Real Money

Terence Foley is dead.

The 67 year old Pennsylvania man succumbed to kidney cancer in 2007, but, in retrospect, his hospital bill probably would have given him a fatal coronary anyway.

A recent article in business week magazine tells the strange tale of Mr. Foley’s medical bill, and in doing so, illustrates so much of what is wrong with the current health care system in this country.

Read it for yourself:

http://www.businessweek.com/news/2010-03-04/avastin-dose-costing-6-600-became-27-360-in-hospital-billing.html

Mr. Foley was billed $27,360 for EACH of four treatments of Avastin, a cancer fighting drug from Genentech. Each treatment contained 1200 milligrams of Avastin, which means that this wonder drug cost Mr. Foley a ludicrous $22,800.00 a gram. For the purposes of perspective, let us consider another exotic, chemical, Weapons Grade Plutonium (WGP).


Mind you, unlike Avastin, WGP is a material that can only be manufactured in a billion dollar nuclear breeder reactor. If you could buy it on the open market, (which you cannot, thankfully) it would set you back around $2000.00 a gram, which makes Avastin more then 10 times more expensive then the stuff that they make nuclear warheads out of.

Don’t blame us, cries Genetech. Why, that drug and dose should have only cost Mr. Foley $6,600.00, or a mere $5,500.00 a gram. (What a bargain!)

Don’t blame use either, pleads the hospital. Why, we only collect 25% of what we bill, so we have to mark things up so we can recover our losses from those who do pay.

Both sides of this issue are, in my opinion, equally insane.

Sorry, Genetech - why some material you manufacture should still cost almost 3 times more then WGP (at your Suggested Retail Price) is difficult to fathom, no matter how you may try to explain it.

As far as the hospital is concerned, this is a perfect example of how hospitals are fueling the skyrocket that is taking our health care expenses into the stratosphere.

The more that hospitals charge those who can pay, the more that our health insurance premiums increase, and we are left with even more people who can no longer afford health insurance coverage. Of course, this new smaller group of insured people will now be charged even more for their health care, and the cycle will continue, spiraling upwards, until only a very few Americans will be able to afford health insurance. Along the way, hospitals in areas with lower concentrations of insured patients will feel the pinch, and start failing because they no longer have anyone to pass the buck (and the bill) on to. This is already happening across the country with hospitals in lower income areas. And like a blight, it is spreading to hospitals in neighboring areas which are now forced to service patients, many of them uninsured, from the failed and failing hospitals. There is no end in sight.

Come to think of it, the entire area of hospital economics is starting to resemble a huge Ponzi scheme. Perhaps we should let Bernie Madoff out of prison and appoint him to a new cabinet post where he would be responsible for keeping the entire system afloat. He certainly has shown a greater aptitude for this type of shenanigans than the people who are presently running the system.



Yes, it wouldn’t be a long term solution, but when it comes to solving the health care crisis, our leaders seem to favor quick feel-good fixes instead of real reform.

***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/

Free Blog Counter

The Great White North, Part 2

I promised you a Dirty Little Secret last time, but I lied (Sorry!) – I actually have TWO Dirty Little Secrets to share with you about why prescription drugs are cheaper in Canada.

The first Dirty Little Secret is that prescription drugs ARE NOT Cheaper in Canada then they are in the US. The truth is that prescription drugs are cheaper in Canada, in Mexico, in Europe, in Africa, and almost everywhere else in the world!

The second Dirty Little Secret has to do with WHY these drugs are cheaper everywhere else, and that reason is call ‘Price Discrimination’.

Now, we all know that ‘discrimination’ is a bad thing, so I find it amazing that the Spin Doctors have yet to dream up a nicer term for this practice. “Price Discrimination” is a recognized academic economic term, so maybe that’s why no one has thought up a better term for it. “Price Discrimination” simply means charging different prices to different buyers for the same product. A bag of flour probably costs more in Manhattan that it does in New Jersey, and this is “Price Discrimination”. The price difference can be partially due to the higher overhead in Manhattan and partially due to the fact that people in Manhattan make more money and can therefore afford to pay more for their flour. Of course, if a Manhattanite wanted to purchase their bargain flour by driving into New Jersey, there is no law against this, and as a result, many Manhattanites do their shopping across the river.

The citizens of Niagra Falls, New York, or El Paso, Texas, are not legally afforded the same privilege. Here is where the pharmaceutical company Spin Doctors start earning their keep: As they explain it, prescription drugs are a unique product, because they cost a lot of money to develop, but are relatively inexpensive to make. They need to recoup these high R&D costs, and they do so by charging US consumers more for their product. By not passing on the R&D costs to consumers in other countries, they can keep the prices there lower and therefore they can still make a profit selling in these countries. If they were to pass on the R&D costs evenly and fairly to consumers in every country, people in other countries might not be able to afford their medications. This is the primary reasoning why we are not permitted (in theory, at least) to buy our medications from Canada or Mexico – if enough people did this, it would upset the balance of the system and drive up the costs in Canada and Mexico. This is how pharmaceutical company Spin Doctors explain their reasons behind their “Price Discrimination”, and why we are not allowed to ‘drive across the river’ and save money.

As ‘nice’ as it sounds, this is patently unfair. The truth of the matter is that other country’s governments won’t allow them to price gouge their citizens, so they make up for it by gouging Americans even more. Offering drugs to third world countries in Africa at a substantially lower prices may indeed be a righteous and humanitarian thing to do, but the same argument does not hold water when you are talking about doing the same thing for countries that have similar economic conditions to the US. Pharmaceutical companies are charging US consumers more for our prescription drugs for one very simple reason – they can.

Of course, they have Spin Doctored a response to this as well. If they were to pursue price equity for their products amongst leading nations, it would upset the established order and cause havoc in those fortunate countries (i.e everywhere but here) with low cost prescription drugs. Lower prices in the US would mean higher prices everywhere else, and that would not be fair to those countries. This is, of course, absurd. Where else, in normal economics, does the largest consumer pay the highest price for goods? “These Widgets are a dollar a piece, but if you want to buy them in larger quantities, they sell for three for ten dollars”. And why is it that we should be raped for our prescription drugs so that everybody else can pay a ‘fair’ price?

Think of this in another way – what would you do if you found out that the same Ford that you were interested in buying was selling in Canada for 1/3 of the U.S. price? I don’t know about you, but I would buy a Chevy! The problem is, of course, you wouldn’t be allowed to buy a Chevy – you only had a ‘permission slip’ to buy a Ford, even though the Chevy was 98% functionally equivalent. Besides, GM, Chrysler, and every other manufacturer would gleefully jump on the same price gouging bandwagon as Ford, so long as you were prohibited from buying your car in another country..

There is really only one solution to this pricing disparity - our elected officials start standing up to these companies and demand – or legislate – fair pricing, just like the leaders in Europe and Canada did for their oppressed citizens.

Until then, as far as our pharmaceuticals are concerned, US consumers will remain the ‘Suckers of the World’. If you are an American citizen who purchases non-generic prescription drugs, welcome to the Schmuck Club. For those interested, we’ll be issuing ID cards and secret decoder rings shortly. In the meanwhile, you can print and laminate this card for your wallet.




***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/


Free Blog Counter

Maple Leafs

OK, so the Winter Games this year weren’t the best run. The torch support failed to rise at the opening ceremonies, the downhill courses didn’t have enough snow, and the bobsled run was downright deadly. Our neighbors to the North really didn’t put their best foot forward.

But there are areas where Canada still shines.

No, this is not going to be a diatribe on the superiority of the Canadian Health Care system. Like the 2010 Olympics, there are many things about their system that are, shall we say, less than impressive? However, there are some things that Canada does better than us, so let’s give credit where it’s due. One thing that Canada does deserve credit for is the way that it controls the costs of prescription drugs.

Take Lipitor for example. Here in New Jersey, and average cost per 40mg pill is $5.23, according to the New Jersey State Attorney General’s office. Shop the same pill and dose on line, and you can buy it from a Canadian Pharmacy for as low as $1.40 per pill. Still no bargain, but certainly much more reasonable and affordable.

I’ve done a lot of reading on this subject lately, and the reasons why Canadian prescription drugs are less expensive are varied. One main reason is that the Canadian Government itself sets price caps on what the pharmaceutical companies can charge for their products. I know that allowing the government to control pricing in any industry is a hot button issue in this country, and not one that I generally am in favor of, but desperate times call for severe measures.

Another reason is that Canada limits the percentage of newer (and more expensive) drugs that are dispensed, favoring generics and older formulations whenever possible. While the newer medications are sometimes more effective than the older ones, this is not always the case, and the Canadians seem to encourage using generics whenever they will do the job at hand. If you have a minor or even moderate case of a particular disease, is having the latest drug, which is ten percent more effective then the generic, really necessary? Of course not.

A lot of this price control happens in Canada because the government is footing the bill for healthcare, and therefore there is a single entity responsible for controlling costs. In the US, where individuals are often shielded from the true costs of our medicines by our prescription plans, there is little concerted effort to pressure the pharmaceutical companies to lower the cost of their products.

A third reason is that pharmaceutical companies have less product liability in the Great White North, and this also has a direct effect in lowering the costs of medications. Canadians are less suit happy than Americans, and when they do sue (and win), awards tend to be significantly lower than similar awards in the U.S. So, to be fair, a portion of that price difference goes towards the purchase price of your ticket in the lawsuit lottery.

While all these things play a part in keeping the costs of Canadian pharmaceuticals low, there is one other factor that has an even greater effect in the price differential – and that is a dirty little secret that no one – especially the pharmaceutical companies - wants you to know about.



Want to know what it is? Stay tuned of my next installment. Same Bat Time. Same Bat Station.





***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/


Free Blog Counter

Damn You WalMart!

Everybody hates a spoiler – the person that ruins a good thing for everybody else. We all know someone like this – the kid who told he teacher about who was talking when the teacher left the room, or the goodie two-shoes who reported that the vending machine at work was doling out free candy bars . Yes, we all know (and hate) this type of person.

You gotta think that, amongst the pharmaceutical giants, WalMart is that annoying spoiler – who went and ruined a good thing for everyone.

You’ve all seen the ads – get a 90 day supply of generic prescription drugs for only $10.00 or so. Bastards.

Here we all were, stupid and lemming-like, forking over hundreds and hundreds of dollars for our name-brand medications, and WalMart has to go and shoot this cash cow, a coup de grace, a double-tap behind the ear, Tony Soprano style. Bastards!

Oh, the Spin Doctors are working overtime trying to fix this fiasco.

Thank God that someone had the foresight to label prescription drugs that are no longer covered by patent as ‘generic’ – a lucky break. Now, at least, people will associate these realistically priced medicines with rasp-like toilet paper and sub-par corn in white-labeled cans.

Oh, they would have us all believe that these affordable drugs are no good – probably made in some shady, dirt-floored Chinese factory that uses children as slave labor. The last thing that they would want you to know is that many generic drugs are made by divisions of the same pharmaceutical giants who manufacture they pricey name brand drugs. They also don’t want you to know that generics have to meet the same stringent FDA specifications and testing as their more expensive equivalents.


They cry that there is a reason why the name brand drugs are more expensive. You see, they have to cover the R&D costs of the drugs. The higher costs of name-brand medications have absolutely no correlation with the billions they spend on TV commercials and on panini parades. They also have nothing to do with the billions posted in annual profits.

In spite of the Spin Doctor’s excellent damage control, WalMart has still made a real mess of this gravy train. Now, other retailers are following in WalMart’s footsteps with similarly priced generic prescriptions.

Luckily for the pharmaceutical companies, Americans are still brand conscious. Many of us would not be caught dead with a generic prescription bottle in our medicine cabinets. After all, what would the neighbors say?

Which gives me another great business idea – fake prescription bottles that you can put your generic drugs into. We can sell them at the flea market, right next to the phony Rolexes and knock-off Louis Vuitton handbags.



Save money and still stay style conscious. After all, it’s the American Way!











***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/

Free Blog Counter

Trivial Pursuit

Can You Spot the Real Television Commercial?

A) Ask your policeman about Remmington shotguns!

B) Ask your Veterinarian about Bengel Tigers!

C) Ask you Doctor about Flomax!

If you answered ‘C’ – Congratulations! That’s the real advertisement!

I tried to trick you here. You see, all 3 items – Firearms, Exotic Animals, and Prescription drugs – are items that you can purchase in this country, but only when someone else gives you permission to buy them. You need a gun permit to purchase a firearm, an exotic animal license to purchase a tiger, and a prescription to buy prescription drugs.

Isn’t it curious, though, how only prescription drugs are advertised on television, directly to people who cannot purchase them without prior approval??

There is a good reason why we need permission slips to purchase these items – in the wrong hands, all three can be quite deadly. Which brings me to another fun quiz: Statistically, which of the 3 aforementioned items is the most deadly?

If you said firearms, you’d be wrong. As reported in the 2003 report “Death by Medicine” (Drs. Gary Null, Carolyn Dean, Martin Feldman, Debora Rasio and Dorothy Smith) almost 800,000 people in the United States die every year from the effects of prescription drugs. Firearms fall a distant second – according to the Center for Disease Control, there were 30,896 firearm-related deaths in the US in 2006. (I could not find any statistics on deaths by exotic animals, so I will have to relegate this category to 3rd place by default.).

This is a very poor showing for the US firearms industry – perhaps if they upped their ad budget, they could improve their ranking in the future. Madison Avenue knows that cute babies make effective spokespersons – I wonder if this cute little tyke has his SAG card?




***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/


Free Blog Counter

Permission Slips

I remember another episode revolving around my great milk dilemma in kindergarten.

Being a bright boy, I had an epiphany in regards to the chocolate stuff – I could kick in the 10 cents difference out of my own pocket, join the chocolate-mustached bourgeoisie and leave the plain milk proletariat behind. My beloved Gram gave me a shiny quarter each week, so the funding was not the issue – I could easily afford the silver Roosevelt dime. But alas, my chocolate dairy dreams were not to be.

As smart as I was, the powers that be at my humble elementary school were smarter still. They had seen most every trick in the 5 year old playbook, and they knew how to keep an upwardly mobile snip like me in my place. If I wanted chocolate milk, not only did I need to cough up 35 cents each week, I had to present a signed permission slip from my parents. Downtrodden and a little more world-weary, I resigned myself to a life of plain milk.

Grown now, I have gladly put the days of signed permission slips behind me. Or have I? It occurs to me that Doctor’s prescriptions are really just another signed permission slip, albeit on fancier paper with messier penmanship. What a prescription really says is, in laymen’s terms:

Dear Mr. Pharmacist:

Please allow Billy to buy this drug.

Sincerely,

Dr. Jones

I wonder if my Kindergarten snacks would have been different if the Dairies started direct marketing to the teachers at my grade school the way that pharmaceutical companies market to physicians today. If this had happened, I am sure EVERYONE would have chocolate milk – heck, I bet a lot of us would have been chugging down milkshakes at snack time!

OK, I am NOT saying that requiring doctors’ permission to purchase potentially dangerous pharmaceuticals is a bad thing – far from it. But it is essential that we start to look at things from a different angle – without and predetermined prejudices or conclusions.

Ask any building contractor – before you rebuild, you gotta do some demolition work. And demolition is not for the sentimental. And it can be messy.

Yes, we have to take a sledgehammer to some of the things that we now hold sacred, strip them of the false
Facade that we’ve built up over the years, and expose the bare bones of our health care system. Once we can study them, we can decide what stays and what goes, and start our rebuilding from there. And yes, its gonna get messy.

***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/

Free Blog Counter

Mysterious Island

OK, let’s toss a few stones at the medical profession. Admittedly, a lot of people don’t trust doctors, and it is easy to see why. To many, the medical profession is seen as some sort of secret society. They even have their own language. Whether by evolution or design, the world of medicine can be a strange and frightening place to the uninitiated.

Many doctors live by the adage of never using a 50 cent word when a ten dollar word can be used. Hence, a patient suffers from cephalgia, and not a common headache. They may treat this malady with acetaminophen instead of taking two tylenol. The list goes on and on.

Traditionally, Medical doctors are addressed by the title ‘Doctor’, even in social situations. This bugs many people with Phd’s who are not afforded the same courtesy. Medical Doctors often dress differently then most of us, with their unofficial uniforms of white lab coats or green scrubs. All of these factors tend to create an air of elitism. And elitism breeds contempt.

Now, over the past few decades, much has been done to break down these stereotypes, and improve the doctor-patient relationship. However, for many people, the schism between Doctors and the rest of society is still there.

The Spin Doctors are well aware of this, and they exploit these prejudices mercilessly as they pursue their own agenda. We almost never here about how the health care insurers, the trial lawyers, and the pharmaceutical conglomerates are bankrupting the system. The blame instead is pointed towards the providers, even though only ten cents of every health care dollar spent ends up in their pockets – and remember, they are the ones who are actually providing the care!

If we are ever to get at the root of the health care crisis, we need to strip away the layers of veneer that obscure the issues and look at things with a fresh perspective. If you have ever refinished furniture, you know that this process is going to be messy, and require a lot of hard work, but the end result will make it all worthwhile.

Now, where did I put that can of Formby’s?

***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/


Free Blog Counter