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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.


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!

Health Care as A Market Play: (Daraprim, Shkerli) Nothing new here

People are outraged that a former hedge fund hack raised the price of a 62 year old drug that costs about a dollar to manufacture, from $13,50 to $750/pill.   He has now relented and will “decrease” the price–to an undisclosed cost.  Imagine that, arbitrarily pricing a drug to maximize profit?  Actually that is nothing new in the era of $100,000-$200,000/year for new drugs.

It’s difficult to conceive of a drug costing more than a luxury auto (a BMW or Mercedes for example)  or perhaps over a few years more than the cost of an average person’s home or even a multiple of the average yearly incomes of families.  But that’s what has happened in the U.S.  We have created a pricing monster that’s arbitrary and that’s  bankrupting individuals and the system.

Medicynical Note: This hedge fund refugee is not unique.  Drug company pricing is simply what they sense the market will bear.  Some of that is market economics but other aspects are the seriousness of the illness and the desperation of the patient. It’s your money or you life.

But at it’s heart we’re simple getting grifted by good ole capitalism.  Remember the goal of every capitalist no matter what they say about competition, is to eliminate it and have a monopoly.  That’s nirvana.   In pharmaceuticals this goal is facilitated by our patent law, aggressive often deceptive marketing practices and the need for safe drugs.  

Big Pharma has been pricing arbitrarily without regard for cost or value for years.  This clown simply said look here! the emperor has no clothes.  Gouge when you can. 

Our drug costs have predictably spiraled.  As to what would be a fair price for a drug costing $1 to manufacture and which has long established indications?  I’d say under $5.   But don’t bet on that!


Big Pharma Manipulates the System to Increase Drug Prices—Anyone Surprised?

A drug company’s goal is to increase revenue.  Cost efficiency, value for the money?  Not their department. 

On Feb. 10, Valeant Pharmaceuticals International Inc.bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.

Medicynical Note:  Health care in case you didn’t notice is a perfect set up for blackmail.  The companies have something you think you want, something that you have been told you must have in order to survive.  Insurers are a buffer and in part delay the effects of price increases on drugs and pay the increased prices.  So companies raise prices whenever and however they can.  They think they can get away with it so they do it.

How else to explain the above increases?  How else to explain the fact that today we are paying in multiples of our median and average incomes for a single medications which  most often are  of modest value.  Panaceas?  Cures?  Not these.  But cash cows for Big Pharma and investors, yes.

What about regulations on prices?  What about some pay back for government funded research?  Both were given away by congressmen/women who guess what, receive lots of money from drug companies.  It’s a corrupt vile system.  But really it’s just business…….as usual.

Pre-existing Illness, or why you should not travel to the U.S.

Yet another mind boggling adventure in the American healthcare.

Jennifer Huculak-Kimmel, a Saskatchewan resident and Canadian citizen, was six months pregnant when she and her husband, Darren, decided to travel to Hawaii on vacation. She checked with her doctor, who said it would be fine to take the trip, and bought travel insurance just in case. When her water broke and she had to be airlifted to a Honolulu hospital, she should have been able to take advantage of her six weeks of mandatory bed rest, reassured that she had taken the right steps to ensure proper healthcare coverage. Right?


After about a week in the hospital, Blue Cross contacted the couple to let them know that their coverage had been denied because of a preexisting condition — a bladder infection that had not threatened the pregnancy. The insurance company maintained its stance, despite the company receiving a letter from Huculak-Kimmel’s Canadian doctor ensuring them that the pregnancy was not high-risk. They would be responsible for the hospital bill, which, due to the baby’s premature birth and critical condition (the baby had to stay in a neonatal intensive care unit, which cost more than $10,000 per day) had risen to $950,000.

Medicynical note:  Another unique adventure in health care in the United States.  The only country in the industrialized world with a category of bankruptcy related to health care expenses.  

And our republican friends support the right of insurers to deny coverage if you are sick (pre-existing illness).  Yet another sign that our health care system isn’t about health care but rather about money.  Yet another example of American exceptionalism.


Health Care in France: Expensive takes on a new meaning

An American in Paris becomes pregnant and encounters a “socialized” health care system.  Does she survive?  Are there “death panels?”  Oh the horror.   Read here

Medicynical note:  Expensive is relative and the U.S. is relatively the most expensive.  No other country is close.  

We also have a large uninsured population now decreasing no thanks to our repub friends.  We also lead the industrialized world in that dubious category.  

The best healthcare system in the world?  Not us.

Cancer Drugs—Is there a Just Price?

Terrific article in the Journal of Clinical Oncology from May 6, Cancer Drugs in the United States: Justum Pretium—The Just Price by Kanturjian, Fojo, Mathisen and Zwelling .  The point of the article is that there is a disconnect between cancer drug prices and efficacy.  The authors propose a value based system for drug pricing. 

The paper notes the size of the U.S. health market, 2.7 trillion dollars/year, and the fact that we spend 18% of GDP on health care, $8,000/year/person.  This compares unfavorably with the costs in other industrialized countries which are at 6-9% of GDP.  When one considers the relative competitive advantage of one economic setting with another, this disparity is damning to U.S. competiveness. 

Yet the drug industry’s main goal is not an improvement in health care, or health care costs, but rather increased profits.  They have the protection of a generation long patent monopoly and the sky’s the limit if they can market the drug, even mediocre drugs, aggressively to users and physicians.  The point of the article is that physicians have some responsibility to look at prices and efficacy when prescribing.  They make the case for the revolutionary (sic) concept that there should be “value” in medicine.

They note:

  The prices of new anticancer agents seem to be decided by pharmaceutical companies according to what the market will bear.There is little correlation between the actual efficacy of a new drug and its price, as measured by cost-efficacy (CE) ratios, prolongation of patient life in years, or quality-adjusted life-years (QALYs).Compared with a decade ago, the price range of newanticancer agents has more than doubled, from$4,500 to more than $10,000 per month

Drug companies maintain that it now costs a billion dollars to bring a new drug to market.  This is an entirely made up figure without documentation and apparently includes “ancillary expenses, salaries, bonuses, and other indirect costs not related to research or development as well as an 11% compounded discount rate over 10 years based on stock market returns on capital investment.”  Yes 11%/year.

In the 70s cancer drugs cost a patient a couple of hundred dollars/month.  The price didn’t change much until the 90’s when new drugs approximated $1000/month.  By the early 2000’s prices were rapidly increasing so that today we’re in the range or $10,,000-$20,000/month and more for drugs, often of limited, if any, efficacy.    What’s missing from is the reality of a competitive market.   With the government handout of patent protection, drug companies have little competition or incentive to price new medications realistically.   It is a fact that we lead the world by a wide margin in the price we pay for most new cancer drugs

Other countries have kept their costs down by simply telling drug companies no on their pricing.  The companies then do the reasonable thing and charge less in order to be able to get into that countries market.  Guess what, they still make money, and lots of it.   In the world market, the U.S. is the big stooge, paying whatever is demanded without considering  value or for that matter the actual cost of development—but that’s another story. 

Medicynical Note:  Health reform will moderate drug pricing over time as we eventually adopt an approach that discriminates in favor of treatments that actually work. We need to  understand that costly drugs are not necessarily better.