Medicine, for example: It's pay a price set by the medical cartel or take your chances.

Well yes and no.

Most every drug developer in the world targets approval of experimental new drugs in the U.S. despite the Byzantine nature of political science at the FDA which doesn't do much math and science. There is even some concern among political types over a cancer drug developed in Cuba.

Despite the horribly inefficient and costly nature of American health care, the U.S. remains a mecca for drug development that can potentially reduce health care costs drastically, not to mention saving lives and health.

The trouble is, of course, that exorbitant pricing of drugs by a Merck or Pfizer is not necessarily the best way to encourage small biotechs to develop revolutionary new platform drugs that must overcome superstitious dread and hostility at the FDA, if not outright corruption.

Few liberals seriously address the imbalance while offering only the absurd notion that buying drugs from Canada or other countries will solve the problem.

It's a classical response to a perceived problem... Fix the perceived problem:

Few liberals seriously address the imbalance while offering only the absurd notion that buying drugs from Canada or other countries will solve the problem.

Many people are simply *completely out of luck* in trying to choose between the rock and the hard place. In the case of the drug price problem, Americans see that they are paying significantly higher prices for drugs than our neighbor to the north, or the neighbors across the Atlantic. So they draw the obvious conclusion: Our neighbors pay less, why can't we? Many of the people advocating the border-crossing "solution" have answers that, for them, are far from absurd. It's their only option, considering both the significance of the price differences and the fact that too many people cannot afford American prices.

Notice that I didn't offer any ill-thought solutions to the problems that I think I see. The reason is that the reality is complex enough that I am not qualified. (My qualifications begin with assembly language and end approximately at JavaScript, plus or minus a few layers...)

I agree that there's a balance to be struck. However, there is something very important missing from the general discussion: Real information about how the American medical dollar is really distributed. I believe this information is protected very carefully by industry players, which prevents those of us in broader society from making informed choices.

Therefore, what I do advocate, and relatively strongly, is that we as a society are allowed to be informed, such that we can collectively make well-informed choices.

"Free markets" only work when their various participants are freely able to make properly informed choices. Markets that limit access to information are not free. Markets in which some participants cannot make choices are not free.

Nonfree markets are structurally inefficient. That inefficiency translates to a transfer of wealth from those who are not informed, or cannot choose the extent of their participation, toward those who manipulate the marketplace.

This is why I originally brought up the issue of "privatization". The problem arises when we combine profit-making entities with situations where demand is inelastic, or when a few players have monopolistic or nearly monopolistic influence.

With respect to the question of the medical industry, we (think we) know that we are paying much more for a set of products and services, but receiving what appear to be lower quality outcomes in exchange.

So, are we permitted to discover the various sources of inefficiency in the system? And what's the best way to manage our resources appropriately? There is some very very big money at stake here, and there are people who don't want to get kicked off the gravy train. This is why I refer to the industry as a "cartel": One way or another, they have established a situation where the providers of the services (insurance, medical industry, big pharma, etc.) have many choices, but we their customers have only one: Pay or take our chances.

BTW... I believe the substandard Americsn outcomes are not *all* the medical industry's fault here. IIRC, Americans are the world leaders in unhealthy lifestyle (not enough exercise, too much of the wrong kinds of food, too much stress).

Right, and the HIPPA laws that are supposed to protect us from having our medical information given out...

Just try to get health insurance without waiving your HIPPA rights. If you refuse to give them the info, they refuse to insure you.

So, you give them the info, and once they see that you've ever been actually SICK, your premiums go way up, and so does your deductible and co-pay. (Unless you are a part of a large employer-based policy)

Is that providing health care? No that is providing the insurance companies with an assured profit.

Jan Knaus

...health outcomes in the United States place it thirtieth in the world, behind Singapore, Chile, Costa Rica, Japan, and every Western European nation.

By what measure? I saw one stat that we were number one in recovery from cancer and heart attack.

The sons of the prophet are noble and bold,
and quite unaccustomed to fear.
But the bravest by far in the ranks of the Shah
was Abdul Abulbul Amir

I don't think it's fair to assume that insurers have all the information needed for informed healthcare choices. Medical histories are at best an imperfect indication of a person's medical needs, and only then for the people who go to the doctor regularly.

4. If we don’t wish to completely prohibit DTC advertising, require full disclosure. This would include mention of the risks of treatment and a summary of proven benefits and competing approaches in clear language that a lay person can understand. The price of the medication, with estimates of monthly and yearly costs as well as a measure of cost effectiveness (cost/unit of additional survival time or other approved measure) must be also be provided to fully inform the consumer.

--
Howard

*equal opportunity offense to both extremes*

Cost and side effects, even for relatively inexpensive medications, would meet my criteria for being open enough--if we have to have DTC advertising.

I certainly agree that a sound/video bite can only confuse and provide incomplete information. My preference, therefore, is to not have such advertising for prescription medications--as is the rule in most industrialized countries.

Re: But... your employer knows everything about your health

Insurers do NOT share health data with employers. Even self-funded employee benefits have a firewall in place (a third party administers the plan so the employer does not know anything about individual employee claims) to prevent this from happening.

There are several areas where this is not true, for sometimes reasons other than pure price, and, conversely, there are areas where something that apparently was "more luxurious" has practical economies.

It's been fairly consistent that the best predictor of success in cardiac surgery, transplantation, and a number of other areas is to have people and a facility who do a lot of them. If a patient doesn't have such a facility in their locality, or a remote specialist facility is not covered by their locally oriented plan, they may not get the best care. Admittedly, some people, knowingly sometimes, will settle for a local facility because it is less disruptive to their lives.

While there are high-end hospitals that have luxury wings for exceptionally well-off patients, new hospital construction tends to emphasize private rather than semiprivate rooms. Hospital-acquired (i.e., nosocomial) infections tend to be less common with private rooms, and patients often are better rested and have shorter stays when alone.

Related to both the specialty center and the economics of emergency medicine is the capability to have major interventions that benefit overall health. Perhaps the most significant, even more so than in heart attack, are new interventions in "developing stroke". Some physicians are recommending the term "brain attack" rather than stroke, to imply that it is a true emergency where specialized interventions, preferably in the first 3 hours and pretty much limited to the first 6 hours, can reverse damage.

The challenge here is that most "brain attacks" are due to clots, and the clots can be dissolved with prompt therapy. A certain proportion, however, are due to bleeding, and, while there is interventional therapy, clot dissolvers would kill the patient. At the very least, a local hospital needs remote video and imagery consultation with a neurologist, but it may be appropriate to bypass local facilities that don't have the advanced X-ray guided techniques that can diagnose fully, and also "patch" a bleeding area.

I might argue that it's less a problem of "inferior goods", and more a problem of access to "standard goods". The access problem can be bad in a sparsely populated area, or in an underfinanced urban one.
--
Howard

*equal opportunity offense to both extremes*

The normal metrics are longevity and infant mortality.

The outcomes of treatment in a particular condition cannot be a good comprehensive measure. Suppose that 10% of our heart attacks are untreated, but among the treated cases we do better. Or suppose that we heroically save lives of people who are in terminal stages of some diseases, thus boosting the "recovery rate" with negligible gains in longevity (and we screw up something else, so the balance is negative).

I have a neighbor that stubbornly refuses to pay for medical insurance. One day he cut his leg pretty badly, it needed stiches. He walked into a clinic and asked how much it would cost to stich up his leg. The administrtors at the desk had no idea. They said he'd have to call the billing department the next day.

He was a mechanic. He told them that was criminal. He had a fee schedule displayed on the wall of his garage--by law--and he asked what kind of idiot would purchase services without any idea of the cost.

We're all idiots.

CSPAN junkies visit http://spannerbackup.ipbhost.com

There's a reasonable body of medical opinion that suggests a future where slow degeneration will not be the expectation, although total longevity may or may not be extended. Techniques for this sort of thing start with present methods of turning diseases once quickly fatal into relatively symptom-free, manageable, chronic diseases. This can be nuanced, depending on genetics and management. For example, both my father and I started showing hypertension in our early thirties. By the time he was in his late thirties, he was significantly limited by heart disease, and was dead at 42 in 1965. I had a first episode of unstable angina at 39, but had it treated aggressively with techniques not available to him, including newer drugs, angioplasty, and bypass. For a time, my heart function continued to decline, not in a terribly limiting way, but in the last 8 years or so, some secondary genetics kicked in and my heart self-repaired. I'm turning 58 in a few weeks, and, while I definitely can lose weight and exercise better, my heart is back to the edge of athletic conditioning.

Some things that may be too onerous now, such as extreme calorie reduction, may extend life but, at present, still depend on genetics. Apparently, I had genetics both for early onset of heart disease, but, as long as it was controlled, additional genetics for "self-bypass", or autocollateralization, where small blood vessels in the heart enlarge to take over the load of the blocked ones.

There are a class of interventions that are more than science fiction, in that we understand quite a bit about the mechanism, but not how to manage it. One very major breakthrough was the understanding that cells effectively programmed to die after a certain number of cell divisions, a process called apoptosis, which is regulated by p53 genes, also called telomeres. A cell starts off with certain number of telomeres, and, every time it divides, loses one.

Apoptosis, if you think about it, is a defense against too-rapid growth in cancer. The tumor cells are dividing too quickly, but they die off more quickly. If we can develop nanotechnology that examines individual cells, and, conceptually, if they turn out to be cancer-free, splice new telomeres back into the chromosomes. It should be obvious I'm simplifying a great deal, but this is one of the first theoretically sound approaches to actual life extension.

We aren't talking immortality, and we also aren't talking something that would be widely available at first. It's possible that this would do no more than keep older people youthful until a quick death.

To say that we have issues now with healthcare economics, the idea of true life extension, especially if available only to the wealthy, has policy implications that tend to go into the unimaginable. For one science fiction view that actually has had more accuracy than the author knew, see Robert Heinlein's Methuselah's Children.
--
Howard

*equal opportunity offense to both extremes*

1. Require the government and pharmaceutical companies negotiate prices for patented medications purchased for government programs and beneficiaries. Including Medicaid, Medicare, the Federal Employee program and Tricare this would affect 100 million citizens (1/3 the population of the U.S.) Since we like transparancy we should make the negotiated prices public

While the prices may not be public, this is already done by the government. The VA has always had separate governmental pricing from the pharmaceutical and medical industry. Same is true for Medicare.

If we don’t wish to completely prohibit DTC advertising, require full disclosure. This would include mention of the risks of treatment and a summary of pr oven benefits and competing approaches in clear language that a lay person can understand. The price of the medication, with estimates of monthly and yearly costs as well as a measure of cost effectiveness (cost/unit of additional survival time or other approved measure) must be also be provided to fully inform the consumer

This would be excellent, especially if the FTC insisted that all the side effects with a greater than 1% incidence along with any major organ test changes have to come across the screen in the same size text as benefits and features of the drug. hahahaha..this should sufficiently scare the average consumer.

Retrieve the taxpayer’s contribution to drug development costs (approximately 20 billion a year to basic medical research) from patent holders and use these proceeds to defray pharmaceutical prices to consumers. This would also require the disclosure of the real development costs of pharmaceuticals.

How does this work? What is the source of  these tax contributions from the consumer? Pharmaceutical companies fund 90% of the R&D costs for new drug development. We can gauge the cost of development, by NIH, costs. Which  is typically funded with tax dollars vs. private industry.

Prohibit direct to consumer (DTC) advertising. In a 30 second ad full disclosure as outlined below is not possible. As a result patients do not fully understand the limits and costs of any given product. Few countries allow such advertising.

I agree. DTC advertising, results in patients pressuring doctors to prescribe medications which may be no more therapeutically effective, but which the mere suggestion of such in a TV ad gives hope to the patient and thus their demand. Physicians know if they do not prescribe it, the patient will simply go to another MD who will. The doctor does not want to lose the patient and will prescribe the drug, even if he thinks there will be no therapeutic gain. This is how Vioxx/Celebrex became such  blockbusters, despite not demonstrated to be anymore effective than other drugs on the market yet, it was a huge seller due to DTC advertising. Most physicians, know full well that the risks of new drugs are unknown and are far more reluctant to prescribe them, until the drug has established a safety profile in the public arena vs. clinical trials.

Require clinical studies include cost data as well as a measure of cost effectiveness (QALY-Quality adjusted life year or other) in the discussion of any phase II, III or IV study reporting positive results.

This would not benefit the consumer and would just add to the cost of development. In Phase II, you are primarily doing human dosingm excretion and the metabolism of the drug. Phase III trials are much larger patient populations where you are looking to establish efficacy. This type of QALY studies are primarily valuable during Phase IV, or basically post-marketing where you have treated a large enough patient population and have comparative data to determine the outcome of quality adjusted life year.

What would be much more useful, is for the drug to have to do a head-head, efficacy trial against the 'standard of care' drug to demonstrate therapeutic benefit, dosing and/or better side effect profile. Presently, efficacy trials are only done vs. placebo and comparative side effect profiles are done against 'well-established reference standards' which would be aspirin and indomethacin for NSAIDs.

Monitor the FDA approval process to be certain that generics come to market quickly on patent expiration.

Generic mfgrs do this already. The problem is that companies are able to get patent extensions. That is what holds up generics from coming to market.

The Canadian system controls patented drug prices by not allowing marketing unless the drug is priced right. A similar program could be instituted here to decrease our pricing to the level of other industrialized countries.

Canada does not bring out any new drugs or major medical advances, either. Restricting drugs on the basis of cost is not a good idea. I would prefer to see that drugs be restricted to market in terms of being a therapeutic advance, vs. all these 'me too' agents, which do not provide advances in treating a disease but allow mfgrs to make money simply because their drug can be taken 2X daily rather than 3-4X daily. A drug should not be brought to mkt to compete with another patented agent unless it provides a significantly better side effect profile or therapeutic advance.

The same process that the Canadian patent drug review board uses. If priced 10% over the comparator, the patent length would be decreased by a similar 10%–there are many ways such a link could be structured

This might be a good deterrent to 'me-too' agents. I would not support this for new therapeutic agents simply on the basis the mfgr's pricing. R&D costs do not shrink as time goes by, if anything they increase significantly..

We're all idiots.

 Speak for yourself, (LOL!)

Hey, the other aspect of the story about your neighbor is that there IS no one fee for any particular service.

The person on the next gurney with insurance has a different fee schedule than the person on the other one with Medicaid, and your friend with NO insurace pays the most, because he doesn't have an agreed-upon fee like the other payors do. 

Is this right?  No.  So why is it this way?  Because

1.  Congress is completely beholden to insurance and big pharma, AND

2. because Congress has such a good policy that they don't want to be included in a universal program that would include them with the great unwashed.

Jan Knaus

The government contribution to drug research is, to a great extent, through direct grants to researchers. For example, Judah Folkman, one of the developers of anti-angiogenesis agents (Avastin) was supported by federal grants for 23 years before taking the drug private. This drug costs $50,000/year.

Another example is imatinib (Gleevec), a drug for chronic myelogenous leukemia. This drug is a wonderful advance, was funded by federal funds during the development stage. It was proven effective after one clinical trial and on the market almost immediately. There were minimal clinical trial costs for the company involved. The cost is in the range of $40,000/year.

The tax payer was a significant contributor to these drug's development. How many times should the taxpayer pay? It’s not as if the pharmaceutical companies are marginal enterprises. Patent law has been carefully crafted to maximize profits of the drug industry. During the patent protected period drug companies can and do charge whatever they wish for a product. The industry has enjoyed record profitability—one example is that in 2002, “the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion).” (From Marcia Angell’s book, The Truth About Drug Companies)

In regard to generics, drug companies still game the system. One only has to look at the July 3 article by Mark Kaufman in the Washington Post which noted "Some at the FDA, as well as leaders in the generic drug industry, complain that "citizen petitions" -- requests for agency action that any individual, group or company can file -- are being misused by brand-name drugmakers to stave off generic competition." Or this article from the Times (http://select.nytimes.com/2006/07/011nocera.html)

In regard to cost estimates of a clinical improvement (QALY). You are right these studies should be limited to stage III studies. Stage II are not comparison studies designed to document and compare efficacy. In my experience stage IV studies are frequently manipulated and of limited utility. The most outstanding example being stage IV studies of breast implants in which the drug company failed to follow-up on half the patients.

A rough estimate of cost benefit can be obtained simply and cheaply by estimating the cost of drug, ancillary expenses and add them up. A benefit that costs hundreds of thousands of dollars (see http://medicynic.com/?p=47 for an example) to achieve and does not prolong life should be a non starter. Requiring such estimates would have a moderating effect on pricing and also call the consumer's attention to the limited benefit of many new agents.

Educating the public about costs is key to controlling expenditures. Charging more than the median and average incomes, more than a new car or for that matter, over the life of a patient, more than his home for one drug is excessive and predatory on the part of the pharmaceutical industry. I do think it is a death tax.

In regard to the location of new drug development, guess what, many new agents are developed and initially marketed overseas.

What is clear is that ultimately, the fragmented for-profit nature of the health care system lies at the root of why the United States spends fifty percent more of our annual income on health care than the average European country (15% of GDP in the US vs. 10% of GDP in Europe) and yet health outcomes in the United States place it thirtieth in the world, behind Singapore, Chile, Costa Rica, Japan, and every Western European nation.

Hmmm, this is not at all clear from the article cited, even if fragmentation does result in higher costs. Decreasing fragmentation may lower overall heath costs but it does not correlate that it will result in an increased quality of healthcare for the consumer. Only that delivery costs will be lower.

What the USA spends on health care vs. other countries is not truly a relevant criteria in terms of health outcome. The reason we know this is because we are a capitalistic society and medical care is not at all delivered in a cost-effective manner. So, to somehow attempt to link link life expectancy and infant mortality is illogical. Particularly, as the American diet and lifestyle is one of the least healthy in terms of life expectancy. We are a nation of obese adults and children. That factor alone decreases life expectancy, without any costs of medical care. Additionally, a recent study showed that being overweight at 50 also decreases life expectancy. Life expectancy does not at all correlate with the cost of medical care.

Also since this study was of only white Americans it is truly irrelevant when America is almost 40% non-white. The only thing it really highlights is that white Americans have poor diets, are just obese and have even more unhealthy lifestyles than  people of color in third world countries

A recent Business Week profile (read the whole article at the link) of the Veterans Administration health system emphasized that an integrated health care system like the VA can accomplish savings that the rest of the balkanized for-profit health insurance system cannot.  

An integrated health care system would improve the overall delivery of health care. That does not mean it would change life expectancy, which is far more dependent on diet and lifestyle than delivery of health care. In short, no matter how cheap health care is, it would not necessarily be true that decrease costs would result in higher outcomes or improved life expectancy for the overall society.

To increase life expectancy for the overall society we need to change our diets and lifestyles. We need preventative medicine and accessible health care. These variables would significantly impact life expectancy and infant morbidity and mortality. All we have to do is look at pre-natal care programs to see what a reduction we ahve in terms of infant morbitidy and mortality to understand the impact of preventative care vs. the cost of health care.

There's another downside, which is quite addressable with political will. Benefits managers arguably define prices for wide area, and, through "most-favored-nation" clauses and market research, have fairly accurate information on what minimum prices the market will support

Yes. But is this not a form of mkt collusion? Physicians can use this as a reference bar, but if you provide svcs. which deliver above the 'standard' outcomes...is it OK to charge more?

 A certain number of providers leave practice, or join groups, etc., to deal with the lower margins and greater administrative costs -

Yes. They also leave those netowrks once they establish a base of patients. Which is how many physcisans today, establish a primary practice.

while office practices may only belong to a few networks and have to comply with their procedures, hospitals often have to negotiate hundreds of reimbursement agreements.

Hospital reimbursement is separate from a private physcisna and not at all the same.

The Department of Justice, however, has warned providers that if they set prices, or even "collude" about whether professionals in an area can establish local standards about requiring cash, that said providers will be prosecuted for antitrust activity.

Physicians need not collude to set fair market value. That is not anti trust.

I must say, I'm somewhat horrified by this thread. I'm afraid I don't have any sort of meaningful contribution, except to say that in terms of health care and healthy lifestyle, it must suck to be American.

I do not see the necessity for it. The discussion has become technical, as much for the purpose of concealment and protecting ideologies, as for the purpose of clarity.

Quality of care varies across the country. Ontario, the richest province, and Toronto, the biggest city do best.

On the other hand, I hear that its pretty terrible in Alberta. But that's ideological. The poorer regions, like the maritimes or northern manitoba, are fairly low end, but still manage to do okay.

I'd like to make a pertinent observation in terms of health care and life spans...

One of the things that makes a difference to medical outcomes, and to overall health and longevity, is the proximate willingness to see a physician.

The United States, with its morass of private care systems, dubious insurance plans, and uninsured, strikes me as fairly hostile to the concept of early entry.

That is, if a person gets sick, most times, they're going to wait a while before seeing a physician, for no other reason than that it is directly or indirectly costly. After all, if its nothing, then you haven't used up your medical insurance chit, or whatever, you haven't risked the family savings...

The trouble is that the longer you wait on illnesses or health problems, the worse, if genuine, it gets. The more resistant it is to treatment, the more protracted and difficult the treatment, and the greater the chance of long term damage.

The result may be a general degradation of the health of the population and the lowered life expectancy.

Up here in Canada, I've heard physicians say that their time is cluttered up by too many people with nothing much wrong with them.

It makes me want to punch physicians in a nose. My father had a lymphatic cancer growth on his neck the size of a golfball before he was willing to see a physician. Most people would prefer to ignore sickness and hope it gets better. The truth is that patients are not qualified to diagnose whether an ailment is trivial or not. That's up to the physician.

So, the Canadian complaint really means that people are going to physicians in the early stages, when something can be handled or dismissed as trivial, rather than the late stages, when it can all too often be fatal or cause long term damage.

I suspect that under any imagineable health care system, people who live in the boonies will get poorer care than those who live in major cities

The limits of life extension were also addressed by Heinlein, although in the novel Methuselah's Children, the long-lived (clandestine) subpopulation simply had good genetics. Their foundation's medical staff constantly searched for true longevity techniques, but, at the time the novel starts, they essentially are methods to delay senescence. A member of the group would usually elect euthanasia once the diagnosis was firm.

Senescence delay is not an implausible possibility, and, if when the last weeks or months come, the decline is very rough, I wonder how society (and religion) will deal with it. Could it be a novel situation where only the wealthy have the luxury of quick death?

--
Howard

*equal opportunity offense to both extremes*

Re: Could it be a novel situation where only the wealthy have the luxury of quick death?

Unless assisted suicide is somehow limited to just the wealthy, why would they die any easier than anyone else? A case could be made that the poor would have "quicker" deaths since they would have less accesss to life extension technology and would perish (albeit younger) still from simpler, quicker causes.

A scary thought: an "old" population would be a very conservative population, not just politically, but in every way. What happens if culture, science, technology etc. ends up just stagnating because no one is very innovative any longer?