Tuesday, November 1, 2011

Can We Afford High Cost Pharmaceuticals?

I'm in New Orleans, to meet tomorrow with a group of union leaders who oversee union health plans. They will have read, or at least - I hope - glanced at "Setting Limits Fairly," the book in which Norman Daniels and I presented the "accountability for reasonableness" framework for curbing unsustainable health care costs.

I'm excited at the prospect of working with union leaders. For them the constituency in the health plans they oversee are fellow union members, not impersonal "covered lives," the unfortunate insurance jargon term for you and me. And they know where the health plan funds come from - their own contributions and, perhaps, contributions from their employers, which could otherwise go into wages.

In advance I proposed four premises for the discussion:
  1. Resources are finite.

  2. There are more potentially valuable things that health care can offer than we can pay for.

  3. Organizations like unions that provide health insurance will have to learn to work with questions like "how much is life worth?" in a thoughtful and constructive manner.

  4. High cost pharmacy is a prime area where tough decisions will have to be made.
We'll use two drugs as examples that ultimately require us to acknowledge "how much is life worth?" as a real question. Provenge is a new immunotherapy for minimally symptomatic metastatic prostate cancer not responsive to hormone therapy. It extends median survival for 4.1 months at a cost of $93K. Cerezume is a biologically engineered form of the deficient enzyme in Gaucher's disease. It can produce significant improvements in quality of life for $150K - $250K per year.

In emotional terms, life is priceless. But in economic terms, it isn't.

I'll make the point that avoiding questions about the value of health interventions is a major reason we're in the mess we're in now. We won't solve the cost dilemma until we learn to think in terms of both numerator (my needs and desires) and denominator (the insured population's needs and desires). I'll make the further point that this kind of learning is more emotional than cognitive. And it takes time, so a long term strategy is necessary.

Union health plans, which are likely to have a high degree of solidarity among the insured population, are a promising venue for thinking this way. I hope we'll be able to probe health care costs as "our problem" rather than as something "they" are forcing on us.

I'll write more after I meet with the union leaders.


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