What’s “broke” in the American health care system? Hospitals overcharging– and politicians who let them. The lobbyists are killing us — literally.

This  article, which appeared in The New Yorker, is a must-read for all American voters.

 Of course patients should know costs — so that they can be outraged enough to demand change.

The real elephant in the room isn't "should they know?" but "why do patients, communities, and elected officials allow medical money machines – i.e., the hospital corporations — get away with pirate costs on even the smallest items?" 

Time to go back to regulation. Better yet, Medicare for ALL.

When it comes to life, death, sickness and health, hospitals that charge 1,000 for a toothbrush should not be allowed to stand between you and the care you need.
 
DECEMBER 23, 2013 / (c) 2013 The New Yorker 

THE PROBLEM WITH KNOWING HOW MUCH YOUR HEALTH CARE COSTS

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Two months ago, I moved into a new apartment. On the first night, in the dark, I tripped and fell. It felt like I had badly scraped my shoulder, but when I looked in the mirror there was no torn skin—my collarbone was simply jutting at a new, funny angle. When I tried to push it back into place, I got nauseated, so I decided to try to sleep. I’ll wake up soon, I thought, and just pretend this never happened.

When that didn’t work, I Googled “rotator cuff tear” and “asymmetric shoulder.” It seemed like a benign possibility; lots of people with rotator-cuff tears lead healthy and productive lives. No luck. I called my mom, who happened to be visiting for the night and was at a hotel two blocks away (and who, like me, happens to be a cardiologist). When she arrived, we made a video of my shoulder to send to my orthopedist cousin for a diagnosis—a clever idea except for the fact that he was sound asleep. Our delay tactics exhausted, we faced the inevitable: I needed to go to the emergency room.

 

Next thing I knew, I was standing with my pokey shoulder in front of an X-ray machine. My mother called out to me from the radiology reading room: “You broke your clavicle.”

“O.K.,” I called back.

After being diagnosed, the rational next step would have been to turn my attention toward treatment. Instead, when two additional X-rays were taken, an orthopedist was called to review the films, and two slings were provided instead of one, I wasn’t thinking about what I needed to do to get better. I was doing arithmetic: How much was all of this going to cost?

“You’re so tough,” my mom said, when I refused, for about the fifth time, to even take a Tylenol.

“It’s not that,” I said. I waited until the nice doctor walked away and whispered, “Did you not hear about the toothbrush?”

The thousand-dollar toothbrush, to which I was referring, had first gained notoriety in 2010, when featured, among other absurdities like twenty-three-dollar alcohol pads and fifty-three-dollar disposable gloves, in a CNN special on exorbitant health-care pricing. Three years later, the buzz around said toothbrush grew when the New York Timesreporter Tina Rosenberg published a widely circulated piece called “The Cure for the $1,000 Toothbrush,” which described how the lack of price transparency in health care contributes to its exorbitant costs, and financial ruin for many Americans. Those pieces, along with Elizabeth Rosenthal’s five-part Times series and Steven Brill’s twenty-eight-page Time cover story, “Bitter Pill: Why Medical Bills are Killing Us,” have made the lack of price transparency in health care an intensely debated topic for both policymakers and the public. And it’s why sitting perfectly still to avoid pain made more sense to me than accepting a Tylenol, which I feared would cost me a hundred times more than what I would pay at the CVS next door.

The obvious antidote to price opacity is price transparency, but such transparency may have a range of effects, depending on where it is applied in the many layers of health-care delivery. For instance, there is emerging evidence that when hospitals publish prices for surgical procedures, costs decrease without a loss of quality. The Surgery Center of Oklahoma, for example, has been publishing its prices for various procedures for the past four years. Because the center’s prices tend to be lower than those of other hospitals, patients started coming from all over the country for treatment. In order to compete, other hospitals in Oklahoma began listing surgical prices; patients were able to comparison shop, and hospitals lowered their prices.

The calls for price transparency, though, have now moved beyond the hospital walls. Intwo recent opinion pieces, Peter Ubel and colleagues argue that doctors ought to directly disclose to patients the costs of recommended treatments. Out-of-pocket costs, they argue, can “cause more distress in patients’ lives than many medical side effects, and patients can decide whether any of the downsides of treatment are justified by the benefits.”

We must find better ways to make affordable, high-quality health care available to everyone. But is injecting price transparency into the patient-doctor dynamic by asking patients to consider costs a step toward achieving those aims? Or will we end up hurting most those we are trying to help?

The first problem with financial disclosure from doctor to patient is a practical one. Doctors rarely know how much their patients actually pay. Patients are covered by a variety of insurers, all of whom offer several plans, for which any individual patient has a different copayment and deductible, which he may or may not have met.

Let’s say, though, with a click of a button, a patient’s out-of-pocket costs for any given recommendation are readily available to both doctor and patient. There will be some situations for which two treatments with similar risk-benefit profiles exist, but costs are clearly divergent. Patients with systemic lupus, for example, often choose between two drugs, Imuran and CellCept; the benefits and risks of the drugs are similar, but the latter costs ten times as much. Under these circumstances, asking a patient to consider price in their choices seems wise.

But many common clinical scenarios are more complicated. Take heart-attack treatment, for which, Ubel and colleagues note, costs can approach forty thousand dollars per year. (The report from which the figure is derived actually suggests a range of three thousand dollars to forty thousand dollars, depending on the plan.) Heart-attack care typically begins when a patient comes to the emergency room with chest pain. A stent procedure to open a blocked artery is often life-saving, but only if done quickly. The longer you wait, the more heart muscle dies.

During my cardiology training, it was my job to describe the benefits and risks of this procedure to patients, and ask them to sign consent forms. I went over each risk in painstaking, non-jargon-y detail. You quickly learn, though, that certain risks are far more disturbing than others. Say “kidney damage,” which, while unlikely, is one of the more common complications, and most people seem relatively unfazed. Say “limb loss,” however—which, while possible, is unbelievably rare—and people panic. In weighing risks and benefits in these situations, it’s not the likelihood of the risk that matters but the ease of imagining it.

Now consider this same scenario and add to the list of potential risks, “Full disclosure: this might cost you as much as forty thousand dollars.” All of a sudden you have injected into a litany of the unfamiliar a “risk” that could not be more familiar: money. Who would not fixate upon this cost information in making medical decisions?

It’s also hard to quantify and convincingly describe the long-term costs of not getting treatment. So while it may be possible to tell someone the cost of a stent procedure, it will always be much more difficult to put a price on not getting the stent—which often includes frequent hospitalizations for heart failure, complicated medical regimens requiring intensive lab monitoring, devices to help the heart pump more efficiently, and sometimes even a heart transplant.

Everyone is prone to fixating on risks that come readily to mind while discounting those that may occur in the future. But the tendency to err in these predictable ways is magnified by how poor we feel in the first place. In their recently published book, “Scarcity,” the behavioral economist Sendhil Mullainathan and the cognitive psychologist Eldar Shafir describe the psychological consequences of feeling like you don’t have enough. The fundamental theme of the book is that scarcity, whether it’s from lack of money, time, or even human connection, “captures” the mind, depleting our mental reserves and giving us tunnel vision. As anyone on a deadline knows, such a mind-set can enhance focus and creativity. But more often, the feeling of scarcity, no matter its cause, leaves us more prone to making cognitive errors.

In one of the experiments described in the book, the authors asked people in a mall to consider hypothetical situations involving payments for a car repair. The subjects then completed tests for intelligence and impulse control. In the first scenario, subjects were asked to consider a relatively inexpensive car repair; afterward, there was little difference between high- and low-income participants on the intelligence tests. In the second scenario, however, the cost of fixing the car increases tenfold. When the same people repeated the tests, suddenly the poor fared far worse—the difference was akin to a thirteen-point drop in I.Q.

Based on this experiment and several others, the authors argue that the feeling of scarcity consumes the mind, causing us to behave in ways that are often attributed to personality, but may actually have more to do with context. No one, they argue, is immune.

I lead an undeniably privileged life, but the day I broke my clavicle, I was experiencing my own sense of scarcity. I had just moved, so I had spent lots of money all at once: the first and last month’s rent, cable and other utilities, and, most salient in my mind, a big wad of cash I had handed to the movers a few hours before the big break. And so I tunnelled. That’s why, after leaving the emergency room, while my mother read about treatment and recovery time for broken clavicles, I was frantically trying to understand my high-deductible health-savings-account insurance plan, unwilling to commit to further care until I knew how much I would pay. When it became clear that I would need surgery, and soon, as my mother tried to explain the various options—a big metal plate and screws versus a new technique, which would look better—I stopped listening after hearing the word “new” because “new,” in my mind, only heralded more expensive.

When I emerged from surgery a couple of days later, with the large, visible metal plate, I was delirious from the anesthesia, my heart rate was low, and my oxygen levels were falling. My surgeon insisted that I be admitted to the hospital overnight for monitoring and pain control. Though it was hard to remember to take deep breaths, it was not hard to remember that an overnight stay would cost thousands of dollars more than same-day care. “Take me home now,” I said to my mother.

Not surprisingly, I lost that battle. But in every other way, I won. I received outstanding care from a surgeon who is an expert in his field, ended up having far better insurance than I had initially understood, and have a mother who put her own life on hold to take care of me for a week. Though I will need a second surgery to take the metal plate out—which I wish I had thought about before—it feels like a win because rather than waiting two years, which was my surgeon’s initial estimate, I now have to wait only six months. But, most of all, I won because whatever scarcity had captured my mind was only temporary. For most people, it isn’t.

Transparency, as a concept, has tremendous visceral appeal. How can more information not be better? But information is not knowledge, and efforts to bring transparency to health care have previously failed, or caused unintended harm.

Millions of dollars, for example, have been invested getting restaurants to post calorie counts. Despite the fact that there is no evidence to suggest that these labels have decreased calorie consumption, and even some concern that low-income consumers may choose higher-calorie items, the Affordable Care Act mandates this approach for large restaurant chains. Another failed transparency effort, launched in New York State, involved using “report cards” to publish cardiac surgeons’ performance so that consumers would have better information. In this case, it was physician behavior that changed: the sickest patients, more likely to die and thus reflect poorly on the physicians’ performance, were increasingly turned away. Racial and ethnic disparities, which continue to plague all of health care, worsened.

In the weeks after surgery, stymied by dictation software and limited in what I could do, I spent a lot of time slowly wandering around New York City. In the same way that I had fixated on beautiful hair during times in my life when I had a regrettable haircut, I became enchanted by the loveliness of the clavicle—its symmetry and the amazing way it curves, which is unlike any other bone. But I also started noticing all the people who were broken—in slings like me, or limping along in awkward orthopedic shoes—a whole outbreak of hardship I had previously failed to register. One woman, when our paths crossed early one morning in Central Park, was wearing a sling just like mine. She smiled at me sympathetically and shook her head. “There’s a whole lot of that going around,” she said.

I wondered, but didn’t ask: Did she feel that she had enough to invest in getting fixed? Or was she still hoping, as I had so briefly, that with a little luck, she would mend?

Lisa Rosenbaum is a cardiologist, a fellow at the Philadelphia V.A. Medical Center, and a Robert Wood Johnson Foundation Clinical Scholar at the University of Pennsylvania.

(c) 2013 New Yorker Magazine

 

 

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Another way in which our Congress is the best Big Pharma can buy.

Drug costs

This article in the New York Times spells it out succinctly. Having a mother who died of the blood disease Myelodysplasia, this truly breaks my heart. If she hadn't been old enough for Medicare, it would have bankrupted her.

Almost ten years ago, TIME magazine pointed out that "The prices Americans pay for prescription drugs, which are far higher than those paid by citizens of any other developed country, help explain why the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue."[1]National expenditures on pharmaceuticals accounted for 12.9% of total health care costs, compared to an OECD average of 17.7% (2003 figures)…"

Not much has changed.  Like locusts, 12,389 Big Pharma lobbyists hover around our lawmakers. In fact, according to the Center for Responsive Politics, the pharmaceutical industry spent $18,530,000 in 2012 — and $232,583,920 between 1998-2012 – ensuring that the laws created protect their clients while decimating the health and wellbeing (and bank accounts) of the American people.

I guess a few hundred million over a span of fourteen years is a small price to pay for the tens of billions they net in revenue  each year.

These companies are profiting on our lives. — Josie

Doctors Denounce Cancer Drug Prices of $100,000 a Year

By ANDREW POLLACK / New York Times
Published: April 25, 2013 
 (c) 2013 New York Times

With the cost of some lifesaving cancer drugs exceeding $100,000 a year, more than 100 influential cancer specialists from around the world have taken the unusual step of banding together in hopes of persuading some leading pharmaceutical companies to bring prices down.

Prices for cancer drugs have been part of the debate over health care costs for several years — and recently led to a public protest from doctors at a major cancer center in New York. But the decision by so many specialists, from more than 15 countries on five continents, to join the effort is a sign that doctors, who are on the front lines of caring for patients, are now taking a more active role in resisting high prices. In this case, some of the specialists even include researchers with close ties to the pharmaceutical industry.

The doctors and researchers, who specialize in the potentially deadly blood cancer known as chronic myeloid leukemia, contend in a commentary published online by a medical journal Thursday that the prices of drugs used to treat that disease are astronomical, unsustainable and perhaps even immoral.

They suggested that charging high prices for a medicine needed to keep someone alive is profiteering, akin to jacking up the prices of essential goods after a natural disaster.

“Advocating for lower drug prices is a necessity to save the lives of patients” who cannot afford the medicines, they wrote in Blood, the journal of the American Society of Hematology.

While noting that the cost of drugs for many other cancers were just as high, the doctors focused on what they know best — the medicines for chronic myeloid leukemia, like Gleevec, which is enormously profitable for Novartis. Among the critics is Dr. Brian Druker, who was the main academic developer of Gleevec and had to prod Novartis to bring it to market.

Novartis argues that few patients actually pay the full cost of the drug and that prices reflect the high cost of research and the value of a drug to patients.

Gleevec entered the market in 2001 at a price of about $30,000 a year in the United States, the doctors wrote. Since then, the price has tripled, it said, even as Gleevec has faced competition from five newer drugs. And those drugs are even more expensive.

The prices have been the subject of intense debate elsewhere as well. The Supreme Court in India ruled recently that the drug could not be patented, clearing the way for use of far less expensive generic alternatives.

Some of the doctors who signed on to the commentary said they were inspired by physicians at the Memorial Sloan-Kettering Cancer Center in New York, who last fall refused to use a new colon cancer drug, Zaltrap, because it was twice as expensive as another drug without being better.

After those doctors publicized their objections in an Op-Ed article in The New York Times, Sanofi, which markets Zaltrap, effectively cut the price in half.

What impact the new commentary will have remains to be seen. The authors, however, call merely for a dialogue on pricing to begin.

The leader of the protest is Dr. Hagop M. Kantarjian, chairman of the leukemia department at the prestigious MD Anderson Cancer Center in Houston.

Many of the roughly 120 doctors who were co-authors of the commentary — about 30 of whom are from the United States — work closely with pharmaceutical companies on research and clinical trials. They say they favor a healthy pharmaceutical industry, but think prices are much higher than they need to be to ensure that.

“If you are making $3 billion a year on Gleevec, could you get by with $2 billion?” Dr. Druker, who is now director of the Knight Cancer Institute at Oregon Health and Science University, said in an interview. “When do you cross the line from essential profits to profiteering?”

Gleevec’s sales were $4.7 billion in 2012, making it Novartis’s best-selling drug. A newer Novartis leukemia drug, Tasigna, had sales of $1 billion.

Novartis said in a statement released Thursday: “We recognize that sustainability of health care systems is a complex topic and we welcome the opportunity to be part of the dialogue.”

It said that its investment in Gleevec continued after the initial approval, expanding the drug’s use to other diseases. It also said that it provided Gleevec or Tasigna free to 5,000 uninsured or underinsured Americans each year and to date had provided free drugs to more than 50,000 people in low-income countries.

Novartis and the manufacturers of the other drugs for chronic myeloid leukemia say the prices reflect the value of the drug. While many cancer drugs with equally high prices extend life by only a few months on average, it is widely agreed that Gleevec and rivals are near-miracle medicines that essentially turn a death sentence into a chronic disease likediabetes.

“It is a little surprising that their focus is in a cancer where the small-molecule medicines have had the greatest impact on long-term benefit,” said Dr. Harvey J. Berger, chief executive of Ariad Pharmaceuticals, which sells the newest and most expensive of the leukemia drugs, Iclusig.

Dr. Berger said the price of Iclusig was $115,000 a year, not the $138,000 a year cited in the commentary. Pfizer said the price of its drug, Bosulif, also was overstated in the piece. The manufacturers cite the price at which they sell to wholesalers, while the authors of the commentary were referring to a price they say better reflects what is charged by a pharmacy to patients. 

The other drugs for chronic myeloid leukemia are Sprycel from Bristol-Myers Squibb and Synribo from Teva.

The commentary noted that despite drug company programs, a minority of the estimated 1.2 million to 1.5 million people in the world with chronic myeloid leukemia were receiving one of the drugs. In many developing nations, it said, cancer experts were advocating risky bone marrow transplants because that is a one-time procedure that is cheaper than continuous treatment with one of the drugs.

The article also said the survival rate for patients in the United States appeared to be less than it should be, perhaps because costs are forcing patients to not take their medicine. Prices for the drugs are twice as high in the United States as in many other countries, which often apply some government pressure or price controls to keep drug costs down.

Even if out-of-pocket costs can be low, health systems in general still must pay for the drugs, the commentary says. And some patients say assistance programs are not always easy to use.

Raven Riedesel of Winlock, Wash., said she had been turned down by various charities — though she hadn’t yet tried Novartis itself — because her husband, a pipe fitter, makes too much money. Yet the insurance from his union would require her to pay $1,200 to $1,600 a month as a co-payment for Tasigna.

“It would take everything that we had left over after buying necessities and paying our bills,” said Ms. Riedesel, 28, a mother of two young children. She is now in a clinical trial allowing her to obtain Tasigna free; the trial will end in November.

Patients in the United States circulated an online petition last year protesting the price of Gleevec, but the effort was dropped after receiving about 400 signatures.

Cheap generic versions could enter the American market as early as 2015 when the main patent on Gleevec expires., Novartis might try to assert other patents to stave off competition, however. It is also trying to shift patients to Tasigna, which has a longer patent life.

Dr. John M. Goldman, emeritus professor of hematology at Imperial College in London and a co-author of the commentary, said he knew several researchers who declined to become authors because they feared losing research money from the industry.

Dr. Kantarjian, the lead author, said that was a risk.

“I am sure I am going to be blackballed,” he said. “My research career will be hurt.”

But he said it was time to speak out. “Pharmaceutical companies have lost their moral sense,” he said. Prices, he added, “are getting to the point where it is becoming unsustainable.”

(c) 2013 New York Times