Cost escalation

IPAB: Fix It, Don’t Repeal It

August 8th, 2011 | 1 Comment | Source: Commentary

In recent weeks, several Democrats and some health reform advocates including the AMA have joined Republicans in calling for a repeal of provisions in the new health law that create the Independent Payment Advisory Board (IPAB). For these people, IPAB represents the worst aspects of the new law–an unelected, centralized planning authority empowered by government to make decisions about the peoples’ health care. Arbitrary cuts to providers, short-sighted decisions that stifle innovation and rationing of care are sure to follow, they claim.

While it’s true that the rules governing IPAB are flawed and should be fixed, eliminating IPAB altogether would be a mistake.

Created by the Affordable Care Act, IPAB is a fundamental part of the law’s plan to control health care cost escalations. The law contemplates that each of the Board’s 15 members would be appointed to a 6-year term by the president. Members are to include providers, health policy and public health experts, and consumer representatives. Each would have to be confirmed by Congress, much like Supreme Court justices. And unlike a frightening, wizard-like bureaucrat operating behind a curtain-as critics would have you believe-the IPAB chairperson would be required to appear before any committee of Congress that desires a hearing, just as the President’s cabinet members are required to do.

IPAB’s mandate would be to recommend ways to prevent excessive escalations in Medicare expenditures. Specifically, whenever these costs grow faster than targets established by the Affordable Care Act, IPAB would propose ways to reduce Medicare spending by up to 1.5%. When that happens, Congress can either approve those recommendations, develop alternatives with the same impact, or simply allow Medicare costs to accelerate. In the last instance, a 60% majority of the Senate would be required to overrule the IPAB recommendation.

Some sort of cost-governing approach is mandatory, because we want to offer comprehensive coverage to Medicare beneficiaries within some reasonable cost structure, and because Congress has shown no inclination to do so, for example by enacting quality- and efficiency-based payment models. As Jonathan Cohn points out, Congress is unlikely to do this going forward, because its members are heavily influenced by lobbyists whose job it is to maintain the lucrative status quo. IPAB members, shielded as they would be from such influences but still wholly accountable to Congress, may well succeed where lawmakers have not. (more…)


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Screening and Prevention: Separating the Wheat from the Chaff

July 6th, 2011 | No Comments | Source: Commentary

In the last month, the Obama administration announced programs to reduce racial disparities and increase prevention in health care. Neither program was funded with actual money, so they are about political showmanship as much as any real desire to tackle the worthy causes. After all, who would oppose such programs? I half-expect the administration to follow-up these announcements with one focusing on moms and apple pie.

But have a closer look at what Iowa Democrat Tom Harkin said at the press conference introducing the latter initiative. “For every dollar we invest in prevention, we save $6. We need to provide an approach that makes it easier to be healthy and harder to be unhealthy.”

I haven’t found the report on which Harkin bases his assertion about the returns on health prevention efforts, but my sense is its more complicated than Harkin would have us believe. Some screening and prevention programs are not effective at all. Others are effective, but prohibitively expensive. Any national program to improve prevention needs to evaluate each potential component to assure it reflects Harkin’s focus on cost-effectiveness.

Many recently proposed screening programs do not meet this criterion, in fact. Let’s take a look at a few of them.

Screening for Prostate Cancer
Two months ago, scientists reported the results of a 20-year follow-up study of 1,500 Swedish men between the ages of 50-69. The study found that routine screening for prostate cancer did more harm than good. The screening program (which included digital rectal exams and prostate-specific antigen tests) enabled physicians to detect and treat nearly a third more cancers, but there were problems with overtreatment and treatment related side-effects. More importantly, prostate cancer death rates were the same in the screening group as they were in the control group. (more…)


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Medicaid to Fund ‘Stay-Healthy’ Incentive Programs

April 7th, 2011 | 1 Comment | Source: CMS, Medical News Today

In recent years, scientists have shown that financial incentives can drive short-term behavioral changes that are associated with improved health; things like losing weight and quitting cigarettes, for example. The rewards in these studies include direct cash incentives, gift cards and so on.

Recently, the Centers for Medicare and Medicaid Services announced plans to leverage this strategy with a $100 million initiative that permits states to offer incentives to Medicaid enrollees for adopting healthy behaviors.

Called a “demonstration program,” the CMS initiative is designed to figure out which strategies produce long-term behavioral changes. It should also help CMS determine the extent to which special populations (like adults with disabilities or children with special needs) can participate in the program, the level of satisfaction with the program, and the administrative costs incurred by State agencies that administer the program.

The program is funded by the new health care law (known as the Affordable Care Act). It invites each state to submit one proposal . Grant Applications are due to CMS by May 2, 2011. There are no state cost-sharing requirements.

According to CMS, the proposals must be “comprehensive, evidence-based, widely available, and easily accessible.” When states prepare their proposals, CMS recommends that they rely on evidence-based research which can be found in documents like the Guide to Community Preventive Services, the Guide to Clinical Preventive Services, and the National Registry of Evidence-based Programs.

“Keeping people healthy is an important goal of the Affordable Care Act,” HHS Secretary Kathleen Sebelius said in a press release. “One way to reach that goal is to encourage all Americans to make better choices about diet, exercise and smoking to avoid potentially disastrous outcomes down the road like heart disease, cancer or diabetes.” (more…)


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Medicare Committee Supports Provenge Coverage

December 15th, 2010 | No Comments | Source: LA Times, Medscape

Last month, a Medicare advisory committee provided metza metz support for sipuleucel-T, Dendreon’s prostate cancer vaccine that is  better known as Provenge. The lukewarm recommendation by the Medicare Evidence Development & Coverage Advisory Committee means that that Medicare will probably end-up paying for the treatment, but only for FDA-approved uses.

Provenge is the first cancer-fighting vaccine to be approved by the FDA. The regulatory agency green-lighted the vaccine after a key Phase III trial showed the jab increased life-expectancy in patients with asymptomatic or minimally symptomatic, metastatic, castrate-resistant prostate cancer by a median of 4.1 months and increased 3-year survival by 38%.

Those improvements come at the exceptionally steep price of $93,000 per course of therapy. By law, Medicare cannot factor-in treatment costs when deciding whether to cover a particular treatment.

The final ruling by Medicare won’t be made until next spring. It will be crucial for Dendreon, since prostate cancer strikes elderly men almost exclusively, and many of them use Medicare to insure themselves against catastrophic illness.

The committee’s decision comes at a time when governments around the world are struggling to control spiraling health costs.

In reaching its decision, the committee voted on 5 separate issues concerning the vaccine. On a 5-point scale (with 5 being high), the committee came out with an overall score of 3.6 when asked to rate their confidence in the evidence showing the vaccine improved survival.

Most casual readers would view this as lukewarm support, but Daniel Petrylak, a Provenge investigator and the co-director of the Prostate Cancer Program at Columbia concluded otherwise. “It’s clear that they believe from their voting that there is a survival benefit,” Petrylak told MedScape.

The committee was unequivocallly against the idea that Provenge should be used for non-FDA-approved (that is, off-label) indications. The committee’s average vote regarding the use of Provenge in 3 such categories ranged between 1.1 and 1.4. One of these groups was patients in whom the disease had not metastasized. That’ll cap things, at least a little.



Needless Screening Tests for Cancer Patients

November 19th, 2010 | No Comments | Source: JAMA, MedPageToday

The US health care system is generally recognized to be obscenely wasteful and to deliver poor value for the money. But even the most jaded observers are likely to be shocked by the results of a new study which shows that many patients with advanced or metastatic cancer and a correspondingly short life expectancy undergo routine screening tests like cholesterol checks, Pap smears, mammograms and PSA tests.

For example, 14% of male Medicare beneficiaries with advanced pancreatic cancer underwent PSA testing. Similarly, 18% of women with this condition had at least one mammogram and 5.4% had a Pap smear. Nearly 20% of these patients had a cholesterol test.

The appalling findings come from a study by Camelia Sima and colleagues at the Memorial Sloan-Kettering Cancer Center. These scientists looked at Medicare billing data from 88,000 beneficiaries that had been diagnosed with advanced cancer between 1998 and 2005.

The scientists compared utilization rates for screening tests in this group with a control group of Medicare enrollees that did not have cancer, but were matched by gender, age, race and area of residence.

The first group included patients with stage IIIb to IV lung cancer, advanced stage pancreatic cancer and stage IV breast,colorectal, and gastroesophageal cancer. The vast majority of these patients have a life expectancy of less than 2 years.

Screening rates for the cancer patients were about half that of their matched controls. There were no differences in screening rates for patients with each kind of cancer. Married and more affluent cancer patients tended to get more screening tests than their counterparts.

“In an ideal healthcare system, healthcare practitioners would discontinue cancer screening for patients whose prognosis is too limited for the benefits of early detection to be realized,” Sima’s team wrote. “Each medical specialty needs to engage in thoughtful self-scrutiny to identify episodes of unnecessary care,” they added.

The write-up appears in JAMA.



Screening CT Scans Reduce Lung Cancer Mortality. A Little. Now What?

November 8th, 2010 | 2 Comments | Source: Commentary

According to the results of a large study, chest CT scans performed annually as a lung cancer screening test can reduce the risk of lung cancer death by 20% in current and former heavy smokers.

To reach these conclusions, federally funded scientists performed a multi-center trial in which they enrolled 53,000 people between the ages 55 and 74 that had at least a 30 pack-year history of smoking. Participants were randomized to receive either a chest x-ray or a CT scan at trial entry and then again one year, and 2 years thereafter. Ex-smokers that had quit within the last 15 years were enrolled as well.

The enrollees were followed for up to 5 years. There were 354 lung cancer deaths in the group that was randomized to receive CT scans, and 442 deaths in those receiving chest x-rays. The difference was large enough to prompt the study’s overseers to halt the study before its planned completion date, and to publicize the findings even before the write-up appeared in a peer reviewed journal.

Lung cancer kills nearly 160,000 people per year in the US. That’s more than the combined annual deaths from breast, colorectal, prostate and pancreatic cancers combined. 

Previous studies had ruled-out chest x-rays as useful screening tests for the scourge, because they caught the disease too late. Not surprisingly therefore, many scientists hailed the news as a major advance in lung cancer screening.

“This is the first time that we have seen clear evidence of a significant reduction in lung cancer mortality with a screening test in a randomized controlled trial,” the National Cancer Institute’s Christine Berg told the New York Times.

Statements like this seem premature to me. Chest CT scans cost between $300-1,000 per test. There are nearly 90 million Americans who smoke or used to smoke. A widespread screening program using this technology would cost tens of billions of dollars per year in direct costs alone.

That’s not counting the indirect costs. In the present study, fully 25% of the subjects who were randomized to receive a CT scan were found to have a false positive result (an abnormality that turned out not to be cancer). Many of these false positive results undoubtedly triggered additional scans, lung biopsies and even thoracic surgery which drive up the overall costs of the screening program many times over.

It’s not clear that our overburdened health system can accomodate the cost escalations implied by a widespread CT scan-based screening program for lung cancer.

Beyond this, CT scans, even the newer “Spiral” scans, are associated with modest levels of radiation exposure in their own right. The cumulative effects of this can actually cause cancer.

And that 20% mortality reduction? That statistic can, in itself, be deceiving. According to Jaan Sidorov’s calculations over at Disease Management Care Blog, the absolute cancer death percentages in last Friday’s study were 1.3% for subjects receiving the CT scan and 1.7% in those receiving chest x-rays. The absolute difference in death rates was therefore about 4 in a thousand. More than 98% of both groups didn’t die of lung cancer during the study period, and the direct cost per life saved was $180,000. That’s an awful lot of CT scans, and an awful lot of money to achieve that reduction in absolute risk. (more…)


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The Astronomical Cost of Alzheimer’s Disease

July 2nd, 2010 | No Comments | Source: Alzheimer's Association

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.

Where'dIputmyglassesThe 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.”



Heralded Heart Drug not as good as Generics

April 30th, 2010 | No Comments | Source: JACC, LA Times

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.

Heart BreakAs 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.


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DTC Advertising and Drug Costs

December 24th, 2009 | No Comments | Source: Archives Int. Medicine, BurrillReport

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.

mediasensationThe 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.

gettingbettereverydayThe 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.


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Antibiotic Misuse Costs $20b Per Year

November 24th, 2009 | No Comments | Source: Clinical Infectious Diseases

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

throwthisawayTo 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.


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