Health care/Insurance—We’re the worst

T.R. Reid’s book “The Healing of America” compares our non-system of  health care  with other countries solutions.  In a recent interview he noted:

In coverage, against all the countries like us, we’re the worst. There’s no other country that lets people go without health insurance. Quality on comparative measures…we rank pretty low among the rich countries. We’re better than the poor countries, but compared to Britain, Germany, Japan we rank pretty low on health outcomes. Cost–we’re the highest by far. We pay twice as much per capita  for health care and still leave 31 million people without coverage.

And

The first thing we need to do is make a moral commitment to cover everybody and we’ve never done that. It doesn’t have to be socialized medicine. Germany covers everybody with private insurance, private doctors and private hospitals and they still spend much less than we do.  We could do it through government, we could do it through private insurance, but you need to commit to cover everybody and once we do that we’ll get it done.

Medicynical Note:  The question is why don’t we formally commit to cover everybody.  We, the government,  already cover all people over 65, those who are disabled, some of the poor, the military and their retirees, government employees—probably half the country.

Meanwhile health care costs spiral.  Drug companies gouge the sick and infirm.  Insurers make certain to get their 20%.  An no-one really really is interested in curbing costs.  It’s amazing what we tolerate. 

The $153,000 Snake Bite and America’s Decline

The paradox of American capitalism is that we say it works best when there is a “free market” with competition.  But as we have seen time and again the goal of business, even in healthcare, is obtain monopoly status (i.e. eliminate competition) for your “product” and then gouge your customers–a great business plan, no?

This was brought home by the Washington Post article reporting a snake bite for which medical costs were $153,000.

The bulk of his hospital bill—$83,000 of it— is due to pharmacy charges. Specifically, charges for the antivenin used to treat the bite. KGTV reports that Fassler depleted the antivenin supplies at two local hospitals during his five-day visit. Nobody expects antivenin to be cheap. But $83,000?

There’s currently only one commercially-available antivenin for treating venomous snakebites in the U.S. — CroFab, manufactured by U.K.-based BTG plc. And with a stable market of 7,000 to 8,000 snakebite victims per year and no competitors, business is pretty good.

and

BTG has fought aggressively to keep competitors off the market. A competing product, Anavip, just received FDA approval this year and likely won’t be on the market until late 2018. This lack of competition is one reason why snakebite treatments rack up such huge hospital bills — $55,000. $89,000. $143,000. In May of this year, a snakebit Missouri man died after refusing to seek medical care, saying he couldn’t afford the bill.

Excessive costs  are nothing new to anyone with a serious illness.     New cancer drugs for example start at $100,000/year for the drug alone, whether they work or not.  As a matter of fact most don’t work at all for the majority of patients treated with them.

This article was almost immediately followed in my browser by the brief statistical review of the 12 economic signs that the U.S. is on the decline published in Fortune magazine  based on the academic article Is the U.S. Still the best Country in the World? Think Again by Hershey Friedman and Sarah Hertz.  Interestingly the thesis of the article is not that the U.S. has too many regulations but rather that unfettered capitalism really really does not work.

“Capitalism has been amazingly successful,” write Friedman and co-author Sarah Hertz of Empire State College. But it has grown so unfettered, predatory, so exclusionary, it’s become, in effect, crony capitalism. Now places like Qatar and Romania, “countries you wouldn’t expect to be, are doing better than us,” said Friedman.

Read the article for the 12 signs but consider that whether it’s incomes, poverty levels, internet speeds, education, health, or prison population the U.S. lags other countries in the world.  Hardly the position for a world leader.

Medicynical Note:  I would posit that the snakebite anecdote is the concrete example of the second article’s thesis.  Our costs lead the world (yes that is one area we are world leader) and that in turn affects access, quality and yes the economic well being of citizens.  The U.S. continues to lead the world in bankruptcy from health care costs–a category of bankruptcy unknown in other countries.

Even more damning is that patients almost never know the cost of a  health care service AND providers (hospitals and practitioners) have little certainty  as to what they will actually be paid for the service rendered.  And yes adding to the insanity,  people billed directly, those without insurance and least able to pay, are billed more, much more, for the same services.  That’s true predatory capitalism!

Oncologists Consider Value: About Time!

I suppose coming late to the table, albeit at a great cost to society, is better than missing out completely.  That’s the way I read the recent earth shaking announcement by ASCO (American Society of Clinical Oncology) of a “value framework” for considering cost in the evaluation of a drug.

Drug costs have increased such that new medications for cancer are in the $100,000/year and higher range.  It is  not so surprising  that  doctors buffered by insurers, isolated from the billing procedures and in many instances on the payroll of drug companies have been slow to discover that their patients endure hardships in trying to pay for medications and that drug costs seem disconnected from efficacy.

He said the price of new cancer drugs now averaged about $10,000 a month, and some cost $30,000 a month, which can mean prohibitive co-payments even for some patients with good insurance. “Many cancer patients are facing severe financial strain, even bankruptcy in some cases,” he said.

The value framework envisions considering two costs: the out-of-pocket costs for the patient and the overall cost of a drug to the health system.

Drug companies of course don’t like the idea saying that drug costs are only part of the total cost of care (all of which has inflated in recent years)

But most telling:

Some experts say that ideally, the price of a drug should reflect its value, but that does not seem to be the case with cancer drugs. A recent study by researchers from the National Cancer Institute, published in JAMA Oncology, surveyed cancer drugs approved from 2009 through 2013. It found that prices did not correlate very well with how novel a drug was or whether it prolonged life versus just shrinking tumors.

Medicynical Note:  As I have noted previously our health care non-system is not designed to provide efficient cost effective care but rather to provide revenue to patent holders, insurers and the various providers.  There are no brakes in the system on costs.  The FDA is prohibited by congress (influenced by drug lobbyists) from evaluating cost-efficiency of new products; Medicare is prohibited by congress (influenced by drug lobbyists) from negotiating price or even evaluating value.  And doctors for whatever reason felt it unethical to consider costs when choosing an intervention.   It’s a perfect system for revenue generation but a rolling disaster for patients and society who ultimately have to pay the bills.  It’s bankrupting us.

We lead the world in costs, individual bankruptcy from health care expenditures (unknown in other industrialized countries) and the number of people without health care insurance.  This is not a desirable or viable health care system.

It’s the Money Stupid: Hospitals Cost to Charge Ratio

Health Affairs studied the cost to charge ratio in U.S. hospitals.  They found:

the average ratio of hospital charges for services (gross revenues) to payments received (net revenues) has grown from 1.1 to 2.6. This reflects a transition from predominantly cost- and charge-based payment systems to regulated and negotiated fixed payments. Hospitals have been able to squeeze additional revenues from remaining charge-based payers and services by sharply increasing charges, negatively affecting the uninsured.

Note that in the U.S. those least able to pay, i.e. those without health insurance are charge more, many times more in some instances, than those with insurance.

While most public and private health insurers do not use hospital charges to set their payment rates, uninsured patients are commonly asked to pay the full charges, and out-of-network patients and casualty and workers’ compensation insurers are often expected to pay a large portion of the full charges. Because it is difficult for patients to compare prices, market forces fail to constrain hospital charges.

The Washington Posts lists the hospitals and discusses the issue:

All but one of the facilities are owned by for-profit entities and the largest number of hospitals — 20 — are in Florida.

And:

Understanding hospital pricing and charges is one of the most frustrating experiences for consumers and health-care professionals. It is virtually impossible to find out ahead of time from the hospital how much a procedure or stay is going to cost. Once the bill arrives, many consumers have difficulty deciphering it.

Medicynical Note:  Our money driven non-system of health care emphasizes revenue over health care quality, efficiency and value.  Overcharging patients is the norm and frankly the daily goal of hospital CFO’s.  Hiding the cost until the presentation of the bill is a little like the Mad Magazine cartoon from the fifties…Great Moments in Medicine.  While satire, it does represent the reality of American health care today. 

 

 

ASCO Meeting: Cancer Drugs Unsustainable Pricing, Getting Worse!

Only on rare occasions does the yearly meeting of oncologists (ASCO) confront the reality of spiraling drug costs for cancer.  After all, the meeting is largely sponsored by drug companies and most of the research oncologists are in the pay of the drug companies (literally and figuratively).  But this year Leonard Saltz raised the issue, as he has done in the past, a more or less lone voice in the wilderness.

Dr. Saltz’s remarks focused mainly on an experimental melanoma treatment made by Bristol-Myers Squibb Co. , but he also criticized pricing more widely. He cited statistics showing that the median monthly price for new cancer drugs in the U.S. had more than doubled in inflation-adjusted dollars from $4,716 in the period from 2000 through 2004 to roughly $9,900 from 2010 through 2014. Dr. Saltz cited studies showing that the price increases haven’t corresponded to increases in the drugs’ effectiveness.

And talking about a new regimen for malignant melanoma:

Dr. Saltz said the combination regimen’s benefit was “truly, truly remarkable for a disease that five years ago we thought was virtually untreatable.” But he said that combining the drugs would cost around $295,000 a patient over nearly one year, which he called unsustainable. If all U.S. patients with metastatic cancer took drugs priced at $295,000 a year, it would cost $174 billion to treat them all for just one year, Dr. Saltz said.

Medicynical Note:  The irony of drug development is that the most effective regimens require the least testing on patients because they work.  It’s the regimens with results that are marginal and maybe not even real that require large randomized studies to prove even a paltry few weeks delay in progression so as to get FDA approval. 

Whatever the cost of development, drug companies price drugs based at least in part on the seriousness of the illness treated.  The more desperate the situation, the higher the price.  A little like “your money or your life.”

Our congress doesn’t allow the FDA to evaluate cost effectiveness of regimens and doesn’t allow Medicare to negotiate prices with drug companies.  After all, the unstated goal of our non-system of health is NOT affordable care for all citizens but rather protection of the profits of patent holders and maintaining the cash flow of some of the most profitable corporations in the country. 

You think that’s why our health care is the most expensive by far in the world but only has average results? 

Psst, in case you are worried about American Exceptionalism, we also lead the world in bankruptcy from health care costs, we’re number 1

Health Care in America: Overcharge the patient whenever you can

The LA Times notes the wide disparity in charges for joint replacement surgery in the LA area.

New Medicare data show that Inglewood’s Centinela Hospital Medical Center billed the federal program $237,063, on average, for joint replacement surgery in 2013.

That was the highest charge nationwide. And it’s six times what Kaiser Permanente billed Medicare eight miles away at its West L.A. hospital. Kaiser billed $39,059, on average, and Medicare paid $12,457.

They also note:

The average charge nationwide for a major joint replacement operation was $54,239, according to federal figures.

This is an industry unaware of value and efficiency, intent on charging whatever it can, without regard to actual cost.  Revenue rules.

Medicynical Note:  Insurers can negotiate the actual price with the hospitals and doctors but individuals are at a huge disadvantage.  Without insurance they will pay what’s billed or negotiate a lower price which will be still more than the insurers.   And if a consumer can’t pay cash he/she will incur financing charges and/or go bankrupt.  It’s a scam,  but in this case it’s run by the most distinguished (sic) institutions in our communities.  

US Not Number 1……in murder rate, we’re only number 3 in the world

Graphic presentation of the murder rate around the world.  While we are number 3 in the world with 52/100,000 we can, however, take pride (sic) in that we do lead the industrialized world, in homicides, by a wide wide margin.

Medicynical note:  Think the number of guns in the U.S. has anything to do with it?  Is this collateral damage from our “freedom” to bear arms?   Has this anything to do with the wide disparity of wealth in our country?  Our failing educational system?  Our long standing institutional racism?  Take your pick.  The question is where we go from here and how to get ourselves out of this mess?