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Structural Inefficiencies in American Health Care
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Transcript of Structural Inefficiencies in American Health Care
Structural Inefficiencies in American Health Care
Eric Bernstein, MD, MPHNew Mexico Cancer Care Associates
Santa Fe, NM
Safe topics
• Money
• Politics
• Cancer
• Health care reform
National Health Expenditures and Their Share of Gross Domestic Product, 1960-2009
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip).
Dollars in Billions:
5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%
Insurance premiums are rising and fewer people can afford them
• 1,516,971 Personal bankruptcies 2011• 62% of these are classified as “medical”
(Himmelstein D, et al, Am J Med 2009)• ~940,000 “medical bankruptcies” in 2011• 8% of NSCLC patients bankrupt within 5 years of diagnosis (Ramsey SD, et al. 2011)
Claxton G, et al. Health Aff (Millwood). 2010 Oct;29(10):1942-50.
Health care spending worldwide
Best Health Care in the World?For many specialized things, the USA is terrificBUTAverage life expectancy at birth =33rd DALE (disability-adjusted life expectancy) =24th WHO World Health Report 2000 =37th
United Kingdom WHO World Health Report 18th
6% of GDP spent on healthcare
76
88 8981
8899 97
109116
10697
134
115 113
127120
55 57 60 61 61 64 66 67 74 76 77 78 79 80 8396
0
50
100
150 1997–98 2006–07
Deaths per 100,000 population*
* Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections.See Appendix B for list of all conditions considered amenable to health care in the analysis.Data: E. Nolte, RAND Europe, and M. McKee, London School of Hygiene and Tropical Medicine, analysis of World Health Organization mortality files and CDC mortality data for U.S. (Nolte and McKee, 2011).
Mortality Amenable to Health Care
HEALTHY LIVES
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.
Why Are Our Outcomes Not Better?
Uninsured:• More ill when seek treatment= Breast cancer: 30-50% higher mortality Colon cancer: 50-60% higher mortality• Mortality of uninsured hospitalized children= 1.6 times that of the insured childChronic conditions poorly managed; Not systematic
JPUBHealth10/29/09 advance publication on lineCalHealthReform.org accessed 11/14/2009
Budgets Cut
• N.C. Division of Mental Health, Developmental Disabilities, and Substance Abuse Services
• Community Care of North Carolina
• N.C. Office of Rural Health and Community Care
Administrative Costs• USA: easily the world leader at 30% (6XOECD*) • France 4%• Canada 6%• Taiwan 1.5%
In USA, 1 insurance employee for every two doctors
68K/year in billing costs per doctor in an office-based practice*Organization for Economic Co-operation and Development
Where Does Your Health Care Dollar Go?
Hospitals 31 centsAdministrative Costs 30 cents: - Insurance Company -20 cents -Doctors, Hospitals -5 cents eachDoctors 21 centsDrugs 10 centsOtherGoing UP Going DOWN (as a percent)
2010 Revenues of Top Insurers 1. UnitedHealth Group - $87 billion (25)2. WellPoint - $65 billion 3. Aetna - $34.7 billion (85) 4. Humana - $30.9 billion (98)5. Cigna - $18.4 billion (141) 6. Health Net - $15.7 billion (179)7. Coventry Health Care - $13.9 billion
“Sometimes it’s good to be a health-care CEO. Health-care company chief executives had the highest median pay of any industry captured by the recent The Wall Street Journal CEO Compensation Study.” 2011
“…hired more than 350 former government staff members”“…At least ten others have been members of Congress”… Billy Tauzin
Karen Ignagni
Health Care Industry Spending 1.4 million/day on lobbying --The Washington Post 7/06/09, others
Magnetic Resonance Imaging (MRI) Machines per Million Population, 2008
Source: OECD Health Data 2010 (Oct. 2010).
* 2007.
MRI Scan and Imaging Fees, 2009
Source: International Federation of Health Plans, 2009 Comparative Price Report.
Dollars
1,500
US average
US high-end
Why does the market fail?
• Inelastic demand
• Almost no one pays directly for care
• Pricing is a mystery
Everything costs more
Los Alamos Medical Center
• Population 12,000
• 20 bed hospital
• 140 doctors
Depot Lupron
• Lowers testosterone to control prostate cancer
• Hospital bills $12,000
• Medicare pays $651.00
• Everybody else?
Los Alamos Medical Center
• Population 12,000
• 20 bed hospital
• 140 doctors
Little relationship between EFFECTIVENESS and PRICECancer Wholesale Price per 28 or 30 day cycle >$10,000 $5,000 to $10,000 $3,000 to 5,000 $1,000 to 3,000Breast Cancer Bevacizumab Ixabepilone Lapatinib Docetaxel
(Patent 2010)Capecitabine monotherapy
Paclitaxel (Generic)
Nab-paclitaxel Trastuzumab Chronic Leukemias
Nilotinib.Dasatinib Bendamustine
Lung Bevacizumab Pemetrexed Crizotinib (Xalkori) $9600
Erlotnib
Melanoma Ipilimumab Yervoy $30,000
Vemurafenif (Zelvorah) $9400
Renal Sorafenib.Sunitinib Temsirolimus Other Cancers
Lenalidomide Brentuximab (Adcetris)$25,000
Nelarabine
Colon Bevacizumab Panitumumab Various Sipuleucel-T
Provenge $93,000x1
Bevacizumab
Cost per life year
• Dialysis $87,561 per year
• Bevacizumab ~ $600,000 per year
J Natl Cancer Inst. 2011 Jan 19;103(2):117-28.
US Healthcare
• Most expensive
• Outcomes mediocre
• Many uninsured
Why So Expensive?
• Expensive care is more profitable
• Administrative costs very high
• Lacks benefits of a single payer system or a free market system to control costs
Thought Leader
• Lee Newcomber, MD, MHA
• Head of Oncology for UnitedHealthcare
Providers Effecting Change
• Memorial Sloan Kettering
• Zaltrap (aflibercept)
• Twice as expensive as Avastin (bevacizumab)
• MSK doctors refused to use the drug and wrote an Op-Ed in the New York Times
• Price subsequently cut by 50%
Affordable Care Act
• Will increase the number of Americans that have health coverage
• Economic impacts are yet to be determined
• Most significant reform in health care since Medicare in 1965
Obvious downsides
• Does not fix some of the fundamental barriers to controlling costs
• Some gaps in coverage will remain
• Had to listen to my talk
Opportunities
• Public is aware and fed up with failure to do a better job
• Fundamental reform is still needed, but perhaps more likely after the weeks events
• Conversation is continuing
What is Needed
• Campaign finance reform
• Address the role of special interests in government and healthcare
• Service minded individuals need to take back the reigns on a state and federal level
• Life is short
• Do good work
• Be kind
• Life is short
• Do good work
• Be kind
• Have fun
Structural Inefficiencies in American Health Care
Cancer as an example of why the worst cancer may be the system.