Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

Two votes for doing nothing

The Wall Street Journal has two articles today that report on the benefits of doing nothing. According to the Journal, “Inaction May Work for Some Types of Prostate Cancer,” and “Childbirth Incision Doesn’t Help.”

It appears that many men with nonaggressive prostate cancer can live for 20 years or more without disease progression. They can avoid surgery and radiation that often cause incontinence and impotence. This finding has broader implications, because new diagnostic techniques are being developed that will spot many kinds of cancer long before they pose a threat. The question then becomes whether to treat and how.

And it turns out that episiotomies, small incisions to enlarge the vaginal opening during childbirth, cause more injuries than they prevent. There is also more pain, more trouble healing, and more difficulty returning to sexual activity.

Who knows? If doing nothing proves useful in enough situations it could help slow health care spending.

New York Times misses the mark with air ambulance story

The New York Times ran a front page story on the growth of the air ambulance industry yesterday. (As Medical Airlifts Proliferate, The Public Price Tag is Rising.) The Times angle was that the air ambulance business is growing and the cost to insurers and the federal government was rising.

But readers of this blog know that there’s much more to the story than that. There are other issues to be concerned about besides rising costs:

  • Air ambulances are dangerous. A crew member who worked 20 hours per week for 20 years would have a 40 percent chance of being killed
  • Patients often don’t get to the hospital any faster in an air ambulance than by ground
  • The constricted space and noise level in a helicopter limit the ability of paramedics to assist the patient
  • Oversupply is not the only reason for rising utilization. ER physicians, scared of liability, are overreacting and sending even minor cases to specialty centers by air

On the other hand, there can be some good reasons to use air ambulances in non-emergency situations:

  • When a rural community transports a patient a long distance by ground ambulance, they put their own community at risk by losing their ambulance for most of the day
  • Once a patient is stabilized, sending them by fixed wing aircraft over a long distance is more comfortable than a ride in a bumpy ambulance

Will German price controls hasten the era of personalized medicine?

An article in yesterday’s Wall Street Journal (German Curbs on Drug Costs Rile Big Brands) describes a German health commission’s review of drug efficacy. The objective is to determine which brand name drugs deserve a price premium over generics.

Results have been terrible for the branded companies. So far only two brand name drugs (the antibiotics Ketek and Avalox) have been deemed worthy. Many other brands, including the best selling drug in the world, Lipitor were deemed to be no better than generics. As a result the government is only willing to pay the same price for the branded products as for the generic drugs in the class. The pharmaceutical companies are furious, and understandably so.

The problem for the companies is that in general the commission may be right. The statin Lipitor may be no better overall than the generic statin, simvastatin. And the same will be true for many categories of treatment that have “me-too” drugs. But certain statins may be better for particular individuals, just as some people do better on Bextra than Celebrex and vice versa (see I’m Upset About the Bextra Withdrawal).

If the pharma companies lose their initial legal, lobbying and public relations battles, a fallback position may be to push to identify the patients who do better on their drugs, and build a case for charging substantially more for those patients. That would require stepped up efforts in pharmacogenomics and personalized medicine, which would benefit us all.


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Merck discount program may not really be competitive with Canadian prices

As reported earlier, Merck’s Prescription Discount Program, available to the uninsured regardless of income, is meant to compete with Canadian pharmacies. The program offers 15-40% off retail prices for Merck drugs.

According to PharmaLive, analyzed the Merck program and found that Canadian pharmacies remain a better deal–with discounts in the range of 29-46% for Merck drugs. Even deeper discounts are available from pharmacies in Australia and New Zealand.

Merck’s program still makes sense to me. Prices are reasonably close, and will be closer once shipping costs are added for overseas orders. And there’s a decent argument that it’s worth a little extra to buy from a domestic, completely legal source.