Health Insurers Profits — The Most Expensive Health Care in the World

Interesting new profit statements from insurers:

WellPoint Inc., UnitedHealth Group Inc., Aetna Inc., Humana Inc. and Cigna Corp. reported combined net income of $3.2 billion, a 31 percent leap from the same period in 2009. Premiums grew faster than medical costs, while most insurers lowered the share of premium dollars spent on actual health services. The five insurers together set a full-year profit record in 2009 despite the worst economic downturn since the Great Depression. Now only a few months later, Wall Street analysts have been marveling at the first quarter of 2010.

As noted earlier drug companies have had a banner year as well.

Medicynical Note: The only one not doing well in health care are the patients. After all what’s the system for, care of the sick or profits? In the U.S. guess what?


Cancer Costs Study — Why publish now?

A flawed analysis of cancer costs appeared yesterday in numerous outlets:

It found that cancer treatment costs rose from nearly $25 billion in 1987 to more than $48 billion by the end of 2005. Medicynical note: Remarkably outdated information since the ACS is reporting expenditures of $93 billion in 2009. With indirect costs of an additional $18.8 billion. Which means a doubling or more of costs since 2005.

Better and more advanced treatments mean more people with cancer are remaining alive, so the spending increases represent money well spent, said Kenneth Thorpe, a health policy researcher at Emory University who has focused on the cost of health care.

“It seems like we’re buying increases in survival,” Thorpe said. Medicynical Note: I think most of the survival gain has to do with diagnosing cancer earlier (lead time bias) and/or changes in definition such that inherently more benign tumors are now lumped with cancer? (DCIS, Gleasons 5 prostate cancer for example).

The analysis of costs in this study stopped in 2005. In the last 5 years (since 2005) costs for cancer care have shown a remarkable acceleration associated with a decrease in those insured and a decrease in the quality of insurance. The data in this study is historical and probably not fully relevant.

As noted in the article.

Recent government reports have found that the percentage of Americans with private health insurance has been shrinking and recently hit its lowest mark in 50 years. Yet the study found that the proportion of cancer treatment costs paid by private insurance rose.

And companies have been tightening or cutting employee benefits, causing out-of-pocket costs to go up for many patients. Yet the study found that the proportion of bills paid by patients declined.

He alluded to widely reported increases in personal bankruptcies prompted by medical bills. “There’s no question that the out-of-pocket costs for some patients have risen dramatically,” Lichtenfeld said.

The study did not add in the cost of diagnostic tests and scans, which are cost drivers. And the data does not include the last five years, which saw some extremely pricey cancer drugs come on the market. Medicynical note: A PET scan costs in the range of $5000, more than the entire treatment course of the 1970’s.

Medicynical Note: Why publish this out of date analysis now?

This study might have been relevant 5 or 6 years ago, but it’s been overtaken by events. Health costs for cancer doubled between 1987 and 2005 (the period studied) AND remarkably have doubled again (see ACS data cited above) between 2005 and the present.

Meanwhile median and average salaries in the US declined in the last 10 years. Amazing and sobering.


Uganda, HIV — The Success that Wasn’t

Not too long ago we were touting the wonders of abstinence education and the HIV control program in Uganda. More here and here. You may recall the emphasis of the Ugandan anti HIV education program, encouraged by the Bush administrations, away from use of condoms to abstinence. They claimed, prematurely it seems, to have the HIV epidemic under control.

However:

In the 1980s, Uganda earned renown for pushing its infection rate to 6 percent from 18 percent. Many here still remember the pounding drums on the radio and the slogans “Practice ABC” and “zero grazing” — no extramarital sex.

But infection rates are creeping back up. Casual sex is on the rise, epidemiological surveys say.

Condom use, never very high, has dropped. Even among people who know they are infected, only 30 percent consistently use condoms.

link: In Africa, Cultural Obstacles to Safe Sex Drive HIV Infections – NYTimes.com

Abstinence education if it isn’t accepted by the population didn’t work. And while the epidemic is reasserting itself the international community is suffering from HIV assistance fatigue.

Uganda is the first country where major clinics routinely turn people away, but it will not be the last. In Kenya next door, grants to keep 200,000 on drugs will expire soon. An American-run program in Mozambique has been told to stop opening clinics. There have been drug shortages in Nigeria and Swaziland. Tanzania and Botswana are trimming treatment slots, according to a report by the medical charity Doctors Without Borders.

The collapse was set off by the global recession’s effect on donors, and by a growing sense that more lives would be saved by fighting other, cheaper diseases. Even as the number of people infected by AIDS grows by a million a year, money for treatment has stopped growing.

link: In Uganda, AIDS War Is Falling Apart – NYTimes.com

Medicynical Note: In fact, the emphasis on abstinence was wrong. It confused the education message and in doing so undermined the use of condoms as a mechanism to prevent spread. The “great success” of Uganda never was.

We now add to the continuing disastrous legacy of the Bush administration, the collapse of the anti-HIV campaign in Africa. Can you imagine starting a long term expensive treatment program that in addition to treatment forced the use of unproven prevention method, abstinence, without implementing a mechanism to pay for it. Amazing!



More on Provenge –How beautiful the Emperor’s Clothes?

Provenge is innovative, very expensive and minimally effective. It won’t cure disease but will provide a very slight 9% improvement in those alive at 3 years–that’s less than a 1 in 10 benefit.

The cost is $93,000 for a full treatment. It’s not clear whether repeat courses can be given.

To put in perspective consider that a more conventional chemotherapeutic agent docetaxol (Taxotere) provides a 3 month benefit at significantly less cost.

Here is a detailed review of this drug’s efficacy:

The two trials used 2:1 randomization, with patients to receive Provenge or placebo three times, with 2 weeks between each treatment. Study 1 randomized 82 men (median age 73; 89% white) to Provenge and 45 (median age 71; 93.3% white) to placebo. The treatment group had a nonsignificant median time to progression of 11.0 weeks, compared with 9.1 weeks in the placebo arm (P = .085). (Medicynical emphasis)

After study 1 failed to meet its primary endpoint, researchers halted enrollment in study 2 following accrual of 98 of 120 planned patients with similar age and racial characteristics as those in study 1. (The difference in time to progression in the second study also was nonsignificant, 10.9 weeks for Provenge vs 9.9 weeks for placebo (P = .719). The two trials found no significant regression in tumor size among the treated patients. (Medicynical emphasis)

Although neither study specified overall survival as an endpoint, a post hoc analysis of the study 1 data showed an overall median survival benefit for the Provenge arm, compared with placebo, of 25.9 months vs 21.4 months (P = .01). “

An analysis of study 2 found a median overall survival of 19 months for the treatment arm vs 15.7 months for the placebo group, a difference that failed to reach statistical significance (P = .331). “It should be noted that the survival time in this study was shorter than the counterpart in study 1, which suggests that significant populations in these two studies may not be exactly the same,” remarked FDA clinical reviewer Ke Liu, MD, PhD. Dendreon also presented combined overall survival data from the two trials, showing a significant advantage for Provenge, 23.2 weeks vs 18.9 weeks for placebo (P = .011)

link: Substantial Evidence for Provenge Efficacy: FDA Panel – Cancer Network

And this from a later study:

In clinical trials, Provenge extended survival by a median 4.1 months — about half of patients were below that amount and half were above. But some of the patients remain alive years after the treatment. In the most recent trial, 32% of Provenge-treated patients remained alive three years after treatment. Only 23% of placebo-treated patients survived that long. (Medicynical Emphasis– It’s not stated whether patients receiving placebo also remain alive years after the treatment)

link: FDA OKs Provenge for Prostate Cancer Therapy

Of interest is that more patients in the study group received docetaxol (Taxotere) 57% vs 50.3% in the placebo group after signs of disease progression. As in many drug comparison trials the matching up of the groups is essential to the validity of the study. It’s conceivable given the small size of the study that normal biologic variation in the diseases course and the differences in patient management could account for much of the “evidence” of efficacy.

There is a long history of study results often sponsored by drug companies that were viewed as “significant” that later turned out to be simply artifact–see Premarin and erythropoietin data to name two examples.

Medicynical Note: After three years survival in the treated group was 9% better than those receiving absolutely nothing–a placebo.

Provenge does not appear to work with the more malignant Gleason 8-9 varieties of the disease.

However, according to information supplied by Dendreon, analysis of the data for pre-specified variables revealed Gleason score as the single most important predictor of response to Provenge®. In patients with a Gleason score = 7 who received Provenge®, the likelihood of remaining progression free and free of cancer-related pain while on study was over twice that of men who did not receive Provenge®. In addition, those patients receiving Provenge® whose disease had not progressed six months after randomization, had a greater than eight-fold advantage in progression-free survival compared to those patients who received placebo (35.9% versus 4%). In contrast, the benefits of Provenge® therapy were not seen in patients with a Gleason score = 8.

link: Prostate Cancer Research Institute – Update on Provenge Trials


This is an advance but it also is a very limited benefit from a very expensive drug. Would you buy a car for $100,000 that lasted months? Would you go into debt to get this drug? Would you sell your house to raise funds to have access?

Drug companies became alchemists in the mid 90’s when they discovered that patients with fatal illness were neither cost aware nor cost sensitive. Any minor advance that offer a modicum of success even as little as a 10% chance of living a month or two or four longer was worth spending huge sums of money. They don’t justify the pricing by their costs or the efficacy of the drug, they simply point out that other drug companies charge similarly for similarly ineffective agents.

Drugs like Provenge, that have interesting mechanisms of action with minimal efficacy are money cows for the pharmaceutical industry. The question is how much longer can they ride this gravy train, before the emperor is shown to have no clothes? And/or the system crashes?

More here.


Change in Health Insurance: At long last.

It’s hard to believe that this was common practice for health insurers before health reform.

The health insurance industry has decided to end its practice of cancelling claims once a patient gets sick next month, well before the new health care law would have required it, the industry’s chief spokesman said Wednesday.

Congressional Democrats and Health and Human Services Secretary Kathleen Sebelius had pressured companies to end the practice early. The overhaul plan will ban the practice in September, except in cases of fraud or intentional misrepresentation, and subject it to a third party review.

Medicynical Note: The best health care system in the world? For health care, no! As a system to generate money, yes! We have a long way to go.


Socialized Agriculture?

I don’t hear farmers complaining about their subsidies. Is this socialism?

The federal government wants to save taxpayers billions of dollars by reducing spending on crop insurance after years of big profits by insurers, but the industry claims the reductions could hurt rural areas.


Powerpoint Dysfunction Disorder

I wondered over the years why our military doesn’t anticipate and seems bound to spend several years flailing about before finding a strategy that works.

I think I’ve found the enemy! I hope our military has.

“When we understand that slide, we’ll have won the war,” General McChrystal dryly remarked, one of his advisers recalled, as the room erupted in laughter.


$617,000 Spent: Patient’s wife doesn’t know whether the treatment helped

The American “system” seems to have developed the fine art of separating patients from their money. Even with the best of intentions by all involved, our health care non-system for people with incurable disease is perilously close to a scam.

Watch this

Medicynical Note: Kidney cancer’s course varies widely. It often remains stable for years without treatment. This patient may have benefited but also it’s quite likely that after surgery none of the treatments altered the disease course–but did have great toxicity.

The surgery that removed the initial tumor cost $25,000–and the tumor was gone for two years. Avastin (a “new” targeted treatment) one dose cost $27,000 did nothing. Amazing what we’ll spend for a limited benefit  when we are desperately ill.

The Solution to Health Care Overpricing–go overseas, if you can afford it

Good old American efficiency: The article describes a man who needed some type of nasal surgery: The cost in the US $33,127, in UK, at a private hospital $2,930.

An estimated 878,000 Americans will travel internationally for a medical procedure this year, according to a report from the Deloitte Center for Health Solutions. That number is expected to nearly double by 2012.

The majority of medical tourists are uninsured; however, the cost of health care in this country has become so expensive that even some U.S. health insurance companies are coordinating with hospitals overseas.

Medicynical Note: We priced ourselves beyond our ability to pay. According to those opposing health reform, we have the “best health care system in the world.”

That of course is not quite correct. We do lead the world in:

  • Medical bankruptcy
  • Costs of health care, drug costs,
  • The number of people going overseas for care
  • The number of people by percent or absolute number without insurance coverage (in the industrialized world)
  • Administrative inefficiency
  • Drug company profits
  • Insurance company salaries and profits
  • Malpractice Premiums
  • Doctor’s Salaries (in most specialties)
  • and so on


What’s the real cost of Progress when a drug costs $100,000/year drug

It’s in vogue in medicine to market drugs offering slight benefit to desperately ill patients at cost of between $50,000 and $100,000/year.

What’s the real cost of these “advances.”

In a hypothetical (but typical) situation lets say the drug is used in 100 patients and compared with another group of 100 patients receiving placebo (or standard therapy).

As one would hope the group of patients receiving the study drug appears to have some response. In the distant past a response was defined as a decrease in tumor bulk of 50%. In recent years that definition has been broadened, some would say undermined, to mean that there was no evidence of tumor progression during treatment. Since we are in “modern” times lets use the definition of response being no progression.

We do our study and find in the group of patients receiving placebo (or standard therapy) 25% showed no progression. While in the study group receiving the new drug of 100 patients 40% showed no progression.

Drug companies take such data as evidence of the drug’s efficacy and try to get FDA approval. Note there is no evidence at this point of extension of life.

The real cost of this advance is interesting to contemplate. Consider treating 100 patients with a $100,000 drug–that’s 10 million dollars. Consider that just 40% get a “benefit” with the drug and 25% had the same “benefit” with placebo (or standard therapy)–and a marginal “benefit” at that. That means that 6 million dollars was spent on patient who got no “benefit” at all from the drug (the 60 of 100 patients without “benefit”). 2.5 million dollars on the 25 patients who would have shown no progression with placebo (or standard therapy). The incremental “benefit” of the drug over placebo or conventional therapy was therefore a total of 15 patients.

That means in our hypothetical but somewhat typical new drug situation 85 out of 100 patients will be treated with the $100,000/year drug and get nothing from it. 15 patients get a limited improvements. The cost/patient that improved is $100,000 X 100 patients treated/15 patients who get the improvement=$666,666 expended for each patient who improved. It should be noted that this is a cost per year figure for a single drug.

How much is a reasonable amount for the system to spend for an improvement. It’s been thought in the literature that between $50,000 and $150,000 per year of life gained was an affordable sum. It’s never been clear to me where these numbers came from but in the cost efficacy literature they seem to be the most used figures.

In our hypothetical situation our outcome was no progression of disease during the treatment period. But for the sake of our discussion lets say the study continues and the study patients (the 15% with benefit) lived a median of 2,3,4,5, or 6 months longer. For what it’s worth except for the very rare super effective new agent (Gleevec for example) most new biological agent’s improvement of survival is in the 2-6 month range.

If the median improvement is 2 months then the cost of a 12 month survival would be 6 X $666,666 (the cost/patient who benefitted) or about $4,000,000 to buy a total of a year’s survival time for patients who benefit from the treatment.

If the improvement is 6 months then the cost of 12 months survival would be 2 X $666,666 or in the range of 1.33 million dollars.

Neither would be considered cost effective by any of our current measures.

Medicynical Note: You won’t find the drug companies funding cost efficacy studies nor touting their results as cost efficient. Instead our hypothetical study would be touted as showing a 60% improvement in response rates between placebo and study group. (40% response rate with drug/25% with placebo or conventional Rx X 100=160%) It won’t be easy to find out that the difference between a “response” to placebo and the study drug was 15% (40% vs 25%) or that the benefit was just 2-6 months, if that. That the American way of drug marketing.

In case you think the above is exaggerated consider these from real life NEJM 355:2542-2550

The median survival was 12.3 months in the group assigned to chemotherapy plus bevacizumab, as compared with 10.3 months in the chemotherapy-alone group (hazard ratio for death, 0.79; P=0.003). The median progression-free survival in the two groups was 6.2 and 4.5 months, respectively (hazard ratio for disease progression, 0.66; P<0.001), with corresponding response rates of 35% and 15% (P<0.001). Rates of clinically significant bleeding were 4.4% and 0.7%, respectively (P<0.001). There were 15 treatment-related deaths in the chemotherapy-plus-bevacizumab group, including 5 from pulmonary hemorrhage.

Or this from today’s (April 25, 2010) Seattle Times:

Dendreon’s case rests largely on a study of more than 500 men with an advanced form of prostate cancer that spread to other parts of their bodies. Of the men who got Provenge, nearly a third were still alive in three years, compared with less than a quarter of those who got placebos. (medicynical emphasis) The vaccine boosted median survival time by 4 months, from 22 months in the placebo group to 26 months in the Provenge group.

How much difference is there between nearly a third and less than a quarter? I wonder who provided this verbiage? I figure an 8% benefit. Affordable?