Health care inflation consistently outpaces economic growth, and threatens to 'crowd out' other important societal priorities. This blog addresses efforts to control health care costs. The blog began as an outgrowth of a class at the Harvard School of Public Health, and is open to all. Please join us.
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My post on Monday about the lack of
mortality improvement from detection of thousands of cases of ductal carcinoma
in situ (DCIS) made me look for some data on the changing rate of colorectal
cancer mortality in the US. The CDC has
published data on this since 1999, during which time our population has aged –
so we’d expect an increase in colon cancer mortality. We’ve also had a steep fall-off in death from
heart disease, leaving more people alive to get colon cancer.
Nonetheless, the unadjusted mortality rate for colorectal cancer has decreased
every year – for a total decrease of 29.7%
Now, don’t think for a minute that this
means that doing more colonoscopies saves money. The cost per quality adjusted life year
saved for colonoscopy
is between $50-100,000. That means
that saving all these lives has an associated cost of billions. But the purpose of medical care is to
prevent death and improve the quality of life, not to lower costs.
Are you 50 or over? Get your colonoscopy, if you haven’t already!
Repeat every 10 years. We need to see more bar graphs like this.
It’s been 5 days since JAMA
Oncology published its landmark article on ductal carcinoma in situ (DCIS),
thought to be a precursor to breast cancer.
And the top five articles in the New York Times Health
section this morning were all about this article. It’s a big deal – important to the treatment
of women with breast calcifications on mammograms, and also important to health
Researchers used the SEER (Surveillance, Epidemiology, and End Results)
database to show that the 20 year likelihood of dying
of breast cancer among the 110,000 women who had DCIS was a bit over 3% - very
similar to the likelihood among women who were not diagnosed with DCIS. The likelihood of local recurrence went down
with mastectomy or lumpectomy, but the likelihood of dying of breast cancer was
unmoved. Radiation therapy with lumpectomy was not significantly better at
decreasing mortality compared to lumpectomy alone; removal of the entire breast
was associated with statistically significantly higher rate of breast cancer mortality
than lumpectomy with or without radiation therapy.
DCIS is increasingly common; it
represented 3% of all breast cancers found before mammography became
widespread, and was usually diagnosed on autopsy only. It now represents 20-25% of all breast
cancers detected – 50 to 60,000 women a year.
But we’re increasingly finding that
screening isn’t nearly as effective for many other cancers. Prostate cancer screening raised diagnosis
dramatically, but few lives were saved, and many suffered from complications of
therapy. I’ve written earlier about the
epidemic of diagnosis of thyroid
cancer, unaccompanied by any decrease in diagnosis of invasive cancer, or
any decline in death from thyroid cancer.
We should look at population data before
deploying population-wide screening. The goal of medical care is to give people
more life and better quality life – not merely to make diagnoses that subject
patients to potentially harmful therapy without benefit. We also need to
recognize that there are subpopulations where screening and therapy
recommendations can differ, as their risks are substantially higher.
Oncology, a journal that just began publishing this year, is offering access
with no paywall to the original
research and to the editorial.
There are two developed countries that
allow direct to consumer (DTC) marketing of prescription pharmaceuticals – the
United States and New Zealand. The FDA’s power to regulate drug company
commercial speech is on the wane; a district court found earlier this month that the FDA
couldn’t stop a company from communicating that its fish oil pills could be
used for non-approved indications unless the company knew the claims were
false. A federal appeals court ruled earlier that
the FDA couldn’t mandate that tobacco companies admit their previous misstatements on cigarette packages, and plans to require use of plain packaging with large graphic
warnings have been thwarted.
The US began to allow DTC pharmaceutical
marketing in newspapers and magazines in 1985, and television in 1997. The rationale was that they could help educate Americans
about various conditions which could be helped by drugs, and DTC advertising
was consistent with a move to make health care less paternalistic. Why shouldn’t patients know about the drugs
available to them?
But DTC marketing has made television a
wasteland of ads for treatments for erectile dysfunction, insomnia, and
hepatitis C. And many of the
well-meaning regulations restricting how drug companies communicate actually
obfuscate the real dangers and tradeoffs of medications. For instance, mandating
the presentation of a raft of uncommon side effects makes it harder to focus on
common side effects. Everything eventually looks like an iTunes user agreement
– and who pays any attention to those.
What’s always really bothered me is
advertising for expensive brand name drugs (Yes, I’m thinking of Nexium, the
purple pill) that are absolutely equivalent to omeprazole at 16 times the
price. Until Nexium lost its patent protection last year, it was among the top
cost drugs for most employers whose data I reviewed – which certainly doesn’t
speak to increasing value.
There are two articles in yesterday’s New
England Journal focused on DTC drug advertising. “Rethinking DTC
Advertising.. “ points to the failure over decades to develop meaningful
“patient package inserts” (PPIs) to help patients understand the risks and
benefits of a drug. The FDA initially
intended to mandate PPIs – but gave up during the Reagan administration. The authors conclude
For all its capacity to encourage
overdiagnosis and overmedication, DTCA's virtue is that it treats consumers as
people who deserve to know something about the compounds they take into their
bodies. After 30 years of DTCA, it's not clear that advertising is the best
medium for communicating risk information,5but marketers should at least be
required to try to communicate risk information as effectively as they do their
If disclosure is to work, as others have argued, it must be
done right, in a format that's designed to be usable. As an example of success,
Fung et al. cite the simple, salient, and familiar “A, B, C” system used to
rate restaurants on the basis of public health inspections, with the results
posted prominently by the door. The new FDA guidance is a move in this direction,
at least if it gives companies more liberty to construct readable disclosures.
However, even revised disclosures written by the companies themselves are
unlikely to be simple and candid enough to steer patients away from drugs that
are inappropriate for them. One can imagine a system that would grant drugs an
“A” rating if they proved a substantial advance over the previous standard of
care in treating a serious medical condition, with minimal risks or side
effects. Regrettably, many of the most widely advertised drugs would not secure
that golden ring.
I’m pretty sure we won’t see restaurant
style A, B and C grades for drugs that include safety cost and effectiveness
any time soon – and in fact a drug might be a “c” for some patients and an “a’
for others (think about high dose statins for those who had a heart attack,
compared to those with a 3% risk of a heart attack in the next decade).
But we do desperately need better
consumer information on pharmaceuticals – and given the strong incentives for
pharmas to emphasize benefits, we need a standardized way to portray risk and
A report in this weekend’s New
York Times notes that air pollution in China is more widespread than
previously believed - 3/8 of the
population lives in areas with air pollution rated on the average “unhealthy” in the US; 92% of
the population. 1.6 million people die
prematurely each year in China due to air pollution. That’s a staggering
number; I think it might have more impact to say that air pollution kills 4400
people a day.
Speaking of environmental stewardship, I’m
pretty embarrassed to be a citizen of Belmont, MA, where our inadequate efforts
to control water runoff mean that our streams, which feed the Mystic River,
just received an “F” from the Environmental Protection Agency. According to a Boston
On many days, just getting splashed with the water coming out
of the culvert flowing into Little Pond, which in turn flows into Alewife and
the Mystic, poses a health hazard.
Clean water, like clean air, is important
to the health of the community. Both
are a community good - the air I breathe and the water I swim in, or
don’t, is profoundly influenced by activities far from my hometown. Funding environmental protection locally makes
it more likely that some towns won’t make a big enough investment. Cap and
Trade for sulphur dioxide has also shown us that we can use the market to be
sure that incremental dollar spend on cleaning air (or water) are spend where
they can do the most good.
So, I’m pretty embarrassed to live in a
town whose streams are called “poop water” in our newspaper. There is a health and economic price we pay
for sending raw sewage into our streams, or nitrogen and sulphur dioxide and
particulates into the air.
There's a bipartisan move to eliminate
the Affordable Care Act's excise tax on employer sponsored health insurance plans that cost more than $27,500 (family) or $12,700 (individual) in 2018.Current bills to repeal this tax have been cosponsored
by 132 Representatives in the House and 7 Senators.The New York Times editorialized against repeal in
The broad based coalition that opposes the excise tax includes:
Who wants to be taxed?
The excise tax will make it tougher to negotiate higher benefits, and
will take dollars away from potential raises.
·Health plans, which don't want to administer this and be blamed for it
·Anti-tax advocates: who don't want the feds to collect
·Equality advocates: There's no adjustment
- so employers with older employees, sicker employees, or with workers in
expensive areas will now be doubly penalized
·Urban advocates: Health care costs in many
metro areas are high, with large portions of the population cared for by
academic medical centers
·Rural advocates: Health care costs on
single hospital rural areas also tend to be high since there is no competition
There are serious problems with this
excise tax as it will be administered.
The first problem is fairness. A “fair”
excise tax would either account for demographics, illness, and geography. All these adjustments would increase
fairness, but they would also increase complexity and the propensity to game
the system, though. Another way to be
sure that the excise tax didn’t penalize employers for elements beyond their
control would be to levy the tax if the total actuarial value of the health
plan was high. That would penalize plans
that were “too rich”, and many economists believe that these plans are
responsible for excess spending. It
would also discourage narrow network plans or some staff-model plans like
Kaiser that accomplish high actuarial value without an especially high price.
The second problem is that the excise tax
has helped encourage substantial cost shifting to employees. One way to pretty much guarantee an employer’s
health plan will cost less is to “buy down” to a lower value plan. These low value plans, though, are bad news
for those of modest means, for whom a $3000 or higher family deductible is an
unbearable barrier to obtaining care.
My sense is that the threat of the excise
tax has helped convince employers to substantially decrease the value of their
health plans already, and I don’t think we need this tax to further discourage
overly generous plans. Making it fair
through adjustments would be complicated, and pegging it to actuarial value
would discourage plans with meaningful coverage for those of modest means.
It’s not likely that Congress can pass a nuanced
bill to address these problems with the excise tax, nor is it likely that the
current Congress can replace the estimated $84 billion in revenue from the
excise tax over its first decade. Therefore, a repeal would likely add to the projected
deficit. This would cost angst to those who dislike allowing the government to
run a deficit, but will not be a significant economic drag at this point.
Congress eliminated the physician “sustainable
growth rate” pay cuts without coming up with respecting budget neutrality; I suspect they do the same for the excise tax. Opponents of the ACA can declare that they have repealed a piece of the law, and supporters can breathe another sigh of relief because this tax will make the ACA less popular and it is not critical to the ACA's success.
This shows that the portion of Americans facing high deductibles is already quite high. The exercise tax threshold would only increase with the consumer price index, pushing employers to increase cost sharing each successive year to avoid the tax. Source: KFF HRET Employer Sponsored Health Benefit survey, 2014.
I’m back from a week off – and the bike
ride and the beach were great. Now,
back to wonkiness and health care.
I listened to snippets of the Republican
health care debate on Thursday night –and there wasn’t much about health care.
Post posted a transcript –and I looked for words associated with health
care. I found only five words or
·Health Care (2 mentions)
·Abortion (10 mentions)
·Obamacare (11 mentions)
·Planned Parenthood (15
I reviewed the transcript
for the ‘undercard” debate, too. Mentions
of abortion (14) and Planned Parenthood (14) overwhelmed “health care “ (7) and
“ObamaCare” (7) in that debate as well.
I was emailing with one of my
conservative friends the other day –and he expressed a sense of frustration
that the serious health care policies that have been put forward by economists
and policymakers on the right are being totally ignored.
This is especially
ironic, since the heart of ObamaCare was designed during the Nixon
Administration as a private market alternative to national health insurance.
Further, the move to high deductible health plans and health care savings
accounts has been championed by conservatives – and the health care financing
system has made big leaps in that direction over the last few years.
I looked back to the op-ed in the New England Journal
“Bending the Cost Curve Through Market Based Incentives” written by right-leaning
health care policy experts prior to the 2012 election. (It’s available with no paywall). Recommendations
·Shift Medicare from a defined
benefit to a defined contribution plan – essentially fixing subsidies at
current levels. If health care costs
rise more, patients will pay the difference.
Slyly, this is dubbed “premium support.”
·Convert the current tax
exclusion of employer sponsored health plans to a fixed refundable tax credit,
or at least cap the tax exclusion. (That’s effectively what the “Cadillac”
excise tax in the Affordable Care Act does, although a cap on the tax exclusion
would be ‘cleaner.’)
·Combine Medicare Part A and
Part B deductibles. (This is something
that would make Medicare much more like employer-sponsored insurance, and
remove a gnarly hard-to-understand distinction for patients who are often
caught off guard when outpatient services are substituted for inpatient
·Split CMS into regional health plans
for ‘traditional Medicare.” Each would have their own administration, which the
authors feel would be more accountable.
Overhead would go up.
·Do away with state regulations
that increase the cost of health insurance through coverage mandates and which increase
complexity for employers, who often have beneficiaries in many states. Note that most Americans with employer sponsored
insurance are in “self insured” plans which are already exempt from these state
·Allow sale of bare bones health
plans for those who want to purchase less coverage. This would include the “minimed”
plans with maximums of $1000 to $5000 which were banned by the Affordable Care
·Allow sale of fully-insured health
insurance plans across state lines. This
would effectively do away with many of the state mandates and regulations, as
insurers would seek to domicile in the states with the most lax regulation,
much as credit card companies are so often based in South Dakota, and
corporations choose to incorporate in Delaware.
You can tell that I’m not a fan of the
conservative agenda for health care. I feel that patients are vulnerable when
they are sick, and aren’t in a good position to negotiate. I know that’s
especially true of the 5% of people who are highest cost, who alone represent about
half of all expenditures. I am
comfortable to let health insurance to serve as a transfer of wealth from those
lucky enough to enjoy good health to those unlucky enough to be gravely
ill. I like the fact that some states
like Massachusetts can choose to more vigorously regulate fully insured health insurers.
I watched Michael Moore’s documentary Sicko in 2007 and was relieved that most
of the worst insurer practices had been banned in my state for years.
But there are some real ideas on the
right – more than the trope of “repeal and replace” or “job killing ObamaCare”
or “let’s defund Planned Parenthood.” It’s
certainly hard to get beyond sound bites with so many candidates clogging the
stage, but I hope we’ll hear a little more about what the candidates really
want to do with health care in the coming months.
I’m used to seeing time-lapse maps of the United States that
show that society is crumbling and that our health is just getting worse and
worse.For instance, these CDC maps are in many presentations (mine too!) – they show obesity getting relentlessly
That’s why yesterday’s
JAMA has set of time lapse maps that warms my heart.It’s no surprise that Medicare costs less per
person in 2013 than it did in 2009.The
average age of a beneficiary went down a tad (as us boomers age into Medicare),
and the Affordable Care Act meant that hospitals got much lower rate increases
It’s a shocker that mortality dropped from 5.3 to 4.85% (a
16% drop), and the number of hospitalizations of Medicare beneficiaries dropped
by over 23%.Even inflation-adjusted
end of life care costs dropped dramatically from a peak in 2009.
Total inflation-adjusted Medicare costs per beneficiary
dropped almost 15%, from $3290 to $2801.
There’s no clear answer as to why things are getting so much
better. Each successive year there are relatively fewer smokers aging into Medicare, and improvements in air quality lead to longer lives and fewer hospitalizations for those with lung disease. A combination of improved quality improvement processes at hospitals,
technology and pharmaceutical improvements, and even pay for performance could
all share some credit.
In the meantime, let’s bask in this great news!
(I’m riding the Pan
Mass Challenge, a 192 mile bike ride to raise money for cancer research,
this weekend, and will be on vacation next week – so posts will likely be
sparse.Here’s a link to post from 2013
and 2014 with some musings on charity athletic events.)