Health Business Blog

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

Why the US will buy defibrillators and Europe won’t

A study in this week’s New England Journal of Medicine (The Effect of Cardiac Resynchronization on Morbidity and Mortality in Heart Failure) demonstrates that bi-ventricular pacemakers for cardiac resynchronization therapy are effective in reducing death rates in heart failure patients. As the Wall Street Journal reports today (A More Affordable Cardiac Device), the effect was essentially the same as a combination bi-ventricular pacer and defibrillator.

The combination device costs about $30,000, while the pacer alone is about $12-14,000. The value of the defibrillator is that it can bring the patient back to life from a sudden, abnormal rhythm. The devices are made by Medtronic, Guidant, and St. Jude Medical.

What’s interesting to me is the different effects the study results are likely to have in the US compared to Europe:

  • European health agencies are likely to refuse to pay the extra cost for the combination device –arguing that the money is better spent elsewhere
  • In the US, doctors are likely to keep implanting the combination devices –arguing that some patients are saved by defibrillators. Also, there’s no global health care budget so there’s no real tradeoff being made

The difference in philosophy is a key reason why US health care spending is higher than in Europe. Here, we pay for unproven therapies if they seem plausible. In Europe, they don’t.

Medicare physician fee cut may really happen in 2006

For the past four years, Medicare has proposed cuts in the fee schedule for physicians. And for the past three years, the AMA has prevailed upon Congress to turn those cuts into 1.5%increases. However, this time the proposed 4.3% cut may stick. The last time it happened this way was 2002, when reimbursement rates were cut by 5.4%.

Why the tough news for doctors now?

  • Utilization has been increasing, so total payments to doctors (reimbursement rate x volume) are rising much faster than the fee schedule
  • The overall budget is under pressure (think Iraq and tax cuts)
  • Reversing the decrease will cause pain elsewhere: by making Medicaid cuts deeper, or making the premium increase for Medicare recipients even higher
  • As I’ve written before, the Medicare Drug Benefit is going to start squeezing out other benefits over time –although there won’t be much affect next year

The one year cut isn’t a big deal. The real question is whether in the coming years we’ll see fees brought back to the baseline as happened after the last cut, or whether it’s the start of a downward ratchet.

Nevada tries to regulate emergency room wait time

Nevada legislators are pushing forward a bill to require hospital to treat patients within 30 minutes of their arrival at the emergency room by ambulance. The bill wouldn’t impose any penalties, but supporters say it would shine a spotlight on wait times because none of the hospitals would want to perform poorly.

I’ve posted on this topic before, but usually about hospitals taking the initiative. This bill seems well intentioned, and maybe it will work. It may produce some unintended side effects, however.

  • By only covering patients arriving by ambulance, it may encourage abuse of the EMS system by patients who could get to the ER under their own power
  • It could cause busy ERs to divert patients to other hospitals, which could increase the total wait time

A Change of Heart

I’ve been reading a good book about the Framingham Heart Study (A Change of Heart, How the People of Framingham, Massachusetts Helped Unravel the Mysteries of Cardiovascular Disease) and yesterday I went to a talk by its author, Daniel Levy, the current director of the study.

I’ve learned some interesting things:

  • The study, which began in 1948 and continues to this day, is the first epidemiological study to focus on chronic disease. In the past, such studies were used only to locate sources of outbreaks such as cholera, the plague, and TB
  • The term “risk factor” was coined by the original directors of the study in 1961. The study has been responsible for identifying a number of risk factors for heart disease that we take for granted now, including hypertension, high cholesterol, and obesity
  • The study, which enrolled over 5000 people in the original recruiting cycle, recruited an equal number of the original participants’ children, and then grandchildren. It’s the only study in the world that has data on three generations of people at the same points in their lives (e.g., blood pressure for three generations at age 40)
  • The study enrolled an equal number of men and women from the start, although the original motivation was to understand why women didn’t seem to get heart disease. (It turns out they do get it, just later in life)

I recommend the book.

I’m upset about the Bextra withdrawal

A close friend of mine has rheumatoid arthritis. Under the supervision of her rheumatologist she’s tried all the prescription and OTC options and found that Pfizer’s Bextra –and not any other COX-2 inhibitor or other medication– worked well for her. I know someone else with a similar story about Vioxx.

Yesterday the FDA asked Pfizer to withdraw Bextra from the market. A number of cardiovascular, gastro-intestinal, and dermatological adverse events –some fatal, along with Bextra’s failure to prove its superiority to other treatments, doomed the drug. In an unusual move, the FDA overruled its Advisory Panel, which had recommended that the drug be allowed to stay on the market. The only hope the FDA left for patients who feel they need Bextra was to state that a proposal for a compassionate use program would be received favorably, if Pfizer wants to propose one.

Something’s gone terribly wrong here. The pharmaceutical companies made a big mistake by promoting COX-2 inhibitors to the widest possible customer base. As a result it looks like a number of people who should have been treated with the occasional Tylenol or nothing at all ended up sick or dead. And after the FDA was caught asleep at the switch, it may have overreacted to the latest data. As I wrote last month, J&J is taking the lead in balancing risks and benefits in its direct to consumer advertising –this is in the industry’s own best interest.

I read Marcia Angell’s book, The Truth About the Drug Companies when it came out, and there is a lot of truth in there. But I disagree with one of her main arguments –that me-too drugs (similar drugs in the same class) are bad and should not be allowed. Celebrex, Vioxx, Bextra, and the rest may be quite similar, but for whatever reason each seems to work better in some patients than others. There are similar stories in other drug classes, notably in drugs for depression. It doesn’t matter to me whether the motives of the drug companies are pure; I’d rather have more choice than less.

In 20 years or so, when pharmacogenomics and personalized medicine are the norm, we won’t have to go through trial and error treatment with many different drugs. But for now it’s the best we can do.