In the absence of disease-modifying treatments, the cumulative costs of care for people with Alzheimer’s disease will exceed $20 trillion, in today’s dollars, over the next 40 years according to a new report from the Alzheimer’s Association.

The report, “Changing the Trajectory of Alzheimer’s Disease: A National Imperative” concludes that the number of Americans with the disease will jump from 5.1 million today to 13.5 million by 2050.
 
Driving the exploding costs of Alzheimer’s by 2050 is the fact that nearly half (48 percent) of the afflicted 13.5 million people will have an advanced form of the disease which is associated with expensive, intensive care.

The report also highlights the remarkable financial impact that even modest, incremental treatment improvements can have on this trend. For example, a treatment that delays onset of Alzheimer’s disease by five years would, if instituted now, decrease the number of Americans with Alzheimer’s from 5.6 million to 4 million by the end of the decade.

Annual Medicare savings by 2020 would be $33 billion, and would climb to $283 billion by 2050 in this scenario.

“Today, there are no treatments that can prevent, delay, slow or stop the progression of Alzheimer’s disease,” said Harry Johns, President and CEO of the Alzheimer’s Association in a press release. “While the ultimate goal is a treatment that can completely prevent or cure Alzheimer’s, we can now see that even modest improvements can have a huge impact.”
 
“Given the magnitude and the impact of this disease, the government’s response to this burgeoning crisis has been stunningly neglectful,” said Johns. “The federal government has sent a token response and has no plan. Immediate and substantial research investments are required to avoid an even more disastrous future for American families and already overwhelmed state and federal budgets.”

Multaq, an expensive new drug for the treatment of atrial fibrillation, is only half as effective as amiodarone, its generic congener, and it has a similar side-effect profile according to Sanjay Kaul and colleagues at Cedars-Sinai Medical Center.

As a result Multaq should be reserved for patients in whom amiodarone is ineffective or associated with intolerable side-effects, the scientists concluded in an op-ed piece in the Journal of the American College of Cardiology.

Their conclusion is based on a review of 3 clinical trials (summarized below). It represents a huge setback for Multaq, which was at one time touted to be a potential blockbuster with annual sales in the billions.

Multaq “has only modest efficacy and no clear-cut safety advantage,” Kaul told the LA Times. The drug costs $9 per day, whereas amiodarone costs just a few cents. “Why would you want to use an expensive, ineffective alternative?”

Atrial fibrillation (AFib) affects 2.3 million Americans and causes about 71,000 deaths per year.

Afib is characterized by chaotic electrical and muscular activity in the upper chambers of the heart. The condition can predispose patients to strokes and can cause fatigue, dizziness, loss of consciousness or heart failure.

Amiodarone is highly effective in restoring normal cardiac rhythm in patients with Afib, but it is associated with frequent, potentially serious abnormalities of thyroid and lung function. Multaq was developed by Sanofi-Aventis as an alternative. 

The first trial showed that Multaq doubled the risk of death in patients with moderate- to high-risk for hospitalization and death from Afib.

The second showed that Multaq reduced hospitalizations from Afib, but there was no impact on mortality in lower risk patients.

The third revealed that Multaq was half as effective as amiodarone in preventing hospitalizations and deaths. There was no difference in the incidence of side-effects.

Most people have assumed that direct-to-consumer advertising has helped drive up the cost of drugs, but there really hadn’t been much proof of that. Until now, that is.

The proof comes in the form of a study published in the Archives of Internal Medicine.

In the study, Michael Law of the University of British Columbia and others looked at US sales of Plavix, the $4 billion clot-busting blockbuster co-marketed by BMS and Sanofi-Aventis for the prevention of recurrent heart attacks and strokes, and thrombotic complications following stent placement.

Plavix was introduced to the US market in 1998. DTC advertising for the drug began 3 years later, and exceeded $350 million dollars over the next 4 years.

Law’s group queried pharmacy data from 27 Medicaid programs from 1999 through 2005 to analyze changes in Plavix prescription volume, the cost per unit dispensed, and total pharmacy expenditures before and after DTC advertising was introduced.

The scientists detected no change in the preexisting trend in the number of Plavix prescriptions written after DTC advertising was introduced.

They did, however, detect a sudden, sustained increase in cost per unit of the drug, of $0.40 per unit dispensed which coincided with the introduction of DTC advertising.

This resulted in an incremental cost of $40.58 per 1000 Medicaid enrollees per quarter, or an additional $207 million in total pharmacy expenditures.

“The key issue is whether advertising to consumers, which has risen 330% in the last 10 years in the US, contributes to the significant cost increases in publicly funded health insurance programs such as Medicaid,” Stephen Soumerai told BurrillReport.

Inappropriate use of antibiotics and consequent antibiotic-resistant infections waste $20 billion per year, according to a study published in Clinical Infectious Diseases.

To reach this conclusion, Rebecca Roberts and colleagues at Cook County (Stroger) Hospital quantified antibiotic resistant infections (ARIs), total costs, length of stay, length of ICU stay, surgeries and mortality rates for 1,391 high-risk adult patients that were hospitalized in the year 2000. 

The scientists found that 188 (13.5%) patients developed an ARI. The medical costs attributable to ARIs ranged from $18,588 to $29,069 per patient. In these patients, length of stay was 6.4–12.7 days longer than in those who did not develop ARIs. Excess mortality in the ARI group was 6.5%.

Common ARIs include methicillin-resistant Staphylococcus aureus (MRSA), vancomycin-resistant enterococci (VRE), as well as many other bacteria that are becoming resistant to common antibiotics.

“Significant health and economic benefits could be realized through effective interventions to reduce antimicrobial-resistant and healthcare-associated infections,” said Roberts in a press release.

Stuart Levy, a senior author on the paper added that his study “demonstrates the enormous cost savings that could be realized for both the health care system and to individuals and their families…these costs will continue to increase if we don’t practice a more prudent usage of antibiotics.”

Levy added that more studies are needed to determine how much could be saved at a national level if we took steps to slow the rise of resistant infections, especially those acquired in hospital settings.

Preventive services for patients with Type II diabetes do reduce future health-care costs, but even in the long term, the initial expenses are not completely recovered according to a study published in Health Affairs earlier this month. 

To reach these conclusions, Michael O’Grady and colleagues compiled data from several clinical trials that used an aggressive but doable program to manage all phases of the disease.

They found that federally-insured patients enrolled in such a program would cost over $1,000 per person per year, and that even after 25 years, only ¾ of those costs would be returned via reduced spending on dialysis, amputations and coronary heart disease.

The only group in whom preventive services actually reduced long-term costs were those in their mid-20s at study onset.

“There’s no free lunch here,” concluded O’Grady in an interview with the Washington Post.

President Obama, House Speaker Nancy Pelosi and others claim that health reform will save money, in part by preventing the costs of future diseases by increasing access to preventive services.

Pelosi and Senator Tom Harkin frequently criticize the Congressional Budget Office for adopting a long-enough time horizon in estimating the cost impact of such programs.

The new study supports their position. Most savings accrued well after the 10-year horizon typically used by CBO. The study authors propose a 25-year time horizon for calculating the impact of such programs.

CBO Director Douglas Elmendorf seemed open to the suggestion, indicating the study was “exactly the sort of research that we use in building our cost estimates. We will consider these findings in future estimates we do in this area.”

Earlier this month, the CBO concluded that the costs of widespread cancer screening and cholesterol management programs were going to far outweigh any savings, even in the long term.

Back in August, 2005, physicians at Urological Associates ordered 9 CT scans for patients covered by the local BCBS carrier. They ordered 8 in September. That rate was lower than most physicians in the community.

But in October, the Iowa-based group ordered 35 scans and then 41 and 55 in the ensuing 2 months. That was about 3 times higher than local norms.

The sudden jump began when the practice purchased its own CT scanner, according to the Washington Post, and the tale repeats itself all over the US. 

The bump in imaging does not translate to improved health outcomes, as numerous studies have shown.

And the excessive radiation from the scans may cause up to 1% of all cancers in the US.

The self-referral problem was thought to be solved in 1992 with passage of the Stark Law, but a loophole allowed physicians to keep up the practice, so long as the devices were housed under the same roof as their practice.

The exception was intended to permit physicians to use the machines for expedited diagnoses of fractures, pneumonia and the like, but soon after Stark passed, CT and MRI scanners shrank magically in size.

“Physicians who purchase machines for their offices have a financial incentive to refer patients for additional services,” MedPAC stated in a recent report. “Physician ownership could influence the judgment of some physicians, particularly when there is not strong evidence to guide their decisions.”

Meanwhile the Web site of GE Healthcare posts testimonials from physicians about the nifty return on the imaging devices. “We’re already beating our pro forma in terms of the return on investment,” says one West Virginia physician.

Congress, by the way, is considering a proposal to prohibit the practice.

Seems like just about the only thing folks inside the Beltway can agree on these days is that the US government ought to invest in disease prevention. It’s cheaper to keep people healthy than to treat them after they become sick, right?

Well, maybe.

The Wall Street Journal is reporting that some government-led prevention efforts have worked, while others have been costly failures.

The WSJ cites a study on the matter appearing in last year’s NEJM for example, which reviewed 279 prevention-oriented government initiatives and found a mixed bag.

The NEJM authors cite a program to increase colonoscopy rates in men in their early 60s as one that saved lives and money, but pan another that screened people for diabetes in addition to high blood pressure. That one wound up costing $590,000 for every healthy year of life added.

Meanwhile according to the WSJ, Medicare has conducted 7 pilots of disease management programs in the last decade, and not one of them showed cost savings or improvements in health status.

The largest such study was the Medicare Health Support program, which began in 2005 and covered 200,000 patients. In that study, participants with diabetes and CHF were assigned to companies that were supposed to help them improve their health while reducing medical costs.

Nurses from these companies contacted patients relentlessly to assure treatment plans were implemented. They shipped educational materials and shepherded patients to health promotion classes.

The initiative had no impact on hospitalization rates, readmission rates, ER visits or mortality, nor did it cut Medicare payments by an amount equal to the costs of the services themselves, which amounted to between $67-118 per month.

Disease management programs like these are “not going to cut costs,” Louise Russell, a professor at Rutgers University told the Wall Street Journal. “We already do a lot more prevention than other countries (and)…we are not healthier.”

An editorial in the Journal of the National Cancer Institute has questioned the routine use of expensive cancer drugs that prolong lives by just weeks or months.

NCI oncologist Tito Fojo and NIH ethicist Christine Grady called-out Erbitux as a particularly egregious example. An 18-week regimen of Bristol-Meyers Squibb’s cancer-fighter costs $80,000 and prolongs life by 1.2 months on average, they say.

“Many Americans would not regard a 1.2-month survival advantage as ‘significant’ progress,” the authors stated. “Would an individual patient disagree? The death of a mother of four at age 37 years would be no less painful were it to occur at age 37 years and 1 month, nor would the passing of a 67-year-old be any less difficult for the spouse were it to have occurred one month later.”

Complicating the debate is the fact that the drugs do work miracles in some patients, and it’s impossible to predict who will be so lucky.

“A drug like Erbitux is not very impressive when you look at the statistics, but for some it’s just remarkable,” Marti Nelson Cancer Foundation chief Robert Erwin told the Wall Street Journal. “How much does it cost for a person to have the opportunity to benefit?”

For their part, drug makers said the NCI article did not capture true costs of the cancer-fighters.  BMS spokesperson Brian Henry said the actual costs paid by patients for Erbitux is much less than $80,000.

“We can’t add on Mercedes-like drugs one after another and have every single patient cost the system phenomenal amounts of money,” said Eric Winer, chief scientific adviser to Susan G. Komen for the Cure, a breast-cancer advocacy group.

“But we have to be careful not to slow down the process of drug development. Ultimately, medical therapy will make a huge difference in people’s lives.”

Physicians have lamented for decades the absence of a reliable screening test for lung cancer, and they’re going to have to hum that tune awhile longer since the latest study of chest CT confirms previous findings: the test has an unacceptably high false positive rate.

The disappointing findings were reported by the NIH’s Jennifer Croswell at the recently completed meeting of the American Society of Clinical Oncology.

“False-positive results may create increased psychological stress in patients and an increased burden on the healthcare system,” Croswell told MedPageToday.

In Croswell’s blandly named Lung Screening Study, 1,610 participants received a baseline CT and 1,580 got a chest X-ray. Both groups received a repeat imaging study a year hence and were followed for another year.

The scientists defined a positive test as one revealing a noncalcified nodule at least four millimeters in diameter, or any other finding that was suspicious for cancer.

They defined false positives as positive screens that prompted a negative work-up or that resulted in no cancer diagnosis 12 months later.

The false positive rate for participants receiving CT scans was 21% after the first image and 33% after the second.  It was 9% and 15% for those receiving chest x-rays.

In the CT group, false positives tests prompted invasive diagnostic procedures and major surgeries in 6.6% and 1.6% of the participants, respectively. Those numbers were 4.2% and 1.9% for false positives resulting from a chest X-ray.

According to Peter Bach of the Memorial Sloan-Kettering Cancer Center in New York, “nothing really changes here,” as a result of the new study. “There is no organization in the world that recommends screening for lung cancer with CT,” or any other technique, Bach told MedPageToday.

Since forever, the Big O has argued that comprehensive health reform was a prerequisite to revivifying the nation’s flagging economy.

Last week, his argument got support from a report by the Council of Economic Advisors, which claimed that cutting annual growth in health-care spending from 6% to 4.5% could create 500,000 jobs per year and increase annual family income by $2,600 over the next decade.

Alas, the report lacked details regarding how such goals would be met, and failed to mention the extra dollar or two in government spending that would be needed to jump-start the process.

The report also acknowledged that the 25% reduction in the rate of growth in spending was “near the upper bound of what is feasible.”

Republicans and independent analysts were deeply critical of the report, decrying in particular the assumption that a broad expansion of health insurance could translate into long-term savings for the government and the economy as a whole.

“This report is nothing more than smoke and mirrors,” seethed House Minority Leader John Boehner to the Washington Post. “The administration hasn’t offered a credible plan to (cut costs) without raising taxes or rationing care.”

Nevertheless, the Unflappable One pushed onward, releasing the contents of a letter from a consortium of industry stakeholders that promised to help save money over the next decade. 

In it, American Hospital Association pledged to fight nosocomial infections and readmissions. The AMA said it would coax physicians to follow evidence-based guidelines for back pain, heart disease and prenatal care. Big Pharma said that starting drugs earlier in the course of certain illnesses could reduce the need for more costly interventions later on.

One can only wonder why these obviously good ideas weren’t implemented long ago.

In 2006, Massachusetts enacted a law requiring that all residents obtain health insurance.

Ever since, developments there have been watched closely since what happens in the state might play out nationally should the Great American Health Care Do-Over include an individual mandate.

Unfortunately, the Bay State’s program has been plagued by unsustainable cost escalations since Day 1, and the situation has been exacerbated recently by recession-related budget shortfalls and rising unemployment.

It was a matter of time before cuts had to be made, and that happened yesterday when state policymakers announced they’re cutting $115 million, or 12% from the budget of Commonwealth Care, a centerpiece of the state’s initiative which subsidizes premiums for poor residents.

The cuts amount to a forced slowdown in Commonwealth Care enrollment. According to the Boston Globe, about 18,000 residents who qualify for subsidies but who have not designated a health plan will no longer be automatically enrolled in program.

Tentative cuts in dental coverage for 92,000 Commonwealth Care enrollees and health insurance for 28,000 legal immigrants have also been proposed, although these proposals  must be approved by governor Deval Patrick.

He has until Monday to decide.

Commonwealth Care currently has 177,000 members. It’s projected to have 212,000 by year end, 2010.

“No decision has been made’’ on the immigrant coverage issue, Leslie Kirwan, Patrick’s secretary of administration and finance told the Globe. “It’s certainly going to be at the top of the list’’ of items Patrick might restore to the budget, she added.

Leaders of Health Care for All, a Bay State consumer group, said the proposal would be tough on non-English-speaking residents who find it hard to navigate the complex enrollment process for Commonwealth Care.

“My concern is people will not get the care they need,’’ lamented the group’s representative, Lindsey Tucker to the Globe.

Everyone knew the US’ Rube Goldberg healthcare system was plagued by high costs for billing- and insurance- related activities, but few would have believed it was this bad.

A recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.

That’s not including the astonishing $34,052 per year per FTE physician to account for the physician’s own time spent on billing and insurance.

Summing the 2 brings the annual spend on these activities to $85,273 per FTE physician, or 10% of the total operating revenue for an average practice.

Approximately 0.67 FTE non-clinical personnel per FTE physician is allocated to billing and insurance, according to the study.

To reach their conclusions, Julie Sakowski and colleagues at the Sutter Health Institute interviewed business office personnel, observed office work flows, conducted budget and expense reviews and implemented a survey to assess clinician time spent on billing and insurance.

The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation.

In a separate study just released by the Medical Group Management Association, investigators found that physicians spend about 43 minutes per workday interacting with insurance plans.

MGMA estimated that system-wide, overall staff time spent on insurance matters alone equaled $21-$31 billion per year, or $68,000 per physician per year, a number that can be reconciled with results from the above-mentioned Commonwealth Fund study.

“Minimizing billing and insurance-related activities is not the only goal of (health system) reform, (but) standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” Sakowski told HealthCareITnews.

Massachusetts’ universal health care plan has increased the number of insured Bay State residents and caused the states’ already highest-in-the-nation health care costs to balloon 42% in just 3 years.

Now it’s time to pay the piper, and the Bay State’s Special Commission on the Health Care Payment System believes the way to do that is to implement a capitation model similar to the one that was ridiculed, then buried 15 years ago.

In proposing a system that establishes prospectively a single, comprehensive payment that covers all care for an entire year, Commissioners hope to discourage providers from offering unneeded tests and treatments, and encourage provider network development.

The networks would, they hope, more effectively manage care across the continuum of care and reduce errors in information handoffs.

The old fee-for-service system “has all the wrong incentives,” Dolores Mitchell, a Commission member told the Boston Globe. “People know the system has been dysfunctional for years.”

The Commission must still decide how quickly to implement the new payment mechanism, which necessitates a massive reorganization on the provider side, and how to split fees among PCPs, specialists and hospitals. That’s the La Brea of tar pits.

Capitation was popular during the heyday of managed care in the 1980s and early 1990s.

It caused many small practices to lose millions on very sick patients, and raised concern that physicians were denying patients necessary care in order to stay within budget.

Commissioners believe the state can overcome the former problem by setting aside a separate pool of funds for the very sick, or by insuring providers against large losses.

The denial of service issue, they hope, could be handled through close monitoring of the quality of care.

That didn’t take long.

Just 3 days after the Big O appeared to make serious hay out of last Monday’s announcement that key health care stakeholders were steppin’ up to save 2 trillion or so in future health care costs, reps from providers and insurers threw a bushel of thumb tacks on the road.

The Coronated One had hailed their cost-cutting promise as historic.

“These groups are voluntarily coming together to make an unprecedented commitment,” Obama told the New York Times. “Over the next 10 years, they are pledging to cut the rate of growth of national health care spending by 1.5% each year, an amount that’s equal to over $2 trillion.”

Not so, say the reps, who clearly caught an earful from their constituencies after the photo op. They claim to have agreed to cool off spending more gradually and never did they sign up for specific year-by-year cuts.

“There’s been a lot of misunderstanding that has caused a lot of consternation among our members,” Richard Umbdenstock told the Times. And the president of the American Hospital Association added that he’s “spent the better part of three days trying to deal with it.”

To make matters worse, Nancy-Ann DeParle, the director of the White House Office of Health Reform, then pulled a John Kerry by saying “the president misspoke,” and then saying “I don’t think the president misspoke. His remarks correctly and accurately described the industry’s commitment.”

Karen Ignagni, president of America’s Health Insurance Plans remembers reaching consensus around the concept that savings would “ramp up” more gradually than what Obama had said.

And for his part, David Nexon, an EVP of the Advanced Medical Technology Association recalled that “there was no specific understanding” of the pace with which savings would be achieved.

Everyone agrees that controlling health care cost escalation is vital to cutting our budget deficit.

The problem is that no one agrees how to do it, and yesterday’s kumbayah press release by key stakeholders certainly hasn’t addressed the issue substantively.

The Big O has already ticked-off Big Insurance by cutting payments to Medicare Advantage plans, and the $1.1 billion he tucked into his Economic Hail Mary for comparative effectiveness research has garnered similarly negative reviews from Big Pharma and the Device Makers.

Obama believes cost-effectiveness research can help physicians reduce wasteful or ineffective treatments, especially if they are reminded about the findings at time they write orders.

This could be done by incorporating reminder systems into those newfangled EMRs he’s incentivizing physicians to adopt.

The Hail Mary allocated $400 million to the National Institutes of Health, $300 million to the Agency for Healthcare Research and Quality, and another $400 million to Health and Human Services.

This amounts to a budget increase, not a policy shift for AHRQ. For example, its 2007 guide to pain medication for osteoarthritis explained how a 30-day supply of Lodine cost $170 whereas the same course of treatment with aspirin cost $10.

And CMS has long-since established the precedent of using AHRQ-sponsored research in reaching coverage decisions for Medicare and Medicaid.

Still, the decision raised red flags for Big Pharma, whose trade group was one of the signees in yesterday’s kumbaya press release, and the device makers as well.

Teresa Lee, a VP at the Advanced Medical Technology Association, warned the Wall Street Journal for example that using “this research to deny access to appropriate treatments for patients with (specific) medical histories and needs should not be the objective.”

And on the Hill, Republican Senator Jon Kyl just missed passing legislation that would have prevented CMS from relying on comparative effectiveness research to deny coverage.

Charles Grassley and Russ Feingold, 2 key actors in health reform legislation, voted for that one.

A coalition of health industry stakeholders, including some that scuttled Hillary Care in 1993, have offered to help save $2 trillion from projected increases in health spending over the next decade, according to White House officials.

The group includes the American Medical Association, the American Hospital Association, the Pharmaceutical Research and Manufacturers of America, America’s Health Insurance Plans, and the Service Employees International Union.

“We are developing consensus proposals to reduce the rate of increase in future health and insurance costs through changes made in all sectors of the system,” the stakeholders wrote in a letter to the Big O that was obtained by the Washington Post.

“We are committed to taking action in private-public partnership to create a more stable and sustainable health care system.”

The groups want to meet with Obama before offering specifics.

Obama administration officials praised the offer as one that should enhance momentum for health care reform. Their goal is to have a bill passed by the end of this summer.

“As restructuring takes hold and the population’s health improves over the coming decade, we will do our part to achieve your administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate,” the groups wrote.

Projections are that after just 5 years, the proposal would save a family of four $2,500 per year in health-care costs. Within a decade, the savings would “virtually eliminate” the nation’s budget deficit.

Of course this is all happy talk until the groups specify how they will achieve their cost reduction targets and how the required behavior will be monitored and enforced.

That is not going to be a walk in the park.

Still, it’s a good day for the health reform movement. Poll after poll after all has shown that while Americans care deeply about the number of uninsured citizens, their top complaint by far is the rising cost of care.