Category Archives: Health Economics

It’s the Money $tupid– the busine$$ of dialy$i$

The Dialysis Duopoly Spends $100 Million to Protect Profits in California https://prospect.org/article/dialysis-duopoly-spends-100-million-protect-profits-california

“With Medicare for All being discussed in national circles, the situation with the dialysis providers is instructive. Faced with a single-payer system with lower reimbursement rates for their service, the dialysis industry bankrolled a charity to shift people into private insurance and jack up the cost. We don’t know what loopholes might enter the picture under Medicare for All, but the dialysis duopoly scam bears watching as a potential tactic. It speaks to how resourceful medical providers might be in their vigorous opposition to single-payer, and why politicians need to be mindful of their power.”

““I feel like it’s an unfair business practice all of us are paying for,” said Wood, who’s hopeful the bill will pass. “For me the bigger part of this is that, we’re trying to make sure we get access to care for as many people as possible, you can’t do that if you can’t contain costs.””

Medicynical note: In medicine as in other capitalistic enterprises the goal is to become a monopoly, gouge your customers and then fight like mad to protect your profits. Patient care. Access? Good outcomes? Value. All are nice goals but not a really the primary aim of the endeavor. It’s $ucce$$ is mea$ured by other parameter$$$$$.

Privatization….Doesn’t Work Without Regulation

“Beginning in 1996, the military launched the largest-ever corporate takeover of U.S. federal housing, shifting ownership of more than 200,000 family housing units on bases to private real estate developers and property managers under 50-year contracts.”

Great Moments in American Medicine: Snake Bite $142,000

Overcharging is the rule in the U.S.

The average list price for CroFab is $3,198 per vial, according to the health care information tech company Connecture. Manufacturing costs, product improvements and research all factor into the drug’s price, said Chris Sampson, spokesman for BTG. ”

“A Mexican version of snake antivenin can cost roughly $200. But it couldn’t be sold in the U.S. (More about that in a moment.)”

And

“In Oakley’s case, St. Vincent Evansville hospital charged $16,989.25 for each unit of CroFab, according to the facility’s bill. That’s more than five times higher than the average list price.”

“WellRithms analyzed Oakley’s bill from St. Vincent Evansville at Kaiser Health News’ request and found providers generally accept $16,159.70 for all four vials of the drug.”

Read the article for more.

Medicynical note: The U.S. overcharging for healthcare services seems to be more the rule rather than the exception, particularly for those in life threatening situations. If the patient is insured they will most often get a significant discount rate that cuts the bill dramatically. Ironically if a person has no insurance, hospitals and other providers bill the full amount…… to the most vulnerable patients

United Healthcare…..in it for the money

Not a big surprise

For those who thought insurance companies are in it to provide excellent healthcare……you were wrong.

“US Chief Magistrate Judge Joseph Spero issued his decision Tuesday against United Behavioral Health, a unit of UnitedHealthcare, saying the insurer created internal policies that effectively discriminated against those seeking mental health and substance abuse treatment.”

“”It is well-established that effective treatment of mental health and substance use disorders includes treatment aimed at preventing relapse or deterioration of the patient’s condition and maintaining the patient’s level of functioning. UBH Guidelines deviate from that standard,” Spero said”

Medicynical notes: Given a choice between enhanced profits or funding excellent care, the private insurer’s policy was programmed to choose the former. After all it’s their their fiduciary responsibility.

Pizza and Prescriptions.

We’ve talked about doctors receiving honoraria and other payments from drug companies to influence their choice of treatments.  Always quite righteously physician groups have responded to such allegations with drivel about their professionalism and their over riding concern for their patients.  That works up to a point but in our culture money talks.

This puts such arguments to rest:

As little as one free meal from a drug company can influence which medicines doctors prescribe for Medicare patients, according to a study using Medicare records and recently released data from the health care law’s Open Payments program.

More here.

Medicynical Note:  For the almost 50 years that I’ve been a physician drug companies have vied for face time with physicians.  Some of it is fairly legitimate education on new better drugs but most is simply  a sales pitch to get the doc to change his/her prescribing habits, almost always with limited benefit and  increased cost.  Various incentives are provided to get this access–cash payments, meals, faux jobs, deals on medications given directly to patients.  It all works and it all costs the system integrity and cash. 

But hey that’s the way America works. Check out the gun lobby and the recent assault weapons votes.  Money buys access and influence.  Doctors are not immune. 

Your Money or Your Life: America’s Health Care Disaster

It used to be financial planning was a field which provided assistance for the golden years (retirement),  In the U.S. financial planning is necessary for patients to get their health care.  Our amazingly inefficiency expensive (most in the world) health care non-system is now providing such planning to patients to “help” finance their care.  Something is terribly wrong here.

His doctor had prescribed the cancer drug Gleevec, but Steiner’s insurance refused to cover its $3,500 monthly cost. Steiner, a warehouse manager for a publisher of Bible-themed literature, and his wife, Brenda, a part-time nurse, made just $30,000 a year. No way could they afford the drug on their own.

“We still had six kids at home — how were we going to come up with that kind of money?” Steiner said. “We couldn’t re-mortgage the house, because it had already been re-mortgaged. I wouldn’t have been able to take the medication. We would have had to just trust in the Lord.”

It was a scary brush with “financial toxicity,” as researchers call the mix of economic stress, anxiety and depression cancer patients often endure. But then Steiner was assigned to Dan Sherman, an oncology social worker at Mercy Health Lacks Cancer Center who within days got a free supply of Gleevec from the manufacturer. He also made sure it was delivered promptly. The package arrived at Steiner’s home on Christmas Eve, his 46th birthday.

In the eight years since, Steiner has faced a series of medical and financial reversals, and each time Sherman has done as much as any doctor to keep Steiner going — scrambling to get the treatment he needed without sending his family into bankruptcy. “He keeps throwing me life rafts before I sink,” Steiner said.

Read the entire article.

Medicynical Note:  Health care in the U.S. is a special type of hell if you are not independently wealthy.  Something like 60% of bankruptcies in our country are related to medical expenses and it appears from the above article that the first goal of our non-system is to spend all the patient’s savings and then offer assistance.

Our insurance companies’ main goal is to assure profits to share holders, hospitals have a multilevel billing system which ironically bills most those without insurance coverage and least able to pay;  our drug companies think nothing of gouging patients to pad their bottom line, because they can (pretty sadistic); and our medical practitioners often are on their receiving end of payments from technology providers to get them to use the company’s product.  Care of patient is not the primary concern of many in our health care industry.

There are bright spots.  People working to help patient’s figure out the non-system; primary care types working very hard for relatively (compared to some medical specialties) low salaries; our nursing and medical support colleagues who work face to face with patients helping with their care and problems, medical and otherwise.  

The Affordable Care Act is a good first step but more needs to be done.  

Limits– Drug Pricing in the U.S.

Drug prices are a prime example of the monetization of medical care.  The price of drugs is currently based on the ability of the manufacturer to increase it (exclusivity and lack of competition) and the seriousness of the person’s illness (the more dreadful the illness the higher the price).  The cost of research of course is an issue, but when Pharma raises the price of generics hundreds percent you know that it’s all about profit and that the costs of drug development has nothing to do with it.

It is a fact that the fiduciary responsibility of the drug manufacturer is to the stock holder not to the patient.  So costs skyrocket and we in the U.S. pay more for everything medical than anyone else in the world.  Are we dumb or simply naive.  We seem to buy into drug company and politicians propaganda that we have the best of all worlds, when we don’t.

This in the JAMA gives some perspective

The rate of increase in drug prices has outpaced that of overall medical care every year since 2008. A recent survey found that retail prices of selected brand-name dermatological medications increased an average of 401% between 2009 and 2015 (363% in real terms, accounting for inflation), while prices of the generic medications increased an average of 279% between 2011 and 2014 (265% in real terms). These price increases for dermatological drugs are well above the national average for all drugs and payers—up 23% in real terms between 2009 and 2015. They do not reflect the possibilities that patients might switch to cheaper alternatives, or there may be slower growth in prices paid by insurers and public programs.

Retail prices have increased dramatically for other types of drugs, as well. The aggregate retail price of a basket of 477 widely used drugs doubled between 2006 and 2013, even though retail prices for generics decreased. Per life-year gained, new anticancer drugs prices have quadrupled in 2 decades and now exceed conventional levels of cost-effectiveness.

And

Constraining prices so more drugs are cost-effective—for example, below $100,000 per quality-adjusted life year—is one approach to managing drug price inflation. Although the political prospects for such a policy are poor, recent value-based contracts between manufacturers and insurers or pharmacy benefits management companies are similar in spirit. For example, Cigna’s payments to Novartis for the heart failure drug Entresto are linked to how effectively it reduces hospitalization.

Medicynical Note:  The article follows with a discussion of how much we as a society can pay for drugs.  Frakt seems to accept that $100,000/QALY is doable and posits that perhaps we can pay even more–though not much.  On the other hand one can reasonably argue that we’ve already exceeded our ability to pay and that for a QALY drugs for a year’s treatment should at a maximum cost no more than a our culture’s median or average income for a year –that is $50,000-60,000.  And that may be too expensive.  Read the article!