Let's get normative! Octogenarians and heart surgery
Healthy octogenarians are apparently good candidates for heart surgery. Now I can't say that this surprises me. Those who take care of themselves and have good genes are experiencing longer and longer lifespans. This is basically true even in developing nations — if not to the degree that it is in developed countries. We have record numbers of people living beyond the age of 100. From a human perspective, this is an amazing achievement. But from a pessimistic, Malthusian point of view, death is useful.
Patients 80 years and older who are in overall good health are perfectly able to withstand open-heart surgery, according to the latest study of Dr. Kevin Lachapelle of the McGill University Health Centre (MUHC). His findings were presented this morning in Toronto during the 2008 Canadian Cardiovascular Congress.
"Age should not be a reason for doctors to rule out the possibility of heart surgery for their octogenarian patients," explained Dr. Lachapelle. "If patients with heart problems are otherwise in good health, this surgery can significantly improve their quality of life."
Well that's fantastic. (It really is, I'm not being sarcastic.)
Economics is fundamentally the study of the allocation of scarce resources subject to effectively infinite demand, and while we like to think that healthcare is an infinite good, it most certainly is not. Specifically, normative economics is the process of incorporating value judgments into economic arguments. Most economists avoid making value judgments because there are always exceptional cases, and because it often leads to spectacular foot-in-mouth syndrome. That said, I can't help but have thoughts that tend toward the normative when I read paragraphs like the one I quoted.
Sure, octogenarians may survive and even have a net positive outcome. But what are the opportunity costs associated with operating on individuals who have already exceeded the mean lifespan for someone of their sex? Are we operating on these folks while leaving those that are younger — and therefore potentially more productive — in the lurch? Are we forgoing an operation on someone much younger? How does the fact that the average 80 year old is not as productive as the average 40 year old factor into this equation? Generally taxpayers want something in return for their investment. Do we want the government subsidizing a procedure on someone whose primary income is their monthly Social Security check, and if the answer is yes, how do we prioritize who goes first? How do we manage that inevitable wait list? Generally we subsidize healthcare because we expect some kind of benefit in return, usually in the form of economic output.
I've worded my questions provocatively, but I don't really have an opinion one way or the other, except to say that I'm glad that I won't be the one who has to make these decisions in the coming years. These questions aren't purely rhetorical either: these are very real, difficult questions that are going to have to be addressed as we move inexorably toward some kind of basic universal health coverage in the United States.
As I pointed out yesterday, Americans don't like to be told "No," and we don't like to wait for things, and I mostly include myself in that generalization. If we postpone, or worse, opt to forgo very costly surgeries on the elderly because a cost-benefit analysis doesn't add up, will our culture be able to accept it?
My guess is no, and as soon as it happens, there will be some very ugly public political lynchings.
What are your thoughts?
Public health and entitlement
Cathy wrote a thought-provoking comment on my last post, so I thought I would respond to it in its own entry.
I'd imagine costs for DM2 care had risen, like everything else, but was surprised to hear the thoughts about public health & nationalized health insurance. It's been a long time since I took a public health class, but I'd been under the impression that they were cut from the same cloth. Now, that I think of it, I don't hear about Medicaid paying for diabetes education, but then, I'm not familiar with who utilizes the program, and who pays for it, whether Medicaid, Medicare, or private insurers would reimburse the provider for diabetes classes.
Because pharmacists and ancillary staff deal primarily with drug therapy, we tend to think of the rising cost of healthcare as a result of the increase in the cost of prescription drugs. However this isn't actually true. According to the CEO of Harvard Pilgrim, drug costs have been increasing at a rate of less than 5% per year, whereas medical expenses have been increasing at a rate of about 10%, so the increase in healthcare costs isn't really driven by prescription drugs as much as is commonly thought.
In the long run, drugs tend to be cost-savers rather than cost-centers when utilized correctly, but that's not news to anyone.
When you speak of $1 for public health are you saying 'education & prevention'. If so, I would agree conceptually. There are probably long-term studies that prove this beyond a doubt.
Yes, that is what I mean, but I was unintentionally vague in my first post. I consider public health to be education and prevention in the form of programs and legislation design to try to have a long-term impact. I also consider public health to be (mostly) a public good in the economic sense of the term.
But the government considers public health to be quite a bit more than that, ranging from the IHS to Medicare/Medicaid to the FDA. When you look at their FY2009 budget (121 page PDF), I would have to cherry-pick the bits and pieces that I consider public health, add up their budgets and calculate the percentage of the whole… So clearly that's not what Uncle Sam considers public health, and I should probably find a better term. "Education and prevention" like you suggested is good, but I think that's a bit limited, because I see the laws that are being passed that prevent the sale of certain types of food in public schools to be public health, as well. Then there's the work that the CDC does — particularly in containing and eradicating communicable diseases like smallpox and polio — and other things like providing clean drinking water and sanitation.
At the very least, though, I consider "public health" to be very separate from more traditional healthcare delivery.
And, so I'd venture your point is that any successful nationalized healthcare insurance-type or other type of program would need to incorporate a preventive arm with incentives for greater self-care. A lot of the obesity problem has to do with not bucking the current socially acceptable behaviors, i.e. too much availability of nutritionally cheap food, devaluation of importance of physical effort and exercise, sedentary lifestyle, plus knowledge deficits about foods and hidden human costs. Look at what happened when NYC banned trans fats, for example. I think the fallout will be realized in our lifetime, with a slowly falling domino effect.
Yes, a comprehensive wellness-type program would have to be instituted. I would go so far as to attach financial penalties to those who are wildly unhealthy. Think of it as almost like a Pigovian tax, if you will. Even if you return this money to the consumer at the end of the year in the form of an income subsidy, it's still a powerful motivator to change because there's a real financial pain associated with a specific aspect of their lifestyle. Then of course there's the perennial moral hazard problem that's never going to go away. It is true that if you are responsible for a greater part of your healthcare costs, you will go out of your way to make healthier choices to minimize the chances of becoming ill. (Just ask those who have consumer-directed health plans with high deductibles who pay out of pocket for "normal" medical care.)
But of course you need to fund pathways that would enable people to learn and make healthier lifestyle choices. You can't just take an overweight smoker who works in a coal mine and has less than a high school education and tell him to lose 100lbs or he'll pay more for his healthcare without setting a reasonable timetable and funding the education and exercise program that will help him get there. That's just rotten and doesn't help anyone.
What is troubling and will present problems in a nationalized system of healthcare is that Americans don't like to hear the word "No." We live in an entitled society where the customer is always right, and it's our God-given right to have cheap gas, drive SUVs, eat our fast food, and spend our the government's money on futile, end-of-life care. In other countries that have nationalized healthcare, there are very limited formularies in place, and many treatments and interventions aren't covered at all, or if they are, there may be a multi-month waiting period to have that procedure. That kind of rationing would be tough for America to swallow. We seem to have this bizarre notion that simply because we are living, breathing human beings, we are entitled to X, Y, and Z, and we should have it now.
Obviously we're not beautiful and unique snowflakes, and I think that the younger generations are beginning to recognize this as their thoughts linger on new ideas like "sustainability", but I get the sense that the baby boomers are going to resist these kinds of necessary limitations.
Anyway, hope I answered your question.
Cost of diabetes treatment has doubled in 6 years. Is anyone surprised?
Research out of Stanford USOM indicates that the total money spent on diabetes care went from $6.7bn in 2001 to $12.5bn in 2007. I can't say I'm terribly surprised. Every time you turn around, someone's hammering the dangers of monotherapy down your throat, especially when a comorbidity is present. (When isn't there one?)
However, I am pleased to see that the Stanford researchers are interested in how much of this extra cost is due to costly new medications that may or may not be worth their price — a topic too rarely discussed in the Ivory Towers of academia. They cite Januvia and Byetta as potential cost centers, but I can't help but think that they're missing the mark just a little bit. In outpatient diabetes management — and I'm going to assume that institutions and hospitals are similar — Byetta and Januvia, while successful, aren't what I would consider blockbusters. They aren't super mainstream yet.
In terms of quantity and price, the TZDs — particularly Actos, since Avandia got thrown under the bus — are far more costly. Yeah, incretins, whether direct or indirect are the new CME hotness with the associated mindshare, but compared to your TZDs, biguanides, and sulfonylureas, they're a distant a second/third/fourth fiddle in volume, if not cost.
Drug companies market these new drugs with claims of greater convenience and better control of blood sugar levels, and physicians have increasingly used them as alternatives to injected insulin, Alexander said. Insulin use has correspondingly dropped from 38 percent of treatment visits in 1994 to 28 percent in 2007.
This particular sentence bugs me because the implication is that insulin is cheaper than most oral medications. This just isn't true, particularly with the modified human insulins that can be very costly indeed. At the very least, they're on par with the cost of oral meds, and let's not forget that most people with T2DM would prefer not to stick themselves with a needle, no matter how small.
Talk of direct costs aside, it is obvious that $1 spent in the name of public health has a greater marginal utility than $1 spent on a medical intervention — be that drug therapy, a procedure, or whatever. Ben Franklin was right, after all. Unfortunately, the long-run cost savings of public health programs are notoriously difficult to measure, and certainly nowhere near as sexy as a medical intervention. Perhaps that's why public health gets shortchanged? I've spent some idle moments wondering how much money we could save if we spent a third or even a quarter as much combating things like poor nutrition and obesity as we do on direct healthcare itself.
It seems like the bulk of the money spent on prescription drugs is spent to offset the poor lifestyle choices that we Americans like to make. Unfortunately we pay dearly for that privilege. Any sort of nationalized healthcare will have to take this God-given right tendency into account.
Best lab ever? Possibly.
The folks at the Temple U SOP are doing some interesting stuff in one of their pharmacy labs with a focus on Coumadin:
"Prescribing this medicine is like trial and error in finding the right dosage that works best for you," says Krynetskiy. "Five milligrams is a typical dose, but a little less or a little more could have dramatic consequences or no benefit at all."
Doctors call this optimal dosage the therapeutic window, and Krynetskiy is trying to find it through pharmacogenomics, the study of a person's response to drugs based on their genetic makeup. It's a collaboration that crosses campuses and includes Krynetskiy and fellow clinical faculty at the School of Pharmacy, clinicians at Temple University Hospital and Jeannes Hospital. The researchers are studying why people process the same drug differently. In this case, they're trying to find the correlation between genotypes, or a person's inner code of DNA, and the correct dosage of Warfarin. By collecting saliva samples and extracting DNA from 77 participants already on the drug, the researchers can look for variances, genetic clues, which make people metabolize the same drug in very different ways.
Sounds more like a fun lab experiment than something that'll be clinically valuable for something as cheap as warfarin. This might be more interesting in terms of cost-benefit by choosing a drug that's both expensive and has a narrow therapeutic index. Aminoglycosides, some cancer drugs, and then there's always the iatrogenic narrowing of therapeutic windows — especially via the P450 isoenzyme — that might benefit from this kind of relatively blunt pharmacogenomic hashing. At the very least, some interesting and possibly useful trends might be established.
Warfarin, as cheap as it is, probably isn't a bad place to start. At the very least, I bet it makes for an awesome lab — we never did anything nearly as cool when I was in school…
Update from Eric:
It's not the cost of the drug – it's the cost of the 29% of Warfarin users that are hospitalized in the first year due to a drug-related adverse event.
If this is indeed the case, then preventing just one hospitalization could pay for dozens, and possibly hundreds of these tests, not to mention the impact on human and opportunity costs associated with hospitalization and ADEs.
BiDil on the block for $24.5M
Man, I knew BiDil wasn't worth much, due to its absurdly high cost relative to its ingredients, but I had no idea that it was worth so little:
Targeted drug maker NitroMed Inc. plans to sell its BiDil drug business to JHP Pharmaceuticals LLC for a possible $26.3 million. New Jersey-based JHP, a privately held specialty pharmaceutical company, will buy the assets related to BiDil for $24.5 million in cash, plus up to an additional $1.8 million for inventory at the closing date.
[...]
NitroMed also reported its financial results for the third quarter which ended Sept. 30. The company's total revenues climbed slightly to $4 million, compared to $3.8 million for the same period in 2007. All of that revenue came from sales of BiDil, officials said. NitroMed's net loss dropped to $400,000 for the quarter, compared to a net loss of $8.4 million last year.
Yeah, sounds like it's time to off-load that to a company that has other winners in its lineup and doesn't need to maintain the marketing and manufacturing overhead required to keep BiDil on the market. Of course, they should have done that in the first place. You can't really build an entire company around an uninteresting drug priced too high to be relevant when its components are already available in generic form for pennies per tablet. It's not a bad drug; it's just too expensive for what it is.
If JHP is smart, they'll cut the price to about a third of its current cost, and let volume take care of the rest. Not that BiDil will ever be a huge winner, but it could certainly be bigger than it currently is if priced and marketed appropriately. Monopoly pricing only works when you have something people want, and are willing to pay for.