Saving The World Through Better Coding! ICD-10 is HERE!

Thank goodness we made it to October 1st!  Finally ICD-10 codes have arrived in your doctor’s office and local hospitals!

Luckily we now all have a new medical coding system in place for our patients and their medical problems. Just by the fact that I now have the ability to code for an orca bite or (God forbid) an accident due to water skis on fire, I know that I will be able to provide better care for my patients.


(Photo courtesy of PBS)

The use of ICD 10 is now mandated by the Federal government for hospitals and healthcare providers all across the US. Originally designed by the WHO as a way to track worldwide disease and collect health and wellness statistics, the ICD coding system was intended to be a way to identify and target certain diseases and injuries. The hope was that by tracking disease, specific interventions could be made in order to improve outcomes in areas where a particular health risk was present.

Since its inception, the US has adopted the coding system as a way to capture billing information for the purposes of reimbursing physicians and hospitals for the work that they perform. In the previous iteration, ICD-9, there were nearly 55K diagnosis and procedure codes. Under the new system there are almost 155K. Over the last year, doctors and hospital personnel have been required to undertake hours of “ICD-10” training in order to ensure competence with the new coding system by October 1st. The new system expands the types of diagnoses, and is intended to be much more specific—requiring that statements of laterality and the chronicity of a particular ailment or injury be included in the diagnostic code. For physicians, this means—you guessed it—tons of additional electronic paperwork. With EMR already in place (and barely functional in some instances) physicians are already overwhelmed with data entry and screen time. Now, in order to complete an office visit in the EMR, physicians must navigate a new, and even more cumbersome, coding system.   We have codes for injuries that occur while falling from a spacecraft, injuries sustained in a Macaw attack as well as a thermal injury that occurs while skiing on water skis that are, in fact, on fire.

Do any of these help us better care for our patients with diabetes, heart disease or hypertension? Do my patients benefit because I am able to carefully code in the EMR the fact that there chest pain is due to “native coronary artery disease with angina”? Wouldn’t the result be the same if I simply wrote in my office note that the patient has prior coronary artery disease and is having typical angina and likely needs an evaluation with a particular test?

In many cases, I expect that the codes that are recorded in the middle of a very busy office day will be no more accurate than the previous system—many providers will simply click a diagnosis that is “related” to the patient’s problem in order to move the electronic paperwork along. (Instead of searching an endless list of codes for the exact letter and number combination that is required).

When exactly did anyone prove—in a randomized controlled clinical trial—that more specific coding of diagnoses by physicians improved patient care and impacted outcomes?

I would argue that is simply the result of the combination of continued government ignorance (and arrogance) when it comes to dabbling (or meddling) in healthcare. Bureaucrats love to create paperwork, committees, meetings and agendas. They often pontificate on the benefits of a particular plan or algorithm even when they have no data to support their position. Doctors care for patients—our government should let us all do what we do best—Spend time with our patients, connect with them and work to improve their health. For now, however, we must continue to look for the right code–especially when we encounter a person who has been injured by a jet engine. Better learn that one—its an everyday thing around the primary care office. Ahh, here it is…. V97.33XD: Sucked into jet engine, subsequent encounter


The Cost of a Cure: What’s the Right Price?

Recently, two significant pharmaceutical breakthroughs have resulted in a renewed debate about the costs of drug therapy. In the last year, a new drug class for the treatment of Hepatitis C has been released by two different manufacturers and has been found to cure a once incurable chronic liver disease for nearly 90% of patients who are treated with a full course of therapy. The drug appears to be safe and highly effective—however, the cost of a curative course of therapy is nearly 80K dollars. As you might imaging, there are already barriers to access for many patients including those treated in the Veterans’ Affairs (VA) system as well as those on government based insurance programs such as Medicaid.

In the last several months, another remarkable, potentially “game changing” drug has been approved and released into the market. These drugs, made by Regeneron and Sanofi, are intended for patients who do not achieve adequate cholesterol reduction with standard statin therapy (the current standard of care).   According to some analyses, these drugs, when used in the appropriate patient population, may result in the prevention of thousands of cardiovascular related deaths. However, just as seen with the new hepatitis C drugs, the price tag for therapy is exorbitant—nearly 15K dollars annually. With the Hepatitis C drug, therapy is only required for approximately 12 weeks and then is no longer needed—with the cholesterol drug, the therapy will most likely be lifelong.

This month a study examining the cost effectiveness of these new cholesterol drug has been published and concluded that the drugs are far over-priced (nearly 3 fold) for the benefit that they produce. Based on a pure economic analysis, researchers concluded that the drugs should actually cost between 3K and 4K dollars annually rather than the current 15K price tag.

Did Healthcare Reform Forget Big Pharma?

The purpose of the Affordable Care Act (ACA) (as touted by supporting politicians and its authors) is to make health care accessible and affordable to all Americans. Certainly this is a noble goal and one that we should continue to strive to achieve. However, the legislation has failed to meet this mark. While addressing physician reimbursement and clinical behaviors (and limiting choice and physician autonomy), the ACA has done nothing to regulate the high price of pharmaceuticals. Big pharma is allowed to charge exorbitant prices (whatever the market will bear) without regulation. It is clear that pharmaceuticals must reclaim their research and development investments and make a profit—however, many of these drugs are far overpriced and pricetags are simply designed to exploit the system and maximize corporate (and CEO profits). IN addition, many of the most expensive drugs in the US are sold overseas and in Canada at a fraction of the cost. This seems to me to be clear evidence of the pharmaceutical industry taking full advantage of the inherent wealth in the US today.

However, Would it not follow that if we placed limits on the prices of new drugs and paid “fair and equitable” charges, that healthcare costs would significantly decline?

It seems our politicians have sought to attack the problem from a few angles and have failed to address other significant sources of excessive healthcare spending. While reimbursement for physicians and physician groups are set clearly in the crosshairs of the ACA, it appears industry and litigators are not even on the radar. There is hope—legislation is being introduced that will allow legal purchase of drugs from Canada for Americans. In addition, pharmaceutical companies would be required to disclose what they charge for the same drugs in other countries. I believe this is a step in the right direction. Lets continue to innovate and provide new therapies for ALL Americans. But lets do it in a way that is cost effective. The latest studies make it clear that these drugs are overpriced. We must find a way to negotiate a fair and reasonable price that promotes and rewards innovation BUT also provides access to the newest and most effective therapies for all who need it.


Social Media and Pharma: How the FDA is “Keeping Up with the Kardashians”

This week, the Washington Post reports that the FDA has issued a warning letter to a pharmaceutical company concerning statements about a new prescription drug that were made by Kim Kardashian on her recent posts on social media. In her posts on Instagram and twitter, Kardashian touts the effectiveness of a prescription drug called Diclegis for pregnancy associated morning sickness. Ms Kardashian has a substantial following on social media—including nearly 35 million on Twitter and nearly 45 million on Instagram. Of note, Kardashian is a paid spokesperson for the drug maker Duchesnay USA.

The FDA issued a letter to Duchesnay USA “The Office of Prescription Drug Promotion … has reviewed the Kim Kardashian Social Media Post,” the letter states “The social media post is false or misleading in that it presents efficacy claims for DICLEGIS, but fails to communicate any risk information.” In the letter the FDA points out that the social media posts fail to report information on potential risks and side effects. In addition, the FDA expressed concern over the fact that the social media posts do not mention that the drug has not been studied for women with certain pregnancy complications and that the drug is not suitable for women who are sensitive to several other types of medications.

Social media, when used properly, can be a powerful tool for patient engagement and patient education. It can also be a very effective marketing tool and can be utilized in the recruitment of patients for clinical trials. While the use of social media in medicine becomes more popular and more widespread, the FDA has been very slow to respond with a position statement. In 2012 a survey of social media use amongst biotech, pharmaceutical and device companies found that there were more than 211 industry related twitter feeds, over 115 Facebook pages and numerous YouTube channels actively communicating with doctors and patients. In fact, one company had nearly 115K tweets in one year. While the FDA vigorously regulates medical traditional communications regarding medical treatments, there has been a significant lack of regulatory guidance for the internet and social media use. In July 2014, the FDA attempted to produce a webinar to discuss the use of social media by industry and physicians—however, technical difficulties precluded access for many potential attendees. Ultimately, the FDA did issue a draft document to industry providing guidance for marketing on Twitter and other social media outlets.

What Did the FDA Draft Document Advise?

For the most part the draft document outlined requirements for a marketing based social media post.

  1. Each post must discuss both the benefits and risks of the drug or device—the information must be balanced. The benefit information must be accurate and not misleading in any way.
  2. Ideally, a hyperlink should be included in any twitter or social media post. This hyperlink should provide detailed information on risk and adverse effects of the marketed product.
  3. Both the chemical and brand names should be utilized in any social media post
  4. The Risk information must be just as prominent as the Benefit information contained within the post

What Exactly is the FDA doing in Social Media/Cyberspace regulation?

(Data obtained from White Paper “Eye on the FDA” by Mark S Senak, JD)

During the time period from 2008-2012, data from the Office of Drug Promotion reflects the fact that the FDA issued more violations for traditional media than those issued for media in the digital space. In fact, official warning letters were three times more likely to be issued to traditional media violations as compared to digital media postings. However, now it appears that with the Kardashian warning letter that the FDA is now poised to more closely scrutinize social media marketing efforts.

Advertising and marketing in the social media space is not the only new area of FDA regulatory interest in cyberspace. Now, the FDA is vigorously evaluating medically related applications for mobile devices. Regulated applications—those that the FDA considers to transform a mobile device into a medical device—are any applications that utilize sensors or attachments or any devices that provide patient specific analysis.

What About Clinical Trials?

Recently, social media has emerged as a very effective tool for the recruitment of patients for clinical trials. In most studies, the biggest barrier to a successful project is the effective recruitment of appropriate patients. In fact, patient recruitment typically accounts for nearly 30% of the time spent on a particular trial by research staff. The FDA now requires that social media ads, tweets, blogs and other forms of digital communication be reviewed in the same way that traditional recruitment materials are reviewed.

For Now, the FDA will  continue to “Keep up with the Kardashians”

This week’s action by the FDA makes it clear that more regulation of medical related activity in cyberspace is on the horizon. As consumers we must be careful of what we read and see on social media and must always consider the source—just as we often view traditional print and television media with a hint of skepticism.


(photo courtesy of E!)

Pro Publica and Rating Surgeons: Garbage IN equals Garbage OUT.

Recently, the independent investigative journalism research group known as Pro Publica has received a great deal of attention for a newly published project for rating surgeons. This particular project has been met with a great deal of scrutiny by the medical community and has stirred significant debate since it was released in early July 2015. While providing patients with an objective metric by which they can evaluate physicians before deciding where and when to receive care is a lofty goal, Pro Publica’s attempt has fallen significantly short—and if anything—has created more confusion and frustration among both doctors and patients.  Several of my colleagues have written blogs and commented publicly about this rating system–Here is my take.

Helping the public make informed decisions about healthcare is an essential part of the process of improving the quality of care throughout the US—However, any information provided to the public must be easily digestible, RELIABLE and ACCURATE and supported by solid, well-conducted research. The methodology by which any data is assembled and any particular meaningful conclusions are reached is critical in determining whether or not the conclusions are of ANY use to the intended audience.

What Exactly is Pro Publica?

According to their website, Pro Publica is an “an independent, non-profit newsroom that produces investigative journalism in the public interest”. It is labeled as a non-profit organization and is funded by philanthropic donations as well as advertising dollars. The organization is staffed by nearly 45 investigative journalists and is located in Manhattan. Their mission statement is published as follows:

“To expose abuses of power and betrayals of the public trust by government, business, and other institutions, using the moral force of investigative journalism to spur reform through the sustained spotlighting of wrongdoing.”

What exactly was the Surgeon Rating project?

In the surgeon rating project, Pro Publica sought to produce a mechanism by which healthcare consumers could examine outcomes data prior to choosing a medical professional. In the project, journalists collected data from Medicare billing databases—these data were limited to a few selected low risk procedures and only included patients admitted to hospitals for these procedures. The analysis did not consider outpatient surgical center locations, nor did it evaluate data from patients admitted from the Emergency Department.   Doctors in particular specialties such as orthopedics, neurosurgery, general surgery and urology from all over the US were rated based on two outcomes—death and readmission—and all data was mined from a Medicare billing database. The journalists clearly state their methodology on their website. They examined records from in patient hospital stays from 2009-13 and looked at complications from what they defined as low risk surgeries. While Pro Publica does insist that they consulted with “experts” in each area evaluated, they do not mention if they had any guidance from statisticians, and other experts in the design of medical research investigations.

In their project, Pro Publica journalists collected information from nearly 3600 hospitals involving almost 17,000 surgeons. The outcomes of almost 64,000 Medicare patients were evaluated. A searchable “surgeon scorecard” was created online and has been available to the public since early July.

What DOES make a good surgeon?

The most important quality of a successful surgeon is judgement. Ironically, many outcomes are determined by the surgeon before operating—choosing an appropriate surgical candidate is often the most difficult decision a surgeon will make. This database does not take any of the pre surgery decision making into consideration. A good surgeon certainly has inherent physical talent and dexterity—most great surgeons have exceptional skill with a scalpel. In addition, patient volume is a huge determinant in surgical outcome. A surgeon with a large volume practice is much more adept at performing a routine procedure and is also much more skilled at handling intra operative surprises. Moreover, surgeons who have been well trained and well educated at academic institutions during their residencies and fellowships are more likely to practice evidence-based medicine and adhere to “best practices” and clinical guidelines.

Why is the Pro Publica project fundamentally flawed?

The project, while well intended, is of no practical use. The methodology is flawed at the beginning. Mining Medicare databases assumes that the data entered is in fact accurate. There are coding errors and data entry errors that occur every single day in hospitals and at CMS. The project does not take into consideration surgeons who accept patients that others would turn away—due to high risk, etc. In addition, the data analysis only takes into consideration inpatient procedures. Many of these low risk procedures are also performed in outpatient surgical centers—including these numbers would certainly bolster a surgeon’s “scorecard”. The research presented by Pro Publica was NOT peer reviewed. Any reputable medical journal requires that all investigations are reviewed by a minimum of two or three independent and anonymous EXPERTS in the discipline of interest. These experts are charged with evaluating not only the quality of the research and its findings but also the methods that were utilized in the study. Other than mentioning a group of physician experts that were consulted to identify complications, there is no mention of a peer review process and no mention of a methodology review.

Epilogue: Pending Impact of the Pro Publica Surgeon rating project?

 Ultimately time will tell. This database unfairly evaluates surgeons. While not all physicians are created equal, the methodology involved in arriving at the Pro Publica ratings has produced unreliable and inaccurate data. I fear that rating projects of this sort—that are not based on good, sound science—will result in many physicians refusing to treat sicker, higher risk patients. Ironically, it is the BEST surgeons that must take on the toughest cases. I, along with many of my colleagues, applaud any effort that can potentially empower patients to make informed decisions about their healthcare. However, I cannot endorse faulty science. If you put garbage data into a statistical program, you simply get well analyzed garbage out. As British economist Ronald Coase once said….”If you torture the data long enough, it will confess to anything…”


Physicians and Journalism: Responsibly Meeting the Challenge

As a physician journalist I find myself in a very fortunate and quite unique position—I am able to reach vast numbers of Americans on a daily basis and provide them with credible (and hopefully impactful) news on health and wellness. Medical journalism is similar to the practice of medicine in that we must put the PATIENT first. Just as physicians provide patients with information they need to better understand their disease state and treatment options in a clinical interaction, physician journalists must carefully choose their words when on camera or quoted in print. In a clinical situation, there is time for questions and two-way interaction between doctor and patient. In contrast, medical reporting in broadcast media is a very different situation–there is no opportunity for patient interaction and what is said MUST be something that will stimulate further conversation between viewers and their OWN private physicians. Statements must be clear, evidence based and stories must be reported without bias.

I entered the world of medical journalism nearly five years ago. It is my job to carefully dissect and interpret new studies and provide candid and accurate commentary. It is essential that as a physician, I am able to communicate new research findings on new treatments or new health risks in a way that is non-biased and free from any external influence. Moreover, it is vital that I am able to report stories in a way that does not sensationalize or overstate the effectiveness of any particular therapy. In the last several years, we have seen numerous examples in the media in which medical journalists have behaved in ways that have not met these lofty expectations.   From Dr Mehmet Oz and his overstated claims on herbal remedies to Dr Sanjay Gupta and his heroic involvement in surgical cases while covering stories in Nepal and in Haiti, there are numerous examples from which we can all learn. Dr Oz ultimately testified before Congress concerning his choice of words when discussing non-proven therapies for weight loss and other common maladies. Dr Gupta, a well-respected neurosurgeon and medical reporter, admits that when he is covering a story in a disaster area, he always is a “doctor first” and will respond to an emergency while reporting—even though ethics dictate that journalists should never be “part of the story”. For medical journalists, it can be difficult to decide exactly where the boundaries exist between the responsibilities of being a doctor and serving as a reporter.

The Society of Professional Journalists lists four major tenets in their Code of Ethics that I think MUST be upheld by any medical journalist in order to ensure that patients are protected from mis-information and sensationalism on television as well as in the print media. I believe that any physician who is contemplating entering the world of the media must be aware of these guidelines and think about how each can specifically apply to medical journalism. Below, I have listed each of these principles (as they are listed by the Society) and shared my thoughts on how they may apply to each of us when serving as medical reporters.

1. Seek the Truth and Report

As physicians it is our duty to carefully examine new findings and analyze studies in order to determine their scientific merit. It is important to understand exactly how researchers conducted their studies and arrived at conclusions prior to reporting on any new medical “breakthroughs.” While it may be a great headline to report on a new “revolutionary” treatment, it is far better to temper excitement with the facts—while a new finding may be promising, it takes time to determine whether or not it will truly be a groundbreaking new therapy. It is important that medical journalists describe the basics of any study to the audience—sample size, randomization, and design methods—in order to help viewers understand exactly what conclusions can be drawn for a particular bit of research. Once the data is reported, it is essential that the physician journalist place the findings in context—how can the study be applied to patients and how might it impact lives.

2. Minimize Harm (Primum non nocere)

Certainly, all physicians take an oath to first do no harm when caring for patients. This principle should also apply to physicians who are reporting the news. It is essential to remember that physicians, by their very title are given a certain level of elevated credibility. Physicians who are featured on television are provided an even higher level of credibility and believability. When a physician with well respected credentials speaks to a national television or radio audience, most viewers believe what is said and do not question the source—this requires a physician journalist to carefully choose the words that they use to communicate complex ideas in order to leave no room for ambiguous interpretation. Sensationalization can produce confusion and may result in patients running for treatments that are not proven to be safe and effective in randomized controlled clinical trials. In addition, if a physician journalist is involved in debating policy or healthcare politics, he or she must remain respectful to the opposition and remember that, even though we may not agree with others, all involved are human beings.

3. Act Independently

Conflicts of interest can destroy credibility and can also lead to perceived professional misconduct. It is essential that the physician journalist is careful to avoid any outside influence when reporting on a new device or treatment. Pharmaceutical and medical device companies can significantly influence the way in which data or breaking news stories may be reported. In order to remain and perceived as unbiased reporters, physician journalists must carefully disclose ANY relationships with industry and ideally avoid accepting ANY payments or gifts from industry partners. Avoid any form of “advertising” when reporting and always use trade names rather than brand names when appropriate. Always mention alternatives and competitive drugs or treatments when discussing a particular branded device or drug in order to provide the viewer with a more complete view of the story.

4. Be Accountable

A credible and successful physician journalist must accept responsibility for your words when reporting. We all must be willing to respond to challenges and criticism in a respectful, professional way. Not all viewers will agree with your assessment of a particular story—and most certainly will not always agree with your position in a healthcare policy debate. Be ready to defend your position with vigor but also be willing to admit if you have made a mistake or error in your reporting or in any conclusion that you may have drawn. Clarify your position when required and be very transparent with your sources of information when appropriate.  Carefully determine the impact of your words–as a physician on television, you are given an elevated level of credibility.  Avoid the Dr Oz example of sensationalization and over-blowing stories.  If medical journalists are conscientious and honest, they will not likely be required to testify before Congress as in the case of Dr Oz.

What is the Bottom Line??

The practice of medicine is an honor and a privilege—every person with the degree of Medical Doctor is very fortunate to be able to utilize a particular set of gifts and skills to help others. Providing care to patients and offering treatment and even cures for chronic disease is incredibly rewarding. For me, as a physician journalist, it is equally as important to educate the public and improve awareness of diseases and their treatments. Television, radio and print media provide the opportunity for physicians to serve the pubic in an entirely different way. By discussing medical advances and drawing attention to common symptoms and medical problems, physician journalists have the chance to make a real impact on overall public health. Just as the physician has a responsibility to provide their very best to the patient when involved in patient care, the physician journalist also has an enormous responsibility to provide credible, non biased and accurate information to the public when reporting.

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What Would YOU Do With An Extra Second….Better Decide Soon, Its the Day of the Leap Second!

In medicine, I have learned that time is a precious commodity. Too often, when life slips away and patients and families wish they had just a little more time. For physicians, a little more time may make the difference in a patient’s ultimate outcome and sometimes makes the difference between making it home in time for a family dinner. Today, we add ONE second to the international world clock at midnight. Over fifty years ago, world clocks began keeping time with atomic clocks that are governed by oscillations of an atom–which are determined in part by the rotation of the earth. The earth’s rotation is slowing over time, and in order to keep these clocks coordinated with the earth’s rotation, we must add an extra second from time to time.

What Can You Do With An Extra Second?

While a second may seem like an insignificant amount of time, when you are a careful steward of time much can be accomplished quickly. An extra second can have a substantial impact—Here is my list of possible plans for my extra second:

1.  One more chance to say “I love you”

Too often, the pace of the world gets in the way. We forget those most dear to us and allow our daily challenges—both at work and at home- to take center stage. I may use this extra moment in time to make sure that my wife and daughter know exactly how I feel. Time is unwavering and unyielding. Time rarely stops—actually almost never stops—but today we have a brief pause. We must use it wisely and take advantage of the extra “time” with loved ones and remind ourselves that time spent with those we love is precious

2. An opportunity to pause before pressing send on an angry email

In the heat of the moment, many of us have sent a note that we wish we could have back. Email and electronic communication can be unforgiving. Just think if we were able to use the extra second we are given to pause before sending an angry reply. That one second to ponder the implications of an email response may actually save even more time by preventing hurt feelings, damaged relationships and tarnished reputations.

3. A chance to pause and take a breath

Lets’ face it, today’s world moves at a very quick pace. Electronic communication, social media and instant messaging leave each of us with very little down time. Just recently I flew to Italy from New York and was amazed to have active internet service for the entire flight. Rather than unplug and enjoy the beginning of my vacation, I remained connected and engaged through the flight. Much can be gained from taking a few minutes to meditate, unplug and recharge. All of us can benefit from stepping away from the business of a hectic day—just one second may help relieve stress and recharge the mind–Maybe I should use the extra second to take a deep breath, reflect and relax. If a 5minute meditation works, why wouldn’t a 1 second mini meditation work as well?

4. Send a tweet

Social Media is an excellent example of how we can reach out to others—all over the world—in a matter of seconds. We are now more connected than ever. Twitter brings doctors and patients together and makes the world a smaller place. Twitter provides for the brief communication of ideas, exchange of information and socialization all in a moment. One second is all that is needed to send a tweet. At midnight tonight, I may decide to use my extra second to push send and publish a tweet.  Maybe I will connect with a new friend or colleague.  Maybe my tweet will reach a patient suffering with chronic disease and provide them with new hope.  Maybe my tweet will make someone laugh, or (if I am really lucky) make a lonely person smile.

Tonight, we have a rare opportunity to stop time. At midnight we are able to take back time—if only for a second. I have shared a few of my ideas. What will YOU choose to do with it? Time is ticking away–we have to decide soon how to use that extra time.  Midnight will be upon us soon.  How we use it could change a life….or result in time for one more Zzzz…


The High Cost of A Cure: The First Step in Rationing Care

Hepatitis C is one of the most common chronic infectious illnesses in the US today and affects nearly 3.2 million Americans. Complications of hepatitis C infection include liver cancer as well as cirrhosis.  Many patients with chronic hepatitis ultimately develop liver failure and will die without liver transplantation.  In the last year,  a new drug class has entered the market and is able to produce cure rates in excess of 90%.  These drugs–Sovaldi and Harvoni– are incredibly expensive and some treatment courses cost more than $1000 a day.  Typical treatment courses to achieve cure require 12 weeks of continuous treatment.  Drug maker Gilead reported that sales of Sovaldi exceeded 2.2 billion dollars in the first quarter of 2015. According to a report released by Express Scripts in 2014, spending on Hepatitis C therapy increased by 700% between 2013 and 2014.  In fact, only 1% of drugs accounted for 32% of spending over the same time period–much of this is due to the emergence of the new treatments for hepatitis.

When questioned about the cost of the drug, most pharmaceutical executives will claim that the cost is justified by the investment of time and money in research and development that led to the cure.  The cost to take a drug to market and obtain FDA approval is great but does it really justify the astronomical costs?

But aren’t they simply charging what the market will bear?

Gilead executive Gregg Alton argues that the pricing of their drug is based on what they think is a “fair price for the value that [we] are bringing into the healthcare system and to [the] patients”.  Will the price be lowered once investment is recouped?  Alton thinks this scenario is “very unlikely.”

What are the implications for Medicare?  Who will get the drug and who pays the bills?

The Washington Post reports that Medicare spending on hepatitis C therapy exceeded 14.5 billion dollars last year alone.  Nearly 350,000 Medicare beneficiaries have hepatitis C (and many are not even aware of their diagnosis) according to an analysis by Health Affairs published last year.  By law, medicare is prohibited from negotiating prices with pharmaceutical suppliers.  Taxpayers will bear the brunt of the cost–once a medicare recipient reaches 4700 dollars out of pocket, the government program’s “catastrophic” coverage will then pick up the bulk of the remaining tab. Ultimately, other medicare patients will have higher deductibles and continued “cost sharing” will result in higher costs for everyone.  My fear is that widespread rationing may be implemented and access to a life saving drug may be ultimately limited due to overwhelming costs.  Medicaid is already beginning to ration use in many states and the Senate Veterans Affairs committee has held hearings in the last year in order to question industry about the price point and to prepare to address how the national VA Hospital system will deal with the exorbitant costs of the therapy.

Here is my take–It all goes back to Reform…

Healthcare costs continue to rise–even with reform.  The Affordable Care Act is clearly short-sighted and laser focused on only certain aspects of healthcare costs.  The legislation has addressed limiting costs thru declining payments to doctors and healthcare systems.  Access to physicians, particular heatlhcare centers and certain treatments is tightly controlled and, in some cases, severely limited.  The ACA does nothing to address the other TWO major root causes of skyrocketing healthcare expeditures –cost of drugs/therapy as well as medical liability and lawsuits.  Until such time as the US adopts a national policy of tort reform (which is unlikely to happen given the power of the trial lawyer lobby in Congress) as well as price controls on expensive drugs such as the biologics for Hepatitis C, nothing will change.  Ultimately, the costs of these life saving drugs must be addressed.  If we continue in the current system, the money for these therapies will have to be carefully adjudicated.  The hints of rationing in healthcare are already here–medicaid and the VA system–a “model” for socialized medicine are already addressing ways in which they can adjudicate dollars to treat the most severe cases of Hepatitis C.  I expect that eventually we will see waiting lists for therapy and policies put in place to determine which patients will be eligible to receive higher priced drugs. Innovation is expensive and pharmaceutical companies and entrepreneurs should be rewarded for their investment and their risk–but, we must also balance the reward with what is reasonable and affordable for ALL patients seeking a cure for a potentially deadly disease.