Sunday, August 7, 2011

Is Cost-Effective Medicine on Life Support?

The concept of cost-effectiveness in medicine is elastic. One’s view on this issue depends upon who is paying the cost. Of course, this is true in all spheres of life. When you’re in a fine restaurant, you order differently when the meal will be charged to someone else. Under these circumstances, the foie gras appetizer and the jumbo shrimp cocktail are no longer luxuries, but are considered as essential amino acids that are necessary to maintain life.

In the marketplace, except in the medical universe, goods and services are priced according to what the market will bear. If an item is priced too high, then the seller will have fewer sales and a bloated inventory. Consumers will not pay absurd prices for common items, regardless of supernatural claims of quality.

  • Would you pay $100 for an ice cream sundae that boasted it was the best in the world?
  • Would you pay $1000 for a tennis racket that promised performance beyond your ability?
  • Would you pay $500 for a box of paper clips that never lose their tension?
Of course, you wouldn’t because none of this stuff is worth it, even if the quality claims are true. If any readers disagree, then send me a private email so I can enter into a business arrangement with you.

We lose sight of this obvious truth in medicine. It is not enough for a treatment to be effective. The benefit must be worth the cost. I realize that a cost-benefit analysis is interpreted differently by sick people and their families. I am sure this would be true for me and my own family. If my child needed a bone marrow transplant, I would devote my entire being to making this happen, regardless of long odds against success and a six figure price tag. In this hypothetical, I am no longer a smug blogger, but I am a terrified parent.

There will always be arguments about where to draw the line. Some treatments, such as routine vaccinations and proven preventive medical screening tests should be under the line. Other therapies that have minimal clinical benefit and astronomical costs should remain in high orbit and out of reach. All the stuff in between will be the grist for comparative effectiveness research, if it ever gets airborne.

A few months back, The New York Times reported on 2 new drugs, approved by the FDA for cancer treatment. Provenge, a new drug for prostate cancer extends life by 4 months at a cost of $93,000. Impressed? Wait, there’s more. Yervoy, a treatment for melanoma also extends life by 4 months at a cost of $120,000.

Are these two treatments under the line or over the line? In my view, as a spectator and not a sufferer of either disease, I think they should both be directly in the line of fire.

What’s your view?


  1. I think the problem with trying to "Sell" cost effectiveness is that we calculate it on a population basis, but patients receive their care as individuals and do not pay in proportion to populations-based costs.
    In addition, that 4 months life extension will include a few outliers who live significantly longer - and cancer treatment is all about wanting to be the outlier. (I know - we just got through 2 yrs of failed cancer treatment with my sister...) Add in a media that feeds on miracle stories and you get a public primed to ask us to spend whatever it takes, but in reality unwilling, and in most cases unable to pay the costs themselves. Toss in fear of malpractice and you get a medical community that has little choice but to go along.

    I truly don't see us solving this thing anytime soon.


    Here is an answer to the Provenge/Yervoy dilemma

  3. People often calls one who tries to ration healthcare "heartless", as if that is an insult. In truth, the rationing of healthcare is just the opposite.

    In a mass casualty situation, one does not devote limited resources to cases that are unlikely to be successful, until those who would more benefit from the care will be served. We see this as correct and noble.

    What we are unwilling to do is accept that the entire healthcare system is not unlike the mass casualty system. In truth we cannot afford to provide every element of healthcare that might be beneficial to an individual patient.

    The elements of care that might be cut are not so hard to identify, if one looks at a population level. This is, of course, "heartless", but this is the only way such decisions can be made. To make them influenced by any individual situation ultimately would destroy the effectiveness of the overall endeavour.

    The country want to pretend that 'rationing' of healthcare is unethical, and there is some kind of alternative. Many do not accept, or realize, that we are already rationing healthcare, and that we do so through our insurance agents.

    Rationing is a mathematical certainty. We cannot continue to fight it. We just have to decide who will do it. In my opinion, it would be far better that it is a government agency than industry driven by individual profit.

  4. Great comments all. Appreciate the link from AVD. Of course, we are rationing, and we have been for some time, although more sanitized terms have been used. If rationing means that every individual is not entitled to every conceivable medical test or treatment on someone else's tab, then consider me a rational rationer.

  5. What if you as a consumer decide when you are buying the coverage (presumably while still healthy) if you want a “below the line” reasonable policy (let’s say $100/month), or a “desperate-times-call-for- desperate-measures policy” (costing $1000+ per month)? That way everyone pays according to the value they place on the last few months of life. It still calls for comparative effectiveness research, but everyone draws their own line and pays according to their values.

  6. The current progressive strategies to contain health-care costs involve price controls and rationing.

    I wish the Obama administration would have been honest about this. It's a far cry from "You can keep your doctor, have your same insurance coverage, and it won't cost anyone a dime".

    Obama's dishonesty established the tone that will ultimately bring down his administration.

    And it can't happen soon enough.

  7. Obama's failure to be forthright about our nation's need to ration healthcare is hardly unique to him. No politician is willing to promote this idea, even though it is true. So instead our government claims that it will defend everyone's right to unlimited healthcare, and pass on the dirty job of rationing to the insurance companies. We complain that insurance companies deny certain things, but in most cases they are denying things that could be handled in less expensive ways with equal or near-equal efficacy. They are doing exactly what society requires of them.

  8. Obama wanted to make a public system that by nature would have had to create a single rationing standard. The republicans wouldn't stand for it.

  9. Well, I surmise we have representatives of both parties in the above commenters. Pleased to have a bipartisan blog. the economy makes Obamacare seem sturdy and solid by comparison. Keep in mind, Nick, that we physicians are more responsible for overutilization than anyone. We order every test and prescribe every medicine.

  10. Speak for yourself. I don't do that.

  11. Hey AB, no accusation launched Gainst you! Do you not agree that medical profession is responsible for large measure of overutilization for various reasons?

  12. In 1908, the great English philosopher and theologian GK Chesterton was invited by the Times of London to respond to the question, "What's wrong with the world?" His answer - "I am" - may also be applied to the query, "What's wrong with our health care system?"

  13. Thanks , Mark. Many folks are answering Chesterson's question with regard to health care with the response, "you are"!

  14. Michael - We are responsible but we waste our medical resources because we have no reason to ration. To a physician delivering medical care is free. In "Free", an author whose name escapes me proposes that in situations where the marginal cost of using a resource approaches or equals zero, it becomes economically correct to waste that resource. That is exactly what we do, as the cost visible to us is exactly nothing.

  15. Chris Anderson

  16. Good point, Nick, regarding that we physicians don't bear the cost of our advice. In addition, in most cases, the care is free for the patients also. So, there's no real brake on the system. Thanks for your comment.

  17. To Nick and others, an editorial in current issue of NEJM speaks to same issue we are discussing. Here's the link.

  18. I think it comes down to paying attention, asking questions, finding out medical options and asking more questions. Here are some suggestions:

  19. Unfortunately, the cost-effectiveness of quality medicine is on the decline. It doesn't seem to be a priority anymore. But there is a way to create cost-effective, time-efficient medicine, cheap, during the preclinical and clinical stages of drug development. Read more on this revolutionary system.


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