nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Monday, June 21, 2010

The Results Are In: Govt Drug Price Controls Lead To...Increased Cost.

 
This interesting new study published in Health Affairs (June 17) has a message for reformers:  actions have consequences, frequently unintended.

The authors looked at data subsequent to the implementation of Medicare reform in 2003 (the Medicare Prescription Drug, Improvement, and Modernization Act,), which
"aimed to lower Medicare spending by reducing reimbursements for specific drugs. It also aimed to reduce the incentive to prescribe certain drugs that afforded particularly higher margins for the doctors and clinics but did not offer any clear clinical advantage for patients."
Does this sound familiar?  Can you say "comparative effectiveness?"

The study looked at chemotherapy in lung cancer and found
"Physicians switched from dispensing the drugs that experienced the largest cuts in profitability, carboplatin and paclitaxel, to other high-margin drugs, like docetaxel. We do not know what the effect was on cancer patients, but these changes may have offset some of the savings projected from passage of the legislation. The ultimate message is that payment reforms have real consequences and should be undertaken with caution."
So when the government instituted a price control on certain drugs, there was a switch to other drugs.  Your basic government-run health care supporter would say that stronger prohibitions are needed to keep doctors from switching to higher cost drugs, but hold your horses...

1.  Although doctors shifted somewhat to more expensive drugs, there was no data that showed they benefited financially from doing so.
2.  The authors weren't able to look at whether these drugs were used differently; that is, before radiation or after, at the same time, etc.
3.  Percent profit on the drugs converged on a stable amount, so prices weren't being jacked up along the way.
4.  Medicare started to cover a new breakthrough drug (Avastin) during the study.
5.  Data wasn't available for managed care-covered Medicare (conceivably more responsive to cost efficiencies).
6.  Throughout the study no research suggested that there were survival advantages across the different chemotherapy regimens.

In summary, the authors "could identify no major, coincident changes in practice patterns that plausibly explain our results."  The payment changes, designed to save money may have had effects that "offset some of the savings projected from passage of the bill."

Finally, the researchers "urge caution for health care payment reform."

So what does this tell us to do about reigning in health care costs?  Nothing.  Of major concern is the fact that by the time we get data on comparisons and prices, medical care has moved on... and the conclusions are no longer relevant.  This happened with drug-eluting stents in Great Britain:  by the time the govt decided to deny care for this new more expensive care, the denied treatment was already the new standard for narrowed coronary arteries.

Boil down all the facts above to this simple conclusion:  price controls correlated with an increase in costs.

Actions have consequences.

Doc D
 

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