Utah Healthcare Initiative blogs

The High Cost of Cancer Care-2

Joe Jarvis — Sun, 26 Feb 2012 15:56:50 +0000

The Associated Press ran an article about the cost of treating cancer (find it at http://www.deseretnews.com/article/765554241/Cancers-growing-burden-the-...). Excerpts:
Patients, taxpayers and insurers are struggling with the cost of care for many diseases. One of the costliest is cancer.

Patti Tyree was afraid that cancer would steal her future. Instead, the cost of treating it has.

She had hoped to buy a small farm with money inherited from her mother. But co-payments for just one $18,000 round of breast chemotherapy and one shot of a nearly $15,000 blood-boosting drug cost her $2,000.

Bills for other treatments are still coming, and almost half of her $25,000 inheritance is gone.

"I supposedly have pretty good insurance," said Tyree, 57, a recently retired federal worker who lives near Roanoke, Va. "How can anybody afford this?"
The financial strain is showing: Some programs that help people pay their bills have seen a rise in requests, and medical bills are a leading cause of bankruptcies.

"Patients have to pay more for their premiums, more for their co-payments, more for their deductibles. It's become harder to afford what we have, and what we have is becoming not only more costly but also complex," said Dr. Michael Hassett, a cancer specialist and policy researcher at Dana-Farber Cancer Institute in Boston.
Modern treatments have fewer side effects and allow patients to have a greater quality of life than chemotherapy did in the past. But they are far more toxic financially.

Of the nation's 10 most expensive medical conditions, cancer has the highest per-person price. The total cost of treating cancer in the U.S. rose from about $95.5 billion in 2000 to $124.6 billion in 2010, the National Cancer Institute estimates. The true tab is higher — the agency bases its estimates on average costs from 2001-2006, before many expensive treatments came out.

Tyree, the woman from Virginia, said the hospital billed her insurer $14,865 for Neulasta, a shot to boost white blood cells and help her tolerate chemotherapy. Several cancer specialists said Neulasta usually costs less than half that amount, but the charge was $12,000 for Tyree's friend and blog postings by other cancer patients tell similar stories.

The worst part: A much cheaper alternative is available — a different formulation of Neulasta — but many patients aren't offered that option. There's even a cheaper way to get Neulasta, but hospitals make a lot of money giving the shot instead of teaching a patient or a caregiver how to do that.

A recent American Cancer Society survey found that one-quarter of U.S. cancer patients put off getting a test or treatment because of cost, the group's chief medical officer, Dr. Otis Brawley, writes in his new book "How We Do Harm," which discusses costs and argues for more rational use of health care. One out of 5 survey respondents over 65 said they had used all or much of their savings on cancer care.
The burden hits hard on the middle class — people too well off for programs that cover the poor but unable to afford what cancer care often costs.

Dr. Amy Abernethy, director of the cancer care research program at Duke University, did a study of 250 such patients from around the country. Most were women with breast cancer, including Tyree. All but one had insurance, and two-thirds were covered by Medicare. The vast majority also had prescription drug coverage.

Their out-of-pocket expenses averaged $712 a month for doctor visits, medicines, lost wages and travel to appointments. To pay for cancer drugs, half spent less on food and clothes, and 43 percent borrowed money or used credit. Also, 26 percent did not fill a prescription, 22 percent filled part of one and 20 percent took less than prescribed.

Here's where things get sticky. Desperate patients often demand treatments that have a very small chance of helping them. And many doctors feel they have a duty to offer anything that might help, regardless of the cost to insurers and society, said Hassett, the policy researcher from Boston.

An example is the outcry over the government's recent withdrawal of approval of Avastin for breast cancer. Studies showed the drug did not improve survival for most women and there are no biomarkers to identify the few it does help. Many doctors and patients still want access to the drug, and Medicare is still paying for it.

But denying "useless" treatment isn't just about saving money — it's about avoiding harm and false hope, Brawley writes in his book. "A rational system of health care has to have the ability to say no, and to have it stick," he contends.
My comment:
Dr. Otis Brawley is the chief medical officer for the American Cancer Society. Surely he has a vested interest in finding new and better ways to fund the care of cancer patients. Yet, in his book "How We Do Harm" he points out that we currently pay for 'useless' treatments for cancer patients, which he classifies as harm, both because of false hope and because of excess cost. His conclusion bears repeating: "A rational system of health care has to have the ability to say no, and to have it stick."
Inappropriate care--which is care given where no clinical science supports the intervention--even if well intended or desperately demanded by a dying patient, is quality waste. We know enough about clinical science to say no to many kinds of inappropriate care. We need a societal mechanism which can stand up to the enormous pressures to pay for inappropriate care. These pressures don't primarily come from patients, but from powerful corporations seeking government welfare for their product-be it drug or device. Federal agencies have not shown the backbone necessary to do the right thing when these pressures come to bear. Congress is bought and paid for by the powerful corporate interests.
The Utah Healthcare Initiative proposes the formation of a state based commission to serve this vital function of saying no to inappropriate care. A similar commission is already functioning in the state of Washington. We ask the federal government to get out of the way and let states be the primary innovator in reducing inappropriate care.

Dr. Joe Jarvis

Taxonomy:

Cancer Care

Corporate Welfare Keeps Health Insurance Alive

Joe Jarvis — Sat, 25 Feb 2012 14:56:59 +0000

David Brooks, columnist at the New York Times, makes a convincing case that the US is a back door welfare state (find it at http://www.nytimes.com/2012/02/24/opinion/brooks-america-is-europe.html?...). Excerpts:

The U.S. does not have a significantly smaller welfare state than the European nations. We’re just better at hiding it. The Europeans provide welfare provisions through direct government payments. We do it through the back door via tax breaks.

For example, in Europe, governments offer health care directly. In the U.S., we give employers a gigantic tax exemption to do the same thing.

These tax expenditures are hidden but huge. Budget experts Donald Marron and Eric Toder added up all the spending-like tax preferences and found that, in 2007, they amounted to $600 billion. If you had included those preferences as government spending, then the federal government would have actually been one-fifth larger than it appeared.

The Organization for Economic Cooperation and Development recently calculated how much each affluent country spends on social programs. When you include both direct spending and tax expenditures, the U.S. has one of the biggest welfare states in the world. We rank behind Sweden and ahead of Italy, Austria, the Netherlands, Denmark, Finland and Canada. Social spending in the U.S. is far above the organization’s average.

You might say that a tax break isn’t the same as a spending program. You would be wrong.

David Bradford, a Princeton economist, has the best illustration of how the system works. Suppose the Pentagon wanted to buy a new fighter plane. But instead of writing a $10 billion check to the manufacturer, the government just issued a $10 billion “weapons supply tax credit.” The plane would still get made. The company would get its money through the tax credit. And politicians would get to brag that they had cut taxes and reduced the size of government!

But, as the economist Bruce Bartlett demonstrates in his impeccably fair-minded book, “The Benefit and the Burden,” the cumulative effect of these tax breaks is terrible. Like overgrown weeds, the tangle of tax breaks distorts behavior, clogs the economy and deprives the government of revenue.

And because they are hidden, many of the tax expenditures go to those who need them least, the well connected and established over the vulnerable and the entrepreneurial.

My comment:

Without the federal tax credit for employers who buy health insurance for employees and dependents, health insurance would have ceased to exist decades ago. The health insurance business model is a useless, wasteful, stupid way to pay for health care, which Americans increasingly do not want, but are forced to have, because tax credits and the 'Affordable' Care Act prop it up. The health insurance industry is the epitome of the well connected and established who receive preferential tax treatment over the vulnerable (the sick and injured in America) and the entrepreneurial (who can not start up a business because health care costs kill the opportunity). No better illustration exists of the overgrown weeds fostered by tax credits than the tangle of insurance which is currently distorting health care delivery (perverse incentives), clogging our economy, and depriving government at all levels of needed revenue.

Time to move on beyond the health insurance business model.

Dr. Joe Jarvis

Taxonomy:

Corporate Welfare

Proper Way to Reduce Taxes

Joe Jarvis — Fri, 24 Feb 2012 14:53:57 +0000

The Deseret News published on op ed piece I authored today (http://www.deseretnews.com/article/765553651/What-would-Dougalls-tax-cut...) all about growing or reducing the size of government. Here is the entire text:
About 20 years ago while serving as the principal public health officer for the state of Nevada, I was frequently harassed by citizens who expressed a belief that their state government had grown too big and that I, and other civil servants, were "slopping at the public trough." It seemed to me that these same finger pointing citizens would be the first to complain if the well on their residential property was contaminated. Never mind that the budget for regulatory enforcement had never been functionally sized.

These experiences as a state public official came to mind with the recent filing of a bill by Rep. John Dougall that would cut the state's income tax from 5 percent to 4 percent, the state's share of the sales tax from 4.7 percent to 3.5 percent, according to Bob Bernick, reporting on the website Utah Policy. He quotes Dougall as saying, "I ask, can we do more with less? But I also ask, can we do less with less — in other words, how do we stop the growth in government?"

Bernick asked: "Could state government function with this ($600 million) cut?"

"Yes we could," said Dougall, who as budget vice chair deals intricately with state spending. "We could do this and still fund growth in public education. At the very least, we will have a discussion about growth in government — which is always worthwhile."

Having a discussion about negative growth in government should never be separated from a discussion about which functions of government should be cut and how. Apparently Dougall wants positive growth in government functions related to public education, and he has in the past voted for tax increases to fund highway projects, especially those in Utah County.

So, which functions of state and local government does he believe to be unnecessary, or unnecessarily large? Pollution control? Public safety? Law enforcement? Justice? Economic development? Parks? I think Dougall should not be taken seriously unless and until he can specifically identify $600 million in excess government services that we should live without.

And, since Dougall wants to grow the budget for education, he should tell us how the additional funds would best be used. It is the lazy legislator who does not do his homework.

Dr. Joe Jarvis is the chair of the Utah Health care Initiative and has made specific proposals for reducing the Utah Medicaid budget, which can be found at www.utahhealthcareinitiative.com

My comment:

We can reduce the size of health care costs, including those paid for by government. But we need to move beyond simply cutting to specifically identifying waste and eliminating it. Join the Utah Healthcare Initiative and help make health care less costly.

Dr. Joe Jarvis

Taxonomy:

Medicaid

High Cost Causes Uninsurance

Joe Jarvis — Thu, 23 Feb 2012 19:18:44 +0000

The Center for Economic and Policy Research has published a report about low-wage workers and health insurance coverage (http://www.cepr.net/documents/publications/health-low-wage-2012-02.pdf).

Here is an excerpt:
Center for Economic and Policy Research
February 2012
Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond
By John Schmitt

In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979.

Coverage problems are particularly severe for Latino workers. Almost 40 percent of all Latino workers (not just low-wage workers) have no health insurance of any form. African American (about 22 percent) and Asian (about 17 percent) workers are also much less likely to have coverage than white workers (about 12 percent).

Affordable Care Act of 2010

For simplicity, if we assume that all adults – workers and non-workers – have the same coverage rate, then under CBO’s projections, workers as a group would have a 5.8 percent non-coverage rate after the ACA. By comparison, in 2010, the actual non-coverage rate for all workers was about 17.7 percent. The CBO gives no guidance about how the coverage improvements for workers would be divided across the wage distribution. If, at the extreme, we assume that all of the uncovered workers are low-wage workers by our definition – that is that all 5.8 percent of workers remaining without coverage are in the bottom quintile – then the non-coverage rate for low-wage workers would be about 29.0 percent. This would be a reduction of one-fourth in the share of low-wage workers without coverage relative to the actual non-coverage rate for low-wage workers in 2010 (38.5 percent). A less extreme assumption about the distribution of non-coverage rates by wage level after the ACA would produce larger gains for low-wage workers. For example, if instead we assume that the top 80 percent of workers have a frictional 3 percent non-coverage rate, then an overall non-coverage rate for workers of 5.8 percent implies a 17.0 percent non-coverage rate for low-wage workers, well short of universal coverage, but a non-coverage rate that is less than half of the current rate.

The ACA will not produce universal coverage for low-wage workers. But, if the ACA is not enacted – due to judicial or legislative action – every indication is that coverage rates will continue their three-decades-long decline.
The decline in coverage rates has its roots in two long-standing economic processes. The first is the rising cost of health care, which has squeezed workers’ wages and made it less economical for firms to offer health insurance, especially to low-wage workers. In the absence of reforms to the existing health-care system, these costs – and implicitly the pressure on workers’ after-health-insurance compensation – are projected to continue rising indefinitely.

My comment:
The principle flaw with the Affordable Care Act is the approach to reform which emphasizes increased coverage rather than reduced cost. We can not 'afford' increased coverage without first reducing the cost of care and the overhead related to financing health care. Low wage workers will never be adequately 'covered' for health care financing under ACA. The real problem in business as usual for American health care is the wasteful spending on poor quality care and inefficient financing. We need legislation (best at the state level) which addresses the high cost of American health care. Coverage will naturally follow reductions in cost.
Dr. Joe Jarvis

Taxonomy:

Costs

Illusion Over Evidence

Joe Jarvis — Thu, 23 Feb 2012 00:41:03 +0000

Found on the Health Affairs blog (find it here):
Health Affairs Blog
February 15, 2012
Medicare And Commercial Health Insurance: The Fundamental Difference
By Diane Archer and Theodore Marmor

As the debate over Medicare continues in connection to America’s fiscal problems, it is critical to understand how Medicare differs from commercial health insurance for working people. There is a fundamental difference between these two types of health insurance plans, one social and one commercial.

The basic difference between Medicare and commercial insurance is that Medicare is designed to absorb risk, serving individuals who have or may have costly and complex medical needs as well as the relatively healthy, whereas commercial insurance is required to protect its business interests by avoiding those most likely to use medical care.

****

But nothing can change the underlying reality that programs like Medicare are designed to absorb and broadly distribute risk, protecting everyone, while commercial insurers are designed to select and protect individuals with the fewest needs.

The belief that competition among private health insurance firms can produce cost savings or higher quality care represents the victory of illusion over evidence. We need to let the existing Medicare system do what it already does effectively: insulate Americans from risk, rather than shift risk to the most vulnerable citizens.

My comment:

The private health insurance business model does not produce quality care, protect patients, or even really fund health care. It is designed to guarantee profit taking. Period.

Dr. Joe Jarvis

Taxonomy:

Health Insurance Business Model

Health System Won't Cure Itself

Joe Jarvis — Tue, 21 Feb 2012 17:00:00 +0000

So says Wyoming's on-line news source, the Star-Tribune (find it here). It's a short piece, so here is the entire text:

Evidence continues to mount that the U.S. health care system as currently configured is unsustainable for both patients and businesses.

A Commonwealth Fund report concludes that if premium increases continue at the rate seen before enactment of the Affordable Care Act, the average premium for family coverage will rise 72 percent by 2020, or to nearly $24,000.

The report focused on private employer-based health premiums and deductibles. Across all states, total premiums for family coverage increased by 50 percent from 2003 to 2010, while employees’ annual share of premiums increased by 63 percent.

The report concluded that health care reform offers at least the potential to reduce insurance cost growth.

“If efforts succeed in slowing annual premium growth by 1 percentage point, by 2020 employers and families together would save $2,161 annually for family coverage, compared with projected premiums at historical rates of increase,” the report said.

In Wyoming, insurance premiums for single and family coverage have increased rapidly in recent years.
The average cost for single coverage was $5,204 in 2010, up from $3,706 in 2003. For a family policy, the average cost in 2010 was $13,899, up from $9,612 in 2003.

As a Star-Tribune series last week pointed out, personal bankruptcy is an all-too-frequent consequence of the current system. Because of high copayments and deductibles, even people who have health insurance are not necessarily immunized against financial ruin.

A Harvard University study found that in 2007 fully 62 percent of personal bankruptcies in the U.S. stemmed from medical costs. The analysis was based on debtors’ stated reasons for bankruptcy filings, income loss due to illness and the magnitude of medical debts.

Whether the Affordable Care Act, derisively called “Obamacare” by its detractors, is the answer to all or even much of what ails the medical system is a matter of debate.
But this much is clear: The maladies afflicting the U.S. health care system will never go away on their own.

My comment:

The Commonwealth Fund indulges itself by pretending that the "Affordable" Care Act will actually have some effect on health care costs. Even if it did, that would not necessarily translate into lower premiums for health insurance, since health insurers set their premiums at a level meant to guarantee their profits, and not as a direct reflection of real cost of care. Further, after ACA is fully implemented, Americans will be required to buy health insurance and federal subsidies will assist low income people with the purchase. This sounds like an automatic opportunity for raising premiums.

The Wyoming newspaper is correct. American health care business as usual will not fix itself. We Americans must do the heavy lifting required to rid ourselves of health insurance parasitic practices.

When will you be ready to join this fight?

Dr. Joe Jarvis

Taxonomy:

Health Insurance Business Model

Obama-Care Won't Bring Lower Overhead

Joe Jarvis — Sat, 18 Feb 2012 07:59:41 +0000

Deloitte has published a synopsis of facets of the health reform package known as the 'Affordable' Care Act or Obama-Care (find it here). Having reviewed the excerpt about administrative simplification, I find no evidence of any real administrative savings. There is a reason for this. Obama-care depends upon the health insurance business model, and therefore, depends upon the administrative complexity of the American health insurance business model. A savings of about $400 billion/ year could be realized by eliminating this business model, which is the most wasteful and expensive way to finance health care in the world.

Dr. Joe Jarvis

TR Reid Makes Another Statement

Joe Jarvis — Fri, 17 Feb 2012 07:53:36 +0000

KUED ran TR Reid's latest health system reform documentary last night (find it here). Here is the caption for the film:

One small community in the Colorado oil patch near the Utah border delivers the highest value-for-the-money health care in the United States, and in the process covers nearly everyone in town. How do they do it? Could other communities do it, too? Correspondent T.R. Reid interviews health policy experts at the Dartmouth Institute before heading to Colorado and other places in the U.S. where doctors and hospitals are working hard to provide excellent health care at reasonable cost.

My comment:

Mr. Reid documents that if American health care were to ignore the health insurance business model and eliminate the for profit motive in health care delivery we could save about $700 billion per year because of improved care. This is the figure that has been repeatedly offered (as documented here on this website) over the past 4 years. Higher quality care costs less.

If you have an opportunity to see this film, do so. Then join with the Utah Healthcare Initiative to bring these changes to the electorate.

Dr. Joe Jarvis

The High Cost of Cancer Care

Joe Jarvis — Thu, 16 Feb 2012 10:27:13 +0000

My daughter-in-law told me about one of her former students who is currently struggling with cancer. Then she sent me a link to his story as published by ABC 4 (find it here). Excerpts:

Stephen's family says that after nearly a year of chemotherapy, and other medical treatment including a month-long stay in the hospital, the Griener's medical bills have become more than his family can manage. With the help of countless friends and neighbors, they have been able to take care of previous treatments, but still need to raise a large sum to pay for the stem cell transplant.

A blog has been set up for donations as well as for members of the community to stay up to date on Griener’s condition and treatments.

My comment:

Health care costs, including those for treating cancer, are often more than a family can manage. And having health insurance is no protection from this financial embarrassment. Once the low value plans anticipated by the 'Affordable' Care Act become the business standard, virtually all cancer patients will find themselves at financial risk because they are struck by disease.

Isn't it time that we found a way to finance health care without bankrupting families?

Dr. Joe Jarvis

Amicus brief: Press coverage

Joe Jarvis — Wed, 15 Feb 2012 09:10:32 +0000

Kirsten Stewart posted an article about the Amicus brief on-line for the Salt Lake Tribune (find it here). Excerpts:

Fifty medical doctors who want a single-payer health care system rather than the proposed federal reform have signed a legal document opposing the law.

Among them are two from Utah: Joe Jarvis and Clark Newhall.

The high court is weighing a challenge to the constitutionality of the insurance requirement via a lawsuit filed by 26 states, including Utah.

The Obama administration argues the requirement is necessary to protect insurance companies from the risk of people waiting until they’re sick to get covered.

But in their legal brief, doctors contend the requirement isn’t necessary to reach Congress’ goal of universal coverage.

"Most people oppose the [law] without having an alternative in mind. That’s disingenuous," said Jarvis of Salt Lake City.

His decades-long push for a statewide health cooperative — a publicly-funded, nonprofit health insurance trust to cover every Utahn for all medically necessary care — has been a non-starter in conservative Utah. Chances of it gaining traction grew slimmer with passage of President Barack Obama’s health overhaul.

Jarvis isn’t a betting man. But he says the high court’s decision to consider multiple problems raised in opposition to the law, "shows they’re taking this seriously."

Without the insurance mandate, the law can’t stand on its own, which could open the door to single payer, he says.

Under the model promoted by Jarvis, a Republican, people would still pay for coverage, but it would be subsidized and kept affordable by eliminating insurance middle men and simplifying payments.

It calls for the creation of a commission to squelch unnecessary tests and procedures ordered by doctors required to meet productivity targets or to fend off malpractice lawsuits. The commission, composed of medical experts, would determine which services are covered for given conditions based on research. It would also hear malpractice claims and insurance appeals.

Obama’s fix does nothing to curb health spending, Jarvis said. "It’s a propping up of the private insurance business model. What they’re trying to do is force us to buy, in most cases, poor quality health benefits."

My comment:

The Oregonian (find it here) also covered the filing of the Amicus brief. The angle taken in Oregon's newspaper was interesting, documenting that the individual mandate is opposed by the majority of Americans. So, it's both unpopular and ineffective. Sounds like the Supreme Court should just do us all a favor and overturn it.

Dr. Joe Jarvis