Tag Archives: health care cost

“America’s Huge Health Care Problem”

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From Vox: A CT scan costs $1,100 in the US — and $140 in Holland

An excerpt:

The Health Care Cost Institute put out a new report Tuesday showing how the prices paid for medical services by private insurance in the United States stack up against prices in other countries. As expected, American prices are collectively higher than the rest.

But four charts, based on the report, show just how thoroughly the United States is outspending other countries for almost every medical service or prescription drug.

Image Available on Twitter and Can be Found in Article

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Healthcare Company CEO Salaries

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Becker’s Hospital Review: Highest-paid CEOs in 2018: Who made the list from healthcare  The full list includes 200 chief executives from public companies with revenue of at least $1 billion. Thanks to Jeff Lewis for pointing out this list.

Total compensation may include salary, bonuses, perks, stock and options.

  1. Hologic, Stephen MacMillan — $42 million
  2. Align Technology, Joseph Hogan — $42 million
  3. Regeneron Pharmaceuticals, Leonard Schleifer — $27 million
  4. Centene, Michael Neidorff — $26 million
  5. Universal Health Services, Alan Miller — $24 million
  6. Abbott Laboratories, Miles White — $23 million
  7. CVS Health, Larry Merlo — $22 million
  8. Merck, Kenneth Frazier — $21 million
  9. Abbvie, Richard Gonzalez — $21 million
  10. Johnson & Johnson, Alex Gorsky — $20 million
  11. HCA Healthcare, R. Milton Johnson — $20 million
  12. Pfizer, Ian Read — $20 million
  13. Bristol-Myers Squibb, Giovanni Caforio — $19 million
  14. Cigna, David Cordani — $19 million
  15. Vertex Pharmaceuticals, Jeffrey Leiden — $19 million
  16. Thermo Fisher Scientific, Marc Casper — $19 million
  17. Amgen, Robert Bradway — $19 million
  18. UnitedHealth Group, David Wichmann — $18 million
  19. DaVita, Kent Thiry — $17 million
  20. Gilead Sciences, John Milligan — $17 million
  21. Alexion Pharmaceuticals, Ludwig Hantson — $16 million
  22. Humana, Bruce Broussard — $16 million
  23. Celgene, Mark Alles — $16 million
  24. Biogen, Michel Vounatsos — $16 million
  25. United Therapeutics, Martine Rothblatt — $16 million
  26. IQVIA Holdings, Ari Bousbib — $16 million
  27. Eli Lilly, David Ricks — $16 million
  28. Baxter International, José Almeida — $16 million
  29. Biomarin Pharmaceutical, Jean-Jacques Bienaimé — $16 million
  30. Danaher, Thomas Joyce Jr. — $15 million
  31. Molina Healthcare, Joseph Zubretsky — $15 million
  32. Tenet Healthcare, Ron Rittenmeyer — $15 million

Canaletto.  El Gran Canal desde San Vio. Thyssen-Bornemisza Museum. https://www.museothyssen.org/en/collection/artists/canaletto/grand-canal-san-vio-venice

 

Self-Service Health Care??

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A provocative commentary (DA Asch et al. NEJM 2019; 380: 1891-3) notes that the current approach to improving health care costs needs to be reconsidered.

“The physician-patient encounter is health care’s choke point.” Instead of pushing for more primary care visits, the authors recommend greater use of automation.  Examples in other industries have included:

  • TurboTax -helped reduce need for tax preparer’s
  • Automated tellers at banks -reduce costs at banks
  • Self-checkout at grocery stores -reduce costs at grocery stores
  • Websites to directly arrange travel rather than travel agents

Much of medical care can be algorithmic, including hypertension (which affects one-third of U.S. adults), hyperlipidemia, anticoagulation, diabetes, and “might be far more efficiently managed by a bot.”

“An efficient industry wouldn’t lead with primary care, but would reserve it for cases  for which lower levels of support haven’t been enough.”

The authors note that efforts to promote this will require removal of state-based regulation.  “There is not legitimate interest that benefits from making it hard for a patient in Kansas to get automated care with third-level support from a physician in Ohio.”

My take: The authors are right in their assertion: “Transformative change in any industry requires breakthroughs in productivity.”  Some of these changes are likely to be implemented given the cost escalations facing health care.

Magic Fountain, Barcelona

We Are Last in Health Care Among High-Income Countries

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In a recent commentary (EC Schneider, D Squires. NEJM 2017; 377: 901—4) explains why the U.S. Health Care System is last among high-income countries.

Overall, the U.S. “begins with a challenge: its population is sicker and has higher mortality than those of other high-income countries.”  The U.S. has a rate of death from “conditions that can be managed and treated effectively (referred to as ‘mortality amenable to health care’) is far higher than in other high-income countries.

Four areas that have to be addressed to help U.S. move from last to first:

  • U.S. must confront lack of access to health care. The top-ranked countries offer universal insurance coverage with minimal out-of-pocket costs for preventive and primary care.
  • Underinvestment in primary care. In other countries, a higher percentage of “the professional workforce is dedicated to primary care than to specialty care.”
  • Administrative inefficiency. “Both patients and professionals In the United States are baffled by the complexity of obtaining care and paying for it.”
  • Disparities in the delivery of care. This may be mediated in part by a less robust social safety net than other high-income countries.  “Social spending [for] stable housing, educational opportunities, nutrition, and transportation may reduce the demand for” many health care services.

My take: It makes me mad that our health care system performs so poorly compared to other countries.

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Should Physicians Dispense Drug Coupons?

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This is a good question.  Before you answer, consider some of the following information from a recent commentary (NEJM 2013; 369: 1188-89):

  • “Commercial drug-insurance…have tiered pharmaceutical formularies..requiring small patient copayments…for inexpensive generic drugs and higher copayments…for brand-name drugs. Manufacturers use coupons…so that…the out-of-pocket costs are the same as those for generic drugs.”
  • “Coupons were used for approximately 100 million dispensed prescriptions in 2010 –about 11% of prescriptions for brand-name drugs.”
  • The authors performed analysis ‘by manually abstracting information on each coupon advertised in March 2013 at http://www.internetdrugcoupons.com.”  They found that with 62% of coupons there were lower-cost therapeutic alternatives available.  58% had generic alternatives and 8% had less-expensive brand-name therapeutic equivalents (some drugs had both generic alternatives and less-expensive brand competitors).

The arguments against coupons:

  1. “On a population level, drug coupons undermine the tiered-formulary system that commercial insurers have implemented to limit prescription-drug spending.”  Insurers must still pay the higher cost of the brand-name drug.  This leads to higher insurance coverage rates for all patients.
  2. Some have argued that these coupons should be disallowed as illegal kickbacks by subverting the cost-sharing arrangements in patients’ insurance contracts.
  3. The costs for these medications for the patient usually are more in the long run as these coupon offers are often limited to 6-12 months.

Bottomline: when there are lower cost therapeutic alternatives, drug coupon programs increase long-term costs and undermine efforts for patients to have ‘skin in the game.’

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Can the FDA prohibit free speech? | gutsandgrowth

What physicians can learn from fast-food restaurants and retail shops

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Going to a physician is worse than going to a jeweler.  At a jeweler’s, it is commonly said that if you have to ask how much it costs, then you probably cannot afford it.  When seeing a physician, in all likelihood the costs of various tests are not completely known (until the bill arrives).  In contrast, when going to a fast-food restaurant or to most shops, the price is clearly posted and this helps make an informed decision.

Not surprisingly, a recent study from Johns Hopkins has shown that physicians order less tests when the fee for the test was displayed (JAMA Intern Med 2013; 173: 903-08).

This study randomly assigned 61 inpatient diagnostic laboratory tests to an “active” arm with the fee displayed or to a control arm with no fee displayed.  The displayed fee was based on the Medicare.  During a 6-month baseline period 208-2009, no fees were displayed.  allowable fee.  Pediatrics was one of the smallest hospital services involved in this study (0.8%); internal medicine service accounted for 52.1% and intensive care 26.6%.

Results: Rates of test ordering were reduced from 3.72 tests per patient-day in baseline period to 3.40 tests per patient-day in the intervention period (8.59% decrease).  In contrast, the control arm tests increased during the same period from 1.15 to 1.22 (5.64% increase).  The net result was $400,000 charge reduction in a 6-month period.

The study limitations included the practice setting where most orders are placed by residents. In addition, it is not known whether the reductions in testing led to any detrimental affects.

Trying to sort out the price of laboratory tests, imaging, and procedures for the individual are complicated by the unfathomable world of insurance contracting and discounts. Yet, providing the baseline cost, even without knowing what part insurance would cover, would be worthwhile.  Presumably, somebody is paying.

Bottomline: How many physicians know how much that blood test, the endoscopy, or the CT scan is going to cost? In medicine, physicians frequently discuss risk-benefit ratio.  I think an effort to understand the cost should be part of the equation as well.

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Don’t miss the gorilla!

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A recent narrative on improving value in health care (NEJM 2013; 368: 959-62) made use of a few psychological experiments to make some excellent points.

The first experiment asked the study participants to focus on a video and to count the number of passes for a team of three basketball players dressed in white while another three-player team dressed in black also played.  “During the video, a woman in a gorilla suit walked across the screen pounding her chest, remaining there for 5 seconds….Consistently, about 50% failed to notice the gorilla.”  Afterwards, when shown the video a second time, many of those who did not see the gorilla insisted that the video had been altered.

The second experiment involved perception.  “One group was initially shown a blurry image of a dog.  Then both groups were shown the exact same image, less blurry.  Those seeing the image for the first time had a much easier time recognizing it as a dog than those who had received previous ambiguous information.”  So, like those in the first experiment who did not  see the gorilla, participants are reluctant to change their opinion even when better information becomes available.

The author notes that the ‘value narrative’ can split patients and physicians into separate teams.  For physicians, value suggests avoiding overuse and providing evidence-based care.  For patients, value means enhancing their experience and catering outcomes that matter to them.  There is a study which shows that patients rate their care as better if they went to an ER for abdominal pain and underwent a CT scan (regardless of whether it was indicated).  Similarly, for back pain, two studies have shown that patients are far more satisfied with their care if they undergo an MRI.

The implications of these experiments on perception is that value in health care needs to be more transparent.

  • “We must admit that turning health care into a customer-service industry may to some extent undermine the delivery of evidence-based care.”
  • We actually know very little “about patients’ values and about how they should or might influence our decision-making.”
  • If we want to control costs and improve quality, “it will first require a look at the whole picture — and then a willingness to believe what we see.”