Is Federal Policy Really to Blame for the High Cost of Cancer Care?

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U.S. healthcare costs have been high for decades, outpacing other developed countries since at least the 1980s. But costs continue to rise, and that is causing many experts to ask why. Some people blame federal policies. As an example, they point to reimbursement policies that create incentives for healthcare providers to consolidate. When hospitals merge with each other, or when hospitals buy out physician practices, healthcare providers gain negotiating leverage over insurers, which enables them to negotiate higher prices.

But what evidence do we have that federal policies are to blame for such consolidation?
(To read the rest of this article, please visit Forbes.)

How Physicians Respond to the Price of Lab Tests before Ordering Them


Healthcare prices in the U.S. are often hidden. Some people think this price opacity contributes to our nation’s high healthcare spending. If people don’t know how expensive healthcare is, they won’t have much reason to restrain healthcare utilization.
recent study tested what would happen if physicians were immediately informed of the price of lab tests that they were planning to order for their patients. The study took place in three Philadelphia hospitals. The researchers randomized whether or not the electronic health record gave physicians price data on specific lab tests. For some lab tests, the computer never gave doctors price information; for other tests, they always got price information (after a baseline, so the researchers could establish how often doctors normally ordered the tests).
(To read the rest of this article, please visit Forbes.)

How a Leading Medical Journal Helped a Pharmaceutical Company Exaggerate Medication Benefits


How excited would you be about a medication that lowered your risk of cardiovascular death, heart attack, or stroke by 1.5%? Excited enough to spend a few thousand dollars a year on the drug? I expect not.
What if, instead, the drug reduced those same terrible outcomes by 20%? That’s probably enough benefit to interest some in the drug.
Well, those statistics come from the same clinical trial, evaluating the same drug. In fact, they present the exact same results, but they simply do it in different ways. The 1.5% number refers to the absolute reduction in the risk of those outcomes—the drug reduced the two-year risk of cardiovascular death, heart attack, and stroke from 7.4% to 5.9%. That’s an important reduction by any account. That’s on par with many medications that have become critical in combating cardiovascular diseases. But that 1.5% reduction sounds much less impressive than the “20% reduction” that the authors describe in the discussion section of their New England Journal article, and was repeated, practically verbatim, by the physician who wrote an accompanying editorial in the same journal.
How can these experts claim a 20% reduction in risk when the study showed only a 1.5% reduction? Because 1.5% is approximately 20% of 7.4%. When summarizing the impact of this drug, the researchers and the editorialist chose to emphasize the relative risk reduction of the treatment rather than the absolute risk reduction.
(To read the rest of this article, please visit Forbes.)

You Know Who Else Fails 'The Jimmy Kimmel Test?' Hospital Emergency Rooms

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When Jimmy Kimmel’s child was diagnosed with a serious heart condition, Kimmel realized that people without his wealth (or his generous insurance coverage) would not be able to pay for the life-saving care that his child received, if their children were to be similarly ill. So he gave a moving monologue one evening, explaining why he now believes that healthcare policies should be judged by whether they keep finances from being a barrier to receiving lifesaving care, a view that some now call “The Jimmy Kimmel Test.”
Kimmel’s monologues on this topic have gone viral, but it doesn’t look like hospital ERs have gotten the message. Too often, they charge patients outrageous prices for their services, especially when people don’t have insurance.
Do you think these hospital ER prices are irrelevant for you, because you have insurance? Think again.
Suppose you are on vacation when your diabetes spins out of control. Or you are shopping at a local mall when you have a fainting spell. You are rushed to the nearest hospital by an ambulance crew to an emergency room, where you get an IV, an EKG, and other state-of-the-art care. All is good, until you receive the bill.
According to a recent study, if you happen to receive care in a for-profit hospital emergency department that’s out of your insurance network, you can expect a bill that’s almost six times higher than what Medicare would have paid for those same services. Did you get an EKG? Medicare would have paid $16 for that test. Your bill could be more than $300, a bill that you will have to pay, not your insurance company.
(To read the rest of this article, please visit Forbes.)

Healthcare Spending and Life Expectancy: in One Stunning Picture

Let me be clear: how long people live in any country of the world is determined by lots of things, not just by the quality of their healthcare system. Nevertheless, one of the things medical care is supposed to do is help us live longer and healthier lives. So you would think that a country which dramatically increases its health spending would gain more in life expectancy than similarly wealthy countries that do not increase such spending.
Your thinking would be wrong.
Here is a picture from The Financial Times, showing that in 1970 the US already lagged behind the UK and Japan in life expectancy by about one year, despite spending a little bit more per capita on healthcare. By 2014, the US spent more than twice as much as those other countries on medical care, with residents of the United States now living five years less than people in those other two countries:

Again, this difference in life expectancy doesn’t arise simply from the quality of medical care in these three countries, but has lots more to do with eating habits, drinking habits, traffic safety, and the like. That said, it points out a real major problem – despite the great wealth of this country, we haven’t figured out how to help Americans live long and healthy lives.

Burdened by High Medication Costs? Your Boss May Be Able to Help


Pharmaceutical companies have been charging way too much for way too many of their products. Both Donald Trump and Hillary Clinton complained about drug prices during the election campaign, but neither political party has taken action since November to tackle the problem. Insurance companies aren’t doing much about this problem either, despite having a huge incentive to tackle high prices.
But there is someone who appears to be up to the challenge – employers. According to a recent study in the New England Journal, a consortium of 55 Catholic organizations decided to redesign their employee healthcare benefits in 2013. Before that time, these organizations provided their employees with tiered co-pays for their medications. Under formulary tiers, a patient might pay $10 a month for generic drugs, $25 a month for brand-name drugs, and $100 or more per month for expensive specialty drugs and biologics. Tiered formularies are designed to motivate patients to use less expensive medications, because they carry lower co-pays. But such formularies are usually blunt motivational instruments. They might convince a patient to choose a generic medication rather than a brand-name cholesterol pill, but the patient will have no further incentive to choose the least expensive generic medication. Similarly, a patient with rheumatoid arthritis will face a significant co-pay for a biological therapy, but that co-pay won’t change from one biologic drug to another, even if those drugs have very different price tags.
That’s where reference pricing comes in, a topic I have written about before. The Catholic organizations got together and looked at different categories of medication, and decided how much they would pay for drugs within each category, with the understanding that patients would pick up the rest of the tab. For example, medications for stomach reflux range in price from $26 a month to almost $300 a month. The employers promised to cover $26 of the cost of whichever reflux medications patients chose to take. Similarly, patients who wanted to take $400 nasal inhalers for their allergies could go ahead and do that, but the insurer would only cover $34 of that price, given that an equally effective inhaler was available at that price.
(To read the rest of this article, please visit Forbes.)

Why Investing in Better Primary Care Failed to Save Money


We have a huge healthcare problem in the U.S., spending way more than other wealthy countries, expenses that not only burden state and federal governments, but that also take money out of American pockets.
Some people hope that better primary care will reduce U.S. healthcare spending. They point out that a small number of chronically ill patients—super-utilizers—account for half of healthcare spending. The hope is that taking better care of these super-utilizers, with more robust and improved care coordination, will improve their health and reduce healthcare spending.
Or perhaps not. When the Palo Alto VA tested an intensive primary care program for its super-utilizers, healthcare spending and utilization didn’t budge. One iota. Except for primary care utilization which, unsurprisingly, rose significantly among people receiving intensive primary care.
The Palo Alto study was well-designed. The researchers targeted patients who were in the top 5% of healthcare utilization. These patients were typically elderly, and on average had 10 chronic health conditions. Two-thirds carried mental health diagnoses, and a quarter had a history of homelessness. The population included people I am very familiar with from my almost 20 years in the VA: older men with PTSD and anxiety; hypertension, diabetes, coronary artery disease, congestive heart failure, emphysema, and a touch of renal failure; recent hospitalizations for pneumonia, leg wound infections, or maybe a mild stroke.
(To read the rest of this article, please visit Forbes.)

Medical Malpractice – Who's Being Sued and What Is It Costing


A baby is born. The delivery was rocky, with the infant’s heart rate showing occasional signs of distress. Later, the parents learn that their child has cerebral palsy, and may never walk normally. Was the obstetrician to blame and, if so, should the parents sue?
American medical care is burdened by a flawed and expensive malpractice system. Too many doctors are being sued not because they make mistakes, but because their patients experience bad outcomes.
A fascinating study lays out recent trends in malpractice, offering good and bad news for physicians. First, the good news: malpractice claims are declining. The rate of paid claims, in fact, went down more than 50% from the early 90s until now.
(To read the rest of this article, please visit Forbes.)