Capitalism and Health Care

[Chilly]

I read an interesting article in the New York Times this morning. They're having a weeklong special on diabetes.

 

This is the link to the article.

 

The point from the article that I want to discuss is this one:

 

They were victims of the byzantine world of American health care, in which the real profit is made not by controlling chronic diseases like diabetes but by treating their many complications.

 

Insurers, for example, will often refuse to pay $150 for a diabetic to see a podiatrist, who can help prevent foot ailments associated with the disease. Nearly all of them, though, cover amputations, which typically cost more than $30,000.

 

Is there a real concern here, or is this not whats happening? To be honest, I don't know, but I am wondering how accurate these statements are.

[IowaBill]

I read an interesting article in the New York Times this morning.  They're having a weeklong special on diabetes.

 

This is the link to the article.

 

The point from the article that I want to discuss is this one:

Is there a real concern here, or is this not whats happening?  To be honest, I don't know, but I am wondering how accurate these statements are.

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Most insurers will, however, pay for a diabetic to see an endocrinologist. Most endocrinolgists will do many of the same tests and treatments that prevent amuptation of any extremeities as a result of diabetes. I think thereason that many insurers don't pay for diabetics to see podiatrists is because diabetes is a disease of the endocrine system, not a disease of your feet (that was worded poorly!). there is no questions that the disease may manifest itslef in its later stages with problems with your feet due to poor circulation, howevere. much of that can be prevented by proper treatment early in the diseases course, treatment you receive from an endocrinologist. I don't think there is any conspiracy here , in fact I think the insurers are following good medical protocol in this case.

[TheMadCap]

In general, I don't think that many insurance or pharmacuetical companies really want there to be medical cures for disease. That would put them out of business. That being said, there seems little they can do to prevent medical advances in this respect...

[GG]

In general, I don't think that many insurance or pharmacuetical companies really want there to be medical cures for disease. That would put them out of business.

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That's a falacious argument, as the medical & pharmaceutical industries gain a lot more profit out of an older population than out of a dead one.

[RuntheDamnBall]

That's a falacious argument, as the medical & pharmaceutical industries gain a lot more profit out of an older population than out of a dead one.

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I'm guessing, but perhaps he's talking about regulation of diseases/symptoms (drugs -- more profitable) vs. cures (less profitable)?

[GG]

I'm guessing, but perhaps he's talking about regulation of diseases/symptoms (drugs -- more profitable) vs. cures (less profitable)?

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The more diseases you cure, the longer the people live to catch new diseases.

 

It's a highly superficial argument to say that medical industry only benefits when it doesn't cure people. Kind of like the adage that car companies don't build cars that last forever because they would go out of business.

 

IowaBill had the right answer - many people see a doctor when it's too late. Seeing a podiatrist for diabeties is the proverbial chair on the Titanic.

[Crap Throwing Monkey]

I'm guessing, but perhaps he's talking about regulation of diseases/symptoms (drugs -- more profitable) vs. cures (less profitable)?

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Doubt it. Even if an HMO springs for the cure of a disease, they still collect premiums. Though there may be a cash flow argument following your line of thinking...don't really know, though, since health care is an industry I neither work nor invest in.

[Chilly]

The more diseases you cure, the longer the people live to catch new diseases.

 

It's a highly superficial argument to say that medical industry only benefits when it doesn't cure people.  Kind of like the adage that car companies don't build cars that last forever because they would go out of business.

 

IowaBill had the right answer - many people see a doctor when it's too late.  Seeing a podiatrist for diabeties is the proverbial chair on the Titanic.

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One of the ideas that I got out of the Times article, is that it makes them more money to continue treating a disease long term, rather then actually curing it or providing such good care that no other life-threatening complications arise.

 

Ex: dialysis instead of controlling by dieting

[Rubes]

There is no doubt that pharmaceutical companies make more money from chronic diseases than acute, curable ones. Infectious diseases is a good example. Fewer and fewer pharmaceutical companies are staying in the business of antibiotic discovery and production, largely because there is far less money in treating (and curing) an infection than in some other chronic illness like heart disease or diabetes. The majority of new antibiotics coming out, in fact, are for the infections with resistant microbes that require longer courses of therapy and are less likely to be cured. Not that that's a bad thing, becaue we really need those drugs, but that's how it goes.

 

It's true that diabetes is an endocrine disease, not a disease of the foot. However, good podiatric care is necesary for diabetics and we know it helps prevent complications. Diabetes, however well it is controlled by medications, will eventually break down the body, and it will affect the blood vessels and nerves in the legs and feet. There's just no way around it. Once that happens, any foot injury, no matter how small, can end up in amputation. An ingrown toenail can do it. That's why we recommend older diabetic patients to have all foot care be done regularly by a podiatrist. Including toenail cutting.

 

Preventative care has been shown in many cases to be much more cost-effective than waiting for complications to arrive. Organizations that refuse to cover preventative care have it all wrong and will end up paying more in the end.

 

Then again, I try not to pin everything on the big companies. Trying to get a patient to stick to regular preventative care is like pulling teeth. I'm sure there are a whole group of guys here over 40 who ran right out to get their prostates checked.

[GG]

One of the ideas that I got out of the Times article, is that it makes them more money to continue treating a disease long term, rather then actually curing it or providing such good care that no other life-threatening complications arise.

 

Ex: dialysis instead of controlling by dieting

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Although I didn't read the Times article, you clued me in on the tone of the piece.

 

Are you saying that the Times wrote in the article, criticizing the medical/insurance/pharma industries, that these companies should be controlling people's diets? (This is in the same country where a patient sued a doctor for telling her she's too fat?)

 

Did the article focus on the preventative care, at all? I don't know of any insurance company that will deny preventative coverage. The trick is to get people to see a doctor before their foot is green.

[Chilly]

Although I didn't read the Times article, you clued me in on the tone of the piece.

 

Are you saying that the Times wrote in the article, criticizing the medical/insurance/pharma industries, that these companies should be controlling people's diets?   (This is in the same country where a patient sued a doctor for telling her she's too fat?)

 

Did the article focus on the preventative care, at all?  I don't know of any insurance company that will deny preventative coverage.  The trick is to get people to see a doctor before their foot is green.

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Its not the companies that should be controlling people's diets, but rather the hospitals that should be doing it. However, it pays for them not to.

 

Here's one of the example's they gave

 

"If a hospital charges, and can get reimbursed by insurance, $50,000 for a bariatric surgery that takes just 40 minutes," she said, "or it can get reimbursed $20 for the same amount of time spent with a nutritionist, where do you think priorities will be?"

 

The article is about some special diabetes treatment centers that were doing a great job controlling the diabetes and not allowing it to become a bigger problem, but went under, because financially they don't make nearly as much money from that as hospitals do from such things as amputation.

 

One of the things that the Times is arguing is that its the hospitals that benefit from providing poor care, NOT the insurance companies, but that the insurance companies are forced into paying for it.

 

Nonetheless, both of these centers closed for financial reasons within five years of opening.

 

In hindsight, the financial flaws were hardly mysterious, experts say. Chronic care is simply not as profitable as acute care because insurers, and consumers, do not want to pay as much for care that is not urgent, according to Dr. Arnold Milstein, medical director of the Pacific Business Group on Health.

 

By the time a situation is acute, when dialysis and amputations are necessary, the insurer, which has been gambling on never being asked to cover procedures that far down the road, has little choice but to cover them, if only to avoid lawsuits, analysts said.

 

Patients are also more inclined to pay high prices when severe health consequences are imminent. When the danger is distant, perhaps uncertain, as with chronic conditions, there is less willingness to pay, which undercuts prices and profits, Dr. Milstein explained.

 

"There is a lesser sense of alarm associated with slow-moving threats, so prices and profits for chronic and preventive care remain low," he said. "Doctors, insurers and hospitals can command much higher prices and profit margins for a bypass surgery that a patient needs today than they can for nutrition counseling likely to prevent a bypass tomorrow."

[GG]

Its not the companies that should be controlling people's diets, but rather the hospitals that should be doing it.  However, it pays for them not to. 

 

Here's one of the example's they gave

 

That statement is misleading, because it assumes that the capital expense for the hospital in equipping an office with a nutritionist is the same as staffing up a floor full of operating rooms with state of the art equipment.

 

One of the things that the Times is arguing is that its the hospitals that benefit from providing poor care, NOT the insurance companies, but that the insurance companies are forced into paying for it.

 

In hindsight, the financial flaws were hardly mysterious, experts say. Chronic care is simply not as profitable as acute care because insurers, and consumers, do not want to pay as much for care that is not urgent, according to Dr. Arnold Milstein, medical director of the Pacific Business Group on Health.

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There's the issue. You cannot hold hospitals, insurers, and the industry responsible for people's apathy. Insurance companies are willing to kick the problem down the road, because they can't force a 300-lb smoker to see a doctor.

 

They don't do it NOT because they're afraid of lawsuits, they don't do it because there is no claim until something is serious enough to warrant amputation.

 

Frankly, to have an article take a position that paying for high cost procedures are more profitable for the insurance industry is totally absurd (and reinforces my decision to unsubscribe from the paper of record). The insurance industry profits more when there are lower payouts.

 

The focus of the article should have been that PEOPLE should see a doctor on a regular basis as soon as they hit 35.

[TheMadCap]

That's a falacious argument, as the medical & pharmaceutical industries gain a lot more profit out of an older population than out of a dead one.

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That's true, but not what I really said. The more drugs they can make, the more money they rake in. Which is why there are so many new drugs hitting the market than previous years...

[Live&DieBillsFootball]

That's true, but not what I really said. The more drugs they can make, the more money they rake in. Which is why there are so many new drugs hitting the market than previous years...

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Most of the new drugs coming out of the big Pharma companies are "Me Too" drugs - Their drug to treat the same thing as someone else's drug. Look at how many statin drugs there are. Are newer ones more effective than the old ones? Not really.

 

Then there are the changed formulas. A drug goes off patent, so they change a molecule and tada...a new drug to push on the public. Not much difference between prilosec and nexxium other than prilosec is no longer under patent.

 

I recently saw a commercial for the new cholesterol drug which contains Zocor and something else. Once Zocor goes off patent they can push the new one on doctors and the public. Keep the money flowing in.

 

The power of marketing.

[TheMadCap]

Most of the new drugs coming out of the big Pharma companies are "Me Too" drugs - Their drug to treat the same thing as someone else's drug.  Look at how many statin drugs there are.  Are newer ones more effective than the old ones?  Not really.

 

Then there are the changed formulas.  A drug goes off patent, so they change a molecule and tada...a new drug to push on the public.  Not much difference between prilosec and nexxium other than prilosec is no longer under patent.

 

I recently saw a commercial for the new cholesterol drug which contains Zocor and something else.  Once Zocor goes off patent they can push the new one on doctors and the public.  Keep the money flowing in.

 

The power of marketing.

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Not even that. They used to be able to change a small percentage of inert, filler ingredients or the pill color and get a new patent. There is legislation working to change that, but I don't know if it passed or not.

 

It also seems as if there is a pill for everything these days. Cosmetic type drugs that cater to people's ego, like ED drugs. They are not really necessary to keep you alive.

 

On the other hand, those who have never worked in pharma have no idea the sheer magnitude of the cost to develop, refine, and release a new drug product. I can see why they need to recoup thier costs.

 

In my opinion, the FDA is a joke. Any organization that can shut your doors for documentation issues, when thier own USP methodologies for raw materials are so poorly written that it is a matter of opinion that they even work, clearly has issues...

[The Avenger]

On the other hand, those who have never worked in pharma have no idea the sheer magnitude of the cost to develop, refine, and release a new drug product. I can see why they need to recoup thier costs.

 

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Drugs certainly are very expensive to develop and most new drugs never make it to market - they fail along the way. With all the trial and error of finding a target and then ensuring that the drug is safe enough for human use, you're talking tremendous R&D costs.

 

That said, I just a saw a Frontline story on pharma. Did you know that R&D accounts for 13% of revenues for the average pharma company? By contrast, drug sales and marketing accounts for 16% of revenues - they actually spend more money selling their drugs than they do developing them.

 

The truth is, as a business the drug companies want to come up with the drugs that will sell best. They want to sell Lipitor to millions of people who want to reduce their cholesterol rather than create a drug that can stop liver failure but is only used by a few thousand times a year. They end up creating Celebrex for arthritis when there's no proof that it works any better than OTC ibuprofin in treating arthritis pain.

 

I'm not bashing the pharma companies for running a business, but you have to wonder how a free market economy governs the development of drugs for the good of society.

[colin]

Drugs certainly are very expensive to develop and most new drugs never make it to market - they fail along the way. With all the trial and error of finding a target and then ensuring that the drug is safe enough for human use, you're talking tremendous R&D costs.

 

That said, I just a saw a Frontline story on pharma. Did you know that R&D accounts for 13% of revenues for the average pharma company? By contrast, drug sales and marketing accounts for 16% of revenues - they actually spend more money selling their drugs than they do developing them.

 

The truth is, as a business the drug companies want to come up with the drugs that will sell best. They want to sell Lipitor to millions of people who want to reduce their cholesterol rather than create a drug that can stop liver failure but is only used by a few thousand times a year. They end up creating Celebrex for arthritis when there's no proof that it works any better than OTC ibuprofin in treating arthritis pain.

 

I'm not bashing the pharma companies for running a business, but you have to wonder how a free market economy governs the development of drugs for the good of society.

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getting through the FDA costs much more than R&D.

[The Avenger]

getting through the FDA costs much more than R&D.

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R&D costs are inclusive of the FDA approval process. No dobt its expensive, but pharma would have you believe that the vast majority of it's costs are R&D and that's simply not true.

[TheMadCap]

Drugs certainly are very expensive to develop and most new drugs never make it to market - they fail along the way. With all the trial and error of finding a target and then ensuring that the drug is safe enough for human use, you're talking tremendous R&D costs.

 

That said, I just a saw a Frontline story on pharma. Did you know that R&D accounts for 13% of revenues for the average pharma company? By contrast, drug sales and marketing accounts for 16% of revenues - they actually spend more money selling their drugs than they do developing them.

 

The truth is, as a business the drug companies want to come up with the drugs that will sell best. They want to sell Lipitor to millions of people who want to reduce their cholesterol rather than create a drug that can stop liver failure but is only used by a few thousand times a year. They end up creating Celebrex for arthritis when there's no proof that it works any better than OTC ibuprofin in treating arthritis pain.

 

I'm not bashing the pharma companies for running a business, but you have to wonder how a free market economy governs the development of drugs for the good of society.

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Interesting. I did not know that, as most of my pharma jobs have to do with stability and compendial testing.

 

And that has been my point all along, that it is more profitable to treat your symptoms than cure you once and for all...

[The Avenger]

Interesting. I did not know that, as most of my pharma jobs have to do with stability and compendial testing.

 

And that has been my point all along, that it is more profitable to treat your symptoms than cure you once and for all...

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I don't really see it as treating symptoms rather than creating a cure (I'm a pessimist but even I don't think companies don't want to cure you because it's more profitable to continulally treat your symptoms). I see it as treating something that lots of people have vs. treating something not may people have.

 

Pharma wants to treat things with a large customer base - athritis pain, high cholesterol, ED. These drugs will sell and make money (again - not blasting anyone for making a profit). Pharma doesn't want to treat things like liver failure due to some sort of enzyme deficiency that only 1000 people are treated for in a year.

 

The bigger picture is how do you get pharma to create effective drugs that can do tremendous good for a limited number of people at the same time they are working on another hair growth pill that could sell like crazy if effective? In a free market system with for-profit companies this is hard to do - there's got to be a better way.