Health Business Blog

The US is rightly worried that high and rising health care costs threaten economic competitiveness. Although it seems impossible, the situation in China may be even worse. Access to health care has declined, hospitals and physicians have a major incentive to push high end, costly treatments, and private insurance often fails to protect patients and their families from financial ruin. Add in the demographic distortions created by the 1 child policy (i.e., an increasing ratio of old to young), unhealthy eating habits, alcohol and tobacco use, and polluted environment and the situation doesn’t look too good.

It won’t be long before China is worried about the impact of health care on its competitiveness. Look for attempts to copy US managed care techniques.

See China’s Workers See Thin Protection In Insurance Plans; Under State Health Program, ‘Big Sickness’ Is Pricey; Doctors Demand Cash in today’s Wall Street Journal. Here’s an excerpt:

Health-care costs in China are rising rapidly, turning hospitals into symbols of unfettered capitalism. Chinese and international health experts blame runaway costs in part on an effort to make treatment more affordable for the poor. Authorities capped prices for basic drugs and procedures at below-market rates. But they let hospitals compensate by profiting on almost everything else, from advanced drugs to sophisticated diagnostic tests.

That decision created an incentive to provide high-end treatment that has transformed Chinese hospitals, making world-class care available to those who can afford it. Even small-city hospitals, once technological backwaters, boast CT scanners. In each of the past five years, Shanghai hospitals have spent nearly $100 million on sophisticated medical equipment, says Hu Shanlian, a professor of health management at the city’s Fudan University and an adviser to the Chinese government. Drug sales account for 45% of the revenues of Shanghai hospitals, he says. “The health system is really in a crisis,” he says.

Doctors, many of them employees of state-owned hospitals, also have an incentive to steer patients toward high-cost treatments and drugs. The average monthly pay for Shanghai doctors is less than $400, not much more than a taxi driver working overtime can make. But they can double their incomes through bonuses earned by prescribing tests and by dispensing drugs with high profit margins. Few medical systems in the world link doctors’ pay so directly to revenue from patients, health-care economists say.

Mr. Mao, the Ministry of Health spokesman, contends that market forces have gone too far. “If you only trust the market, you will have a disaster,” he argues. The government needs to play a leading role, he says.

The practices of hospitals and doctors are only lightly regulated by Beijing, and there is little self-regulation. China lacks the kind of medical professional associations that set ethical standards, hear complaints and punish wrongdoers in the U.S. and other countries.

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From Ynet News:

Israeli scientists have developed what they believe could be a natural alternative to Ritalin and other drugs for use to treat ADHD… The parents of one group of children were asked to spread the substance together with chocolate spread on a slice of bread each morning…After a three-month period, 20 of the 30 children who were given the oil were able to control their ADHD and showed significant improvement when retested.

Here’s to chocolate spread!

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It’s extremely hard to get access to good mental health resources for kids. As a result many who need help aren’t treated. The burden of untreated kids with mental health conditions falls on their schools, where guidance counselors, nurses, and other staff and outsiders have been stepping up to help.

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There have been a lot of stories recently about physicians and scientists failing to disclose conflicts of interest in journal publications and regulatory filings. Invariably the guilty party claims the failure to disclose was an “oversight” or blames the problem on a secretary or other underling.

Now the Journal of Thoracic and Cardiovascular Surgery is beginning to blacklist authors and institutions that fail to disclose conflicts, according to the Wall Street Journal. That should reduce the forgetfulness.

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Prices of biotech and other specialty drugs are so high and rising so fast that they now make up 25% of pharmaceutical spending. Today’s Wall Street Journal (As Biotech Drug Prices Surge, U.S. Is Hunting for a Solution) reports on four different suggestions for restraining that growth:

1. Create a path for generic biotech drugs
2. Give government negotiating power
3. Create a federal agency for assessing drug value
4. Reduce the cost of developing drugs

All of these suggestions have some merit. I like #1 and some aspects of #2 the best.

(1) There aren’t any biotech generic drugs, which means that biotech companies are able to maintain monopolistic pricing indefinitely. There are technical and regulatory hurdles to developing biotech generics, which is why it hasn’t happened yet. There’s not much that can be done about the technical hurdles, but the regulatory ones could be lowered. For example, a generic biotech would require a full set of clinical trials, unlike a traditional generic, which needs only to show that the active ingredient is the same.

(2) The drug industry is against giving the government the power to negotiate drug prices. But as I’ve discussed before, those concerns will start to be surmounted once the cost of the Medicare drug benefit is fully appreciated. Government-granted patents keep drug prices high –so it’s not completely fair for companies to insist that government intervention is necessary to support innovation but bad when it comes to controlling budgets. The best part of the Journal’s analysis is the suggestion to follow Japan’s system, which ratchets down prices automatically over time. Let the drug companies recoup their R&D costs up front with high prices, but then set prices on a downward spiral as happens with most commodities. (If the ratchet system were introduced, it would make #1 less important.)

(3) The third suggestion is to copy the system employed in the UK and Germany. This is tempting, but I worry that value will be based on the size of the budget –it’s too tempting to declare expensive treatments to be not worthwhile. In this case I do agree with the industry position that innovation could be retarded.

(4) The gist of this suggestion is to reduce the number and size of trials needed for approval, especially for drugs that treat rare disorders. Industry would love it, but it would mean more drugs coming to market whose efficacy is unproven. There are ways to reduce development time and length through adaptive clinical trials, which allow trials to be adjusted part-way through without introducing bias –but the Journal didn’t mention this.

I’m glad the Journal is taking on this important topic.

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For any vitamin and supplement producers reading this, here’s an idea for a seasonal vitamin regimen.

A daily dose of vitamin D could cut the risk of cancers of the breast, colon and ovary by up to a half, a 40-year review of research has found. The evidence for the protective effect of the “sunshine vitamin” is so overwhelming that urgent action must be taken by public health authorities to boost blood levels, say cancer specialists.

After assessing almost every scientific paper published on the link between vitamin D and cancer since the 1960s, US scientists say that a daily dose of 1,000 international units (25 micrograms) is needed to maintain health. ” The high prevalence of vitamin D deficiency combined with the discovery of increased risks of certain types of cancer in those who are deficient, suggest that vitamin D deficiency may account for several thousand premature deaths from colon, breast, ovarian and other cancers annually,” they say in the online version of the American Journal of Public Health.

The dose they propose of 1,000IU a day is two-and-a-half times the current recommended level in the US.

Since sun exposure produces some Vitamin D it makes sense to take two multivitamins during the winter and one in the summer in order to keep a constant level of vitamin D. However, this is not the only consideration. Folate is broken down by sun exposure:

The protective role of folate in preventing neural tube defects is now well established. The hypothesis is advanced here that photolysis of folate by ultraviolet (UV) light may, in some women, precipitate a folate deficiency sufficient to cause a neural tube defect (NTD) during the first few weeks of pregnancy. This hypothesis is supported by the demonstration of in vitro photolysis of folate by simulated strong sunlight (1), a decline in folate levels in light-skinned subjects exposed to UV light for dermatological conditions (1), and the occurrence of NTDs in the offspring of women who exposed themselves to high levels of UV light on the sunbeds of tanning salons (2). If established, a connection between in vivo folate photolysis by UV light, clinical folate deficiency and NTDs would suggest that intense or prolonged periconceptual exposure of women to UV light for recreational or therapeutic reasons should be avoided.

As a result, it makes sense to take two multivitamins in the summer and one in the winter in order to keep a constant level of folate.

The obvious solution would be to have two versions of multivitamins, one high in folate for summer and the other high in vitamin D for winter.

Thanks to Mickey for this post.

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Academic medical centers in Boston are starting to adopt customer service methods from the hospitality industry. Now, patients can expect to see smiling staff, have their phone calls answered, and even to know the names of the doctors and nurses treating them! The new push is a response to competitive pressures, consumers taking a more active role in their health care, and Medicare’s intention to require customer satisfaction surveys by 2007.

There’s still a tendency for providers to talk about “patient experience” rather than “customer satisfaction” –a bit like utility companies calling their customers ratepayers. But things do seem to be getting better. It’s about time.

See Lessons in Hospital Courtesy in the Boston Globe.

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From the AP:

Accidental poisonings from the nation’s most popular pain reliever seem to be rising, making acetaminophen the leading cause of acute liver failure.

Use it correctly and acetaminophen, best known by the Tylenol brand, lives up to its reputation as one of the safest painkillers. It’s taken by about 100 million people a year, and liver damage occurs in only a small fraction of users.

Thanks to Mickey for this post.

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Check out Grand Rounds, the best of this week’s medical blogging, at The Health Care Blog.

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From the Wall Street Journal (Making Colonoscopies More Comfortable):

An increasingly popular approach to colonoscopies is making the test more comfortable for patients. But the method, which involves a potent and fast-acting anesthetic, is sharply boosting the cost of the procedures — and some insurers are taking action to curb its use.

Colonoscopies are critical for detecting colon cancer, a leading, preventable cause of death.

Anything to encourage people to get colonoscopies done is worthwhile from my standpoint, even if it’s not “medically necessary.”

By refusing to cover the use of Propofol, insurers raise doubts about how committed they are to prevention. After all, why not avoid the expense of colonoscopy and let the patient’s next insurer pick up the colon cancer tab?

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PS – Blogger’s spellchecker, always wanting to get in on the action, suggests replacing “colonoscopies” with “saloonkeeper.”

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