Category: Health Costs

Magical Thinking and Aduhelm

Check this out. What you will see, unless I am missing something, is a statement of the obvious. To me not surprising is the fact that Biogen reported Aduhelm sales of a mere $300,000 for 3rd quarter 2021. Somewhat more surprising was that this was up against analysts’ consensus of $14 Million.

Yup, sometimes things turn out just like you think they will. On launch, this drug was panned for being FDA approved despite lack of clearing what were deemed to be appropriate clinical trial efficacy hurdles. Its $56,000 annual price tag per patient doesn’t help sales, nor does the collective impact that this price would have on the Medicare budget if the product’s coverage is approved.

Bottom Line. Despite all of the above, predictions are still being heard that in 2022, the drug will get traction, with a $9 Billion peak sales figure being bandied about. At the same time, talk is also being heard of the possibility of Biogen abandoning the drug. 

The moral of the story? Forecasting based on magical thinking is always a little dicey!

There’s $$$ in Serving the Underserved!!!

Check this out. What you will see is that substantial funding is being captured by Cityblock Health, a company that specializes in providing care for “marginalized patients with complex needs.” Keep reading and you will see an interesting strategy. While many organizations are attempting to “disrupt primary care,” most of them focus on more well-to-do patients. Going where the money is makes sense, but so does Cityblock’s strategy of shooting at the other end of the financial spectrum where there is less competition and plenty of Government funding.

Bottom Line. This is another one for us to keep our eyes on. If Cityblock Health can deliver on its vision to serve 10 million patients by 2030, they will become a major force to be reckoned with in Primary Care. What impact will this have on other models, like Federally Qualified Health Centers and Free and Charitable Clinics, that are currently serving the underserved? And how will we promote to this new practice model?

It may be time to start thinking about the answers to these and other important, related questions!

Why Do “Ancient Drugs” Cost So Much?

Once again, our friend the “Country Doctor” poses an interesting question. Check this out. If the line of reasoning supporting high prices for drugs is the cost of their development, why the heck do drugs that have been around forever cost so much?  Insulin, albuterol inhalers, and epinephrine are offered as examples of such apparent malfeasance. BUT. Scroll down and check the response offered by one reader. Dr. JKH notes that “designer” delivery systems for old drugs are modern inventions that permit new patents and raise prices. Another explanation. The impact of “Big Government” and its policies.

Bottom Line. This is an interesting discussion when you dig into the details. BUT. Most people don’t dig this deeply, and “old drugs at new prices” is bad optics to the general public. AND. Likely no amount of rational argument can make this perceptive go away.

Shopping For Healthcare

Check this out. What you will see is, to me, a very annoying article. It makes a couple of points. First, it demonstrates that in a State like Massachusetts, significant differences can be found in the billing rates for the same medical procedures. Yup! No great surprise there. What is rather surprising are the conclusions reached based on this finding.

More specifically, the author goes on to comment that a patient can pay less for healthcare if she has it delivered in a less expensive geographic area. Yup again!

But here’s the kicker. For a privately insured patient, that journey could very well take the patient to a practitioner who is “out of network,” with the result that the patient will receive NO reimbursement for the medical expenses incurred.  

Bottom Line. This little piece is just one more explication of the fact that “shopping for healthcare” is, for most patients and for most kinds of care, simply not practical. Sure, “medical tourism” is a real phenomenon for patients looking for discounted rates on big ticket/out-of-pocket procedures like face lifts, but if have appendicitis you are not going looking for the best price. You want a good doctor, then and there!  

SO. Over the years I have read hundreds of articles like this on the topic of “shopping for healthcare.”  


Healthcare Waste

Check this out. What you will see is a description of three areas in which hospital innovation has been accelerated by COVID-19. These include “Alignment of Incentives.” With the pandemic putting significant strains on the finances of many hospitals, the movement toward value-based medicine has been significantly accelerated. Concepts like “Command Center Management” have evolved to accelerate decision making and increase efficiency. Whether this will help the hospitals’ bottom lines remains unclear.

“Market Competition” is another area where hospital innovation has been accelerated.  Telehealth, for example, is a capacity that every hospital now must offer. In fact, excellence in telehealth is rapidly moving from being a differentiating factor to becoming “table stakes.”  

“Consumerism” is the final area where Covid-19 has accelerated innovation. Patient demands on healthcare have radically changed with the pandemic. For example, patients are increasingly evaluating institutions based on the accessibility and features of their “digital front door.”  

Bottom Line. The common theme here? Innovations that hospitals were moving toward pre-COVID have been greatly accelerated by the pandemic. Over the course of the rest of 2020, it will be important for us to keep our eyes on what else is going to change in the hospital environment.  

Small Copays, Major Impact!!!

Here is an interesting article with a simple message. Even a “small” copay can have a deleterious effect on patients’ adherence to a medication regimen. The larger the copay, though, the larger and more deleterious the impact. This is certainly true in diabetics’ use of insulin, which has gotten a lot of press lately. Amazingly, it’s also true in oral contraception and oral therapies for cancer!

Perhaps the clearest graphic presentation of this issue can be seen in the comparisons across countries graph shown in this article. The non-compliance rate due to drug cost in the U.S. looms over that in every other country where patients are expected to contribute significantly less of a drug’s cost.

Bottom Line. Study after study that we and others have conducted have demonstrated that there are myriad reasons for nonadherence to drug therapy. Side effects, patients not wanting to be reminded that they are sick, the inconvenience of having to return to the physician to get a prescription renewed, etc. BUT. The practical issue of drug cost remains a significant one in the big picture.  

While this article makes the point that there is a logic to having patients pay some of the cost of drugs so that they don’t seek “unnecessary health care,” the societal expense of the negative health outcomes of cost-related non-adherence also needs to be considered.

How do you strike a balance between these two rationales? Apparently, other countries do a better job of this than we do!!!

Will Anything Stick???

Check this out. What you will see is a report that the Trump Administration is working on a plan that would allow Americans to import drugs legally from Canada. Why? To permit our patients to “get the benefit of the deals” that our pharmaceutical companies have struck with other countries. Wow! Think of everything that would possibly be affected by this move. Do patient safety concerns arise as drug companies are asserting? How do patients get reimbursed for their drug spends? What happens to pharmaceutical companies profits and stock prices?

BUT. How likely is this bill to pass. I am going with “not very.” Several Trump drug price reduction initiatives have tanked recently. Remember my post on the absurdity of requiring drug companies to include drug prices in DTC advertisements? Waste of time. This errant move got trashed in Federal Court.  

The bill that would have cut out drug rebates paid by drug companies to PBM’s? Withdrawn by the White House.  

Bottom Line. And so it goes. Cockeyed notion after cockeyed notion of how to reduce drug costs to Americans biting the dust. Will that happen with this Canadian import notion? Probably!

All causing me to ask again. What kind of drug pricing approach would the American government, and the American people, find reasonable,  while still permitting drug companies to make appropriate risk adjusted profits, and what is thebest way to get there?  

The “pot shot” fixes don’t seem to be working. What will?

When Is Cheaper Not???

Check this out. Yup. EpiPen pricing again. We haven’t talked about this inflammatory issue in quite some time. But here we go again. Strange back story here. The FDA proudly announced that in approving a TEVA generic for EpiPen, it was offering the public a “lower-cost option.” Think about that for a minute. Last I looked, the job of the FDA was to make sure that the drugs that are marketed in the U.S. are “safe and effective.” Silly me. Somehow, I never understood the FDA’s charter included commenting upon the economics of the pharmaceutical industry. The plot thickens, when the list price of the Teva generic turned out to be no cheaper than what was already on the market, the FDA jumped in to note that it has been their experience that it takes three or more generics in the marketplace to significantly lower prices. Other pundits jumped in to note the obvious, i.e., the “list price” is not really what people pay for a drug. Bottom Line. The FDA has declared that it is making an “overarching effort to remove barriers” to drug access by approving generics. As we have previously discussed, having other arms of the Federal Gov’t, state governments and numerous other vectors working on decreasing drug prices would seem to be enough already. Do we really need the FDA to take on this role?   I am going with a “No” on that one! 

Health Insurance Is Not Enough If You Are “Really Sick”

Check this out. What you will see is a NYT story reporting the findings of a survey that investigated the experiences of almost 1,500 people in the U.S. who were “really sick.” In a nutshell, what you will see is that our concerns about finances under such circumstances are far too circumscribed. We usually worry about deductibles, copays, etc., and those can indeed add up quickly for the seriously ill. Add up to the point at which the patient is left to decide whether she should pay the electric bill or buy the pills. BUT. Other financial challenges also bedevil the seriously ill. Like a 20% reduction in pay for up to 6 months, or even the loss of a job. 53% of people in the study found that their work had been interrupted as a result of their illnesses, and “health insurance” doesn’t cover that. Bottom Line. The spookiest part about all of this is that patients have no idea what to expect in terms of uncovered medical costs, lost income, etc. With such expenses often coming later in life, financial recovery is often impossible.  I have no profound thoughts about how to fix all of this. But I will ask you to think about the impact that all of this has on our customers, physicians and patients alike. If we are going to lay claim to being “customer centric,” we need to understand such things. “Back stories” are often very important. 

Americans “Skipping” Healthcare Because of High Costs

A simple message today. Check out this Forbes article. What you will see is a survey demonstrating that 40% of the respondents to a national survey indicated that they had skipped a visit to the doctor when they were sick or injured in the last 12 months. And about a third were unable to fill a prescription because of cost concerns. But what does this tell us? Prices are too high? Insurance coverage is inadequate? We have the wrong healthcare system entirely? Something else? Bottom Line. As usual, several different messages with several different action points, can be takeaways from these “top line” survey findings.  Numbers are great. Proper interpretation is even greater!