Schwitzer health news blog

Public willing to make tough health care choices

The non-profit Center for Healthcare Decisions just completed a study, What Matters Most, documenting what 1,200 Californians believe are the most important services for coverage by health insurance.

Len Nichols of the New America Foundation said, "The findings could have national influence as Congress begins deliberation on major health reform….this is perhaps the best representation we have of the public's view on a lot of these complicated issues."

“Leaders often assume that the public is not willing or capable of setting priorities for health insurance,” center executive director Marge Ginsburg said in a press release. “The fact is, when given a chance to speak up, the public is fully capable of making decisions that affect them as patients, as taxpayers and as citizens who want a role in developing a fair and affordable healthcare system.”

What did the survey show? "One thing we heard loud and clear is that the public is not willing to share high costs," Ginsburg said. "Most people said they would elect to take more areas of coverage away rather than paying higher premiums and copays. Everybody's very conscious of the fact that if you make cost sharing too expensive, it's counter-productive. It doesn't matter what wonderful things you offer in the way of coverage. If people can't afford it, they just won't use it," Ginsburg said.

The What Matters Most report can be downloaded here.

Stories on the survey appeared in California Healthline.org and in the Sacramento Business Journal.

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A different angle on all the ASCO news

Read the Forbes piece, "Are Cancer Drugs Worth The Money", for a different perspective on all the news coming out of the American Society of Clinical Oncology meeting. It begins:

ORLANDO - At the annual meeting of the American Society for Clinical Oncology, giant banners with pictures of heroic cancer patients proclaim doctors are "Personalizing Cancer Care."

But many companies seem to be maximizing cancer profit instead. Big drug companies are making big money off smaller and smaller improvements in cancer care. Newfangled cancer drugs can cost $50,000 a year, and that doesn’t mean they will add a year to the patient’s life--you might spend $50,000 for a year and extend the patient's life by only weeks.

The numbers would look better if drug companies did a better job of targeting drugs at the patients most likely to benefit. But that targeting has occurred in only a few scattered examples.

The skyrocketing costs for limited benefit are leading some experts to worry about whether the medical system has the right incentives.

"We are wasting a lot of resources treating people with treatments they don't need," says Otis Brawley, chief medical officer at the American Cancer Society.

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Battle for the soul of American medicine

Wow, what an article by Atul Gawande in the June 1 issue of The New Yorker.

He visits McAllen, Texas, "the most expensive town in the most expensive country for health care in the world."

There are dozens of vital themes in the article:

• Nobody there seemed to know that they were cost outliers.
• Everyone seemed to blame someone else for being cost outliers.
• Except one surgeon who said, "Come on, We all kow these arguments are bullshit. There is overutilization here, pure and simple."
• Doctors owning strip malls, imaging centers, surgery centers...with "entrepeneurial spirit." One surgeon said, "It's a machine, my friend."
• "Medicine has become a pig trough here," one surgeon said. "We took a wrong turn when doctors stopped being doctors and became businessmen."

Gawande concludes:

"Whom do we want in charge of managing the full complexity of medical care? We can turn to insurers (whether public or private), which have proved repeatedly that they can’t do it. Or we can turn to the local medical communities, which have proved that they can. But we have to choose someone—because, in much of the country, no one is in charge. And the result is the most wasteful and the least sustainable health-care system in the world."

This is a must-read.

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TV networks ignore health story costs and evidence

Bad week on network TV.

Stories on...

• a male contraceptive

• robotic surgery

• a new MRI device

* and a new skin cancer detection device

all failed to discuss costs, to quantify benefits and harms, or to give independent perspectives.

Viewers of these programs got one-sided, incomplete, imbalanced portrayals of health care treatments, tests, products and procedures.

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Does the Twin Cities need five children's hospitals?

This story has barely been touched by local Twin Cities news organizations. But a student journalist, Emma Carew, reported on it as her last story at the Minnesota Daily before graduating and before going to work for the Washington Post this summer.

As you'll see, the story touches on issues of duplication of services, increased costs, competition and the medical arms race.

A 1,200-word story by a student journalist on an important topic for local discussion.

In the inquisitiveness and determination of young journalists, there is hope for health care journalism. This is one shining example.

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Consumer confusion over how much a CT scan costs

Whistleblower column in Star Tribune tells important little story about how lost consumers can be in the alleged consumer-driven health care era.

The Strib should note that at 9 a.m. there are already 58 comments online about this column. They - and other US news organizations - should give more voice to the voiceless, confused and angry health care consumer.

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Proton promotions

Journalists can set the agenda for public discussion on health care reform. Or they can simply be led by the nose by special interests down a path of the medical arms race.

The latter was the case with a Columbus Dispatch story last week. It was a shill of a story and it should have done so much more to inform readers.

The story was about one Ohio man having to go to Florida for proton beam therapy for prostate cancer. But the story seemed to promote the plans for two proton beam facilities of their own in the near future right there in central Ohio so no one would have to travel to Florida anymore.

Our HealthNewsReview.org review summarized:

"Cheerleading hometown story, perhaps meant to pave the way for two very expensive proton therapy centers in Central Ohio. No hard questions about whether two are needed, or about the therapy itself.”

Here's a website promotion for the Florida proton center the Ohio man visited.

The story could have asked for evidence on the benefits the website promotes. And for evidence on the "harder on cancer, easier on you" claim.

Indeed, the Boston Globe this week looked for evidence and reported:

"...a study found that though proton beam therapy is at least five times as expensive as other forms of radiation, only a few small, brief studies have examined its effectiveness. There was no evidence that it was better at curing prostate cancer, and insufficient evidence that it was superior at preventing side effects."

The Columbus paper could have asked questions that appeared in a New York Times story about 14 months ago. Excerpt:

“Some experts say the push reflects the best and worst of the nation’s market-based health care system, which tends to pursue the latest, most expensive treatments — without much evidence of improved health — even as soaring costs add to the nation’s economic burden.”

“There are no solid clinical data that protons are better,” said Dr. Theodore S. Lawrence, the chairman of radiation oncology at the University of Michigan. “If you are going to spend a lot more money, you want to make sure the patient can detect an improvement, not just a theoretical improvement.”

Meantime, here’s an ad one medical center is running in local papers in advance of their acquisition of a proton beam facility.

Questions consumers might ask:

1. How can you know you’ll treat 2,000 patients a year when it hasn’t even opened yet? How can you know this will be their choice? Or that it will be the best option for 2,000 a year?

2. Why doesn’t the ad mention any evidence of benefits or harms?

3. Why doesn’t the ad mention cost?

The stimulus plan contains more than $1 billion in funding for "comparative effectiveness" research and guidelines. It is predictable that some in the medical arms race industry will scream "rationing" when questions about evidence and cost-effectiveness arise. Rather than "rationing" journalists could start talking about "rational" health policy decisions. And it starts on the local level, questioning whether any one area needs two - or even one - proton beam facility.

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The scan scam

Gina Kolata raises many questions in her New York Times piece today, "Good or Useless, Medical Scans Cost the Same."
Besides issues of variable scan quality, she writes:

In a recent report, the Government Accountability Office said nearly two-thirds of the money Medicare paid for imaging was for scans in doctors’ offices. And, the report added, doctors were receiving an ever larger part of their income from providing scanning services. Not only were patients more likely to have scans if a doctor did this, but the quality of some of the scans was questioned.

“No comprehensive national standards exist for services delivered in physician offices other than a requirement that imaging services are to be provided under at least general physician supervision,” the G.A.O. wrote.

Private health insurers were concerned, too. “These are alarming patterns that have also been observed in the private sector,” America’s Health Insurance Plans wrote in a response to the G.A.O.

It is clear why self-referral can be tempting, said Dr. Bruce Hillman, a radiology professor at the University of Virginia.

“It’s all profits,” Dr. Hillman said, adding that a group of doctors can make an extra $500,000 to $1 million a year simply by acquiring a scanner.

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The crazy quilt of health care in the US

If you want to get a picture of the crazy quilt of US health care, take a look at the new Dartmouth Atlas Project report.

It shows that:

Medicare spending is rising more than twice as fast in Dallas as in San Diego.

Medicare is spending nearly three times more on seniors in Miami than in Honolulu.

In the image below, Wausau, Wisconsin is shown with rapidly rising Medicare costs amidst a sea of otherwise lower-spending Midwest hospital regions. Why?

Or you can go to this full interactive scroll-over-your-region map.

A news release accompanying the report says:

“This illustrates how huge inefficiencies in the U.S. health care system are hamstringing the nation’s ability to expand access to care.

The authors argue that the differences in growth are largely due to discretionary decisions by physicians that are influenced by the local availability of hospital beds, imaging centers and other resources—and a payment system that rewards growth and higher utilization."

“To paraphrase a line from the gun control debate: technology doesn’t drive the growth in health care spending; people do,” said lead-author Dr. Elliott Fisher, principal investigator for the Dartmouth Atlas Project and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice. “The good news is that in many regions, spending is growing relatively slowly. Reformers can learn from these regions and put in place policies that help them sustain what they are doing now, and encourage high-cost, high-growth regions to change their ways.”

“This work demonstrates why health reformers should work to realign private and public payment schemes to benefit quality performance over the volume of services,” said Dr. Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. “Clinicians who successfully provide high quality care and slow spending growth should be rewarded, not penalized.”

“This is an opportunity for physicians to lead,” said Dr. Julie Bynum, co-author and assistant professor of Medicine at Dartmouth Medical School. “But even though doctors still make most of the critical decisions about how and where their patients get care, they will need help from payers and policymakers. Physicians operate under the rules of a system that is rigged to reward high-cost care.”

More maps are available online.

So is the study, published in the New England Journal of Medicine.

There's an important message for consumers here. This isn't just academic policy wonk talk. Health care consumers need to know that there's tremendous variation in the way health care is practiced in this country. There is tremendous uncertainty about best practices and best treatments. And - repeat after me -

MORE IS NOT ALWAYS BETTER - NEWER IS NOT ALWAYS BETTER - IN HEALTH CARE.

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Gotta have a robot to compete

Paul Levy. President and CEO of Beth Israel Deaconess Medical Center in Boston, blogs about keeping up with the Joneses in the medical arms race. He wrote:

"Many months ago, I wrote about the da Vinci Robot Surgical System and expressed doubts about whether there was evidence to support the clinical efficacy of this equipment, as opposed to the marketing efficacy of the company selling it. Well, the time has come to graciously say, "Uncle!"

Without making any representations about the relative clinical value of this robotic system versus manual laparoscopic surgery, I am writing to let you know we have decided to buy one for our hospital.

Why? Well, in simple terms, because virtually all the academic medical centers and many community hospitals in the Boston area have bought one. Patients who are otherwise loyal to our hospital and our doctors are transferring their surgical treatments to other places.

Prospective residents who are trying to decide where to have their surgical training look upon our lack of the robot as a deficit in our education program. Prospective physician recruits feel likewise. And, these factors are now spreading beyond urology into the field of gynecological surgery. So as a matter of good business planning, concern for the quality of our training program, and to continue to attract and retain the best possible doctors, the decision was made for us.

So there you have it. This is an illustrative story of the health care system in which we operate."

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Drug company pricing shenanigans

The Wall Street Journal shows how a drug company uses classic tactics to:

A. raise its prices in advance of losing its patent and facing generic competition
B. meantime launching a new "longer-acting" form of the same drug
C setting the new drug's price much lower than the suddenly-inflated old drug's price.
D. setting the hook before generic competition kicks in.

Meantime, the WSJ reminds us that "In September, Cephalon agreed to plead guilty to one misdemeanor count of violating the U.S. Food, Drug and Cosmetic Act and to pay $444 million to settle federal and state allegations that it promoted Provigil and two other drugs for off-label uses."

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Chicago Tribune's "United States of Anxiety" series

The Chicago Tribune, in the middle of a good story with a catchy headline - "The United States of Anxiety: Worried Sick Over Our Health Care" - includes some vital messages:

"Polls show voters worry a lot about health care and how much they spend on it. Presidential candidates John McCain and Barack Obama have responded by peddling plans they claim will help more Americans attain and afford care.

But neither candidate has focused publicly on treating the real problem: why American medical care costs too much and isn't as good as it should be.

We waste money on tests and visits to specialists that don't make us better. We spend big to add a few weeks or months to the inevitable end of a dying patient's life. We use expensive technology at any cost, even when it exceeds our needs, and we fail to encourage simple, proactive steps that would keep us healthier and save us money. We often don't know which treatments work the best, so we err on the side of too much care, for too much cost, with sometimes damaging consequences.

As a result, Americans pay significantly more for medical care than anyone else in the industrialized world. Every year, we spend a bigger chunk of our family budget on doctor bills, hospital stays and prescription drugs. Yet we trail several other nations in health-care quality, access and efficiency.

Most Americans have long assumed that more is better when it comes to their health: more doctors, more tests, more hospital time. But a decade of comprehensive studies suggests that all those visits and tests and hospital stays are often a waste of money—and sometimes a drag on our well-being."

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Do health care consumers have enough skin in the game yet?

The Wall Street Journal reports:

As American workers watched their health-care costs double over the past six years, they could at least take consolation in the fact their employers’ share of the cost was rising even faster.

Well, that’s over. A survey from Hewitt Associates confirms what other recent studies have suggested: It’s now employees’ portion of the costs that are rising at the faster clip.

Hewitt, one of a handful of national employee benefits consultancies, surveyed 400 large employers with more than 13 million employees total. Based on its findings, it says it expects companies’ health care costs will rise 6.4% in 2009, to $8,863 per person, after a 6% increase in 2008.

Still, that increase is merely double the rate of inflation — just five years ago, the increase in health costs outpaced inflation by a factor of four. That’s because employees are paying a greater share of their health plan tab, which is putting the brakes on some spending. Employees’ total share (including both premiums and out-of-pocket expenses) are projected to rise a steeper 8.9%, to $3,826.

Employee premiums alone are climbing 7.8%. But the real hit is to people who tend to use more care — a 10.1% increase in out-of-pocket costs such as deductibles and copays.

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Whatever happened to "certificate of need" laws?

See the column by Niko Karvounis, "Sarah Palin, The Free Market, and Certificate of Need Laws," on the Health Beat Blog.

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More health care choices don't mean lower prices

In a study published in the journal Health Affairs (subscription required) and reported in the Star Tribune, there's another challenge to the notion that more choice in health care lowers costs.

Excerpts from the Star Tribune:

Going to a MinuteClinic is cheaper for patients than going to a physician's office or urgent care, but there is no evidence that the advent of the popular retail clinics reduced medical costs overall.

A study published today found prices charged by all providers rose by double digits over the four years tracked, a trend that went against the conventional wisdom that more providers leads to more competition and lower prices. ...

"The data does not support the idea that MinuteClinic or other retail clinics has had any negative impact on rising health-care costs," said the study's author, Dr. Marcus Thygeson, an associate medical director at HealthPartners.

Even if a large number of HealthPartners members switched to retail clinics, the immediate savings would be relatively small, Thygeson said.

What tends to happen, he said, is other providers will raise their charges to make up for lost revenue.

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Who can afford the newest drugs?

The Seattle Times reports on expensive new biotech drugs overwhelming patients and their insurance. Excerpt:

For some patients, such new-generation drugs, often called "biologicals" or "bioengineered" when they are created by genetically modified living cells, have performed magic. In some cases, they work when other drugs have failed, or for diseases that previously had no drug treatments at all.

But they cost a lot — often $2,000 to $3,000 per month.

And in a double whammy, some insured patients who previously paid a fixed amount — likely $30 to $50 even for the most expensive, brand-name drugs — are suddenly finding the rules have changed.

For these new drugs, an increasing number of patients must pay a percentage of the tab, generally 25 to 30 percent. For many of those patients, that can mean a bill of $600 to $900 a month for a drug that they may need for many years.

The rising bill for such complex drugs threatens to financially overwhelm patients and employers, and — if current trends continue — to unravel the very philosophy of health insurance.

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Big business in snoring and apnea

I've been waiting for someone to do a story on the amount of attention and money that's being spent on snoring and sleep apnea, and a USA Today story comes closest to what I've been waiting for.

The story explains that Medicare approved $571 million in payments for devices called continuous positive airway pressure (CPAP) machines last year, up from $291 million in 2004. The story explains that "Spending could grow even faster under a new federal rule that makes it easier for patients to get the devices by testing for sleep apnea at home rather than in a sleep testing lab."

The story raises some important questions:

Some experts warn there is a potential for unneeded prescriptions for CPAPs. "Are people getting treatment they don't need?" asks Fred Holt of the National Health Care Anti-Fraud Association, composed of health insurers and law enforcement groups.

"Not everyone with a diagnosis of sleep apnea needs CPAP," says Holt, an ear, nose and throat surgeon. "Weight loss, avoiding alcohol and sedatives at bedtime or changing sleep position could eliminate the problem for some."

For others, treatment involves sleeping with a mask connected to the CPAP machine, which blows air into the patient's nose, helping prevent obstruction to breathing.

Until this spring, Medicare would pay for CPAP machines only if a sleep center diagnosed patients with apnea. New rules say a diagnosis can be made with a test taken at home.

Opponents say home testing is less accurate. "To be adequately treated, you have to make sure patients are adequately diagnosed," says Mary Susan Esther, president of the American Academy of Sleep Medicine, a trade group representing sleep labs.

Proponents such as William Abraham, a sleep expert and chief of the division of cardiovascular medicine at Ohio State University, say the change makes it possible for more patients to get tested.

"By allowing home testing, perhaps Medicare is opening the floodgates," he says. Yet given the problems of untreated apnea, "it's not only the right thing to do, but may ultimately prove to be a cost savings."

Still, any time you hear about more testing, and with financial incentives to test and to treat, you should know that the risk for abuse, and for unnecessary testing, treatment and spending is high.

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Why are so many drug prices going up 100% or higher?

USA Today reports:

Drug companies are quietly pushing through price hikes of 100% — or even more than 1,000% — for a very small but growing number of prescription drugs, helping to drive up costs for insurers, patients and government programs.

The number of brand-name drugs with increases of 100% or more could double this year from four years ago, researchers from the University of Minnesota say. Many of the drugs are older products that treat fairly rare, but often serious or even life-threatening, conditions.

"There's no simple explanation," says Stephen Schondelmeyer, director of the PRIME Institute at the University of Minnesota, which studies drug industry economics. "Some companies seem to figure no one is watching so they can get away with it."

The price increases are drawing legal and political scrutiny:

• In a decision awaiting approval by the 9th U.S. Circuit Court of Appeals, drugmaker Abbott agreed last week to pay up to $27.5 million to settle a lawsuit over a 400% price increase on its HIV/AIDS drug Norvir. The price did not change.

• Sen. Amy Klobuchar, D-Minn., and Sen. Charles Schumer, D-N.Y., asked the Government Accountability Office last week to investigate large price hikes. Klobuchar asked the Federal Trade Commission in April to investigate Ovation Pharmaceuticals, which raised prices on four drugs in 2006 by up to 3,437%.

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More MRI & imaging centers - do we ever say "NO"?

A few days ago, the Star Tribune reported on plans for still another diagnostic imaging center in a Minneapolis suburb that has more MRI machines than in many entire countries. Excerpt:

Along a two-mile stretch of France Avenue in Edina, medical providers have installed so many powerful magnetic resonance imaging (MRI) scanners that radiologists joke that anyone driving through with a pacemaker should beware.

Come September, there'll be a new one. ...

Its opening is likely to reignite a debate on whether Minnesota has too many diagnostic imaging facilities, encouraging doctors to order unnecessary procedures and pushing up medical costs. It's also likely to raise the ethically thorny question of whether doctors should refer patients to a facility in which they have a financial stake.

"Imaging has been an area of concern for a long time," said Julie Sonier, director of the Minnesota Department of Health's health economics program, which does reviews of major medical investments. "Issues about the concentration in Edina have also been a concern for some time."

A 2007 Health Department report said there was anecdotal evidence in Minnesota that physician investments in facilities led to financial conflicts of interest and overuse.

Among the reader responses are these:

• As a patient, how do you know that you really need a test that may be uncomfortable, that might have some risk associated, that might have radiation exposure associated, and that you might have to pay for when you know that the person telling you you need it stands to make up to $1000 just for suggesting it? The answer is you can't. This practice is a pox on medicine.

• There are as many MRI scanners in the Twin Cities as in all of Canada. Is the health of Canadians compromised by fewer imaging studies? Obviously not. There is no relationship between the number of tests and procedures performed in medical care and the health outcomes of the patients. More medical care is not better care. The Health Department should carefully examine the merits of this expansion of imaging services.

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Insurers say we're wasting $30B a year on scans

Bloomberg reports:

"Insurers, led by WellPoint Inc. and Magellan Health Services Inc., are increasingly rejecting imaging procedures recommended by U.S. doctors as the companies work to trim $30 billion a year they say is wasted on the tests.

CT and MRI scans that allow doctors to peer inside the body can cost as much as $2,000 each. Almost 50 percent of scans for some conditions fail to improve patients' diagnoses or treatment, according to a report issued today by America's Health Insurance Plans, a Washington-based trade group.

With U.S. health costs projected to grow to 25 percent of the economy in 2025 from 16 percent now, insurers are turning to so-called radiology benefit managers who can reject scans determined to be unneeded, said Shay Pratt of the Advisory Board Co., a Washington-based consultant to hospitals. Doctors ordered 115 million of the procedures last year. More than 80 million Americans already must get advance approval for the tests, and that may grow to 120 million in two years, Pratt said. ...

Almost $100 billion a year is spent on imaging in the U.S. and that may double by 2013 unless costs are reined in, according to the report today by America's Health Insurance Plans. ...

The Congressional Budget Office cited the ``widespread diffusion of new medical technologies and services'' as a leading cause of cost increases in its November report forecasting that health care will grow from 16 percent of the U.S. economy to 25 percent by 2025 unless changes are made. Health spending is currently $2.4 trillion, according to U.S. estimates.

Medicare, the U.S. health-care program for the elderly and disabled, has taken an initial step by reducing payments for scanning facilities when they perform more than one procedure on the same patient in the same day. ...

The Government Accountability Office, the investigative arm of Congress, said last month that Medicare should consider requiring pre-authorization for outpatient imaging of its 44 million beneficiaries."

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More on the crushing costs of cancer drugs

A couple of items of note in today's Wall Street Journal.

First, the paper is the second in three days to highlight the dilemma raised by the cost of new cancer drugs. We noted the Sunday New York Times piece on Avastin in this blog yesterday. The WSJ reports:

American doctors rarely used to let costs factor into their treatment decisions. But rising prices -- some cancer drugs now cost more than $100,000 a year -- are dramatically changing that ethos in the field of oncology. Money issues are now disrupting relationships with patients, causing doctors to go into debt and threatening to interfere with treatment options.

Meantime, the WSJ also reports:

In a setback for GlaxoSmithKline PLC, experts advising Britain's health-care system say the company's Tyverb breast-cancer drug isn't effective enough to justify its cost.

If the preliminary judgment holds, Britain's National Health Service won't pay for Tyverb, one of Glaxo's most important new drugs. The treatment, sold as Tykerb in the U.S., costs about £21,000 ($42,000) a year in the U.K. European regulators approved Tyverb for sale in the European Union last month.

Medical experts advising Britain's National Institute for Health and Clinical Excellence, or NICE, found that although Tyverb has shown some benefit in delaying tumor progression compared with the current standard treatment, its benefits aren't sufficient when weighed against its costs, NICE said Monday.

We don't have an agency like NICE in the US.

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Questions about costly cancer drug Avastin

For the second straight Sunday, the New York Times has published a terrific piece in its "Evidence Gap" series. This one, about the cancer drug Avastin, is headlined "Costly Cancer Drug Offers Hope, but Also a Dilemma." Excerpt:

"..like a half-dozen or so new biotechnology drugs with a similar combination — alluring promise, high price and only arguable benefits — Avastin raises troubling questions:

What does it mean to say an expensive drug works? Is slowing the growth of tumors enough if life is not significantly prolonged or improved? How much evidence must there be before billions of dollars are spent on a drug? Who decides? When, if ever, should cost come into the equation?"

Incidentally, readers of the Star Tribune may have thought they read the piece in Sunday's Star Tribune. They did not. They read a scant 754 words out of the original 4,500-word story published by the New York Times.

Why?

Not enough space? Not hardly.

Too much of importance going on over the July 4th weekend? Not hardly - and not by any reflection of what else was in the Strib today.

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To hell with evidence

Read this terrific piece of journalism in the New York Times - "Weighing the Costs of a CT Scan's Look Inside the Heart."

It analyzes important questions about the lack of evidence for these tests, the costs, the radiation risks, and the conflicts of interest of many who promote them.

The story includes a quote from a physician who is a heart CT scan promoter - "It's incumbent on the community to dispense with the need for evidence-based medicine."

To hell with evidence. To hell with science.

This attitude always reminds of me of the saying, "It ain't what a man don't know that gets him into trouble. It's what he knows for sure that just ain't so."

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And while we fiddle with Botox, Rome burns

Employer health care costs are expected to increase by 9.9% in 2008 -- more than double annual inflation rates -- and 9.6% in 2009, according to a study released Tuesday by PricewaterhouseCoopers.

I'm on the lookout for any of those Botox users in my insurance pool. I'm going to give them a new reason to frown.

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Billion dollar Botox bill

Newhouse News Service reports:

Americans last year spent an estimated $13.2 billion — more than the gross domestic product of Bolivia — on cosmetic surgery.

What did they get?

An array of bodily rearrangements from face-lifts to buttock augmentation, from chemical skin peels to laser hair removal.

And Botox. Lots of Botox. In all, 2.8 million treatments with Botox injections, costing more than $1 billion.

In the past decade, surgical cosmetic procedures have more than doubled, and nonsurgical procedures — such as Botox injections — grew nearly eightfold. …

The latest statistics come from the American Society for Aesthetic Plastic Surgery Inc. Its report is based on 12,000 surveys sent to board-certified surgeons and physicians in plastic surgery, dermatology and otolaryngology.

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Checking local health care costs before you move

Dartmouth's Jack Wennberg has often said, "Geography is destiny in health care."

The Wall Street Journal reports on a new twist to that idea. Excerpts:

Charges for medical insurance and for health care differ tremendously in different locales, says Steve Zaleznick, president of Longevity Alliance, a Washington, D.C., company that provides quotes for retirement-related financial services.

For example, the average annual premium for one type of Medicare supplement policy last year ranged from $3,700 in New York to as little as $1,200 in Phoenix, according to an Alliance survey. ...

The Longevity Alliance provides a downloadable booklet about health-care costs in moving at LongevityAlliance.com.

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What's happening with cancer costs?

An analysis published in the Journal of the National Cancer Institute finds that:

"The cost of cancer care incurred during the period two months prior to cancer diagnosis and 12 months following diagnosis increased substantially between 1991 and 2002 for elderly patients in the United States. The increases in costs for breast, lung, and colorectal cancer were due in large part to increases in the percentage of patients receiving radiation therapy and chemotherapy and the rising costs for those therapies."

HealthDay reported:

"Over the course of the study, the average cost for treating a lung cancer patient went up $7,139, to an average of $39,891. With prostate cancer, the average price tag for treatment went up $5,345, to an average of $41,134. The cost of treating breast cancer went up $4,189, to an average cost of $20,964. ...

One expert says that increasing costs for cancer treatment are having a significant effect on Medicare's ability to provide them and a patient's ability to pay for them.

"There were changes to Medicare payment policy over the period of this study. And they had significant impact on how physicians were reimbursed," said Dr. Len Lichtenfeld, deputy chief medical officer at the American Cancer Society. "The net result is that it may have influenced practice patterns that we are seeing, such as the transition from surgery and radiation therapy for prostate cancer."

Lichtenfeld noted that many new drugs have driven the costs up even further. "The impact to Medicare is going to be substantial," he said.

Moreover, increasing costs may actually be preventing some Medicare patients from getting cancer treatment they need, Lichtenfeld said.

"In February, Avastin was approved for the treatment of recurrent breast cancer. It costs about $55,000 a year for a Medicare patient to receive the drug," Lichtenfeld said. "But there is a 20 percent co-pay. If a Medicare patient has insurance, it may be covered, but if they don't have insurance, there is an $11,000 co-pay to cover -- and $11,000 is a lot of money."

There is anecdotal evidence that doctors and patients are being forced to consider costs when they make choices for treatment regimens, Lichtenfeld said.

"Some people are not able to afford those treatments," he said. "The increased use of expensive chemotherapy is having an impact on how we treat cancer patients." "

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Connecting the dots in health care reform news

As we flip the calendar over from a very busy May into a sunny June, I want to reflect on the common themes in the blog entries of the past four days:

1. My PLoS Medicine article, “How Do US Journalists Cover Treatments, Tests, Products and Procedures? An Evaluation of 500 Stories.�?

2. The Commonwealth Fund analysis on variations in child health care across the US.

3. Another "more care isn't always better care" study - this time in JAMA.

4. Consumer Reports releasing an online tool using Dartmouth Atlas data to allow you to look at aggressive vs. conservative care - comparing hospitals on this scale.

Connect the dots. Jack Wennberg's work rings through these themes.

Inexplicably widespread variations exist in the way health care is practiced in this country and more data comes in every day. More evidence also comes in every day that "more and newer isn't always better" in health care. And journalists are spending too much time on the "more" and the "newer" rather than on questions of evidence, costs, quality and access to care.

As a result, many consumers aren't getting much smarter at a time when some policymakers, employers and insurance company marketing folks push "consumer-driven health care" plans. Americans don't know what they're buying with the health care dollar and giving them more "skin in the game" doesn't make them smarter - only makes them hurt more - if they're not educated in the dots.

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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.

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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.

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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.

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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.

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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.�?

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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.

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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."

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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.

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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."

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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.

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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."

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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.

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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.�?

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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.

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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."

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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.

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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.

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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.’ “

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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.

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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?

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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.

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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.

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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?

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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.

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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.

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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.

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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."

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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.''

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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.

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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)

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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."

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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."

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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???

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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."

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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."

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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."

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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."

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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."

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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."

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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.

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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."

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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.�?

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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.

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Is this a market-based solution to health care delivery?

Free valet parking, baby grand piano, macchiatos at the coffee bar, concierge service, flat-screen TVs, 300-thread-count sheets (who counts?), wireless keyboards and in-room Internet service.

These are hospital amenities described in a recent Washington Post story, "Hospitals Treat Patients To Five-Star Amenities: Facilities Seek Market Edge With Plush Extras."

The Post reports: "This trend has its critics, including industry consultants who caution hospitals to remember that their primary mission is to treat patients, not coddle them. Some hospital administrators, too, are leery of overspending on frills." One said, "I would rather put money into nursing care and staffing and making sure our doctors are there. At the end of the day, it's about taking care of patients."

The story also reminds readers: "As some of the Washington area's hospitals expand at record levels and add amenities, others don't have that luxury. They are buckling under the burden of caring for the uninsured, raising concerns about widening disparities in health-care facilities."

Meantime, in the Midwest, former U.S. Senator David Durenberger and the National Institute of Health Policy host a series of dialogues starting tomorrow to better understand "The Medical Arms Race Syndrome" --the interplay between technological innovation, market forces, the role of government, and rising healthcare costs.

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Is this progress?

I'm catching up to a story that's now a couple of weeks old, but which is too good to miss.

Under a terrific headline, "Questions Over New Eyesight Drug That May Be as Good as Older, Cheaper One,"
Andrew Pollack of the New York Times reported on the new drug for wet-form macular degeneration, Lucentis. You may not have that condition, but the story still carries a powerful message about new drug development.

Pollack wrote: "...for patients, doctors, Medicare and other insurers, the drug's arrival will pose a conundrum. That is because the medicine, Lucentis, is expected to be 10 to 100 times as expensive as a similar drug that many ophthalmologists say is every bit as good. ... But the big question is whether insurers and patients will consider Lucentis worth prices that may be $10,000 a year or higher, compared with around $1,000 or less for the drug already on the market that many ophthalmologists say is just as good.

But Genentech has no interest in getting Avastin approved for macular degeneration, because that would undermine the sales of Lucentis, which some analysts predict will have annual sales of several hundred million dollars."

One of the researchers who tested Avastin for macular degeneration is quoted: "The whole experience really opens your eyes to how our whole health care system is operating. We could be incentivized to use the most effective therapy at the most reasonable cost. But that's not how our system is set up."

Wow.

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Losers and winners in Medicare drug benefit

The Associated Press reports that the feds have "added 6,000 operators, quadrupled computer capacity for enrollment and will assist with more than 1,000 events in the week ahead as part of a final push for signing people up for the Medicare drug benefit" prior to the May 15 deadline.

Meantime, the Wall Street Journal has pointed out that "the massive effort has produced clear winners and losers among businesses and seniors. The early winners include some of the nation's largest health plans, which are peddling the drug coverage. After a rocky start in January, the plans have snagged roughly 15 million new customers and healthy government subsidies. Also buoyed: drug makers, which are reporting increased demand for some products used by seniors, such as drugs for chronic conditions. Many seniors are also giving the benefit good reviews, despite initial confusion about which plan to choose."

The WSJ also reports: "But not everyone is faring well. Many seniors have yet to sign up, which is leading to debate in Washington about extending the enrollment period. Medicare already has extended the deadline for people with low incomes. They stand to gain the most because of extra government subsidies, but their enrollment continues to lag. Dozens of smaller health insurers, meanwhile, are seeing only minimal enrollment gains, and independent pharmacists are criticizing the lower payments and suffering cash-flow problems. ... By far, the biggest winner in the race to sign up seniors is UnitedHealth Group Inc., which has used an alliance with AARP to help it grab more than 3.9 million new customers."

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Generic drug's path to retail market often long and contentious

The headline above comes from a Knight Ridder newswire story. It depicts the two-year path it took for a cheaper generic version of the allergy drug Flonase to make it on the market.

An excerpt: "The delay was the result of a series of aggressive administrative and legal maneuvers by GlaxoSmithKline that thwarted the speedy entrance of the generic. After a federal judge in Baltimore rebuffed Glaxo's final legal challenge on March 6, the generic version by Roxane Laboratories hit store shelves. The generic sells for $61.99 at Walgreens.com, while Flonase costs $81.99. At CVS.com, the generic is $68.59 vs. $85.29 for Flonase.

According to Bain & Co., an international consulting firm, patents are set to expire on 75 brand-name drugs over the next two years and on an unprecedented 252 by 2014. A study by the Pharmaceutical Care Management Association released on April 18 found consumers and health plans could save more than $26.4 billion over the next five years by using cheaper generic versions of just 14 brand-name drugs scheduled to lose their patent protection between now and 2009."

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More stink over UnitedHealth CEO & Board stock options

The Star Tribune published two letters to the editor yesterday regarding the awarding of stock options to CEO Dr. Bill McGuire and board members of UnitedHealth.

One came from a former competitor, a rare intra-industry shot in health care. Dr. Donald Woodley, medical director of Blue Cross Blue Shield (MN) from 1973- 1985, wrote: "As a former medical director, I was always embarrassed by the money Dr. Bill McGuire was sucking out of the health care system. However, I always thought the board would watch over this and keep it within reason. Now I understand why no action was taken. The board members were too busy lining their own pockets with millions of dollars in stock options."

Another citizen wrote: "In nearly three decades of working with low-income, uninsured or underinsured persons, I have observed their difficulties in securing affordable health care coverage and, in turn, the health care they desperately need. As such, I read with dismay and disgust April 20 of the excesses characterizing Dr. William McGuire's compensation and UnitedHealth Group's compensation strategies -- excesses that may well have been inflated by the timing of stock options that were exercised.

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Billion dollar battle over generic drugs

There's a billion dollar battle looming over generic versions of statin drugs.

Newhouse News Service reports that "Merck's Zocor, the No. 2 cholesterol-lowering medicine, loses its patent protection in June, opening the door for inexpensive generic copies that could ultimately save consumers billions of dollars."

"We are sitting on a monumental change that's about to occur," George Paz, chief executive of the pharmacy benefit management company Express Scripts, says in the Newhouse story. "That is going to be a significant opportunity for our members and our patients, our clients, to save money."

The story continues: "A 10-milligram tablet of the most popular brand-name cholesterol fighters, including Lipitor, Crestor and Vytorin, usually costs more than $2, while generic Zocor, or simvastatin, is expected to cost about 35 cents.

To stave off what could be mass defections to generic Zocor, most of the big players in the cholesterol market - Pfizer, Schering-Plough, AstraZeneca and even Merck - have mobilized armies of sales reps to visit cardiologists, attend medical conventions and flood doctors' offices with free samples."

That's one huge advantage the brand names have over the generics. What's the last time a physician opened his/her drawer to give you a sample and handed you a generic?

But Newhouse reports that the future will be even more interesting: "The drama surrounding Zocor may be just a preview of things to come. Nearly 70 branded drugs with annual U.S. sales of $46 billion - including 19 blockbusters with annual sales over $1 billion each - are set to go off patent by 2010. Once a generic version goes on the market, it typically cuts the brand-name's sales by 80 percent within the first year."

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Big Oil & Big Health Care

On his blog this week, Merrill Goozner reflected on a Wall Street Journal story headlined "Oil Hits a Gusher." The story had an interesting bar chart that showed that fourth quarter profits for U.S.-based oil companies rose a stunning 66.4 percent over a year ago, and accounted for nearly two-thirds of the entire $20 billion increase for all corporations.

But Goozner writes that "what also caught my eye was the other really long bar in the Journal chart. Health care corporations increased their profits in the same quarter by 68.5 percent -- two full percentage points more than Big Oil! And that accounted for another 30 percent of the increase in total corporate profits in the fourth quarter. In other words, Big Oil and Big Health got it all (utilities accounted for most of the rest)."

Yet the U.S. has 45-million people without health insurance, and an administration trumpeting the merits of a market-driven solution to health care (disingenuously marketed as a "consumer-driven" solution!). Americans, who have already been told they are "addicted to oil, " clearly can't afford to also be addicted to health care.

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What value in Alzheimer's treatments?

Sometimes journalism affords us a stunning glimpse of differences in the way we view health care. Yesterday was once such day, as the Associated Press and the Wall Street Journal published stories about strikingly different perspectives on the value of current treatments for Alzheimer's disease.

The AP story said that "families battling Alzheimer's disease and similar dementias increasingly are calling for a shot at riskier therapies that might bring bigger benefits than today's pretty safe but largely disappointing drugs." And it reported on a survey of elderly people at risk which showed that most accepted even the greatest potential for side effects for any shot at benefit.

The Wall Street Journal, on the other hand, described a preliminary British government decision to ask doctors to stop prescribing Alzheimer's drugs because the cost-benefit ratio wasn't good. The WSJ quotes a British National Health Service spokesman saying, "We reached a point a while ago where there is far more medical intervention available than any health-care system can afford."

The paper explains: " (In the U.S.) even the most cost-conscious insurers say they'll pay if a drug works and there aren't other options. Britain openly and unapologetically adopts the second course. If a drug or type of surgery costs a lot and helps only a little, it says no."

Kudos to the WSJ for presenting the big picture. Unfortunately, AP, which reaches all newsrooms, only told half the story on this day.

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Health costs shifting to employees

A Star Tribune story shows how misleading it can be to hear that health care cost increases have slowed down.

That's happened in Minnesota, down to the lowest levels in seven years, according to a state study released this week.

But only health insurance companies seem to be getting relief, not consumers.
Because while expenses paid by Minnesota's health insurers rose 7.4 percent in 2004, consumer health care costs grew 15.3 percent last year.

"Out-of-pocket expenses for the average Minnesotan are becoming unaffordable," Julie Schnell, state council president of the Service Employees International Union, told the newspaper. "What we have is employers shifting the costs to employees," she said. "That is not the answer to reform, and that is not the answer to reducing costs in health care."

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