“Good enough for Government Work”: Quality, cost, and gaming the system, Part 3 (of 4 parts)

This is part three of the Charles Odegaard Lecture, delivered at the 27th National Conference on Primary Health Care Access, April 6, 2016

The VA is an example of how quality can be and is compromised when public sector funding is cut. In the area of public health, it can have an even greater impact, and no fewer apologists. When, under cost-cutting mandates from the state of Michigan the city of Flint changed its water supply from treated Lake Huron water to the industrially-polluted Flint River, the complaints of citizens were ignored. When concerned health care providers, like Dr. Mona Hanna-Atisha (pictured), raised warnings about rising lead levels in the children of that city, she was attacked and vilified. But she was right and they were wrong, or, perhaps worse, lying. Poisoning our children to save money. If individual health care is jeopardized when those responsible are being rewarded for cost-cutting, we can do a truly impressive job of harm when we destroy the public health infrastructure. And let us not forget that a major reason this was able to happen was Racism; that they were not “our” children, at least not those of the state authorities.

We need more emphasis on quality. Indeed, quality, not cost-cutting, needs to be our primary metric. Spending less should only be acceptable when quality is not negatively impacted. I realize that this is also subject to interpretation; “quality” has almost as many different interpretations as “waste”, and is frequently (if, hopefully, usually unconsciously) associated with “what benefits me”. I am talking about health care that is of benefit to most people, and is considered basic – keeping patients clean and out of their own filth, feeding them, treating the diseases that we know how to treat, doing surgery when it is of clear benefit, not having excessive waits for specialty care that compromise outcomes. And, most importantly, not providing financial incentives for limiting care. From a cost-cutting point of view, money is fungible, whether it comes from ‘cutting the fat’ or cutting needed care; but from a healthcare point of view, there is a big difference. (I refer to healthcare here as “caring for people’s health”, not the industry of the same name!)

This is the big issue, and it is amazing to me that it sometimes seems like such a mystery. If most of our incentives are to cut costs, to keep our jobs or to make bonuses or to keep our agency functioning, costs will be cut. Even when those cuts negatively affect quality, in real and dramatic ways. The argument for privatization goes something like “the private sector can do it better because, motivated by the opportunity to make profit, they will discover efficiencies that government employees do not, and run a ‘leaner ship’”. The problem is that, while there may be some examples of this happening, what usually happens is that costs are cut by cutting services, and making off with the profit, or bonus. The ship is made lean by cannibalizing its parts, and the only thing which is certain to be maintained in fine working order is the lifeboat in which the parties responsible hope to escape in while the rest sinks. This scenario is repeated over and over again, whether services are actually provided by private and for-profit organizations (think drug companies, insurance companies, nursing homes, and increasingly hospitals) or whether “private sector incentives” are built into publicly provided services, as in England at Mid-Staffordshire, or, increasingly, in the US in Medicare.

Profit may not be a great incentive to provide better health care, and is an uncertain to very poor guarantee of quality, but it is an excellent incentive to generating profit. Think of drug companies like Turing and its former CEO, Martin Shkreli, the poster child for unfettered greed, and his 5000% increase in the price of pyrimethamine, or of Valeant, the Canadian pharmaceutical company that recently doubled the price of secobarbital, an 80 year old barbiturate, in anticipation of California’s assisted suicide law. Think of the increase in price of colchicine, a drug that was used (in its plant form) to treat gout in ancient Egypt 3500 years ago, from 10 cents to $5 a pill when the FDA “encouraged” its manufacturer to conduct new studies and banned the generic (finally reversed last year, with generic colchicine again available.) Think of the insurance companies whose profit was baked into the ACA, making it costly and still not covering everyone. The ACP has recently called for government controls on drug pricing. The fact is that you can’t count on private for-profits to provide quality, unless you really trust Martin Shkreli.

Interestingly, in contrast to the Triple Aim advocates, critics of Sen. Bernie Sanders’ proposal for National Health Insurance system, Medicare for All, assert his math must be wrong, that we couldn’t both save money and deliver quality health care to everyone. (The Chicago Tribune editorial endorsing no one in the Democratic primary says: “Sanders first amused Americans who know their fiscal math with proposals for free college tuition, expanded Social Security, $1 trillion in infrastructure spending, "Medicare for all" .... The nonpartisan Committee for a Responsible Federal Budget calculates that his economic plans would push the top federal tax rate to about 77 percent”).[1](By the way, they really mean the topmarginal federal tax rate, which was, for the record, 90% when I took civics in junior high.) I don’t know if they are disingenuous or purposely befogging the issue, since it is clear that every other developed country delivers care to all its people for, usually, 1/3-1/2 of what we spend per capita in the US, with much better outcomes by most or nearly all measures.

So why are cost estimates in the US so high, when other developed countries do it for so much less? A great deal of it is that profit is built into the system. When we read about the problems of our system, we hear from insurers, who think providers charge too much, and providers, who think insurers pays too little, and each with an army to try to get what it wants. It is not because we care too much about patients. In Canada, there is a single payer national health insurance program (called “Medicare”) where the government pays the bills for largely privately-delivered care. The fact that it is private delivered is part of why their costs have risen second only to ours, but there is some central control. In Switzerland, there are multiple payers, insurance companies that are, however, forced to charge the same amount and provide the same basket of services, and be non-profit. How do they compete then? Why, on service to their patients! What an incredible idea! If you call your company to complain and can’t get through, you switch to another! As long as our system is predicated on building in excessive profit for providers, insurers, and drug companies, it will be fantastically expensive, albeit a full-employment program for those people trained to try to get bills paid and, on the other side, to deny payment. And it will be about cutting costs, not improving quality.

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[1] http://www.chicagotribune.com/news/opinion/editorials/ct-marco-rubio-tribune-endorsement-clinton-sanders-0310-md-20160309-story.html

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Drug prices and corporate greed: there may be limits to our gullibility

“A Huge Overnight Increase in a Drug’s Price Raises Protests”, by Andrew Pollack in the New York Times September 20, 2015, features the story of Daraprim, the brand name for pyrimethamine, a drug used to treat toxoplasmosis. “Toxo”, often associated with cat feces, is a protozoan and was an fairly rare infection prior to the HIV epidemic, when it became a significant cause of brain infections in those with very low CD4 counts. Luckily, pyrimethamine, a drug available for over 60 years, had reasonably good success. Now, rights to the drug have been acquired by Turing Pharmaceuticals and its price has been raised from $13.50 to $750 a pill. Turing’s founder and CEO, Martin Shkreli, is a former hedge fund manager who seems to know an opportunity to make a killing when he sees one. A few days later, the Times ran an AP story on a interview Shrkeli gave ABC news which reported that Turing would reduce the price, albeit to one that was unspecified. “’We've agreed to lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit,’ Shkreli told ABC.”

But this is, as the Pollack article points out, not the first or only time this has occurred. In the last few years new drugs, mainly those made in labs from recombinant DNA rather than from plant sources, for hepatitis C, high cholesterol, and various cancers have been criticized for their astronomical prices, but we are talking about old drugs here. One example is cycloserine, used to treat multi-drug resistant (MDR) TB, the price of which has been raised from the previously expensive $500 for a month’s supply to $10,800. (Please note that I am being careful with my decimal points; this is, indeed, over a 2000% increase.) The general manager of the manufacturer, Rodelis, “…said the company needed to invest to make sure the supply of the drug remained reliable.” And thus, of course, required the 2000% increase. Right.

And many more common, prosaic drugs have had the same increases. One I have previously written about several times is colchicine, an ancient treatment for gout derived from the autumn crocus (and I mean “ancient”, not like “20^th century”; there are records of its use in Egyptian papyruses from 1500BC!). Dr. Stephen Griffith’s guest post "VISA and colchicine: maybe the banks and Pharma really ARE in it for the money!” said ”the FDA has encouraged pharmaceutical companies to study some of the older drugs for true effectiveness, and the company can then apply for a three year patent on the medication. URL Pharma, Inc. did the clinical trials on less than 1,000 patients, and proved that a drug everyone already knew worked, worked. Amazing! They received a three year patent, and now a pill that was $4 per month long before the $4 per month plans existed, is $5 per pill! Since it is usually given twice a day, the drug will now cost patients $10 per day when it formerly cost about a quarter.” What? The FDA is encouraging this?

The Times articles cites increases in other common drugs; two heart drugs, Nitropress and Isuprel, were acquired by Marathon Pharmaceuticals in 2013 and had their prices quintupled. Then this year, they were acquired by Valeant Pharmaceuticals which “…promptly raised their prices by 525 percent and 212 percent respectively.” The most depressing one for me is doxycycline, a form of the antibiotic tetracycline, which is broad-spectrum, effective, and, until recently, cheap. It is frequently used for pneumonia acquired in the community, as it is effective against both common bacterial and “atypical” causes of pneumonia, and generally effective against the very dangerous “methicillin-resistant Staphylococcus aureus”, or MRSA. It is used as a first or second-line drug for several sexually-transmitted infections (STIs), including syphilis, and is even effective for prevention and treatment of malaria. An altogether good drug. When I was a medical student, it had recently been introduced (under the brand name Vibramycin) and it was considered expensive compared to other tetracyclines, even if often more effective. So we were all very happy when it became generic and cheap. Indeed, the Wikipedia entry for doxycycline says “Doxycycline is available as a generic medicine and is not very expensive.^[1][5] The wholesale cost is between 0.01 and 0.04 USD per pill.^[6] In the United States 10 days of treatment is about 14 USD”.  Um,  that seems to be dated. The Times article tells us that “Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014.” Oh. A 9200% increase. Kind of high for treating your bronchitis, or even your outpatient (or inpatient) pneumonia, or for your Lyme disease, or Chlamyidavaginitis, or for taking malaria prophylaxis.  Maybe you wouldn’t be very happy to have to pay that when you pick up your prescription, if you don’t have prescription drug coverage. And if you do, I’m sure that your insurer is not. The issue of how this price increase was allowed to happen is described as “murky” by David Lazarus in the Los Angeles Times. [Note: it seems that some of the generic forms of doxycycline have come back down, per a search on the valuable-for-health-care-providers-or-anyone-taking-prescriptions app, Goodrx.]

These price increases for long-standing generic drugs are outrageous, even more than the predatory prices of the new recombinant DNA drugs. It is blatant opportunism on the part of the drug manufacturers certainly, who could be considered to be cold-blooded profiteers on human misery (which of course they are, not to say evil, immoral, unconscionable and inhuman). But, hey, they are in business and are taking an opportunity to make more money, as does every cold-blood, profiteering business, in what is apparently a legal way. This, of course, raises the question of “how come it is legal? What the heck happened?”  Where is the FDA? Where is the Department of Health and Human Services? Where is the Executive Branch? Where is the Congress? Remember, we’re not talking small price increases. We’re not talking fair pricing. We’re talking thousands of percent increases in common drugs that people need, drugs that I, and other doctors, prescribe a lot.

People care a lot about the price of prescription drugs, and the amount that their co-pay is, because this affects them directly, in their pocketbook, regardless of what party they vote for. Margot Sanger-Katz of the Times, in “Prescription Drug Costs Are Rising as a Campaign Issue”, reports on a Kaiser Family Foundation survey that Americans identify costs for drugs for specific diseases and prescription drug costs overall as their #1 and #2 health concerns. “Americans have long paid the highest prices for drugs. Because the United States gives drug makers long periods of patent exclusivity and lets a multitude of insurers each negotiate with drugmakers on price, drug spending here is, on a per capita average, roughly double the amount spent in many developed countries.” (see figure)

I started out saying that these companies were making a killing, but the problem is that the ones being killed are the rest of us. Sounds like something Jim Hightower would say, and he’d be right. The real issue is why do we keep electing people who put our interests, our health, behind the rapacious profits of corporations. It is only because of the enormous coverage Turing’s increase in the price of Daraprim engendered, and the calls for investigations in Congress, that Shrkeli is planning to lower the price. It has nothing to do with his, or any other corporate leaders’, concern for the public (see, for example: Volkswagen diesels, poisoned peanuts).

By the way, you might want to write down the names of the two Congresspeople the Times article notes have called for an investigation of this: Representative Elijah Cummings of Maryland and Senator Bernard Sanders of Vermont. Yes, that Bernard Sanders; the one running for President. Hmm.

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