Contrary to popular thinking, new medical advances may not necessarily be contributing to the rising cost of health care. Although some new medical procedures and diagnostic procedures may be costly, the alternatives would be much costlier. Electron beam tomography (EBT), a new diagnostic procedure to predict heart attacks and other potential health problems costs from $500 for a heart scan to $1,200 for a scan of the whole body. If the heart scan is performed and plaque formation is discovered, the condition can be reversed by medications such as aspirin, certain vitamins, or in more advanced cases prescription cholesterol-lowering drugs. Coronary stenting and open bypass surgery, procedures a patient may need if the problem wasn't diagnosed early, cost around $15,000 and $27,000, respectively. Although many patients who undergo EBT may not need prescription medications, those who do can expect to pay $18,000 or more over their lifetime for cholesterol-lowering drugs.30
Prescription drug therapy for AIDS patients may reduce health care costs by a third. Pro- tease "cocktail" therapies cost about $16,000 a year. In contrast, before the availability of drug therapy, an AIDS patient averaged $24,000 a year in hospital costs. The average hospital stay for an AIDS patient in New York state dropped from 23.4 days in 1983 to 9.6 days in 1999. $16,000 a year for drug therapy? How can we (patients, insurance companies, federal health programs) pay for it? According to Samuel A. Bozette, M.D., who headed a study of antiretroviral therapy for AIDS patients that was published in The New England Journal of Medicine: "'The drugs are almost a perfect substitute for hospital care. We can afford them because, in fact, we are already spending the money on HIV care' in the form of hospitalization."
Can this be said about other prescription drug treatments? If there were a direct link between prescription drug treatment and hospitalization costs, perhaps. Money spent on one treatment could be funneled into another, less costly treatment. But, looking at the previous graph, our health care system seems much more complicated.
The lack of a steeper downturn in hospital care expenses, despite cost saving diagnostic and pharmaceutical treatments, may partly be attributed to the aging of the population. In 1999, the hospitalization rate for those 65 years old and over was greater than three times that of the general population: 370 vs. 116 per 1,000. The number of hospital discharges for the elderly increased 11% from 1990 to 1999. And, the baby-boomers haven't yet reached age 65. As that generation ages and more and more will need hospital care, per capita hospitalization costs (and as a consequence, total health care expenses) will continue to rise.
Are we better off with new drug therapies? Yes. Overall life expectancy is trending upward. In many cases chronic conditions are now manageable with drug therapy, allowing patients to live longer, more active lives. But, not all diseases and conditions can be managed (or cured) simply by having new diagnostic procedures and pharmaceutical treatments available. Despite the availability of cholesterol-lowering drugs, people still have heart attacks. Despite medical innovations and drug therapies to diagnose and treat cancer, people are still hospitalized for and dying of the disease. The same can be said for many other health conditions and diseases.
Why? In some cases, it's a patient's lack of access to proper health care. In other cases, it's people's attitudes about their own health (and consequent behaviors). But, in many cases, this may simply be nature winning over our attempts to control it.
Sources: Centers for Medicare & Medicaid Services. U.S. Health and Human Services. "Table 9: Personal Health Care Expenditures, by Type of Expenditure and Source of Funds: Calendar Years 1993-2000." Retrieved August 5, 2002 from http://www.cms.hhs.gov/statistics/nhe/historical/t9.asp. "The Inflation Calculator." Retrieved August 5, 2002 from http://www.westegg.com/inflation/. U.S. Census Bureau. Statistical Abstract of the United States: 2001. Pharmaceutical Research and Manufacturers of America. The Value of Medicines, 2001 and PhRMA Industry Profile 2002. Retrieved July 16, 2002 and August 2, 2002 from http://www.phrma.org. National Center for Health Statistics. Centers for Disease Control. "Hospital Stays Grow Shorter Heart Disease Leading Cause of Hospitalization," April 24, 2001 and 1999 National Hospital Discharge Survey. Advance Data Number 319, 2001. Retrieved August 7, 2002 from http://www.cdc.gov/nchs/. Advanced Medical Technology Association. "The Promise of Medical Technology" Retrieved August 7, 2002 from http://www.himanet.com/aboutourindustry.shtml. R.J. King. "'Visual Tour' can predict heart attack." The Detroit News, June 23, 2002. Retrieved August 7, 2002 from http://detnews.com/2002/health/. Johnson & Johnson. "Putting a Price on Health Care Progress." Health Care Issues, May 16, 2002. Retrieved August 6, 2002 from http://www.jnj.com/issues/putting_price.html.
1 Stein Wellner, Alison. "Pill-Popping Nation." Forecast, October 2000.
2 Some estimate that the number of prescriptions written will increase to 4 billion by 2004. Source: Psychiatric Times. Full citation in source note.
3 Source: "The Top 10." Retrieved July 16, 2002 from http://www.chiroweb.com/archives/15/04/24.html. For more information about antibiotic drug resistance see the chapter entitled "The Environment" in the current volume.
4 Rescue inhaler for asthmatics.
5 The active ingredient is Albuterol.
6 According to Pfizer, 52 million Americans are in need of cholesterol-lowering drug therapy. More information about drug advertising will appear in later panels.
7 Based on a July 2001 U.S. Census Bureau population estimate of 207,197,000 for those 18 and over.
8 Source: "Antidepressant Prozac introduced 1987." Retrieved July 18, 2002 from http://www.pbs.org.
9 In 2000, sales of Prozac grossed $2.6 billion.
10 PMS: premenstrual syndrome, a milder form of PMDD. An interesting note: Eli Lilly's fact sheet for Sarafem states that it's "to treat the symptoms of premenstrual dysphoric disorder (PMDD)." However, some pharmacy web sites state that this drug may be used "to treat PMS."
11 In June 1995 the New England Journal of Medicine estimated that PMDD affects 3-8% of women of childbearing age. In 2000, this equaled 1.8-4.8 million women. Prozac is in a class of medications called SSRIs. This stands for selective serotonin reuptake inhibitors. These medications alter the serotonin levels in the brain. This brain chemical affects a person's mood and emotions.
12 For more information on ADHD and Ritalin use see the chapters entitled "Diseases" in this volume and "Special Needs and Issues" in the Community and Education volume.
13 Different sources cite different numbers. Unfortunately, no one knows the exact number of children taking Ritalin. The chart estimates for the number of children with ADHD are based on 4% of the population 0-17 years old.
14 A drug is classified as Schedule II by the DEA when it has the potential for abuse. In recent years, there have been reports of methylphenidate abuse, mostly among middle and high school students in many large cities. Those with ADHD, however, do not become addicted to the drug if it is taken properly.
15 Ritalin isn't the only mood-altering drug physicians are prescribing to preschoolers. In 1997, 40,000 children below the age of 6 were taking the antidepressants Prozac, Zoloft, and Paxil. This is a 400% increase from the year before. Source: IMS Health. None of these drugs have FDA approval for use with children and only 8% of physicians reported that they had adequate training in treating children with depression. 57% said that they prescribed an antidepressant for a diagnosis other than depression in patients younger than 18. Source: "SSRI Use Common in Children." JAMA, May 16, 1999.
16 A report published in 1983 that outlined the problems with the United States educational system and proposed solutions to these problems.
17 The HMO was unnamed in the source: "a major national HMO operating in Michigan." Source: "Michigan ranks third in U.S. Ritalin Use." Michigan Education Report, Winter 2001.
18 Competition from generics may only hurt 50% of the brand name comparable sales. According to the FDA, 50% of the generic drugs are manufactured by brand-name firms. "They frequently make copies of their own or other brand-name drugs but sell them without the brand name." Source: Center for Drug Evaluation and Research.
19 Data retrieved July 25, 2002 from http://www.drugstore.com.
20 Overall promotion includes free samples and other promotional efforts aimed at medical professionals and direct-to-consumer advertising. Direct-to-consumer advertising involves newspaper, magazine, radio and television advertising.
21 All prescription prices obtained July 29, 2002 from http://www.cvs.com, http://www.eckerd.com, and http://www.drugstore.com.
21 All prescription prices obtained July 29, 2002 from http://www.cvs.com, http://www.eckerd.com, and http://www.drugstore.com.
22 The average generic prescription drug price in 2001 was $21.96.
23 Not all of this increase can be attributed to higher prescription prices. According to the Barents Group analysis of Scott-Levin Source Prescription Audit Data for 1993-1998, 64% of the increase in prescription drug spending is due to increase in prices and 36% is due to increased utilization of prescription drugs. The Barents Group, a part of KPMG Consulting, provides financial and economic advisory services. Scott- Levin, Inc. is a research firm specializing in pharmaceutical marketplace data.
24 Wholesale and retail markup was extrapolated from domestic sales figures, reported by the Pharmaceutical Research and Manufacturers of America, and U.S. retail spending figures, reported by the National Institute for Health Care Management. See source notes for complete citations.
25 Merck & Co., Inc., Pfizer, Inc., Bristol-Myers Squibb Company, Abbott Laboratories, Wyeth, Pharmacia Corporation, Eli Lilly & Co., Schering-Plough Corporation, and Allergan, Inc.
26 Profits as a percentage of revenue.
27 The six drug companies that answered the survey contributed an average of $426 million a year to charity.
28 Inflation rate for first five columns calculated by averaging the inflation rates of the two years. Last column is the cumulative inflation rate from 1996-2001.
29 Source: Kleinke, J.D. "The Price of Progress: Prescription Drugs in the Health Care Market." Health Affairs, September/October 2001.
30 If a person was diagnosed at age 45, put on Lipitor or Zocor (two of the most advertised drugs in this class) daily for the rest of his life, and lived until 75 years old: Zocor 5mg (the smallest dosage) would cost him $17,982; Lipitor 10mg (the smallest dosage) would cost him $21,550. This assumes that prices stay constant over this 30-year period. Prices obtained August 7, 2002 from http://www.drugstore.com.
User Comments Add a comment…