By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    alzheimer’s disease
    Anavex Life Sciences’ Anavex 2-73 Could Slow Alzheimer’s
    June 14, 2024
    medicare shift
    From Volume To Value: The Medicare Shift To Value-Based Care
    August 20, 2024
    Physicians
    Why Recruiting Physicians is More Challenging than Hiring Other Professionals
    December 17, 2024
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    The Divide in the ACO Debate – Beltway Rhetoric versus Marketplace Cynicism
    February 3, 2012
    Patient Engagement Matters
    February 6, 2013
    future of healthcare survey heathcare reform
    The Future of Healthcare Survey: Does it include Doctors?
    March 2, 2012
    Latest News
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Why Aren’t Health Care Prices Ever on The Table?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Why Aren’t Health Care Prices Ever on The Table?
Policy & Law

Why Aren’t Health Care Prices Ever on The Table?

gooznews
gooznews
Share
5 Min Read
SHARE

Journalist-turned investment banker-turned auto bailout czar Steven Rattner provocatively calls for “not quite” death panels in an op-ed in today’s New York Times. Noting a quarter of all Medicare spending comes in the last year of life, he writes:

Journalist-turned investment banker-turned auto bailout czar Steven Rattner provocatively calls for “not quite” death panels in an op-ed in today’s New York Times. Noting a quarter of all Medicare spending comes in the last year of life, he writes:

No one wants to lose an aging parent. And with price out of the equation (emphasis added), it’s natural for patients and their families to try every treatment, regardless of expense or efficacy. But that imposes an enormous societal cost that few other nations have been willing to bear. Many countries whose health care systems are regularly extolled — including Canada, Australia and New Zealand — have systems for rationing care.

Take Britain, which provides universal coverage with spending at proportionately almost half of American levels. Its National Institute for Health and Clinical Excellence (NICE) uses a complex quality-adjusted life year (QALY) system to put an explicit value (up to about $48,000 per year) on a treatment’s ability to extend life.

At the least, the Independent Payment Advisory Board should be allowed to offer changes in services and costs. We may shrink from such stomach-wrenching choices, but they are inescapable.

Here’s the problem with the NICE/QALY model. It accepts the price that providers set on end-of-life care. It says, here’s the cost; here’s the benefit; and if the cost-per-life-year gained is above a particular level,  we won’t pay anything (actually it’s the National Health Service in Great Britain that won’t pay based on analysis of cost and benefits provided by NICE).  If the average length of time to death from diagnosis with a terminal disease like stage four cancer is 10 months, and the drug extends the average life to a year, those extra two months cost $120,000 or $720,000 per QALY (and that doesn’t even adjust for the lower quality-of-life of that final year from adding a drug that probably has debilitating side effects).  That’s 15 times the British standard of cost-effectiveness.

Here’s another way to tackle the problem. Instead of having a binary option of either not allowing Medicare to pay for the drug or paying $10,000 a month, why not simply set the price that Medicare will pay at its actual value? In this case, it would be 1/15th of $10,000 or $667 a month. If the drug company continues to insist on charging more, then people will have to pay the difference out-of-pocket.

More Read

Image
Surrogacy in the News: Extreme Story Not Reflective of Ethical Practices
Medical Mistakes: To Err Is Human – Yes and No?
Build It Bigger? Maybe Not: Addressing Obesity in the US today
Important Tips For Positive Mental Health At Work
The Art of Medicine: A Pursuit of the Truth

It’s called reference pricing, an idea initially propounded by Steven D. Pearson, president of the Institute for Clinical and Economic Review in Boston and a former advisor to CMS and Peter Bach of Memorial Sloan-Kettering Cancer. Some may object that this will cause rationing by price since poorer patients will suffer the brunt its effects. To a certain extent, they are right. But at least the poor and middle-class will go to their graves knowing they didn’t miss much since Medicare will have sent them a clear signal based on careful science that what they couldn’t afford really wasn’t worth very much.

Others may object by saying, ah, but these new drugs actually work extremely well in a handful of patients. They often live for years and it was this small group’s experience on the drug that drove the overall survival rate to two months. As soon as we figure out how to target them by using sophisticated biomarkers (the latest cancer drugs are being approved with such screening tests), we can limit the drug’s use to those that truly benefit. Great! The cost per QALY should come down dramatically. As long as Medicare doesn’t pay for its off-label use (patients with the same condition who don’t meet the appropriate biomarker profile), the cost to the system should be much more affordable. If that cost was still above the reference price (because even with targeting, the latest therapies are not magic bullet cures, but still life extenders), at least the out-of-pocket for patients (and the cost to Medicare) will be much, much lower.

TAGGED:Medicare
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

Health Tips For Women
Top 5 Health Tips For Women Over 45
Women Health
July 7, 2025
car accident lawsuit
Let Your Lawyer Handle the Work Before You Pay Medical Costs
Policy & Law
July 6, 2025
women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025

You Might also Like

med tech
DiagnosticsMedical InnovationsNewsPublic HealthTechnology

Revolution in Lab Testing: Theranos

October 2, 2013
Health careWellness

How are people successfully handling work-related injuries?

July 24, 2018

Primary Care Workforce Situation: Not Hopeless

March 18, 2011
employer insurance
BusinessHealth ReformPolicy & LawPublic Health

One More Way ObamaCare May Lead to Single Payer

May 12, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?