Interesting Health care cost article

[Elumia]

surfing the web can find interesting tangents. I hadn't seen nor heard much about this but found it interesting.
below is the business week article and below that the research paper it is based on.

“So That’s Why It’s So Expensive: Blame Insurance, Not Just Tech, for Spiraling Health Costs, Says an MIT Economist,” by Howard Gleckman, BusinessWeek Online, August 14, 2006: http://www.businessweek.com/magazine/co ... han=search

“The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare,” by Amy Finkelstein, National Bureau of Economic Research, April, 2006: http://www.nber.org/~afinkels/papers/Fi ... pril06.pdf

[gassman]

Mark:
Interesting indeed; although I believe that the billions spent by the pharmacutical companies in TV advertising each year may have something to do with it !! And thank God for insurance; after all, who else is going to pay the $4500 a month for the meds I have to take just trying to put the cancer I have in remission...I surely don't have that kind of money!!!!

Rick

[Joseph]

Interesting indeed; although I believe that the billions spent by the pharmacutical companies in TV advertising each year may have something to do with it !!

And how about the billions that doctors, hospitals and pharmacutical companies have to shell out for malpractice insurance?

And thank God for insurance; after all, who else is going to pay the $4500 a month for the meds I have to take just trying to put the cancer I have in remission...I surely don't have that kind of money!!!!

I think the point is, it wouldn't cost that much were it not for the insurance machine driving up the costs of everything - including the cost of insurance! I'm glad you're covered, but I (and I think everyone else) would be a lot happier if your meds cost $50 a month instead of $4500.

And I thought I was a pirate!

Joseph

[asianflava]

Insurance companies = necessary evil

[Joseph]

Insurance companies = necessary evil

Like lawyers. But we sure don't need so many of 'em. I read somewhere that the US has 5% of the worlds population and 75% of the world's lawyers. If true, that would explain a lot...

Joseph

[mrainey]

who else is going to pay the $4500 a month for the meds I have to take

My wife and I pay $700 a month for health insurance, and we don't have any history of health problems (we're in our fifties).

The cost of drugs never ceases to amaze me. It seems like any pill you can find costs ten bucks minimum these days. Yours, unfortunately, appear to cost much more.

Out of curiosity, I priced Viagara at drugstore.com. It's my understanding that the active ingredient was already being marketed for other purposes, so no additional R & D was needed. The discovery of its effect on erectile dysfunction was purely an accident.

25 mg cost $99.99 for ten pills
50 mg cost $99.99 for ten pills
100 mg cost - you guessed it - $99.99 for ten pills

Apparently the cost of the active ingredient is so small that it has no effect on the selling price. What, then, are people being charged for? Where is all this money going?

[Nitetimes]

Apparently the cost of the active ingredient is so small that it has no effect on the selling price. What, then, are people being charged for? Where is all this money going?

Right back to insurance. I'm sure the insurance these drug companies carry in case case one of their miracle drugs does something unexpected to somebody isn't cheap either.
Of course if they shortened the length of time they can keep the patent on them that would help considerably toward lowering the costs.


Never said I had a solution.

[Elumia]

I think is was PJ O'Rourke who said, "if you think health care is expensive now, wait til it's free". ( beleive he was referencing single payer healthcare - which is what we have with Medicaid)

I beleive that the basis of the article is that, since once people got insurance, they had no incentive to care how much it cost to go to the doctor. Once people didn't care, the doctors established the "prevailing fee" which is what insurers paid. As time went on, those fees just got higher which raises the cost of healthcare. Since we don't have to pay the bills directly, just our copay we don't really care how much it costs to go, or how much the test is. We get stuck with the increased cost via increased insurance premiums. (which when they were smaller our employer was more easily able to cover). While technology sure adds to the cost of healthcare, the added layer of insurance billing is also raising the cost and additionally hiding the costs of care from the consumer of said care.

Mark

[Joseph]

What, then, are people being charged for?

Do I have to spell it out for you? It's VIAGRA! What do you THINK they're being charged for?

Where is all this money going?

No way to know for sure without knowing what drugstore.com is paying for it.

While technology sure adds to the cost of healthcare, the added layer of insurance billing is also raising the cost and additionally hiding the costs of care from the consumer of said care.

No fooling about the "prevailing fee." A recent trip to the emergency ward (brown recluse bite) where they took my temperature and wrote me a prescription for an antihistamine (which I didn't fill) cost over EIGHT HUNDRED DOLLARS!! My insurance covered most of it but I'm still out nearly two hundred bucks for what came down to a little hand holding. If I knew they can't do anything for a brown recluse bite, I wouldn't have bothered going. I didn't get any of the nasty effects you see on the Internet, BTW - just some swelling that came up very fast.

Joseph

[Greg M]

As a Canadian all I can say is Nyaa, Nyaa

-Greg

[dacrazyrn]

A recent trip to the emergency ward (brown recluse bite) where they took my temperature and wrote me a prescription for an antihistamine (which I didn't fill) cost over EIGHT HUNDRED DOLLARS!! My insurance covered most of it but I'm still out nearly two hundred bucks for what came down to a little hand holding.Joseph

You must remember that when using the Emergency department, you are also paying for ALL the people who do not pay their bills, MedicAid Abusers (where I work, there are ALOT of them), and Indigent Care Programs (LOT of abusers here also). For a little knowledge...lacerations are one of the HIGHEST charged things in "minor" emergencies in ED's. Better off seeing an Urgent Care instead (but then they are probably more expensive than you think.)

[Joseph]

You must remember that when using the Emergency department, you are also paying for ALL the people who do not pay their bills, MedicAid Abusers (where I work, there are ALOT of them), and Indigent Care Programs (LOT of abusers here also).

Excellent point.

Better off seeing an Urgent Care instead (but then they are probably more expensive than you think.)

Good idea, though in the wee town of Excelsior Springs, MO, where it happened, there isn't one. But the next town over, Liberty, does. I'll bear that in mind, though as I said, there's nothing they can do for a brown recluse bite. Funny - Kate's lived in that house for thirty years and never been bitten though she sees them fairly often. I'm there for three days...

Joseph

[gailkaitschuck]

?Help for those struggling with med costs....

So far this year, 67 drugs have been approved for use in generic form, including Xanax XR for anxiety, Flonase nasal spray for seasonal allergies, Percocet for pain, Lexapro for depression and anxiety, Zocor for hyperlipidemia, Zoloft for depression and anxiety and oral suspension of Zithromax, an antibiotic for children.

For a full list, go to http://www.fda.gov/cder/ogd/approvals

According the FDA, 8,730 of 11,487 drugs have generic components.

In 2004, the average price of a generic prescription drug was $28.71 compared with $94.54 for the average price of a brand-name prescription.

Consumer Reports did price comparisons at 132 pharmacies across the counter, including drug store chains, independent pharmacies, mass merchants, supermarkets and online pharmacies, looking at five common generic prescription meds (for blood pressure, lipids, diabetes, blood thinners and a generic version of Prozac.

Costco stores had the best prices at $48 for these drugs.

Omeprazole (Prilosec) sells like hotcakes on ebay.

Gail

[Joseph]

Regarding the cost of pharmacuticals, here's something to consider. I've never heard of this outfit and haven't vetted them but they appear to be fairly credible - I'm sure someone will correct me if I'm mistaken.

Probably the most significant paragraph in the article:

For the pharmaceutical industry, one economic problem is that only 3 out of every 10 of their products generate after-tax returns (measured in present value terms) in excess of average, after-tax R and D costs. The scientific process is heavily regulated, and involves significant technical risk. Only one in several thousand compounds investigated ever makes it through the full development process to gain approval of the Food and Drug Administration. The vast majority of R and D projects fail for reasons related to safety, efficacy, or commercial viability, the authors note. For compounds that do gain FDA approval and are taken to market, the entire process from discovery to launch takes on average about 15 years.

In short, the costs of developing new drugs are astronomical, the risks are extremely high and only 30% of the stuff that finally does make it through to the market actually makes a profit. If the study cited is on the level, it explains, at least in part, the high cost of drugs a bit better than simple greed on the part of "Big Pharmaceuticals."

Joseph

[mincey]

It is funny that I read this thread today. I happened to read a very good article on insurance just this morning. You can read it here:
http://www.realclearpolitics.com/articles/2006/10/getting_medical_insurance_from.html
It makes a lot of really good points. I wish more people felt this way! We need to get people to go back to the days when you were responsible for yourself, not government or others.

As to Canadian health care, yes, it is "free" to citizens, but look how many Canadians come to the US and pay out of pocket for health care, because of the US quality as well and not having to wait extraordinary times to see someone! I have several friends both still in Canada and Canadians living down here, and none are happy with the health care system up there. You get government involved and it all goes to crap!

Cheryl