Recently in Health care costs Category

Pharma sees reform coming, so they raise prices now

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What will Pharma do to maximize profits? The answer isn't theoretical. It's happening right now.

Duff Wilson of the NYT reports:

Even as drug makers promise to support Washington's health care overhaul by shaving $8 billion a year off the nation's drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years.


In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation's drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.

The story includes input from Prof. Steve Schondelmeyer of the University of Minnesota, who, for 6 straight years, has given of his time to come and speak to my undergrad and graduate health journalism students on pharma and pharma pricing issues.

$100 hemorrhoid foam & health care reform

Dr. Rob - on his Musings of a Distractible Mind blog - shares a moment from his clinical experience.

Thoughtful piece in Common Ground by my friend Alan Cassels about what he calls the skyrocketing use of blood glucose test strips to look for signs of Type 2 diabetes. Excerpts:

There are concerns that some people are testing their blood sugars as many as six or eight times a day, even when there is no medical rationale for doing so. There is some research emerging that indicates more frequent testing can cause greater levels of depression and anxiety and perhaps lead to worse health outcomes - not better ones.


This controversy came under the spotlight last year when a national group in the US that sets medical guidelines suddenly withdrew a diabetes guideline after research found that aggressive control of blood sugar could harm patients or even kill them.

Other researchers in Canada, who have examined spending patterns related to blood glucose test strips, have concluded that about half the patients using these test strips are considered at low risk for hypoglycemia and are probably using these strips unnecessarily. These researchers have come to similar conclusions as my own: that excessive testing of blood glucose in type-2 diabetics is costly; much of it is unnecessary and it's probably harmful.

This might not matter if we weren't in economic trouble everywhere you look, but the costs of irrational blood testing are staggering. With each test strip costing about one dollar, and with thousands of type-2 diabetics in BC, possibly testing themselves several times a day, the British Columbia taxpayer is probably wasting in the neighbourhood of $50,000 a day on useless and likely harmful blood test strips. That amounts to about $18 million per year. In British Columbia, the revenue paid out for blood test strips puts them in the top 20 most costly items on the formulary.

Questions about the booming medical imaging business in Texas

Great piece of local health policy journalism by the Dallas Morning News. Excerpts:

"There's a lot of money to be made in owning imaging machines," said Dr. Richard Strax, president of the Texas Radiological Society. "You can buy a relatively inexpensive second- or third-hand MRI machine for a few hundred thousand dollars and make millions on it."


"Today we can't even tell you how many MRI machines are in Texas, who owns them, what condition they're in and what quality of scans they're turning out," Ron Luke, health policy chairman of the Texas Association of Business, told state lawmakers this year. "That doesn't sound like we're very bright, does it?"

For three sessions, radiologists and doctors have fought in the Texas Legislature over the issue of self-referral. This year's legislation, backed by radiologists and business lobbyists, would have required licensing and accreditation of imaging machines, along with a year-long state study of the extent of self-referral by physicians. But it failed.

Proponents of the legislation say opponents are driven by financial motives. Imaging has become a "lifeline" for many doctors, said Dr. Cynthia Sherry, past president of the Texas Radiological Society.

"It's all about the money, OK? Those very doctors opposed to this are the ones participating in it," Sherry said.

An 1,800-word story on a vital health policy topic. Wow, do we need more like this. Ten gallon hats off to the Dallas Morning News.

That's a question the ECRI Institute asks in a story reported by the St. Paul Pioneer Press. Excerpts:

The ECRI report argues that physicians develop preferences for certain medical device brands as they gain familiarity with the product. Other factors might also inform brand loyalties, said the nonprofit group's president, including the influence of sales representatives as well as paid consulting relationships between manufacturers and doctors.


The ties become so strong that when hospitals recruit orthopedic surgeons and heart specialists to their medical staffs, they find they also have "generally 'recruited' the vendors those MDs favored," the report states. "Exacerbating the situation are device manufacturers' sales representative inside the surgical suite during procedures 'assisting' the physicians as they learn how to use new products."

For hospitals trying to negotiate discounts with suppliers, physician preference items can be a problem when doctors' allegiances limit a medical center's ability to shop around for the best price. Hospitals have been reluctant to push back against doctors on these decisions, the report says, because unhappy doctors can threaten to move their practice to another hospital and take their patients with them.

The solution, according to ECRI Institute, is for hospitals to work cooperatively with physicians to make purchasing decisions that incorporate scientific evidence about the relative merits of devices as well as the value a particular product delivers.


More on reining in medical imaging costs in health care reform

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Radiologist Pat Basu of Stanford has an important column on the Kaiser Health News Service, "Medical Imaging: The Good, The Bad and The Ugly."

MRI imaging payments - a case study in the health care reform struggle

In another fine example of its dedication to important health care journalism, the Milwaukee Journal-Sentinel published a piece, "Debate on MRI payments just one hurdle for reform."

Gems in this piece include:

  • Information on the Access to Medical Imaging Coalition, a group backed by the major manufacturers of imaging equipment, including GE Healthcare. The paper reports: "That industry backing goes unmentioned by the innocuously named group. The Access to Medical Imaging Coalition, which includes cardiologists and radiologists, is just one of the myriad special interest groups that often oppose cuts in what Medicare pays for medical services."
  • "The reality is the status quo puts a lot of money in a lot of people's pockets," said Alwyn Cassil, a spokeswoman for the Center for Studying Health System Change, a policy research organization in Washington, D.C.

    Another reality is groups such as the Access to Medical Imaging Coalition often succeed in persuading Congress to protect their interests.


Read the entire piece. It includes local angles on local industry affected and about Wisconsin legislators' activities in this area. A fine example of local journalism on a national issue.

Cyberknife insurance coverage in question - a health policy case study

We salute the Philadelphia Inquirer and reporter Stacey Burling for a terrific piece, "Debate surrounds new prostate cancer treatment."

It got a rare five-star (top score) rating on HealthNewsReview.org. Excerpts of the review:

This was an excellent, provocative exploration of some of the critical issues involving the tension between treatment options, payment responsibility, patient choice, and evidence on risks and benefits. There are a great number of uncertainties about prostate cancer itself, whether active treatment is called for and if so, which is the most appropriate choice for individual patients. Combining this with financial interests of those providing treatment adds another layer of difficulty in making good individual choices.


High marks for a terrific enterprise piece that helps readers understand an important health policy and health care reform topic.

One standout quote from a physician in the story:


"There's a lot of politics involved in this. There's a lot of self-interest. There's a lot of greed."

The New York Times headline: "Bone-Growth Proteins Show Risk in New Study." Excerpt:

"Patients who received a bioengineered protein during spinal fusion procedures to correct neck pain had far more complications than patients who did not get it, according to a study released Tuesday.

The study, published Tuesday in The Journal of the American Medical Association, reinforces previous concerns about the use of the proteins in fusion procedures to treat upper spine, or cervical, pain. The substances studied, sold by either Medtronic or Stryker, are not federally approved for cervical procedures, although surgeons are free to use them for that purpose."


The Wall Street Journal headline
: "Bone Proteins Costly In Surgery, Study Says." Excerpt:

"The findings contrast with previous studies, written by Medtronic consultants, in which authors concluded that cost savings over time could offset the initial cost of Infuse.

For instance, an article in 2002 by former Army surgeon David W. Polly Jr., now of the University of Minnesota, and colleagues said, "Preliminary results suggest that from a payer perspective, the upfront price of bone morphogenetic protein is likely to be entirely offset by reductions in the use of other medical resources. That is, bone morphogenetic protein appears to be cost neutral."

Dr. Polly, who last year received substantial consulting and speaking fees from Medtronic, didn't immediately respond to requests for comment."

The Star Tribune, serving the community where Medtronic and Dr. Polly are based, had what sounded like a local-business cheerleading headline, "Medtronic's Infuse a hit in growth of spine fusion."

But the story itself offered much more beef than the headline suggested.

Still, the Strib story seemed to swing back to what good news this could mean for Medtronic. Excerpt:

"JAMA's findings loom large for Medtronic, which sells the bioengineered product called Infuse used in spine fusion procedures. Since it was approved by the FDA in 2002, Infuse has proven to be a blockbuster device for the medical technology giant. Michigan-based Stryker Corp. makes a similar product, but Medtronic is by far the market leader.

While Medtronic doesn't break out figures for individual products, sales of biologics (including Infuse) have topped $3.6 billion in the past five years. Its spine division, which also markets devices used in spine surgery, is its second-largest with $3.4 billion in annual revenue."

And the Strib story never mentioned Dr. Polly right in their own backyard.

It's an important study and topic. Read all three stories if you get the chance.

$80,000 to prolong survival by 1.2 months

The Wall Street Journal added to the discussion about cost-effectiveness of cancer drugs reflecting on a commentary in the Journal of the National Cancer Institute estimating that "it would cost $440 billion to extend life by one year for the 550,000 Americans who die annually of cancer."

Important topic. I'm glad the WSJ addressed it.

But one line bothered me. It read:

"Some countries, like the United Kingdom, agree to pay for expensive drugs only if they meet a certain threshold of efficacy, but no such rationing exists in the U.S."

A news story that comes right out and labels a demand for proof of efficacy as rationing?

A semantics purist may say that the term applies in this discussion - like restricting or rationing consumption of meat or electricity during war.

But given that any newsroom must realize how the term is used as a heavy-handed piece of rhetoric by those who oppose evidence-based medicine and who oppose health care reform that calls for such evidence, this seems like editorializing.

Good story - but that one word in that one sentence left a bad taste for me. Semantics, word choice and framing matter if you care about public understanding of complex health policy issues.

Despite my red marks on that one section, read the rest of the article (if it's still available online), which was important enough to be on page one of at least the D section of the printed WSJ, not way back on D4.

Philly Daily News column gives awful health advice to men

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"This is so ridiculous, it may not be worth blogging on," Marilyn Mann wrote to me.

I thrive on the ridiculous.

Whenever and wherever I see something this absurd, this non-evidence-based, this unhelpful and potentially harmful to health care consumers, I'm going to comment.

The columnist, a certified personal trainer, says she adapted her column from the July/August issue of Men's Health magazine.

She advises men to think about getting

• Cardiac CT angiography


• Bone density scan - She writes: "Uh, oh, fellows. Did you think osteoporosis was just for women? Nope."

• VO2 Max Test. She writes: "For this one, you get on a treadmill or stationary bike and pump up your cardiovascular volume to maximum effort while wearing a mask that measures your every breath.

The VO2 Max Test is the master cardiovascular test that will let you know what you're made of. It's the most accurate measure of your cardiovascular and overall health."

You won't find one evidence-based recommendation that supports any of those recommendations.

This kind of junk journalism feeds the "test, test, test" mentality that fuels the worried well and drives up health care costs.

I hope Philly Daily News readers either didn't read this column or didn't pay any attention to it. But for those that did, now you know the rest of the story.

Prevention myths and pigs at the trough

Gems from Abraham Verghese's WSJ article, "The Myth of Prevention":

"It is true that if the prevention strategies we are talking about are behavioral things--eat better, lose weight, exercise more, smoke less, wear a seat belt--then they cost very little and they do save money by keeping people healthy.


But if your preventive strategy is medical, if it involves us, if it consists of screening, finding medical conditions early, shaking the bushes for high cholesterols, or abnormal EKGs, markers for prostate cancer such as PSA, then more often than not you don't save anything and you might generate more medical costs. Prevention is a good thing to do, but why equate it with saving money when it won't? Think about this: discovering high cholesterol in a person who is feeling well, is really just discovering a risk factor and not a disease; it predicts that you have a greater chance of having a heart attack than someone with a normal cholesterol. Now you can reduce the probability of a heart attack by swallowing a statin, and it will make good sense for you personally, especially if you have other risk factors (male sex, smoking etc).. But if you are treating a population, keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women (since their heart-attack risk is lower)--I don't see the savings there.

Or take the coronary calcium scans or heart scan, which most authorities suggest is not a test to be done on people who have no symptoms, and which I think of as the equivalent of the miracle glow-in-the-dark minnow lure advertised on late night infommercials. It's a money maker, without any doubt, and some institutions actually advertise on billboards or in newspapers, luring you in for this 'cheap' and 'painless' way to get a look at your coronary arteries. If you take the test and find you have no calcium on your coronaries, you have learned that . . . you have no calcium on your coronaries. If they do find calcium on your coronaries, then my friend, you have just bought yourself some major worry. You will want to know, What does this mean? Are my coronary arteries narrowed to a trickle? Am I about to die? Is it nothing? Asking such questions almost inevitably leads to more tests: a stress test, an echocardiogram, a stress echo, a cardiac catheterization, stents and even cardiac bypass operations--all because you opted for a 'cheap' and 'painless' test--if only you'd never seen that billboard. ...

I recently came on a phrase in an article in the journal "Annals of Internal Medicine" about an axiom of medical economics: a dollar spent on medical care is a dollar of income for someone. I have been reciting this as a mantra ever since. It may be the single most important fact about health care in America that you or I need to know. It means that all of us--doctors, hospitals, pharmacists, drug companies, nurses, home health agencies, and so many others--are drinking at the same trough which happens to hold $2.1 trillion, or 16% of our GDP. Every group who feeds at this trough has its lobbyists and has made contributions to Congressional campaigns to try to keep their spot and their share of the grub. Why not?--it's hog heaven. But reform cannot happen without cutting costs, without turning people away from the trough and having them eat less. If you do that, you have to be prepared for the buzz saw of protest that dissuaded Roosevelt, defeated Truman's plan and scuttled Hillary Clinton's proposal."

Public willing to make tough health care choices

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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.

A different angle on all the ASCO news

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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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This page is an archive of recent entries in the Health care costs category.

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