More about Money
Mohit Ghose was quoted in a recent Washington Post story about insurance cost limits--the limit you hit when you have a very expensive problem. “We need to be addressing those costs very directly” he said. “...why are those costs so high?” This article talks about specialty drugs that provide sometimes lifesaving therapy for rare conditions. But how much is it worth? What’s the value of a human life? When I was in school, kids with sclerosing cholangiitis died. Now, they get liver transplants for $500,000. At that time also, there were three dialysis centers in the country. Now, it’s impossible to die of renal failure. Where do we draw the line? How about $300,000 per year to treat a muscle disease? Every year. And this is maintenance, not a cure. If you’re the patient, of course, there is no limit. Hard to turn down a poster child or a famous baseball player. But if you’re an insurance company, it doesn’t make sense. Should the feds get into the reinsurance business? How many taxpayers want their money to go for preserving patients with rare diseases? Beats starting a war, but there are other priorities. It’s an extension of the Failure of Success (see 1960 era Milbank Memorial Fund Quarterly). We are so successful at preserving life that we have failed to improve the health of the population--more sick people are living longer. Ghose makes a subtle point, though in asking why these treatments cost so much. One reason, of course, is lack of competition. If there are only three patients with this disease, there’s not a lot of competition for treatment. But organ transplants have gotten pretty routine these days. Why hasn’t the price come down? The obvious answer is that there is no price competition. No one selects a renal transplant center because of how much they charge. Even insurance companies don’t shop for price. So why should a transplant center reduce its charges. Doesn’t make business sense. This subject doesn’t make the charts on healthcare costs, but it’s one example of how technology is driving costs. If we ever hope to reduce the amount we spend on healthcare, we must control the healthcare-technology complex. was quoted in a recent Washington Post story about insurance cost limits--the limit you hit when you have a very expensive problem. “We need to be addressing those costs very directly” he said. “...why are those costs so high?” This article talks about specialty drugs that provide sometimes lifesaving therapy for rare conditions. But how much is it worth? What’s the value of a human life? When I was in school, kids with sclerosing cholangiitis died. Now, they get liver transplants for $500,000. At that time also, there were three dialysis centers in the country. Now, it’s impossible to die of renal failure. Where do we draw the line? How about $300,000 per year to treat a muscle disease? Every year. And this is maintenance, not a cure.
If you’re the patient, of course, there is no limit. Also hard to turn down a poster child or a famous baseball player. But if you’re an insurance company, it doesn’t make sense. Should the feds get into the reinsurance business? How many taxpayers want their money to go for preserving patients with rare diseases? Beats starting a war, but there are other priorities. It’s an extension of the Failure of Success (see 1960 era Milbank Memorial Fund Quarterly). We are so successful at preserving life that we have failed to improve the health of the population--more sick people are living longer.
Ghose makes a subtle point, though in asking why these treatments cost so much. One reason, of course, is lack of competition. If there are only three patients with this disease, there’s not a lot of competition for treatment. But organ transplants have gotten pretty routine these days. Why hasn’t the price come down? The obvious answer is that there is no price competition. No one selects a renal transplant center because of how much they charge. Even insurance companies don’t shop for price. So why should a transplant center reduce its charges. Doesn’t make business sense.
This subject doesn’t make the charts on healthcare costs, but it’s one example of how technology is driving costs. If we ever hope to reduce the amount we spend on healthcare, we must control the healthcare-technology complex.
If you’re the patient, of course, there is no limit. Also hard to turn down a poster child or a famous baseball player. But if you’re an insurance company, it doesn’t make sense. Should the feds get into the reinsurance business? How many taxpayers want their money to go for preserving patients with rare diseases? Beats starting a war, but there are other priorities. It’s an extension of the Failure of Success (see 1960 era Milbank Memorial Fund Quarterly). We are so successful at preserving life that we have failed to improve the health of the population--more sick people are living longer.
Ghose makes a subtle point, though in asking why these treatments cost so much. One reason, of course, is lack of competition. If there are only three patients with this disease, there’s not a lot of competition for treatment. But organ transplants have gotten pretty routine these days. Why hasn’t the price come down? The obvious answer is that there is no price competition. No one selects a renal transplant center because of how much they charge. Even insurance companies don’t shop for price. So why should a transplant center reduce its charges. Doesn’t make business sense.
This subject doesn’t make the charts on healthcare costs, but it’s one example of how technology is driving costs. If we ever hope to reduce the amount we spend on healthcare, we must control the healthcare-technology complex.
