What Makes Sense in Health Care – 2 Government Reports Talking about Dollars and Cents

It is finally beginning to take place, looking to see where there are possible duplicated efforts as well as trying to determine whether perhaps a device or a drug is the best answer for certain treatments and of course, cost is right in there. One good example in the text below is the treatment for prostate cancer, with one treatment being 4 times the amount of another. At this point, the question arises too, is the more expensive treatment the better choice as far as the cure and treatment? We may not know the ultimate answer for a while and there will be other emerging technologies no doubt as well.

What is also interesting too is the comparison of aspirin to Plavix by one insurer, stating Plavix is only slightly more effective than aspirin? Yikes, we need more numbers I think to see if that is in fact true, especially since Plavix was the 2nd most expensive item under Part D. That is almost scary if in fact it would turn out to be true as the numbers between cost on the 2 items is huge.

Biotech is not left out either, with some hospitals saying they can use low tech to fight the spread of MRSA better, but that could also be tweaked a bit as hospitals are all on such tight budgets and can’t afford a lot more. BD

Desperate Hospitals – May 2009

TWO GOVERNMENT REPORTS TUESDAY OFFERED early hints of the potential industry impact of a $1.1 billion federal program to compare the medical benefit and cost-effectiveness of surgeries, medicines and medical devices. The reports -- by the Institute of Medicine and the Federal Coordinating Council for Comparative Effectiveness Research -- suggest priorities for spending $700 million of the research program's funds under the American Recovery and Reinvestment Act of 2009.

Neither report identifies particular products or companies for scrutiny, but many suggested studies clearly would zero in on money-makers from identifiable companies. At the top of the Institute of Medicine's list (at http://www.iom.edu) is the comparison of heart-arrhythmia drugs with device-based treatments marketed by Medtronic (MDT) and St. Jude Medical (STJ). Surprisingly high among research priorities is the need to examine "balance training" services that home-health-care outfits such as Amedisys (AMED) promote for the prevention of injurious falls by older adults. Such programs have been a fast-growing source of profits in the home-health business.

Another top priority is examining the use of pricey biologics for fighting auto-immune diseases such as arthritis and ulcerative colitis. Those biotech treatments include Humira from Abbott Laboratories (ABT), Remicade from Johnson & Johnson (JNJ) and Orencia from Bristol-Myers Squibb (BMY). Not far behind on the research program can be spotted the expensive tests for antibiotic-resistant staph germs, now sold by Cepheid (CPHD) and Becton, Dickinson (BDX). Many hospitals have said they can better contain resistant germs by paying careful attention to low-tech anti-infection practices.

The Institute of Medicine experts also urge a comparison of conventional prostate-cancer surgery with surgery that uses the $1.3 million robot from Intuitive Surgical (ISRG) or treatment with radiation. Health insurers complained further that proton-beam treatment for prostate cancer, as sold by Varian Medical Systems (VAR), costs four times as much as radioactive-seed implants, with little evidence for its comparative superiority.

Health insurers decried the overprescribing of the anti-clotting drug Plavix from Bristol-Myers, for preventing the recurrence of a stroke. Plavix costs $1,500 per year, noted one health-insurance trade group, but is only slightly more effective than $15-a-year aspirin. Medicare data for 2007 showed Plavix was the government's second-largest expenditure under the Part D drug benefit, after Pfizer's cholesterol drug Lipitor.