearly two-thirds of the 11.8 million beneficiaries who bought drug policies without gap coverage will hit the doughnut hole this year -- on average in the next few weeks -- according to the Kaiser Family Foundation. Simply put, the "doughnut hole" is the gap in the Part D benefit in which consumers must pay for all of their drug costs. In 2007, it will kick in after the first $2,400 in costs, with Part D coming back in to pay 95 percent of prescription costs beyond $5,451.25."

A state-sponsored senior help line reports calls from up to 450 seniors who have hit the hole and now need help paying for drugs. They report that many are shocked to hit the gap.

The paper portrays this as the second significant snafu in the program: the rocky start with much consumer confusion and now seniors worried and confused over hitting the hole so soon.

One woman, now paying $645 a month for her drugs and preparing to take a drug-buying bus trip to Canada, said in the story: "Congress was not thinking about people when it passed this law. It was thinking how they could make the drug companies and insurance companies even richer."

Consumers can't figure out health care prices

The Chicago Tribune has a good story on how difficult it is for consumers to find out how much something in health care will cost before they agree to pursue it. And the story shows what a joke it is to discuss “consumer-driven health care” in the current environment.

“The market just isn’t ready to deliver on the promise of these new insurance products,” says the president of the Midwest Business Group on Health in the article.

The article told the story of several failed consumer attempts to find out pricing information. One was by a woman who is also an exec with the Wisconsin Hospital Association, who said “How are people supposed to make good decisions if you won’t give them information?”

“This is the only industry where people are buying services without any information,” said the executive director of the Business Health Care Group of Southeast Wisconsin in the article. “If we want people to become more engaged in thinking about what medical care costs, we have to change that.”

Pharma windfall from drugs for poor people

Last week in the New York Times, Milt Freudenheim had a column headlined, "A Windfall From Shifts to Medicare."

"The windfall," he wrote, "which by some estimates could be $2 billion or more this year, is a result of the transfer of millions of low-income people into the new Medicare Part D drug program that went into effect in January. Under that program, as it turns out, the prices paid by insurers, and eventually the taxpayer, for the medications given to those transferred are likely to be higher than what was paid under the federal-state Medicaid programs for the poor."

Freudenheim also reminds readers that "in creating the federal Part D program, Congress — in what critics saw as a sop to the drug industry — barred the government from having a negotiating role. Instead, prices are worked out between drug makers and the dozens of large and small Part D drug plans run by commercial insurers. Since Part D went into effect, the pharmaceutical industry has raised the wholesale prices of its brand-name drugs an average of 3.6 percent. Although the actual amount spent depends on what each insurer negotiates, in many cases the drugs for those 6.5 million people who used to receive their medicines through Medicaid will cost more now."

What a great piece of legislation.