Cautionary Flags Raised by Aduhelm Approval

The FDA recently approved aducanumab, branded as Aduhelm, to treat Alzheimer’s disease. How this was done raises flags of caution, and reveals troublesome features of healthcare marketing in the USA.  Recurrent neglect of these factors will compound the chronic problem of expensive treatments that are not infrequently futile.

This does not mean that the approval was unjustifiable.  The burden of Alzheimer’s disease is crushing.  Over 6 million USAmericans suffer from the disease, and this number can be expected to increase as the proportion of older adults increases.  Since the natural history of each case lasts for years and because the cognitive loss produces extreme behavioral demands, it is easy to see how the manufacturers could argue for more lenient standards to approve this new treatment.

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The first cautionary flag is raised by over-reliance on biomarkers to approve this medication.  Another, separate and commercial concern, is how physicians will be incentivized to administer it.  Both are instructive because the dynamics aren’t unique to Alzheimer’s disease- even if the stakes are arguably higher in this instance.

The biomarker here is amyloid plaques.  These protein deposits in the brain are pathognomic of Alzheimer’s disease.  Evidence of their presence is used to establish a diagnosis.  Relying on a physical manifestation is, of course, not unusual in medicine.  Critics assert that the decision did not adequately weigh clinical markers too.  In this instance, the evidence that aducanumab removes amyloid plaques was not so much in question.  Evidence that it produces clinical improvements, or slower loss of cognitive abilities, was slimmer.   That made this approval contentious. Read more…

8 Reasons Why Price Transparency Doesn’t Lower Healthcare Costs

Would better visibility into costs somehow make healthcare less expensive?   Based on a brief recently published by the Peterson-KFF Health System Tracker, it seems that the impact is modest, at best. Here are some of the reasons why price transparency appears destined to fall short.  Although necessary and useful, eventually it won’t avoid the need for additional steps to regulate prices.

Since January 2021, hospitals in the USA are now required to provide price information online.  Beginning in 2023, insurers will also have to provide rates and cost-sharing estimates for individual, group and self-funded coverage enrollees.

Currently there is no price regulation for hospitals, except in Maryland, where the state sets rates for all payers.  The Affordable Care Act (ACA) requires that hospitals publish these.  Unfortunately, they appear to have become akin to the aspirational rates that are sometimes posted inside the doors and closets of hotel rooms.  Actual, negotiated rates with payers had often been treated like a trade secret.  Once published, there could be dozens of payers that each bill different amounts.

Intuitively, comparison shopping keeps prices down.  That might be true if healthcare services were as simple as having a buyer and a seller.  In fact, knowing about prices is barely a first step at being able to give patients realistic negotiating power over prices. Read more…

The True Drivers of Extreme Healthcare Costs in the USA: Hospitals and Providers

This isn’t breaking news: healthcare costs are way high in the USA.  Results of the 2020 Employer Health Benefits Survey by KFF (Kaiser Family Foundation) now show average annual premiums for employer-sponsored family health coverage in the USA are $21,342. Even though employers pay most of this, workers are paying $5,588 for this coverage (and often much more). The pernicious extreme costs for healthcare remain remain out of control.  What is driving this gargantuan expense?

The true drivers of this waste are not commonly acknowledged.  A recent Peterson-KFF report compared the USA to other 8 European countries and Canada (wealthy, developed economies that would be suitable for comparisons).  Costs are 2x higher in the USA.

While prescription drugs and administrative inefficiencies may capture the most attention, in fact, it is hospital and physician payments that are the true drivers of extreme healthcare costs.  Spending on inpatient and outpatient care is 144% more than what it is in these other countries. This includes primary and specialty care, as well as facility and professional fees.  

Prescription drug expenses are 58% higher than in the comparative set of similar countries.  Drugs are a far smaller component of overall spending than what is shelled out to providers.  The notorious administrative inefficiencies in the privatized US healthcare system result in spending that is 366% higher in this category.  But administration is a small portion of total expenses.  Hospitals and physicians take the largest bite, by far.

Interestingly, the USA lags other countries in spending on long-term care.  Spending for this healthcare component is just 46% of what is spent elsewhere.  It seems hard to believe that there is underspending on anything, and aging citizens should be alarmed by this finding.  Perhaps it is simply more difficult to extract profit from elder care, particularly when prices have flown upwards so easily in other healthcare markets.  

Read more…