We hear a lot these days about research into promising new immunotherapies and targeted cancer treatments. But when prices for new cancer therapies often exceed $100,000 a year, how many people could realistically be helped by new treatments like these? And prices for older drugs are accelerating too.
A recent article in the New York Times reported on the stories of a number of individuals struggling to cope with drug prices for essential medications that are far beyond what they can afford.
And it’s not just prescription drug prices that are rising at astronomical rates. All aspects of healthcare costs are affected, including prices for hospital care, medical devices and physician care. Dr. Elisabeth Rosenthal, in her book “An American Sickness” gives us some perspective on how we got to where we are today with healthcare costs in this country and what we can do about it.
How We Got Here
Rosenthal is a physician who went to Harvard Medical School and trained and worked in internal medicine at a major hospital in New York City. She was a reporter for twenty-two years for the New York Times until 2016, when she became editor in chief of Kaiser Health News, an independent news organization that focuses on health and health policy.
In Part I of the book, Rosenthal takes us through what has been going on behind the scenes in all aspects of healthcare over many years. While the situation we have now may seem to have developed almost overnight, she explains that things have actually been evolving to where they are now over the past twenty-five years.
Because our healthcare system–or rather, non-system–has evolved to where it is gradually, many of us don’t realize how bad the situation has become until we’re faced with outrageous, incomprehensible medical bills. It seems obvious that medical care exists (or should exist) for the purpose of helping people who are sick or injured to get better. And Rosenthal emphasizes that that is what patients and most doctors and medical professionals still want. However, the entire infrastructure around healthcare has evolved to where, like any other business enterprise, it is all about maximizing profits.
Rosenthal walks us through egregious changes that have occurred in recent decades in the role of health insurance, the management of hospitals and physician practices, and the development and marketing of drugs and medical devices–all geared toward increasing profits generally without regard to the impact on patients.
For example, in the chapter on pharmaceuticals, Rosenthal refers to the changes in regulations in the 1990s that led to tremendous growth in direct-to-consumer drug advertising and points out that drug companies now claim that such advertising expenditures are part of the “cost” of a bringing a new drug to market. She says:
Pharmaceutical companies like to say it takes well over $1 billion to bring a new drug to market: the costs of the basic science, developing a new compound, figuring out the right dose, and the FDA process of human testing for safety and efficacy. (Many companies also include opportunity costs–the profits that could have been made by investing the money elsewhere–in the estimate.) In some cases, that is likely true. But academic studies have placed the actual average scientific research and development costs for a new drug at between $43.4 million and $125 million. It is unclear how much of PhRMA’s typical $1 billion estimate is for testing markets, advertising, and promotion.
Rosenthal points out that, in other businesses, we at least have transparency around prices and costs. She makes the analogy to booking a trip or getting a mortgage–information on costs is readily available and we can compare and make choices based on value for our money. It is entirely possible to have transparency in healthcare costs, she says, noting that all other developed countries have this transparency, ensuring it in a variety of ways.
What We Can Do Now
After some talk of dealing with drug prices during the presidential campaign, we hear very little from policymakers on the subject these days. Most policy initiatives at the federal level–including the Affordable Care Act, as well as efforts to repeal or replace it–only address the issue of access to health insurance and not the problem of underlying costs.
Health insurance companies attempt to respond to the problem of rising prices for medical care in a variety of ways, some of which can cause harm to patients. For example, “step therapy” protocols can prevent patients from obtaining needed medications prescribed by their doctors. And earlier this year, the insurance company Humana took the standard breast cancer medication, Herceptin, off its preferred drug list in South Florida, causing an outcry from patient advocates concerned that the cost-saving move could lead to similar actions by other providers in other markets.
Part II of the book is Rosenthal’s “blueprint and game plan for changing both our relationship with the medical system and the system itself, sector by sector, from doctors to hospitals to insurers to drugmakers.” In chapters addressing doctors’ bills, hospital bills, insurance costs, and drug and medical device costs, she lists both practical steps we can take now and system reforms we can demand of the medical industry and our elected and appointed officials responsible for regulating its practices. In addition, appendices include helpful tools such as price calculators for comparing prices on prescription drugs from providers in your area and tools for vetting hospitals.
Overall, I learned a great deal from this book. It helped me to “connect the dots” and understand better what is going on behind the scenes that is causing our healthcare costs to soar. And it gave me some strategies that I can use now while we continue to demand the necessary policy changes from our legislators and officials.