“No other nation would allow a health system to be run the way we do it. It’s completely insane,”

[bik0]

Drug companies argue they have to charge high prices for new drugs to recoup R&D expense and the cost of clinical trials. It takes at about 10 years from inception to FDA approval and only 1-2% of all drugs that go to trials ever get approved. But what is also skewing the prices here in the U.S. is drug companies have to negotiate directly with governments with nationalized health care (Canada, France, U.K. etc.) and as a result, those countries negotiate heavy discounts and then the drug companies turn around and raise their prices to U.S. insurance companies and health care providers so it all averages out and normalizes their profit structure.

As tough as it is to come up with a drug that works, another issue is the FDA approves expensive treatments that only extend life for a few month or only work on a small percentage of the population. How valuable is life? Is it so valuable that any treatment at any cost is worth it to keep someone alive for a few more days or weeks. That sounds noble but is it fair to the general population who have to pick up the tab through higher premiums and taxes?

Some snips from an eye opening account of someone who analyzed the cost of care for a dying loved one…

‘Any Soldier’
The entire medical bill for seven years, in fact, was steeply discounted. The $618,616 became $254,176 when the insurers paid their share and imposed their discounts. Of that, Terence and I were responsible for $9,468 -- less than 4 percent.

The bills and records document our renewed fight as summer in Philadelphia turned to autumn. Terence resumed Avastin. Because he wasn’t in a clinical trial, our insurance company was billed: $27,360 a dose, for four treatments, more than the cost of the surgery to remove his kidney in 2000.

I learned that over the years of Terence’s battle with cancer, some insurers drove harder bargains than others. In December 2006, for example, UnitedHealthcare, a unit of UnitedHealth Group Inc., paid $2,586 to the University of Pennsylvania hospital for a chest scan; in March 2007, after I switched employers, WellPoint Inc.’s Empire Blue Cross & Blue Shield paid $776 for the same $3,232 bill.

In just the last four days of trying to keep him alive -- two in intensive care, two in a cancer ward -- our insurance was charged $43,711 for doctors, medicines, monitors, X-rays and scans. Two years later, the only thing I know for certain that money bought was confirmation that he was dying.

Some of the drugs probably did Terence no good at all. At least one helped fewer than 10 percent of all those who took it. Pharmaceutical companies and insurers will have to sort out the economics of treatments that end up working for only a small subset. Should everyone have the right to try them? Terence and I answered yes. Each drug potentially added life. Yet that too led me to a question I can’t answer. When is it time to quit?

As I leafed through the stack of documents, it was easy to see why 31 percent of the money spent on health care goes to paperwork and administration, according to research published in 2003 by the New England Journal of Medicine. That number has either stayed the same or grown, said Dr. Steffie Woolhandler, a professor at Harvard Medical School and a co-author of the study cited by the journal. Some bills took days to decipher. What did “opd patins t” or “bal xfr ded” mean? How could I tell if the dose charged was the same as the dose prescribed?

The documents revealed an economic system in which the sellers don’t set and the buyers don’t know the prices. The University of Pennsylvania hospital charged more than 12 times what Medicare at the time reimbursed for a chest scan. One insurer paid a hospital for 80 percent of the $3,232 price of a scan, while another covered 24 percent. Insurance companies negotiated their own rates, and neither my employers nor I paid the difference between the sticker and discounted prices.

‘It’s Completely Insane’
In this economic system, prices of goods and services bear little relation to the demand for them or their cost to make -- or, as it turns out, the good or harm they do.
“No other nation would allow a health system to be run the way we do it. It’s completely insane,” said Uwe E. Reinhardt, a political economy professor at Princeton University, who has advised Congress, the Veteran’s Administration and other agencies on health-care economics.


http://goo.gl/tufp

[Ozymanithrax]

1. Free Market Capitalist based health care is wrong...So what are your suggestions?

[cliffordu]

2. Single payer. With the option to buy into private insurance for those extras-

Lipo, face lifts, ass lifts.....

But a basic modicum of care.

Like the French.

[Ozymanithrax]

4. What does it cost?

Who pays?
Give me a whip count of 50 Democratic Senators who will vote for it.

I agree that a single payer system is the best, but it won't be cheap and simply raising taxes on the richest won't pay for it.

This if from a journal I did a while back.

National health care will be expensive.
In the 2009 budget, Medicare was estimated to cost between 417 billion and 480 billion. In 2008, there were 45 million Americans enrolled. IN order to expand Medicare to cover all Americans, we jump to cover everyone, that number would be around 310 million. That would put an estimated cost of 2.7 trillion to cover the entire population. Of course, we would see considerable savings due to economies of scale. Most of that money would go to the Health care insurance companies and HMO's because they are the people who actually provide the service to medicare recipients.

[cliffordu]

8. Single payer takes the profit out of the insurance racket. NO ONE should get rich

because you get cancer.

I have NO idea how much that will reduce costs to the 'consumer'. Maybe half????

(premiums, plus deductable, plus copay, plus denied coverage...)

And it really doesn't matter what the hell I think -

No one in this country is willing to give up a full third of their salaries for free healthcare from cradle to grave.

That would be socialism.

[Ozymanithrax]

9. Single payer doesn't take out the profit in our country.

Single payer simply changes the source of the payment from a gazillion different sources to one, the U.S. government. It doesn't not change the source of the medical treatment, a gazillion different hospitals and HMO organizations owned or controlled by Health Insurance Companies.

Medicare is the most efficient system in use in the U.S. today, with about 3% overhead. 310 million people will cost over 2 trillion dollars to treat if we keep the same efficiency and the same very low overhead.

I and my wife pay for health insurance for our family. It is no where near to a third of my income, but we pay. We would gladly double our taxes for a real single payers system.

My point is that it will not be cheap. It is not cheap in France, which does have a socialized health care system. It isn't cheap in Germany where they have about 200 Health Care Companies and a single payer system. The control costs by limiting profits of health care companies. In France and Germany nobody goes bankrupt due to the cost of health care, but they pay more in Taxes.

Tax rates for France - France 50.1% 41.7%
Tax rates for Germany - Germany 51.8% 35.7%

We need health care coverage for every American. It just won't be cheap.

[dkf]

3. +1000

[stray cat]

5. You are claiming all nations have better health care systems?

[unblock]

6. our medical care is only as good as it is in spite of our distribution system

we have pretty good health care only because we are so incredibly wealthy as a nation. we have great universities and medical schools and are willing to throw a ton of money at health care. that's what makes it as good as it is.

but our health care is nowhere near what it could or should be because there are huge amounts of waste and inefficiencies in the system, and hugely perverse incentives (not the least of which is insurers delaying and denying treatment in the hope that their customers die before they rack up further claims).

[bik0]

10. The article refutes your statement...

There may be policies and guidelines in place that are designed to minimize expenses and deny claims but for an institution to "hope that their customers die" is highly cynical and not realistic.

"and hugely perverse incentives (not the least of which is insurers delaying and denying treatment in the hope that their customers die before they rack up further claims)."

[unblock]

11. just to clarify, they only want their SICK customers to die quickly.

their healthy ones, they want to get easy money from and hope they don't like to visit doctors.

and it's not just policies and guidelines, it's profit incentive as well. in fact, it's fiduciary duty to shareholders.
minimizing expenses and even denying claims is fine and dandy when it's cutting down on frivolous or excessive dispensing of medicine. but it's not at all fine and dandy when it's denying legitimate health care, or even survival, because patient death is cheaper. yet from a corporate perspective, the insurance companies don't really care about this distinction. either way, they're just minimizing expenses and denying claims.

you can call me highly cynical if you like, but unrealistic? sorry, my insurance company just denied me the 24 doses of zomig (a migraine abortive) i need each month, and have needed for about 15 years, saying they'll only pay for 6 per month. there is absolutely no medical basis for their position, i have a long, documented history of migraine at the higher level and yet they are denying coverage for this simply because they are hoping to save money at the expense of greater suffering for me.

this is a very realistic characterization of what's going on.

[bik0]

12. If you said they don't care if a customer dies that would be more accurate IMO

It's just that their top priority is profits and not the well being of their customers. When companies are run by accountants, people are reduced to statistics and are treated as such - very dehumanizing.

That Zomig is expensive... I looked it up at a Canadian pharmacy I use to buy Celebrex and they want $65 for three 5MG pills.

[unblock]

13. yes, it is expensive and $65 for 3 5mg pills is CHEAP compared to prices in the u.s.

i use the nasal spray, $30-35 per dose, and sometimes i need a second does for a single migraine.

and a lot of the arguments they use, like that they need gargantuan profits because of all the experiments that fail is only true for some of the meds and only up to a point.

the genuinely new experiments they cook up, yes. when they first came out with imitrex/sumatriptan for migraine, yes, that was the sort of breakthrough that you figure needs to be rewarded (at least if you're going to have a for-profit system with for-profit r&d).

but zomig is one of 5 or 6 "copycat" meds where they took the based imitrex/sumatriptan molecule and tweaked it slightly and came out with competing versions that were just different enough to get their own patent. yes, they had to go through the whole trial and approval process, but that's nowhere near as risky or expensive as the outlay for imitrex, NOR IS IT NEARLY AS MEDICALLY SIGNIFICANT. it is a commercial contribution much more than a medical one. the differences among the various triptan meds is small.

so there's no need for zomig to be anywhere near as expensive as imitrex. in theory, competition should drive the prices down for both but years after the introduction of competing meds that hasn't really happened.

[bik0]

7. Not better or worse - more convoluted and inefficient.

Need to get drug prices more in line with what other nationalized systems are paying. If that means U.S. gov't negotiating with drug co's or passing a law which puts caps on prices... so be it.