Showing posts with label cost. Show all posts
Showing posts with label cost. Show all posts

High Cost California Hospitals Have Lower Mortality



Today’s Managing Health Care Costs Indicator is 1831


There is so much to blog about.  Since my last post, a federal judge found the entire Affordable Care Act unconstitutional because of the individual mandate, and the federal government announced $4 billion in fraud recoveries in the last year.   Medicaid cuts in many states continue to pose a threat to meaningful coverage for the poor.   But more on those important issues over the coming days.

A brief post tonight. 

Today’s Annals of Internal Medicine  assigns California hospitals to quintiles based on Medicare cost of care (using Dartmouth Atlas methodology) , and then correlates  these costs with mortality for six conditions: heart attack, congestive heart failure, stroke, gastrointestinal bleeding, hip fracture and pneumonia. 

The results?  The most expensive hospitals had lower mortality rates – even though other researchers have found no correlation between hospital spending and various process measures that are proxies for quality, such as appropriate antibiotic therapy or discharge on appropriate cardiac medications. 

The researchers calculated that in California there would have been 1831 more deaths if patients were moved from the highest cost to the lowest cost hospitals.

The health policy implications of this are ambiguous, at best.  This research suggests that simple tiering based on quality process measures might encourage patients to get care at hospitals with higher mortality – a scary thought indeed.  On the other hand, this is an observational study  - it doesn’t prove that spending more is the reason for lower mortality.  The researchers did not calculate the cost per life saved – but provided enough information to do so.  My quick excel spreadsheet is here.   It appears to me that the cost to move all patients from the lowest to the highest cost quintile would over the four year period would be $3.8 billion, or $2.1 million per life saved (not per QALY).

These are difficult social choices with real tradeoffs; there are no simple answers.

Pharmaceutical Detailing

The Wall Street Journal just published an overview of pharmaceutical company detailing - or provision of samples to physician offices. The report the WSJ reviewed is required by the new health care reform bill.

The main participants:
Pfizer: 101 million prescriptions worth $2.7 billion
Merck: 39 million prescriptions worth $356 million
Wyeth 52 million prescriptions worth $64 million
(Wyeth was acquired by Pfizer)
Abbot: 16 million prescriptions worth $32 million

Of note, different companies accounted differently for prescription value (retail vs. acquisition cost) or prescription unit (per pill or per package).

What do the drug companies get for their samples?

They offer samples for high margin medicines.  In most cases, physicians could prescribe lower cost (and therefore higher value) alternatives.   Once a patient starts on the high-cost brand name, it's unlikely he or she will switch to a generic.

The two brand name drugs are mentioned in the WSJ article as samples that are often provided by Pfizer and Lilly cost around $5 per day.  Generic medications cost as little as 50 cents per day (Source: Drugstore.com.)  There is no evidence of increased efficacy of the (expensive) brand name medications.

Many physician offices have eliminated pharmaceutical detailing altogether.   Those offices prescribe more generics, and leave their patients with lower overall drug bills.  This disclosure, along with disclosure of pharmaceutical and medical device company payments to physicians for consulting and other services, can help drive public policy and ultimately decrease medical trend. 

The Cost of Doing Nothing


(Click on image to enlarge graph)

Reed Abelson has an excellent essay in today’s New York Times –making the case that the alternative to health care reform is NOT what we’ve got right now, since what we have right now is getting too ruinously expensive with each passing month.  Abelson reproduces a Commonwealth Fund chart (above) showing estimates of how much less of our GDP we would have been spending on health care if only we had succeeded at reforming health care in the Clinton, Carter, or Nixon administrations.

This is the right way to frame the health care reform debate to break the “Nash Equilibrium” that leads to gridlock.  Obama has tried to do this too, pointing out that if we wanted an health care systemn where every 10 years the costs doubled and 15% of our population was uninsured and much more felt at risk, we should oppose health care reform.  This framing hasn’t stuck, though, and the public (at least in most polling) doesn’t have the sense of urgency that many health care economists and public policy wonks see.

The Washington Post notes that interest groups are gearing up for the fight on health care reform – and pretty much everyone besides for the AARP is hiring lobbyists, shooting commercials, and protecting their turf.   This suggests that stakeholders deeply believe health care reform can be defeated –so they’re not likely to be willing to accept substantial changes (yet).

 Michael Kinsley notes that both sides of the health care reform debate are missing an important point (also in today's TImes)

Neither side has really grappled with the cost issue. When Aunt Minnie back in the district has a hip replacement (her second) and gets a bill for $90,000, the challenge is not to find someone other than Aunt Minnie to pay. The challenge is to deliver hip replacements for less than $90,000, or tell Aunt Minnie she can’t have one. 

We really need to transform the delivery system – changes in health plan benefits, health plan administration, and payment methodologies alone will not get us to the health care system our patients deserve.

Prostate Cancer Screening: Rough Estimate of the Cost

Two studies in last week’s  New England Journal Of Medicine showed disappointing results from prostate cancer screening. This is a reminder that investments in preventive care are not always a good idea.  The United States study, completed in 10 centers, included 77,000 patients and showed a nonsignificant increase in death rates among those patients who were randomly assigned to screening.  The European study, an amalgam of seven different studies which had different designs, included 182,000 patients, and did show a decrease in death from prostate cancer of 7 per 10,000. However, 49 men were treated for prostate cancer for each life saved – leading to an enormous amount of incontinence and impotence. 

 

I’ll turn 50 next year – and it’s not looking like I’ll be getting my first PSA test!

 

The morbidity from all prostate cancer treatment is considerable – whether prostate removal (radical prostatectomy) or radiation (either external beam or implantation of radiation ‘seeds’).  There is has been little written about the cost of the increased cancer diagnosis from  prostate cancer screening – so I figured I would provide some “back of the envelope” guesstimates of the cost of our prostate cancer screening.

 

Population:  18.7 million  ages 50-59 (United States)


Increased Cancer Diagnoses: 3.4% (8.2% in the screening group and 4.8% in the control group)


è Increased Cancer diagnoses: 638,542 for this population over about a decade

 

Distribution of Treatment (and associated cost)

Wilson, et al Cumulative cost pattern comparison of prostate cancer treatments, Cancer 109: 18-527


Note that this is Medicare data, so this understates the cost compared to a population under 65.

 

è Total excess cost over 10 years for this population: $27 billion

 

That’s not a trivial figure even in these days of massive corporate bailouts.


 

 

%age

Cost

#

Spend

Radical Prostatectomy

55%

 $        36,888

         350,055

 $  12,912,828,840

Cryotherapy

3%

 $        43,108

           18,933

 $        816,163,764

Brachytherapy

15%

 $        35,143

           93,684

 $    3,292,336,812

External Beam

9%

 $        59,455

           57,360

 $    3,410,338,800

Androgen

13%

 $        69,244

           85,129

 $    5,894,672,476

Watchful Wait

5%

 $        32,135

           33,378

 $    1,072,602,030

TOTAL INCREASED SPENDING

 

 

 

 $  27,398,942,722