PeterUbel

In my most recent post, I describe several psychologic and economic phenomena impeding our ability to rein in the cost of end-of-life care. In brief, people with nothing to lose, who don’t trust doctors recommending they receive hospice care, and who face few economic consequences for receiving expensive care – they aren’t likely to put the brakes on a round of salvage chemo or a last-ditch admission to the ICU.

But that doesn’t mean we are powerless to reduce end-of-life spending. Recently, Brad Stuart, Chief Medical Officer at the Coalition to Transform Advanced Care, wrote an essay in Health Affairs describing a way to potentially reduce end-of-life costs by better aligning healthcare services with patient preferences.

(To read the rest of the article, please visit Forbes.)

Six-year old Kimmy Merrill fell into an abandoned well outside of Oswega, Pennsylvania, her cries unnoticed in the remote countryside until her mother Susan wandered within earshot of the well. Unable to save Kimmy even with the help of local firefighters, Susan pleaded for rescue workers to dig a hole parallel to the well. Desperate townspeople gathered around nervously as the night temperature began to plummet. The Oswega mayor finally took control of the situation, announcing that “the Oswega emergency council has determined that the cost of digging a parallel hole is prohibitive. Sorry folks, but we’re going to have to let the girl die.”

Unbelievable, right? Of course it is. I made up Kimmy’s story to highlight a fundamental truth about healthcare spending – when it comes to life-or-death decisions, cold-hard economic thinking rarely applies.

Currently, one percent of patients accounts for more than 20% of US healthcare spending. Despite efforts to provide hospice services to people near the end of life, many people are not admitted to hospice until just days before their death.

(To read the rest of the article, please visit Forbes.)

According to a recent CDC survey, one in four cancer survivors struggle to pay their medical bills. An even higher number worry about whether they’ll be able to scrounge up the money to pay off their out-of-pocket healthcare costs.

I’m quite comfortable blaming the healthcare industry, writ large, for this problem. Healthcare prices in the United States are outrageously high. The cost of cancer care in particular is often unjustifiably burdensome, with new chemotherapies typically coming to market at prices exceeding $100,000 per patient even when they yield pretty modest health benefits.

(To read the rest of the article, please visit Forbes.)

Check out my recent interview with The Chronicle of Higher Education about the rising costs of education and healthcare:

For decades, higher education has come under public scrutiny for rising costs. But there is at least one other sector that seems to feel even more heat from policy makers and ire from the public. That sector is health care — and the parallels are not lost on Peter Ubel, a physician who is a professor in Duke University’s Fuqua School of Business.

“I realize that I’ve been making my living off both education and health care, and they’re the parts of the economy where the cost has gone up far faster than overall inflation, and I’ve benefited my whole career,” he says. “So I feel guilty on both counts.”

(To read the full interview, please visit The Chronicle for Higher Education.)

When it comes to healthcare spending, the U.S. is without peer. Consider the 20 countries making up the Organization for Economic Cooperation and Development (called the OECD by the cool kids). The organization includes countries like Australia, Austria, Belgium, Canada, Chile, and the Czech Republic. Oh also Finland, France, Germany…you get the idea. It also includes the U.S. That means we can compare U.S. healthcare spending to lots of other countries and see exactly what’s going on.

And here’s what is going on. The median country in the OECD spends around 9% of its GDP on healthcare. The U.S. spends more than 17%.

(To read the rest of the article, please visit Forbes.)

The US isn’t the only country struggling with the high price of prescription drugs. A decade ago, Germany was facing rapidly rising medication prices. In 2011, it struck back, with a law regulating the price of new medications. Here’s how that law works, and what it has meant for whether Germans have access to new medications.

The law set up an independent, nonprofit institution known as IQWiG (which I pronounce ICK-wig) tasked with determining whether new drugs are priced to reflect value. The folks at IQWiG study the evidence of a new drug’s effectiveness, present the results of their analysis publically, and then review public comments on their analysis. After determining how much benefit a drug produces, the drug company now negotiates prices with the umbrella organization overseeing the nation’s private insurance system. A drug company whose product yields modest benefits is going to have a hard time negotiating a high price.

(To read the rest of the article, please visit Forbes.)