Category Archives: Uncategorized

One can view private insurer’s profits as an incentive to invest in the insurance business. Insurers, however, bring little innovation to the health care, and I emphasize care, field. They are however exceptionally good at finding ways to control and limit what is provided customers and improve the insurer’s bottom line. As such they eliminate higher risk patients by refusing to insure and/or raising rates–a feature of the McCain health plan as well.

As noted in the last post UnitedHealth’s profits for the 1st quarter (net income) approximated 1 billion dollars. This is in addition to covering all administrative costs, salaries, and other overhead. They reported an increase in net income of 12 cents/share from 66 cents last year to 78 cents this year–17-18% gain in earnings/share. Yet this was adjudged by the stock market as a disappointment because of future projections.

Our non-system of care uses 20-30% of premiums to cover administrative overhead and provide for profits. For other countries this number is usually half or less of this percentage. From the earnings data and historical costs of the private insurance business in the U.S. it would appear that these companies are not about delivering quality care and providing acess. It’s all about the money and the quest for profit.

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UnitedHealth’s profits give us some idea why our costs are rising.

“UnitedHealth posted first-quarter net income of $994 million, or 78 cents per share, compared with $927 million, or 66 cents per share, a year earlier.”

“Revenue rose 7 percent to $20.3 billion.”

“The company served medical benefits to about 32.4 million people”

“These financial results are not acceptable for a company with our capabilities and potential,” UnitedHealth Chief Executive Officer Stephen Hemsley said in a statement.”

Meanwhile the economy is melting down, unemployment is increasing and for the first time statistics show a reversal of mortality statistics in parts of the United States.

“It’s very troubling that there are parts of the wealthiest country in the world, with the highest health spending in the world, where health is getting worse,” said Majid Ezzati, the lead author and an associate professor of international health at Harvard. It is a phenomenon, he added, “unheard of in any other developed country.”

McCain thinks this is the best system in the world. The question is for whom?

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Good program, watch it here. Puts our non-system in perspective.

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Merck with their Vioxx deceptions is not by any means unique. Consider the long standing obfuscation of side effects in hormone replacement therapy, the epo/procrit fiascoes, and the standard practice of maximizing minimal advances.

Regarding Vioxx:

“Merck waged a campaign of deception to promote its drug, moving slowly to warn of possible hazards while at the same time dressing up in-house studies as the work of independent academic researchers.”

“Merck gave the Food and Drug Administration an incomplete accounting of deaths in a clinical trial of Vioxx in people with mild dementia.”

“Merck was using what the JAMA authors call “guest authorship and ghostwriting” to make it appear that research done by its employees or contractors was the work of scientists at medical schools and universities. That presumably gave the findings more credibility when they were published, in medical journals, boosting Vioxx’s profile in the crowded painkiller market.”

Disclosure of associations by authors does not fully reveal the extent of the conflict of interest. We need to divorce evaluators of a drug’s performance from the company manufacturing it. Anything less opens the door to shenanigans as occurred with Vioxx and perhaps even more egregious deceptions.

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We’ve blandly paid the price for drugs with mediocre results and insurers simply raised their premiums. All this was done to maintain an obsolete and confiscatory medical financial system. Drug manufacturer’s have used their patent exclusivity to take advantage and charge whatever they wish for medications with little regard for actual costs of development of the drug or for that matter for it’s actual benefit to patients. Now we are paying the piper as noted in today’s NY Times editorial.

We need a new system to change everything in our health care non-system. It’s killing us.

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Dean Baker notes:

“The pharmaceutical industry charges the public $240 billion a year for drugs that would probably sell for less than one-fifth as much if the drug industry didn’t benefit from government imposed patent monopolies.”

Will this monopoly dominated industry respond to market forces? There are alternatives.

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Revealing the details of pharmaceutical industry funding of medical education for physicians and patient disease interest groups is not enough. We need to fully understand the conflicts of interest of drug companies, researchers, physicians and patient advocacy groups. A better solution would be to stop this type spending and lower prices to consumers.

I’ve never known what to make of the disclosure of industry funding of a researcher. Should I disregard the findings? How can one have confidence in results when researchers are on the company payroll? What has been omitted, deemphasized or statistically manipulated?

Those with grey hair will recall that the pharmaceutical companies used to call themselves the “ethical” pharmaceutical industry. Their “ethical” has been tarnished and is rarely used today to describe these robber barons.

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Pharmaceutical manufacturers follow the money.

Patients are left to decide whether to take the chance that they will get a rare dramatic response and spend as much as $100,000/year on a single drug or accept the reality of their fatal illness. For most people, even those with good insurance coverage, there will be out of pocket expense what with deductibles, co-pays and uninsured expenses. Many will face financial ruin in order to obtain the care they think will help.

In reality, most of these terribly expensive drugs provide modest benefits that vary from slowing disease progression with no survival benefit to one to two months additional survival. The notable exception to this is the drug Gleevac (imitinib) which was developed with taxpayer funded NIH grants and then taken private. It has dramatically improved survival in chronic myelogenous leukemia and GI stromal tumors (GIST). The drug also has yielded Novartis billions in profits.

The drug Velcade (bortizomib), referred to in the above article, has shown:

“Patients who were randomly assigned to receive bortezomib had both a significantly longer median time to disease progression than those assigned to receive dexamethasone (6.22 months vs. 3.49 months, P<0.001) and higher response rates (complete response, 6 percent vs. less than 1 percent; partial response, 32 percent vs. 17 percent; P<0.001 for both comparisons).”

“The final consideration of “tolerability” is one of cost. The charge by the pharmacy at my center (Mayo Clinic, Rochester, Minn.) to a patient with a body-surface area of 2 m² for the nine months of therapy as outlined in the APEX trial would be $45,760 for bortezomib and $170 for dexamethasone. Though no price can be placed on the value of an effective drug to a patient or his or her family and doctor, this differential is sobering.” (medicynical note: actual prices in the community seem higher)

In Europe the manufacturer refunds half the payments for this drug if it is ineffective. There is no such arrangement here.

“NICE (Britain’s National Institutes for Health can Clinical Excellence) says that the product is an effective use of the UK National Health Service’s resources when treatment is continued beyond four cycles in those that have a complete or partial response, if J&J refunds the cost of the medication when patients do not respond.” (medicynical note: It’s too expensive and not cost effective without a refund)

The equation would be so much more simple if the price of the medication actually represented the drug company’s development and production costs plus a modest profit. Modest profit, however, is not the goal of the free market pharmaceutical industry.

Meanwhile our republican candidate suggests that to control costs the we need to set market forces free. At these prices, and profits, where do you think the market forces are going to take us? These companies have a monopoly for a generation on medications that promise (but only rarely deliver) long term life saving benefits–is that a “free market?”

We need a new financial/medical system for drug marketing and development.

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We’ve looked at this before.

It’s clear that for insurance companies it’s all about earnings and compensation. Service to the insured is an oxymoron.

I’m on to this because one of my family was in an accident 6 weeks ago, hit from behind. The insurer is still withholding payment. Meanwhile she is in danger of losing her job because of no transportation.

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This is terribly tragic. Reality impinging on magical thinking.

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