7 ms·

A Million-Dollar Cancer Treatment: Who Will Pay?

26 points by onetimemanytime 9y ago

neonate 9y ago
http://archive.is/bOjVZ http://archive.is/bOjVZ
prolikewhoa 9y ago
Simple (yet complex) Solution: don't make health a for-profit business.
- txsoftwaredev 9y ago
  Then what's the incentive to spend millions to develop new treatments?
  - throw2016 9y ago
    What's the incentive to spend billions on infrastructure and trillions on the army?
    - 013a 9y ago
      Those are mostly solved, unevolving problems, meaning their R&D spend is a small fraction of the total budget. For example: in 2016, of the total FY2016 federal budget of $4T, only $145B is committed to R&D (3%) [1]. Compare that to the pharmaceutical industry average of 18% [2]. [1] https://www.aaas.org/fy16budget/federal-rd-fy-2016-budget-overview https://www.aaas.org/fy16budget/federal-rd-fy-2016-budget-ov... [2] https://www.investopedia.com/ask/answers/060115/how-much-drug-companys-spending-allocated-research-and-development-average.asp https://www.investopedia.com/ask/answers/060115/how-much-dru...
      - rootusrootus 9y ago
        That seems likely to be misleading, I imagine most of the R&D done for the defense department is done privately via supplier contracts and not directly accountable as such.
  - trumped 9y ago
    The government already spends millions to help increase population... they might be interested.
  - Spooky23 9y ago
    To serve humanity. Why do people teach? Become soldiers? Priests? Money isn’t the only motivator.
    - woolvalley 9y ago
      Those people have to live, eat, and see my family do well. Those people can decide to go do something else, most people are not financially independent. The money has to come from somewhere, always.
      - Spooky23 9y ago
        All of these things are true. None of these things require a $1M dose of a drug.
  - wmeredith 9y ago
    This reminds of s political cartoon I saw earlier this year of two businessmen talking... “We could save thousands of human lives!” “But at what cost?”
- bradleybuda 9y ago
  Most economists would argue that we would not have nearly as much innovation in medicine without a profit motive. Do you think those economists are wrong?
  - DmenshunlAnlsis 9y ago
    I think: Most economists? That feels like a claim in need of a citation, or revision. Most economists aren’t medical doctors or pharmaceutical researchers. How many of the most useful medical breakthroughs were government funded?
    - michaelkeenan 9y ago
      >> we would not have nearly as much innovation in medicine without a profit motive > Most economists? That feels like a claim in need of a citation The usual best place for finding out what economists think is the IGM Economics Experts Panel[1]. I mention it because it's a great resource to be aware of, but they haven't addressed this question, though it's covered in textbooks. I checked the Mankiw textbook on Principles of Microeconomics[2], which if I'm not mistaken is the world's most popular one. In the introduction, it says that people tend to supply things when the returns are high: "Incentives are crucial to analyzing how markets work. For example, when the price of an apple rises, people decide to eat fewer apples. At the same time, apple orchards decide to hire more workers and harvest more apples. In other words, a higher price in a market provides an incentive for buyers to consume less and an incentive for sellers to produce more. As we will see, the influence of prices on the behavior of consumers and producers is crucial for how a market economy allocates scarce resources." That becomes a background assumption for discussion of incentives in the rest of the book. For example, when talking about externalities, it notes that the patent system increases the incentive to innovate: "Research into new technologies provides a positive externality because it creates knowledge that other people can use. Because inventors cannot capture the full benefits of their inventions, they tend to devote too few resources to research. The federal government addresses this problem partially through the patent system, which gives inventors exclusive use of their inventions for a limited time." [1] http://www.igmchicago.org/igm-economic-experts-panel http://www.igmchicago.org/igm-economic-experts-panel [2] https://en.wikipedia.org/wiki/Greg_Mankiw#Textbooks https://en.wikipedia.org/wiki/Greg_Mankiw#Textbooks
- refurb 9y ago
  Hospital margins are pretty low, so you'd knock what? 5-10% off?
  - prolikewhoa 9y ago
    I'd knock 100% off and make it non-profit with a socialized healthcare system just like almost every other western country in the world. A majority in the USA even favor it. http://www.pewresearch.org/fact-tank/2017/06/23/public-support-for-single-payer-health-coverage-grows-driven-by-democrats/ http://www.pewresearch.org/fact-tank/2017/06/23/public-suppo...
    - asfasgasg 9y ago
      There are many western countries without a single-payer (socialized) system. E.g. Germany, Belgium, the Netherlands, France, Austria, Denmark, Ireland, Greece. That said, almost all of them have national price setting, almost all of them have a mandate, and almost all of them are much more generous to the poor who cannot afford insurance.
  - 013a 9y ago
    And I also wish more people realized that drug companies are sitting flush either. Lilly posted about a billion in profit this quarter. Gilead posted $4B in losses. Novartis posted about $2B in profit. That sounds like a lot. It is, to a degree. Do you think they should fund this treatment for free for 2000 people? Because 600,000 people die from cancer every year. Just in the US. Insurance companies? Anthem made about a billion. State Farm lost $71M. The list goes on. Hospitals are doing far worse. You can cut researcher salaries; great, you just impacted the people who are literally doing the research to save peoples' lives. You can cut executive salaries; they mostly get paid in stock anyway, and its not like their job isn't important. You can rely on public research; uh oh, the public just elected Mr. Donald, who called the NHS "broken". #Defunded. I hate the expediency of some people. Let's look for an easy answer to this problem: Drug companies are greedy! Or... How about this: drug research is fucking difficult, which makes it very expensive. And also: humans are designed to die. There are a billion things on this planet that can kill us, and quite often when drug companies fix one of them, those little asshole bacteria get three times stronger and fight back, or humans discover a new thing to smoke or drink that gives them cancer. And then the same people who just finished a large milkshake from McDonalds hop online or go to a protest and yell that drugs are too expensive.
- RcouF1uZ4gsC 9y ago
  The issue with that is that it will seem to work. You know what a treatment costs, and if you mandate every treatment is through a non-profit, all your treatments will be lost cost. However, you do not know about the treatments that you are missing out on because you did not provide enough incentive for them to be discovered and tested. Thus, you will be blissfully ignorant. Another way to look at this, is the prior to discovery, a treatment for a disease is infinitely costly. No matter how much money you have available to spend, you can't get your disease cured. After discovery, even at the cost of a million dollars per treatment, the cost of the treatment is infinitely less.
wcr3 9y ago
this is, like, the ur-wsj article (if it lives up to that title)
RcouF1uZ4gsC 9y ago
An issue with how health care is funded in the US, is there is not often a rational consideration of cost. People are balking at the cost of a cancer treatment that costs 1 million dollars. However, if it cures a person and the person lives a good quality life for 20 years, then the cost per quality adjusted life year is around $50,000. On the other hand, the median cost for traumatic brain injury is around $160,000 (http://n.neurology.org/content/82/10_Supplement/P5.337 http://n.neurology.org/content/82/10_Supplement/P5.337) with many of the patients dying or having poor quality of life. If you looked at cost per quality adjusted life years, it would probably be a lot higher. In terms of what cost per quality adjusted life year to target, it seems that the UK NHS targets 30,000 GBP (http://www.bbc.com/news/health-28983924 http://www.bbc.com/news/health-28983924) and there are calls to increase it to 70,000 GBP(https://www.bmj.com/content/338/bmj.b181 https://www.bmj.com/content/338/bmj.b181) We need to get away from looking at the sticker price for health care, but look in terms of cost per quality adjusted life year before we can have meaningful discussion as to what and how to pay for health care.
- platz 9y ago
  By your logic any procedure that prevents death is cost adjusted by how many years the patient lives. It 'proves too much'. If I'm 30 and I suffer a knife wound then you could charge any amount to prevent my death, justifying by averaging over 40 years. All kinds of medical intervention may be necessary to prevent death, but that doesn't mean they shouldn't be affordable.
  - matheist 9y ago
    I think the point is to set an upper bound on how much a government ought to be willing to pay for a given procedure, and to compute that upper bound by counting QALYs and multiplying by their official dollar value. For example: Value of stitching knife wound: (40 QALYs) * (30,000 GBP/QALY) = 1.2M GBP Cost of stitching knife wound: (let's say) 1000 GBP Decision process: Is the cost less than the value? 1000 < 1.2M, so yes. Therefore, pay for the procedure. Whereas: Value of expensive cancer procedure on 70-year-old: Let's say 5 QALYs just to make up something, taking into account expected lifespan and QOL and chance of remission, etc, times the same 30k GBP, = 150k GBP. Cost of procedure: 1M GBP Decision process: Is the cost less than the value? 1M > 150k, so no. Therefore, don't pay for the procedure.

neonate 9y ago

http://archive.is/bOjVZ http://archive.is/bOjVZ

prolikewhoa 9y ago

Simple (yet complex) Solution: don't make health a for-profit business.

txsoftwaredev 9y ago
Then what's the incentive to spend millions to develop new treatments?
- throw2016 9y ago
  What's the incentive to spend billions on infrastructure and trillions on the army?
  - 013a 9y ago
    Those are mostly solved, unevolving problems, meaning their R&D spend is a small fraction of the total budget. For example: in 2016, of the total FY2016 federal budget of $4T, only $145B is committed to R&D (3%) [1]. Compare that to the pharmaceutical industry average of 18% [2]. [1] https://www.aaas.org/fy16budget/federal-rd-fy-2016-budget-overview https://www.aaas.org/fy16budget/federal-rd-fy-2016-budget-ov... [2] https://www.investopedia.com/ask/answers/060115/how-much-drug-companys-spending-allocated-research-and-development-average.asp https://www.investopedia.com/ask/answers/060115/how-much-dru...
    - rootusrootus 9y ago
      That seems likely to be misleading, I imagine most of the R&D done for the defense department is done privately via supplier contracts and not directly accountable as such.
- trumped 9y ago
  The government already spends millions to help increase population... they might be interested.
- Spooky23 9y ago
  To serve humanity. Why do people teach? Become soldiers? Priests? Money isn’t the only motivator.
  - woolvalley 9y ago
    Those people have to live, eat, and see my family do well. Those people can decide to go do something else, most people are not financially independent. The money has to come from somewhere, always.
    - Spooky23 9y ago
      All of these things are true. None of these things require a $1M dose of a drug.
- wmeredith 9y ago
  This reminds of s political cartoon I saw earlier this year of two businessmen talking... “We could save thousands of human lives!” “But at what cost?”
bradleybuda 9y ago
Most economists would argue that we would not have nearly as much innovation in medicine without a profit motive. Do you think those economists are wrong?
- DmenshunlAnlsis 9y ago
  I think: Most economists? That feels like a claim in need of a citation, or revision. Most economists aren’t medical doctors or pharmaceutical researchers. How many of the most useful medical breakthroughs were government funded?
  - michaelkeenan 9y ago
    >> we would not have nearly as much innovation in medicine without a profit motive > Most economists? That feels like a claim in need of a citation The usual best place for finding out what economists think is the IGM Economics Experts Panel[1]. I mention it because it's a great resource to be aware of, but they haven't addressed this question, though it's covered in textbooks. I checked the Mankiw textbook on Principles of Microeconomics[2], which if I'm not mistaken is the world's most popular one. In the introduction, it says that people tend to supply things when the returns are high: "Incentives are crucial to analyzing how markets work. For example, when the price of an apple rises, people decide to eat fewer apples. At the same time, apple orchards decide to hire more workers and harvest more apples. In other words, a higher price in a market provides an incentive for buyers to consume less and an incentive for sellers to produce more. As we will see, the influence of prices on the behavior of consumers and producers is crucial for how a market economy allocates scarce resources." That becomes a background assumption for discussion of incentives in the rest of the book. For example, when talking about externalities, it notes that the patent system increases the incentive to innovate: "Research into new technologies provides a positive externality because it creates knowledge that other people can use. Because inventors cannot capture the full benefits of their inventions, they tend to devote too few resources to research. The federal government addresses this problem partially through the patent system, which gives inventors exclusive use of their inventions for a limited time." [1] http://www.igmchicago.org/igm-economic-experts-panel http://www.igmchicago.org/igm-economic-experts-panel [2] https://en.wikipedia.org/wiki/Greg_Mankiw#Textbooks https://en.wikipedia.org/wiki/Greg_Mankiw#Textbooks
refurb 9y ago
Hospital margins are pretty low, so you'd knock what? 5-10% off?
- prolikewhoa 9y ago
  I'd knock 100% off and make it non-profit with a socialized healthcare system just like almost every other western country in the world. A majority in the USA even favor it. http://www.pewresearch.org/fact-tank/2017/06/23/public-support-for-single-payer-health-coverage-grows-driven-by-democrats/ http://www.pewresearch.org/fact-tank/2017/06/23/public-suppo...
  - asfasgasg 9y ago
    There are many western countries without a single-payer (socialized) system. E.g. Germany, Belgium, the Netherlands, France, Austria, Denmark, Ireland, Greece. That said, almost all of them have national price setting, almost all of them have a mandate, and almost all of them are much more generous to the poor who cannot afford insurance.
- 013a 9y ago
  And I also wish more people realized that drug companies are sitting flush either. Lilly posted about a billion in profit this quarter. Gilead posted $4B in losses. Novartis posted about $2B in profit. That sounds like a lot. It is, to a degree. Do you think they should fund this treatment for free for 2000 people? Because 600,000 people die from cancer every year. Just in the US. Insurance companies? Anthem made about a billion. State Farm lost $71M. The list goes on. Hospitals are doing far worse. You can cut researcher salaries; great, you just impacted the people who are literally doing the research to save peoples' lives. You can cut executive salaries; they mostly get paid in stock anyway, and its not like their job isn't important. You can rely on public research; uh oh, the public just elected Mr. Donald, who called the NHS "broken". #Defunded. I hate the expediency of some people. Let's look for an easy answer to this problem: Drug companies are greedy! Or... How about this: drug research is fucking difficult, which makes it very expensive. And also: humans are designed to die. There are a billion things on this planet that can kill us, and quite often when drug companies fix one of them, those little asshole bacteria get three times stronger and fight back, or humans discover a new thing to smoke or drink that gives them cancer. And then the same people who just finished a large milkshake from McDonalds hop online or go to a protest and yell that drugs are too expensive.
RcouF1uZ4gsC 9y ago
The issue with that is that it will seem to work. You know what a treatment costs, and if you mandate every treatment is through a non-profit, all your treatments will be lost cost. However, you do not know about the treatments that you are missing out on because you did not provide enough incentive for them to be discovered and tested. Thus, you will be blissfully ignorant. Another way to look at this, is the prior to discovery, a treatment for a disease is infinitely costly. No matter how much money you have available to spend, you can't get your disease cured. After discovery, even at the cost of a million dollars per treatment, the cost of the treatment is infinitely less.

wcr3 9y ago

this is, like, the ur-wsj article (if it lives up to that title)

RcouF1uZ4gsC 9y ago

An issue with how health care is funded in the US, is there is not often a rational consideration of cost. People are balking at the cost of a cancer treatment that costs 1 million dollars. However, if it cures a person and the person lives a good quality life for 20 years, then the cost per quality adjusted life year is around $50,000. On the other hand, the median cost for traumatic brain injury is around $160,000 (http://n.neurology.org/content/82/10_Supplement/P5.337 http://n.neurology.org/content/82/10_Supplement/P5.337) with many of the patients dying or having poor quality of life. If you looked at cost per quality adjusted life years, it would probably be a lot higher. In terms of what cost per quality adjusted life year to target, it seems that the UK NHS targets 30,000 GBP (http://www.bbc.com/news/health-28983924 http://www.bbc.com/news/health-28983924) and there are calls to increase it to 70,000 GBP(https://www.bmj.com/content/338/bmj.b181 https://www.bmj.com/content/338/bmj.b181) We need to get away from looking at the sticker price for health care, but look in terms of cost per quality adjusted life year before we can have meaningful discussion as to what and how to pay for health care.

platz 9y ago
By your logic any procedure that prevents death is cost adjusted by how many years the patient lives. It 'proves too much'. If I'm 30 and I suffer a knife wound then you could charge any amount to prevent my death, justifying by averaging over 40 years. All kinds of medical intervention may be necessary to prevent death, but that doesn't mean they shouldn't be affordable.
- matheist 9y ago
  I think the point is to set an upper bound on how much a government ought to be willing to pay for a given procedure, and to compute that upper bound by counting QALYs and multiplying by their official dollar value. For example: Value of stitching knife wound: (40 QALYs) * (30,000 GBP/QALY) = 1.2M GBP Cost of stitching knife wound: (let's say) 1000 GBP Decision process: Is the cost less than the value? 1000 < 1.2M, so yes. Therefore, pay for the procedure. Whereas: Value of expensive cancer procedure on 70-year-old: Let's say 5 QALYs just to make up something, taking into account expected lifespan and QOL and chance of remission, etc, times the same 30k GBP, = 150k GBP. Cost of procedure: 1M GBP Decision process: Is the cost less than the value? 1M > 150k, so no. Therefore, don't pay for the procedure.