June 30th, 2009 by Happy Hospitalist in Better Health Network, Opinion
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The drug makers have agreed to cover part of the costs of brand name drugs in the donut hole, that no man’s land of Medicare Part D where patients must pay for their own drugs.
As reported:
Obama said that drug companies have pledged to spend $80 billion over the next decade to help reduce the cost of drugs for seniors and pay for a portion of Obama’s health care legislation. The agreement with the pharmaceutical industry would help close a gap in prescription drug coverage under Medicare.
I see one problem with the assertion that drug companies will be “spending” $80 billion dollars to reduce the cost of drugs for seniors. Drug companies and by default, their board of directors have allegiance to their shareholders, not the the US government or the seniors of this country. I can assure you, this deal may look good on paper (for seniors) and it may benefit seniors a great deal (FREE=MORE) but it is also one step further to the promised land of the senior vote. And it will worsen access to drugs for everyone else. There is no free lunch in this world.
It may save seniors money, but it will not be revenue neutral. It will not save $80 billion dollars over 10 years or reduce overall costs of care. Somehow, someway, the costs will be shifted. It may mean higher drug costs for those privately insured or the uninsured. It may mean decreased access to compassion programs. It may mean higher costs to hospitals. Whatever the agreement means, it will not mean $80 billion dollars saved in the next decade.
Drug companies are not in the business of sacrificing their shareholders or bond holders for patriotic means. They are in the business of making money. And that means they have selfish interests to maximize their ROI for any agreement they make with the government.
The question isn’t really how wonderful this is for seniors. The question is how will buying off seniors affect the rest of America. And I’m telling you here, right now, you will see higher costs for everyone not lucky enough to bathe in a sea of FREE=MORE known as the Medicare National Bank.
*This blog post was originally published at A Happy Hospitalist*
June 29th, 2009 by admin in Better Health Network, Health Policy
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Much has been made of the recent pressure on the FDA to create a pathway for follow-on biologics. On June 9, 2009, Rep. Henry Waxman, chair of the Energy and Commerce committee, sent a letter to President Obama imploring him to approve a pathway for generic biologics: “I urge the administration to consider what steps can be taken under existing authority to prepare and even begin to use a pathway for generic biologics.”
Six days later, President Obama, in his June 15, 2009 speech to the AMA, followed Waxman’s lead, asking the FDA and industry “to introduce generic biologic drugs into the marketplace.” He continued: “These are drugs used to treat illnesses like anemia. But right now, there is no pathway at the FDA for approving generic versions of these drugs. Creating such a pathway will save us billions of dollars.”
Is this true? Are follow-on biologics, biosimilars, or generic biologics (all names for the same concept) truly the path to healthcare savings? And what are they, anyway? To clear up the confusion, this post aims to explain what biologics are, what generics are, and what the challenges are in the creation of an approval pathway for generic biologics.
What are biologics? How do they differ from traditional small-molecule therapies?
When you think of a drug, you probably think of a pill like Tylenol or Lipitor. You may not be as familiar with biologics, which are attracting a great deal of attention from policymakers and media. Biologics represent a different set of drugs, distinguished by their size, their informational and manufacturing complexity, and their therapeutic advantages.
If you were to look at most drugs under a microsope, you would find that they are actually rather small relative to a typical biologic. Acetaminophen, which is the active ingredient in Tylenol, weighs 150 daltons (a dalton is a unit of atomic mass). Enbrel, on the other hand, which is a top-selling biologic indicated for several autoimmune diseases, weighs 150,000 daltons. To put that thousand-fold difference in visual terms, if Tylenol weighed as much as your mountain bike, then Enbrel would weigh as much as an unfueled 12-passenger private jet. Hence you will often hear people in the pharmaceutical industry refer to “small molecule” drugs and “large molecule” drugs — because these are two truly distinct classes.
Biologics are often designed to closely mimic the body’s own specific natural processes. Because of this higher specificity, biologics tend to bind to drug targets in the body more precisely than do traditional drugs, which may bind to other unintended targets in the body, placing the patient at greater risk of side effects.
On top of it all, there is currently no defined pathway at the FDA for companies to develop generic versions of biologics, so biologic manufacturers retain data exclusivity over their products. Not surprisingly, the therapeutic and market advantages of biologics have caused pharmaceutical companies to focus their efforts on developing or acquiring biologics over small-molecule drugs. In fact, according to a recent forecast, by 2014, seven of the top ten drugs in America will be biologics, including every single one of the top six.
Unfortunately, while biologic therapies provide a great deal of therapeutic benefits, they are also extremely challenging for biopharmaceutical companies to develop and manufacture, because they are composed of entire proteins, carefully grown through recombinant DNA methods which are newer and less practiced than traditional drug chemistry methodologies. A traditional drug is usually derived through a set of chemical reactions. It’s a lot like following a recipe. Synthesizing a biologic, however, is a bit more like cloning a cat. In order to synthesize a biologic, host mammalian cells, usually Chinese hamster ovary cells, must be implanted with a gene that codes for the desired drug. The host cells are maintained in a special bioreactor that is designed to keep the cells alive as they translate, synthesize and excrete the drug. The broth of cells must then be harvested from the cells, modified, purified, and tested. The solution is finally packaged into vials or pre-filled syringes for distribution.
This manufacturing process is unusually challenging to reproduce consistently, even within a company. For example, Johnson & Johnson manufactures epoetin alfa, an anemia therapy, under the name EPREX in Europe. In the late 1990s, J&J changed its manufacturing process for EPREX at the request of the EMEA (the European version of the FDA). The process change caused some patients to develop pure red blood cell aplasia, a serious adverse reaction. Rather than receiving the benefit of the anemia therapy, these patients actually lost their ability to make red blood cells because they produced an antibody (triggered by the faulty EPREX) that inactivated both the EPREX and the body’s natural protein that is essential for red blood cell production. J&J eventually determined the cause of the adverse reaction and corrected it, but only after a lengthy and expensive investigation.
Because of the intense development and manufacturing process, biologics are also significantly more expensive than traditional therapies. Herceptin, an effective treatment for some forms of breast cancer, can cost as much as $48,000 for one year’s worth of treatment. It’s important to keep in mind, however, that virtually every drug company provides programs to help underinsured or uninsured patients get financial assistance in the form of co-pay cards, co-pay grants, or free drug programs. Simply contact the drug manufacturer.
Why have biologics gotten so much attention from healthcare reformers such as Rep. Waxman and President Obama?
The high cost of biologic therapies has attracted attention from both private payers, such as Aetna and UnitedHealthcare, and public payers, such as Medicare, Medicaid, and state health insurance programs. While payers agree that the therapeutic benefits of these treatments are important, they are still anxious to limit their exposure to the high price tags. Most insurers require several other therapeutic steps before allowing a physician to prescribe a biologic therapy.
Wait, what exactly is a generic? And what’s all this talk of bioequivalence?
The Hatch-Waxman Act of 1984 established a pathway for generic versions of small-molecule drugs to be offered to the public. Once the patent ends on a drug, generic drug makers may manufacture and sell the same drug without repeating the research, expensive clinical trials, or marketing efforts conducted by the original patent holder. These savings allow generic manufacturers to sell their versions for a lot less.
In order to gain approval, the maker of the generic must still show bioequivalence to the original drug, called the “reference listed drug” in the generic drug maker’s application. In a bioequivalence study, the reference listed drug is administered to one group of healthy volunteers, and the generic is administered to a second group. The blood concentrations of the active ingredients are measured over time and graphed. If the generic drug’s graph lies between 80% and 125% of the graph of the reference listed drug, then the two are deemed bioequivalent, and the generic drug is approved. Once approved for the market, it may be sold and independently substituted by a pharmacist for the branded medication without telling the physician, assuming the doctor has not expressly forbidden generic substitution. This last permission is referred to as the “interchangeability” of the drug.
Why can’t Congress just duplicate the same approval process used for generic small-molecule drugs?
In theory, Congress could. In practice, however, there are several technical hurdles that remain to be cleared. As discussed above, the processes used to create biologic therapies are extremely sensitive to manufacturing changes, as in the EPREX case. If a generic biologic manufacturer develops its own process, there is a good chance that the quality of the product would differ from that of the reference listed drug. Furthermore, no one has yet confidently measured bioequivalence for a biologic.
Frank Torti, Chief Scientist of the FDA, summarized these issues very well in a September 2008 response to a Congressional inquiry about follow-on biologics:
Because of the variability and complexity of protein molecules, current limitations of analytical methods, and the difficulties in manufacturing a consistent product, it is unlikely that, for most proteins, a manufacturer of a follow-on protein product could demonstrate that its product is identical to an already approved product. Technology is not yet sufficiently advanced to allow this type of comparison for more complex protein products.
All is not lost, though. The FDA could still create a pathway for generic biologic manufacturers to develop “biosimilars,” which are products that are intended to be close to a reference listed drug but cannot be shown to be the same. Because they are not the same, biosimilar manufacturers would likely have to conduct clinical trials to show that their version is safe and effective for human use, and can be manufactured consistently.
What are the realistic cost savings?
Because of the added cost of clinical development, testing, and marketing of a biosimilar product on top of the difficult manufacturing process, and competition, generic biologic pricing is more likely to resemble brand-to-brand biologic competition than the generic-to-brand competition seen in the small-molecule drug marketplace. Therefore, it’s not yet clear how much more affordable a FOB would be for health insurers. Without being able to show that the products are truly identical and therefore interchangeable, physicians are also likely to be reluctant to try what is essentially a “new” drug that does not truly share the established track record of the original drug. Payers and patients may be excited about the lower cost but skeptical of potential safety issues. As a result of these factors, generic biologic manufacturers may ultimately fail to capture enough business to make up for the upfront expenses of clinical testing, as well as the ongoing manufacturing and marketing expenses.
The Federal Trade Commission recently published a report that studied and called out these limitations. The consequences of the market dynamics imply that only two or three companies with large biologics manufacturing capabilities will even bother to get involved in this field, because only those companies will already have the plants and people to compete effectively. Ironically, the FOB manufacturer for a given reference drug will probably be other biologics innovators who already have the manufacturing capabilities but don’t normally compete in that particular market.
What would be some of the other implementation challenges for the government?
For one, CMS would need to decide how to bill and code for the new products, a subtle referendum on how identical the biosimilars will really be. If they give the generic versions the same codes as the originals, interchangeability is easier and the cost savings are more likely to materialize. On the other hand, it’s important for both the FDA and CMS to track adverse events with these new products (an activity known as “pharmacovigilance”), which is easier to do if the codes are different.
Where does the policy debate stand? What are the Eshoo and Waxman proposals?
The current Waxman bill is remarkably similar to the Hatch-Waxman Act of 1984, which was originally designed for small-molecule drugs. It would not require any new clinical trials for generic biologics provided that the generic had a “highly similar molecular structures,” and allows a case-by-case determination on whether or not safety and efficacy data would be required before pharmacies could substitute generics for reference biologics without telling the physician, but the default would be to allow substitution on approval. The Waxman bill allows for five to nine years of data exclusivity for the original patent holder.
The current Eshoo bill would require clinical trials comparing the generic biologic to the reference biologic, unless the FDA waived them. Rather than automatically granting interchangeability upon approval, the FDA would have to publish guidance with data that describe the criteria required for interchangeability. The bill also recognizes the greater challenge in developing biologics by allowing for twelve to fourteen years of data exclusivity.
Can the healthcare system really save billions of dollars with biosimilars?
President Obama’s speech to the AMA suggested that billions of dollars would be saved by the creation of a biosimilars approval pathway. Several others to study the issue have cited fairly conservative numbers. Avalere Health put the federal savings at $3.6 billion over a ten-year period, while the Congressional Budget Office says $6.6 billion. Avalere’s model assumes moderate discounting, several entrants, slow uptake of biosimilars, and a ten-year data exclusivity period. The CBO report scores a bill that resembles the Eshoo option described above, but doesn’t account for some of the market dynamics discussed above and in the FTC report.
Finally, to keep pharmaceutical costs in perspective, policymakers should remember that prescription drugs currently make up only 10% of healthcare costs, while physician services make up 21% and hospital care makes up 31%. The CBO estimate also predicts that follow-on biologics would save $25 billion on national biologics expenditures over ten years. Even if correct, those savings still make up one-half of one percent of all national spending on prescription drugs, which is itself one-tenth of all healthcare spending in the United States.
Which option makes more sense?
Overall, the Eshoo bill appears to do the best job of reflecting the current technical challenges particular to biologic therapies. The need for clinical trials to insure the safety, efficacy and quality of FOBs ought to be non-negotiable. However, given the high cost of becoming a FOB manufacturer, and the small number of likely entrants, the optimal length of data exclusivity is a good open question. Henry Grabowski of Duke University studied the issue and concluded that an ideal breakeven point is 12.9 and 16.2 years, also suggesting that the Eshoo option is the most likely to drive economic growth. The European Union currently allows for biosimilars and permits ten to eleven years of data exclusivity. Let’s hope that policymakers work hard to thoughtfully strike the right balance that maintains both a stream of innovative therapies from scientific pioneers and a structure that wisely manages costs for payors.
Author’s bio:
Jonathan Sheffi is a summer intern in the FDA Office of Biotechnology Products. Before the FDA, Jonathan worked for Amgen, first as a marketing analyst and then as a biopharmaceutical sales rep. He will start at Harvard Business School in the fall of 2009, and is seeking an internship opportunity for the summer of 2010. Follow Jonathan’s blog at http://jonathansheffi.com/ and on Twitter at @sheffi.
Acknowledgments:
Thank you to Val Jones (Better Health), Niko Karvounis (The Century Foundation), and Kimberly Barr (UnitedHealthcare) for their comments and suggestions.
Disclosures:
All included information has been derived only from publicly available sources. This blog post reflects the author’s personal opinions and do not represent the opinion of any other organization or individual.
June 27th, 2009 by Happy Hospitalist in Better Health Network, Health Policy, Humor
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You want to know what the process is like for a physician to make a living as a physician?
Look only toward the Medicare Tomato. Imagine for the moment that you have been taken out of reality and into the alternate bizarro world of the Medicare Tomato. In this analogy, the Medicare Tomato represents a day in the life of a practicing physician.
You’re getting verrryyyyyy sleeeeepppppeeeee………….
I love tomatoes. They are one of my favorite foods. Buying tomatoes used to be easy. I would search the Sunday newspaper for the specials of the week. There are multiple grocery chains in my neck of the woods. There are multiple types of tomatoes.
Roma
Hydroponic
On the vine
Organic
Slicing
Cherry
Grape
The variety and quality are endless. Different stores offer different varieties. They try to differentiate themselves in quality and in price.
I have my pick of the tomato litter. I can go to any store I want.
I base my decision on price, geographic location, how the tomato looks and feels, and what I would use them for.
Life is great. I find a tomato I like for a price I consider reasonable. The store is happy. I am happy. I take my tomatoes, and I pay cash for my product. Sometimes I pay by credit card just to earn that extra 1% cash back.
One night I was awakened by a terrible thunder clap. A terrible storm had swept through over night. I didn’t think much of it. But the consequences of that brewing storm soon became obvious. That storm signified the end of the free market trading of cash for tomatoes, in which both customer and grocer were happy with the payment for services rendered.
Enter the massive government take over. A massive coup on the tomato market. By a midnight Congressional mandate, the destruction of the free market exchange of money for tomatoes was replaced and regulated by the Medicare National Tomato Bank (MNTB).
Tomatoes, by nature of their nutritional content, have been deemed a right for all Americans. By Congressional mandate, all Americans (and illegals) were given a Right to tomatoes. No American should ever be allowed to live without their tomatoes.
Wow, I thought. That’s great. I get free tomatoes for life. Life couldn’t be better. Born out of thin air was an entire nation of entitled tomato eaters. (ETEs) I was ecstatic. Somebody loves me, I remember thinking. However, that feeling of joy quickly faded.
Immediately after removing free market principles from the tomato market, the MNTB instituted the principles of most resistance. If something can be regulated, it will be. The word quickly spread through out this great nation of ours that the government would now make tomatoes a right for everyone.
The demand for tomatoes took off. Grocery stores everywhere were selling out. Nobody could keep tomatoes in stock. The grocery stores were ecstatic too. They simply sold their tomatoes and sent the bill to Uncle Sam. Uncle Sam sent them a check for their price of tomatoes. The grocers were happy. They sold out every day. The people were happy. They were getting free tomatoes. ETEs everywhere loved their Congress.
Unfortunately, the MNTB was not happy. They were footing the bill. And that bill was exploding. That $200 billion dollar tomato bill was quickly rising. Faster and faster. 10% a year. Year after year. The MNTB soon realized that they could not afford to continue paying for free tomatoes for everyone. In an effort to reign in the costs of the MNTB, Congress did something completely anti-American. They took capitalism out of the tomato market.
Cutting back on the benefits to the people was considered political suicide. How could these professional regulators, who promised tomatoes for ETEs everywhere; How could they ever back down. They could never ration the tomato consumption. They would be kicked out of office for even suggesting such a thing.
In their brilliant strike of genius, they decided to try something that had never been tried before in the world of capitalism. They would reign in the cost to the MNTB, not by cutting the demand (political suicide), but by instead instituting a policy of 80% payment of market prices.
By now, the people are happy. Their free tomatoes are safe. Their lives as ETEs live on. The grocers? Not so happy. They have just been taken to the cleaners. Their glorious tomato days have just ended. Instead of receiving just payment for a just product determined by market prices, a payment agreed upon between the customer and the producer, they have just been taken out of the loop. To the tune of an 80% payment rate.
This policy had a profound effect on the grocer’s mind set. No longer did they feel the desire to provide the best possible tomato at the best possible price. A price agreed upon between consumer and grocer. No longer did they feel the desire to offer a better tomato to compete with their grocer down the street. When the 20% cuts went into effect, the grocer’s responded by offering fewer tomatoes for sale. Gone were the hydroponic. Gone were the organic. The profit was leaving, and so were the choices of tomatoes available to the ETEs via the MNTB.
At 80%, they could still make a decent profit, so they sacrificed some margin for quality, in an attempt to keep market share. But as the MNTB soon learned, these false price controls did nothing to reign in the cost to the National Tomato Bank. Grocers responded by selling more technologically advanced super duper genetically modified purple tomatoes. The MNTB would pay for them, and pay at a much higher rate, considered a more valuable product via the relative value unit system (RVU) of tomato price controls, which was now in place to differentiate the value of each tomato.
While the benefit of these tomatoes over the cheaper tomatoes was suspect, the MNTB paid for them anyway, as part of the overall MNTB rules and regulations passed by the lifetime regulators known as Congress. What the MNTB soon realized was that the grocers were pushing far fewer of the cheap tomatoes and more of the expensive tomatoes.
Because they got paid more for selling expensive tomatoes. The MNTB got exactly what it paid for. In an effort to decrease costs, they actually got a high cost, low value tomato market, courtesy of the RVU system they signed off on. The cost to the MNTB exploded.
The volume of specialty tomatoes grew exponentially. As the grocers realized they could not make a living on the cheap tomatoes, they moved toward selling the expensive ones with marginal additional value. In response to the continued explosion of cost related to its cost controls, the MNTB did three things.
- They again dropped the payment rate to 50% of current cost for all services, including super duper purple genetic tomatoes.
- They set a sustainable growth rate where in the cost of all tomatoes to be paid by the MNTB would be set in stone, and determined by inflation and population growth
- They established a strict set of rules and regulations known as Evaluation and Management codes for the grocers to get paid by the MNTB.
The first response exacerbated the problem. Since the super duper technology tomatoes were paid at a higher rate, more and more grocers stopped offering cheap tomatoes. They simply removed the variety of product. They removed their rings of service. One product fits all.
The cheap primary tomato market was killed off. What remained was the expensive specialty tomatoes that continued to maintain a high value of importance, relative to the primary tomato market, to the MNTB. As the consumption of specialty tomatoes grew exponentially, the death of the primary tomato market simultaneously led to massive cost increases in the total cost of the MNTB program. The volume continued to explode, without so much as a brake on the demand. Because folks, tomatoes are a right, as decreed by the professional regulators.
Now, to make sure the groceries weren’t cheating the MNTB, the government instituted strict rules and regulations that had to be followed to get paid. Any deviation from those rules and the grocers risked fines of tens of thousands of dollars and jail time for defrauding the MNTB. Long gone were the days of submitting a bill and getting paid based on market prices.
Now you had to submit incredibly complicated paper work to get paid not what you were due, but what the MNTB says you were due, the rates set forth by the sustainable growth rate, as determined by the false economies of the MNTB. For each and every sale made to an ETE, the grocer had to submit to the MNTB a letter detailing the encounter the grocer had with the ETE.
This shall be known as the “progress note:”
A consumer came in today at 12:04 pm on March 7th, 2008. He did not complain of any tomato headache. He had no gas pains. He appeared to be in good spirits. He was not orange. His lips were drooling for a chance at free tomatoes. He appeared angered at the lack of options and declining quality. He was at one point found to be pointing and yelling profanities. He took 7.4 pounds of the super duper genetically altered tomatoes (verified by government scales) with a big fat giant grin on his face, yelling, “I ain’t paying for it”, all the way out the door.
By now, several years into the program, the grocers were tiring of the process. Every ETE that bought tomatoes, took the expensive ones. The cheap ones could no longer make a profit and the makers of the cheap tomatoes had all left the business. The payment rate of the cheap tomatoes had put all the cheap tomato growers out of business.
All that was left was the single brand of expensive tomatoes that the MNTB still considered beneficial to the public at large. It turns out that the lobby group for the special genetic laboratory that earned a profit in royalty for every genetic tomato sold; It turns out that they contributed $250,000 last year to the Congressmen who sponsored the MNTB program.
In a few short years, what was once a thriving market of choice and quality in the tomato market was dwindled down to a single choice of expensive, but marginally beneficial tomatoes, whose sole ability to prosper was based on the corrupt contributions of a few corporate talking heads in high places…
The grocers were mandated by law to make sure that ETEs, who missed their appointment to buy their tomatoes were contacted on at least 16 different attempts to make sure they were aware of the consequences of not consuming their tomatoes and the consequences of not complying with the healthy tomato initiative as set forth by the MNTB. The burden of life was fully placed on the grocers and personal responsibility and common sense was completely removed from the ETEs.
The grocers had to hire additional accountants to run the paper work. They had to buy additional equipment to track the tomato statistics. 10% to the bottom line for the billing and collections department. The overhead of the grocer sky rocketed. While the payment rate from the MNTB plummeted. The grocer was caught in a swirl of capitalistic cost structure with a socialistic payment model. It was not sustainable…
The ETEs would wait for hours to get out of the grocery store and home with their specialty tomatoes. As the costs to the MNTB continued to explode, the government thought of more creative ways to try and keep the entitled tomato market alive. It put the burden of tomato quality on the shoulders of the grocers. Once again, another cost to burden and another way to reduce payment. It created quality incentives which, were at first optional, but eventually would carry a negative payment structure. Do it or lose more money.
The state of the entitled tomato market was in shambles.
A low quality, low choice, over burdened, over regulated, over expensive cost structured had replaced a once thriving enterprise of choice and competition between grocers. With time, one by one, the grocers left the tomato market. Access to free tomatoes by ETEs was dwindling. No longer could the ETEs walk to the grocer down the street. They had to drive miles to see the government mandated access to tomato market. Known as the emergency tomato grocer (ETG), the MNTB created rules and regulations that forced this group of grocers to stay open at all costs. No matter what. And to accept the price paid by the MNTB.
The result was a massive influx of ETEs into these government mandated ETGs. The waits piled up. Hours and hours of waiting a day. The entitled would come from miles around to get their free tomatoes. They would come, even though they hand hundreds of pounds sitting in their brand new stainless steal top of the line fridge. They wanted more, and they would get it by any means possible.
Eventually, the ETGs closed as well, as the payment rates failed to fund the operating costs of the grocers. Even the mandated ETGs closed up shop. One day, even the super duper specialty tomato and its high payment rate couldn’t keep the grocers and the ETGs from doing the inevitable.
They all quit selling tomatoes. All of them. The groceries moved on to selling canned goods and dairy, which carried a cash only high margin profit. The ETGs closed down, causing the back up access for ETEs to collapse on its own weight. The public, so used to getting free tomatoes as their right, was suddenly found scrambling for alternative sources of their free tomatoes.
The grocer decided to go back to the way it was before. The tomato lover and himself. He would start to sell tomatoes again, but he would only accept cash or credit. He would provide a quality product at a reasonable price and let the people decide what price they wanted to pay. He got rid of the forces of destruction and allowed his customers to tell him once again what it was that they wanted.
The Medicare Tomato is the reality of health care delivery today. It is the backwards approach to the rationing of a service that is finite. There is no question about it. Health care is not an unlimited resource and the policies of rationing will always best be determined by the personal financial stake that everyone has in their health care. It doesn’t mean cash only or insurance only, or free care for all or universal access. It is a rational approach to demand control, whether that be means tested or income dependent. Whether that means balance billing or high deductable policies. Whether that means shopping for service and quality through price transparency. Whether that means strictly catastrophic insurance coverage. Whether that means tort reform to reign in defensive medicine. Whether that means judicious use of a gate keeper Medical Home model. What ever it means.
It does not mean price control.
You can’t control costs by controlling price. It will never ever ever ever ever ever ever happen.
Thanks for listening. I think I’ll go eat a salad.
*This blog post was originally published at A Happy Hospitalist*
May 20th, 2009 by SteveSimmonsMD in Primary Care Wednesdays
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The impetus for government to control healthcare costs should be obvious to us all and intervention now appears unavoidable. Two issues will soon come to light: the exorbitant costs to fight disease at the end of life, often when the approach of death is barely retarded and the wide disparity in costs between different geographical regions of our country for similarly aged patients. It is estimated that 27% of Medicare’s annual $327 billion budget – one fourth of its operating budget – goes to care for patients in their final year of life while Medicare averages $20,000 more dollars for patients in Manhattan than in some rural areas of our country.
With this in mind, I share a deep concern with many of my colleagues that part of the healthcare reform debate will turn to the rationing of healthcare. This appears a logical progression from the proposed establishment of guidelines and advisory committees currently allowed for in the Health Reform bill already passed. The question as to who should receive possibly futile care is not clear, rather it is fraught with complexity, often relying as much on evidence-based research as it is on assessments made by the medical practitioner in light of the relationship the doctor has with the patient.
At the heart of the rationing issue are two, often warring, sides of medicine: art and science. Medicine began as an art thousands of years ago, and moved more towards science when, in Ancient Greece, Hippocrates taught physicians to observe the results of their treatments and make adjustments. However, art should not be removed from medicine, for this is where the doctor-patient relationship comes to play, serving as a cornerstone of effective and humane medicine. It would be impossible for physicians to uphold the noble traditions of the medical profession, adequately serve society, or preserve the dignity of human life if doctors were to become, purely, scientists. As long as we are treating people, medicine should never become solely a science.
Rationing, however, would be based purely on science, completely devoid of any art and, I believe, serve as a blow against the sanctity of the medical profession. Setting up rationing guidelines as they pertain to the end of life would circumvent patient’s trust in the doctor-patient relationship and risk the very soul of medicine by negating the importance of the doctor-patient relationship. Evidence-based recommendations can and should be set forth pertaining to protocols for offering treatments as the end of life seems near. This would likely reduce some of the high and disparate costs in caring for our elders; however, it is important to consider the input of a doctor aware of the needs and desires of his patient.
I come to this argument both as a physician and from personal experience. Several years ago, my 75 year old father was hospitalized four times over five months. His medical team, led by a kind and experienced surgeon, unburdened by guidelines or anyone else’s recommendations, gave him a chance despite long odds against his survival. Medically speaking, I am still surprised he made it out of the hospital to live a normal life again. During the subsequent five years, he has welcomed three grandchildren into our family; I would challenge anyone to assign a monetary value for that life experience. My professional and personal experience leaves me quite sure that he would have fallen a victim of any rationing guidelines that could ever exist.
In short, as the average life span increases most of us nurture the hope to live longer, cheering as science opens the door to seemingly innumerable advancements. Yet are we, as a society, equipped, whether it be emotionally or fiscally, to handle the decisions that must be made as the end of life draws near? More importantly, should government be allowed to set up strict guidelines without an active debate from physicians and patients? These guidelines could sacrifice what has long been and should still remain most important to healthcare: the doctor-patient relationship.
April 8th, 2009 by KevinMD in Better Health Network
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Almost 30 percent of Medicare beneficiaries have trouble finding a new primary care doctor.
Expect that number to rise dramatically in the near future, as the number of Medicare beneficiaries balloons, and the amount of primary care physicians plummets.
The whole scenario is a perfect example of how poor physician access makes medical coverage practically worthless.
Contrary to popular belief, Medicare’s paperwork requirements and pre-authorization obstacles are just an onerous as those of private insurers. Combined with the continuing threat of downward physician reimbursements, and the baseline complexity of a typical Medicare patient, it is no wonder that doctors are dropping Medicare in droves.
This phenomenon with Medicare is likely going to spread nationwide, if the current plans for universal coverage go through without first addressing the primary care shortage.
**This blog post was originally published at KevinMD.com**
