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Perspectives on Healthcare Reform: What’s to be Done About Cost Containment?

By Gregory W. Rutecki, MD
University of South Alabama | June 2, 2010

In the December 14, 2009 issue of The New Yorker magazine, Atul Gawande observed, “Cost is the specter haunting healthcare reform.” The idea (or better mantra?) of cost as central to healthcare’s reform is not new but surely a topic that demands this generation’s consideration. Most of the economic debate has been general, looking at national “bottom lines” rather than focusing on the “dollars and cents” of individual diseases. Let’s take a sobering look at rising costs in the context of specific diseases beginning with psoriasis.¹

Somewhere between 4.5 and 7 million Americans have psoriasis. Approximately one-third of them do not improve optimally on topical therapy. Systemic therapy has become the next step in therapeutics and is now standard of care. The reference revealed some pricey annual costs for pharmaceuticals utilized for the treatment of psoriasis: methotrexate(Drug information on methotrexate) 7.5 mg/week ($1197) versus alefacept for a 12-week course ($27,577)!

Another treatment modality available as well as successful for psoriasis is phototherapy. Psoralen-UV-A therapy can cost $7288 per year. Acitretin(Drug information on acitretin) at higher doses (50 mg/day) could cost a patient or her third party payer $17,613 annually. The so-called “biologics” can run up to $27,577 yearly. Loading doses for some (infliximab, for example) can total more dollars, at least during the first year of administration.

The authors looked at the economics of treating psoriasis another way. Even though the costs for methotrexate decreased approximately 20% from the years 2000 to 2008, brand name methoxsalen(Drug information on methoxsalen) increased 316% and acitretin 157.5%. Newer agents such as the biologics efalizumab(Drug information on efalizumab) and adalimumab(Drug information on adalimumab) have been around approximately 4 years and have increased in cost 35.1% and 27.2%, respectively, over the same interval. Since the new vocabulary of reform compares rising costs to inflation or to costs in other arenas, these figures became even more stunning. Overall increases for these and other drugs targeting psoriasis approximated 66%! Outpacing inflation and costs for other services by an impressive order of magnitude was not a problem.

Direct-to-consumer marketing on television constantly reminds patients of the expanding spectrum of benefit associated with biologics. Inflammatory bowel diseases (ulcerative colitis and Crohn disease), rheumatoid arthritis, multiple sclerosis, and other inflammatory conditions are debilitating diseases mitigated by these remarkable agents. Unfortunately, that therapeutic success (real as it is) is accompanied by what some may consider a prohibitive cost. Furthermore, patients with these diseases, but without insurance, cannot afford the price tag. Is reform going to find someone to pick up the tab?

Similar rising costs can be identified in other areas. Bevacizumab(Drug information on bevacizumab), a monoclonal antibody used to treat colon, lung, and breast cancer, is predicted to generate sales of $7 billion for its maker.² This particular drug can cost $48,490 and $39,614 when administered to patients with lung and colorectal cancer, respectively.³The additional longevity acquired at these remarkable costs is nil. One study demonstrated no overall increase in survival at a cost of $90,816 for the drug!⁴

Since continuing technological advancements are going to add to these and other rising costs (dialysis, for example, with more “baby boomers” coming of Medicare age), one has to wonder what the something is that “has to give” in the future. We will be seeing patients with psoriasis, renal failure, and advanced cancer—and considering the high costs of pharmaceuticals for those who can and those who cannot afford to take them. When should we begin to determine, as in reference 2, how much is more life worth? Since it is apparent that these rising costs cannot be sustained indefinitely, will we ration, will we stop and draw the line for some of these miracle drugs and the people who want to take them?

by gregory rutecki | December 01, 2010 11:18 AM EST

I agree with Dr Novick, esopecially "Procedures, procedures...Yes, that aspect drives up costs and according to the Dartmouth Report, may also decrease survival. Greg Rutecki, MD.

by Larry Novik | November 30, 2010 9:42 PM EST

We all know that medical insurance companies eat a large piece of health care spending. However, we much face up to the fact that doctors have to shoulder much of the responsibility for our out of control costs. A system with the following four components cannot continue to survive.

1)the threat of malpractice, which leads to the tremendous overuse of testing and treatment

2)Procedures, procedures,....I would have listed that as number 1, but I'm trying to be subtle. In a free market, retailers are often trying to get the customer to buy something extra for that additional 10-20% of the total cost. Examples are the moon roof with that new car, case and memory card for the camera, or the cocktail with dinner. Rather than getting 20% extra, many specialists are tempted to order procedures that pay up to 1000 to 2000% more than an original visit. Examples are adding an echo and nuclear stess test, or taking off a buch of moles, with the resulting added cost of the pathologist's fee. Thus, a visit that might have cost $100 is increased to $1500. Not much extra hands on time is needed for many of these procedures since the staff technician is already being paid to perform these tasks.

3)These tests, for the most part, are still bascially FREE for the patient. We have no other examples of this is our free market system. A safer car that we buy often has to be balanced against the added cost. If it doesn't cost anything extra, why question the doctor's rec's.

4)Fear of missing something. For the doctor, that usually means fear of being sued. But patient fear adds a lot to the equation. Why not get the colonoscopy after 3 years for the small tubular adenoma--what if I have colon cancer. And, if I'm not paying anything out of pocket, there's no second thought.

Rather Notsay, MD

by gregory rutecki | June 16, 2010 1:06 PM EDT

Thanks to my 3 blogger colleagues for some very insightful comments. Their suggestions are right on target. First, Great Britain already factors in quality and duration of survival after approving a specific treatment/pharmaceutical. They have an agency called the National Institute for Health & Clinical Excellence (or NICE). People have suggested that we do the same (JAMA 2008; 337:137). NICE has decided some high ticket items (e.g. bevacizumab for cancer) don't provide enough bang for the prohibitive buck. Secondly this example not only verifies wisdom can emanate from other countries, but Holland's healthcare reform also jettisoned for profit approaches to haelthcare. Finally, there are more sticker shocks coming, like the prostate cancer vacccine that may be as expensive and unfortunately as efficacious ( a pun) as bevacizumab or cetuximab. Thnaks collegues, we are in agreement, Greg

by Pravin Shah | June 15, 2010 10:25 AM EDT

Expectation and cost needs to be tampered with affordability and ultimate return in terms of gains in life expectancy, real quality of life improvement and out of pocket expense.

by Dorothy Talotta | June 13, 2010 11:25 AM EDT

I think it would be helpful if we looked to other countries for ideas on how to solve our health care issues. In the U.S., we spend a great deal of money on the salaries of C.E.O. 's of insurance companies and dividends to insurance company stockholders. This is money that we all pay in health insurance premiums. If we did not have the system of for-profit, private insurance companies that we have here, that money could all go towards health care. Granted, there would have to be administrative functions to process claims, etc. but the individuals performing these functions would not collect the kinds of salaries that insurance company executives do. Countries such as Canada, Great Britain and others spend far less on their health care than the U.S. does and yet their measures of health care quality such as life expectancy, infant mortality rate, etc. equal or, in some cases, exceed ours. While their systems might not translate seamlessly to the U.S., I believe we can certainly look towards the systems in place in these countries to help us in our situation.

Article Comment Pages: 1 2 Next

REFERENCES:
1. Beyer B, Wolverton SE. Recent trends in systemic psoriasis treatment costs. Arch Dermatol. 2010;146:46-54.
2. Brock DW. How much is more life worth? Hastings Center Report. 2006;3:17-19.
3. Drucker A, Skedgel C, Virik K, et al. The cost burden of trastuzumab and bevacizumab therapy for solid tumors in Canada. Current Oncology. 2008;15:21-27.
4. Mulcahy N. Time to consider cost in evaluating cancer drugs in United States? www.medscape.com/viewarticle/705689.

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Perspectives on Healthcare Reform: What’s to be Done About Cost Containment?

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