If you want to understand why U.S. health care is so expensive, take a look at the chart below. It illustrates how the price of cancer drugs has levitated in recent years, revealing how, in our largely unregulated for-profit health care industry, the seller is the price-maker and the patient is the price-taker. In other advanced countries, the government intervenes with an eye to protecting desperate patients from being gouged. In the U.S. the law specifically prohibits Medicare from trying to negotiate for discounts.

In an article titled “Limits on Medicare’s Ability to Control Rising Spending on Cancer Drugs,” published in a recent issue of the New England Journal of Medicine Dr. Peter B. Bach,  a physician and epidemiologist at  Memorial Sloan-Kettering Cancer Center, uses this chart to demonstrate the steep rise in  Medicare spending on cancer drugs in just the past ten years.

Figure 1. Monthly and Median Costs of Cancer Drugs at the Time of Approval by the Food and Drug Administration (FDA), from 1965 through 2008.

Note that the chart tracks the monthly cost of cancer drugs (vertical axis) from 1960 to 2009 (horizontal axis). What is extraordinary is how the price of the most expensive bleeding edge  treatments has jumped, since 1990, from $2,000 a month to $5,000, $10,000 and finally $25,000 a month. Meanwhile, the fine red line traces the rise in the median price of cancer drugs—from well under $1,000 a month in the late 1960s to $6,000 to $7,000 a month today.

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Below, a guest post from reader Jim Jaffe writing at Centered.Politics.com

Let me add only that the President Obama’s fiscal stimulus package is funding comparative effectiveness research with an eye to finding the best treatments for patients who meet  a particular medical profile.   This research will not lead to “one size fits all” medicine.

Moreover, just as in the UK the research will be used to create “guidelines” not rules. In the U.K. physicians follow the guidelines about 89 percent of the time—which seems about right. There are always going to be cases that don’t fit the guidelines, particularly when patients are suffering from two or three chronic diseases.

 Finally, it is likely that both Medicare and a public sector insurance plan will begin raising co-pays—and lowering fees—for unproven treatments which as Jim points out, “just aren’t working.” In this way, public sector plans can steer both patients and doctors toward more effective treatments. (Private insurers are likely to follow suit.)  At the same time, President  Obama has made it clear that his administration wants to raise fees for primary care physicians who spend time talking to patients, listening to them, and managing chronic illnesses. 

            When Evidence Meets Pluralism 

                                        By Jim Jaffe

Surprising resistance to the embrace of evidence-based medicine as part of health reform reflects a fear of  binary and bureaucratic government regulations that ignore the dynamic nature of science.  Some of these objections are defensive, but they nonetheless deserve a respectful and honest response, lest they fester to a point where they jeopardize progress.

I’ve encountered three separate expressions of concern.  The first was from conservative elements cable news/blogosphere community which predictably warned that the government was going to come between patients and their doctors and second-guess therapeutic decisions in an effort to save money.  The others came from physicians.  One is a psychiatrist who argues that every patient is unique and merits a unique response.  The other argued that there’s a danger research results will be imposed too widely as results are taken too seriously too soon and thus fuel today’s escalation of ineffective and expensive care.

These arguments have merit, particularly if we’re truly moving toward a government-written rule-based cookbook that draws crude, bright lines that will only allow women over 47 to get a mammogram irrespective of personal circumstances.  It isn’t clear whether any of the reformers truly want to go there.  Doing so would be a mistake.

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Insurance industry lobbyists are out in force, doing their best to kill the
possibility that  a public sector insurer
will compete with private insurers for the millions of new customers hat
universal coverage will bring to the marketplace.  I have explained why it is so important that
the public sector alternative  both to
“keep the private sector honest” (in President Obama’s words) and to set a
standard for affordable, comprehensive insurance for all Americans here and here 

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Many Americans assume that once they finally become eligible for Medicare, their worries about skyrocketing health care bills will be over. Unfortunately, that just isn’t the case.    

According to Fidelity Investments a 65-year-old couple retiring this year should assume they will need approximately $240,000 to cover medical expenses in retirement— even though they have Medicare insurance coverage.   This represents a 6.7 percent jump over Fidelity’s 2008 estimate of $225,000.

Just as in every other sector of our health care system, Medicare has been hit hard by the soaring cost of care. As a result, Medicare beneficiaries are paying more and more out of pocket. Some health care reformers suggest that because Medicare’s administrative costs are very low, the program is inexpensive. That just isn’t true—administrative costs represent a relatively small portion of total health care spending. As I have explained in earlier posts,  overuse of advanced medical technologies bears primary responsibility for pushing medical bills heavenward.

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Below a non-fiction story and a poem from Pulse: Voices from the Heart of Medicine, “an online magazine of personal experience in health.”  Pulse is both a magazine and an online community that provides a chance for patients, doctors, nurses, social workers to come together, and share their experiences. The magazine’s founders write: “Despite the large numbers of health magazines and medical journals, few openly describe the emotional and practical realties of health care. We at Pulse believe that our stories and poems have the power to bring us together and promote compassionate health care. “

Pulse was launched by the Department of Family and Social Medicine at Albert Einstein College of Medicine/Montefiore Medical Center in the Bronx, New York, with help from colleagues and friends around the state and around the country (Subscriptions are free: you’ll find the home page here http://www.pulsemagazine.org/index.cfm.

For some reason, medicine and writing seem to go together. Perhaps this is because the experience of providing  care—or receiving it—is so intense that a great many patients, doctors, nurses  and medical students feel a need to write about it. We know that writing does not exorcise the demons, but nevertheless, telling someone  can be vital.  

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One in five Medicare patients returns to the hospital within 30 days of being discharged according to a recent article in the New England Journal of Medicine. White House budget director Peter Orszag read the study and noted that, according to the study’s authors, readmissions accounted for about $17.4 billion of the $102.6 billion in hospital payments that Medicare made in 2004 (the year the study was done.). “That would be more like $25 billion today,”  says Bob Wachter, chief of the Division of Hospital Medicine at the University of California San Francisco. (UCSF) .

Reducing readmissions serves as just one example of how we are going be able to afford to provide all Americans with high quality care—by saving $25 billion here, and $25 billion there. As I have suggested in the past, the fat cannot be found in one section of our health care system. It s marbled throughout the very, very expensive meat. Wasteful spending on drugs, devices,  unnecessary procedures and windfalls to for-profit insurers must be cut, along with reimbursements to some  hospitals and physicians that  are not providing  good value for our health care dollars.

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 HEALTH CARE REFORM: DOLLARS AND SENSE

The reading for today is from the words of Max Baucus, the “blue dog” chairman of the senate finance committee:

Baucus’ statement echoes the sentiment of President Obama in his recent press conference, as well as many other health care and economic experts.  Obama noted that failure to control the costs of health care would jeopardize the economy and hamper any recovery from the recession.

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The  Robert Wood Johnson Foundation’s Commission to Build a Healthier America has just released a new report: Beyond Health Care. At a time when all eyes are trained on the debate over providing access to medical care for all Americans, the report looks beyond health care, to the health of the population. As it turns out our health—public health—has less to do with health insurance than one might think.

 “Beyond Health Care” does a masterful job of pointing out that the conventional wisdom about what we need to do to improve the health of our population is blinkered.  Many pundits assume that  providing access to medical care will solve our problems. Others insist that lecturing Americans on “personal responsibility” will do the trick. The report makes it clear that the received wisdom is wrong on both counts.

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This week, Ted Kennedy is back on Capitol Hill, and health care reformers are moved and relieved to see him, stalwartly carrying on, despite his illness.  Ever since he collapsed at President Obama’s inaugural luncheon, Kennedy has not been able to spearhead the fight on healthcare reform in Congress as he might have wished, buttonholing colleagues in the halls of Congress on a daily basis.  Instead Senate Finance Chairman Max Baucus has become the Democrat’s point-man on reform. And some liberal reformers fear that Baucus may be too quick to compromise with Republicans.

Earlier this week, The Hill explained why liberals have more faith in Ted Kennedy: “. . . they say he will fight to ensure the health care reform package is one they can support comfortably.  . . ‘Sen. Kennedy is our hero on this,’” Senator Ben Cardin (D. Maryland)  told The Hill. “’He will give the passion that’s needed . . .. If we’re able to get this done, it has to be a bill worthy of support and that’s where Sen. Kennedy comes in.’” (Thanks to reader Brad F. for calling my attention to this story.)

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In Senator Edward Kennedy’s absence,  Senate Finance Committee Chairman Max Baucus has emerged as the Senate’s point man on healthcare reform—“prompting  concern among some liberal senators,” according to The Hill.    Why are they concerned? Because they “remember  Baucus’s history of cutting deals with Republicans.”

Friday, Baucus gave a speech at the Campaign for American Progress (CAP) that suggests liberals have reason to be worried. Many consider a public-sector alternative to private health insurance key to reform.  As I have argued,  Medicare E ((Medicare for Everyone) would provide a standard of excellence for private insurers, and in President Obama’s words “keep them honest.”  But  at CAP, Senator Baucus suggested that there are several different ways of putting a “public option” into place.  Such a system could either allow Americans to buy into Medicare, or, open up the Federal Employee Health Benefits(FEHB)  program.

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