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Archive for the ‘Economics of Health Care’ Category

At long last, a favorable ruling  came in December 2016 for former patients at Yakima Regional Medical and Cardiac Center and Toppenish Community Hospital, both in Central Washington, when the hospitals agreed to pay $4.5 million into a settlement fund to compensate those who were wrongly denied financial  assistance from 2007-2014.  Last July, Yakima County Superior Court Judge Susan Hahn ruled that the hospitals had violated Washington’s Consumer Protection Act by failing to notify and screen low-income patients for free or reduced-cost care, as required under another state law, the Charity Care Act which was enacted in 1989. The Charity Care Act applies to all hospitals operating in Washington, and to all patients, insured or uninsured alike, who meet income eligibility requirements: those with incomes at 100% or less of the Federal Poverty Level  (FPL) are eligible for free care, and those whose incomes are at 101-200% of FPL are entitled to discounts.

The legal case on behalf of the patients took slightly over 3 years to be resolved. Due to record-keeping gaps at the hospitals, it is unknown how many former patients are potentially eligible for compensation under the settlement. Deliberate intent by the hospitals to withhold the required notice and eligibility screening was established during the proceedings.

Documents submitted in the lawsuit indicate hospital staff were given incentives and talking points to help them get as much money as possible from low-income patients, and that they were directed not to mention charity care as an option unless a patient knew to specifically ask for it.

In August 2016, the advocacy groups Northwest Health Law Advocates ( NoHLA) and OneAmerica published a report Yakima Regional and Toppenish Hospitals Fail to Provide Sufficient Charity Care   based on their research which revealed the financial hardships suffered by patients who could have been eligible for charity care. Likewise it was found that

Yakima Regional Medical & Cardiac Center

……although Yakima Regional is the most profitable hospital in Central Washington, it provides a significantly lower level of charity care than the regional average.

 

 

 

As a sidebar note since the settlement was announced, the two hospitals are due to soon change hands , for the third time in fourteen years. In 2003, the pair was sold to Health Management Associates and subsequently in 2014 to Tennessee-based Community Health Associates, both for-profit hospital chains. Unlike in other parts of the country, for-profit hospitals are uncommon in Washington. Commitment to upholding the Charity Care Act is one of the conditions for Department of Health approval of a hospital’s conversion from nonprofit-to-for profit.

Across the state, full compliance with the long-standing financial assistance rules can remain still elusive.  In June 2016 a class-action lawsuit against Northwest Hospital in Seattle for Charity Care violations was filed. State legislators seeking a remedy filed HB 1359  and companion SB 5231 early this year, to require that a written notice of the availability of Charity Care be included on all hospital bills. The House bill made it through the first cut-off date, and is moving forward in the legislative process. I will be posting on new developments, including provisions in the bill to ensure that notices are given in the language that patients understand.

 

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Exciting news came at the end of the year for Gary Schwitzer’s Health News Review project which had lost the funding that supported the team of reviewers that analyzed the accuracy of health stories in the news and published their findings. HNR was awarded a two-year, $1.3 million grant from the Laura and John Arnold Foundation to continue and expand its work, which will now be housed in the new Center for Media Communication and Health in the U of Minnesota School of Public Health.

I’ll be looking forward to more important stories coming our way soon to share here.  And all of us can hone our critical thinking skills on health news stories by applying the HNR  framework anytime:

What’s the total cost?
How often do benefits occur?HealthNewsReview
How often do harms occur?
How strong is the evidence?
Is this condition exaggerated?
Are there alternative options?
Is this really a new approach?
Is it available to me?
Who’s promoting this?
Do they have a conflict of interest?

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News from China  gives us even more pause to reflect on the access to medicines scenario. The situation in the US where there are no good excuses for unaffordable medicines, pales in comparison to this chilling tale of a patient whose actions to secure the life-saving drug imatinib mesylate at an affordable price, has resulted in his criminal prosecution.

Veenat400mgTo prosecutors, a leukemia patient named Lu Yong is a criminal involved in credit card fraud and a counterfeit drug scam. But to 1,000 fellow leukemia patients in China, Lu is an unsung hero for helping them get access to cheap, life-saving generic medicines from India.

His crime?  Selling fake drugs and breaking a law about purchase of international credit cards.  What Lu did was considered criminal because any drug  produced in or imported into China without the government’s approval is classified as a “fake drug,”  and Lu purchased international credit cards online to facilitate the transactions. China.org.cn reported that:

The defendant, Lu Yong, was diagnosed with chronic myelocytic leukemia in 2002. He was prescribed Gleevec, a drug produced by Swiss drug-maker Novartis, which cost 23,500 yuan (US$ 3,775) per month, far too expensive for average Chinese families. Lu was even more depressed since the expenses of treating leukemia are not covered by China’s medical insurance system.

Lu later found out that India produced a generic drug which was comparable to Gleevec but which cost only 4,000 yuan, about 17 percent of the cost of Gleevec. He took the medicine himself and found it effective. Later, Lu began helping several thousand fellow patients buy the drug, since the purchasing process was difficult and some patients were not able to fill out the English purchase forms.

Meanwhile, Lu’s trial has been postponed due to his health problems, and some 300 fellow patients with CML have signed an online petition asking for his release.

Also of significance is the astronomical price of Gleevec in China,  said to be the highest in the world, which led  Lu to seek an alternative.  As a point of comparison, Costco’s US online pharmacy is now selling a 30-day supply of the standard 400mg dose of Gleevec for $9022.05.

Glivec400mg

 

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A bevy of news stories local and national have highlighted the ever-worsening situation for consumers , especially  for folks who need so-called specialty drugs but also for the much larger segment of the population who use plain old generic medicines.  While raising awareness is essential, mostly what we are seeing, is increased an amount of talk about the problem, but less often are suggestions being offered in the way of sustainable solutions. Shock over the price for new Hepatitis C drug Sovaldi  was a wake-up call for policy makers and the public; it remains to be seen what will be prescribed as a remedy.  Here’s a sampling of  some more recent headlines:

Small group of specialty drugs could make up half of total pharmacy spending by 2018

Prices Soaring for Specialty Drugs, Researchers Find

Generic drug prices skyrocket in past year

Will Rising Prices for Some Generic Drugs Never End? Monthly Cost for One Heart Drug Can Approach $1,200

Pharmacists Report Soaring Generic Drug Purchasing Prices Impacting Patients, Pharmacies

New strategies needed to curb specialty drug costs

While some in Congress have been asking why in 2014, it remains to be seen if the political will can be mustered anytime soon to secure pricing changes from Big Biopharma.

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Old US Public Health Service Hospital (known as Pacific Tower during its tenure as Amazon HQ building) to become new satellite campus for allied health professions programs of Seattle Central Community College and serve as site for public agencies and NGOs. AmazonBeaconHillHQ*304

Seattleite Jeanne Sather, author of Assertive Cancer patient  blog ,died from metastatic breast cancer  15 years after her original diagnosis

In June the King County Board of Health unanimously approved creation of drug take-back system for county residents , to be financed by a 2-cent per Rx tax. On Dec. 1, PhRMA filed a lawsuit against King County , claiming that the plan causes a financial burden for patients and that in-home disposal of  medicines is the best way to keep Rx drugs out of the wrong hands.

State to review hospital affiliations — Catholic and otherwise

Public hospital CEO gets pay cut to $1 M per year, at Renton’s Valley Medical Center

Harborview to close  pediatrics, women’s, & family clinics

Health Care Reform for American Indians and Alaska Natives 2013  including WA-specific page

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Recent news of note:

Report: Debt Collectors Work In Emergency Rooms, Demand Payment Before Patients Receive Care

Abbott To Pay $1.6 Billion To Settle Depakote Probes

Discrepancies on Medical Bills Can Leave a Credit Stain

American Pain Foundation Shuts Down as Senators Launch Investigation of Prescription Narcotics

Insurers back FDA plan for new drug category

Patients Share Of Expensive Specialty Drugs Is Rising

Racial, Socioeconomic Disparities Alleged In Autism Spending

Premera tries to gut drug benefits, Kreidler says no 

and a shout out to an excellent source of news and analysis with a focus on Oregon and the broader context:

The Lund Report: Unlocking Oregon’s Healthcare System

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Those who have been following the saga of the leukemia wonder drug imatinib mesylate or Glivec (spelled Gleevec in North America to standardize pronunciation) may recall that it was said to be the first medicine for which a global price was set. At the time of its 2001 FDA approval, the worldwide price was US$2400/month, for  a base dosage of  a 30 day supply of 400mg caps.  Indeed, Novartis CEO  Daniel Vasella went to great lengths to discuss and justify both the high price and the pricing decision in his subsequent infomercial-type book  Magic Cancer Bullet: How a Tiny Orange Pill Is Rewriting Medical HistoryThe Gleevec story is notable too in that the typical pharma claim that the price is justified by R & D costs, was refuted by researcher Brian Druker MD, who detailed how most of the initial work on imatinib was publicly funded and he had to convince Novartis to  produce enough of it to begin clinical trials with CML patients. Dr. Druker has also gone on record to criticize  the price being charged for Glivec.

Since then patients in wealthy countries mostly have been clamoring for their  public or private insurance to cover  the drug (and its second-line successors) not that something be done about the price that is exorbitant even in their economies. Novartis  invested heavily in worldwide patient relationship marketing for Glivec , which has contributed to this phenomenon, a topic  explored previously in this blog. In recent years,  it has become much more common to hear complaints from US patients and even some of the big-box disease associations, about the escalating price of  drugs like Glivec and  especially for new biologics. But it has  been rare to to hear demands that something be done about drug prices.

So the recent posting of a patient petition on change.org calling for action to reduce the price of Gleevec is notable:  Novartis and US Representatives in Congress: Reduce to patients the cost of the drug, Gleevec.

The introduction of the petition reads:

Novartis developed this drug in the 1990s. In the years since then the price of the drug has increased astronomically. Novartis must have paid their research costs long ago, but the price just keeps rising. Patients with CML leukemia are dependent on the drug to keep them alive. Our US representatives should work with FDA to pressure Novartis to reduce the cost

Setting aside the issue of  misunderstanding that there are no price controls on prescription drugs in the US open market and that the FDA does not regulate drug prices, the petition is significant as a reflection of the increasing desperation of middle-class privately insured patients. They are among the majority here whose insurance status and/or income levels typically disqualify them for the patient assistance programs much touted by Novartis, whose global Gleevec sales generated $4.7B in 2011.   Many US patients are now finding that the Gleevec price has skyrocketed at the same time that insurers are requiring them  to pay a much larger share of its  hefty price tag.  The situation is quite simply unsustainable.

One person who signed the online petition shared:

I started taking Gleevec June 1, 2001, when it was first approved by the FDA. It cost $2400 for 30 pills. Now, these same pills cost $7367 per month. I pay $1035 per month for insurance to cover this cost. My insurance Co. gets billed for the drug. Why has Novartis raised the price so much? …

A look at  Costco’s online pharmacy, which has a reputation, anecdotal at least, for offering “good value” retail prices on Rx meds in the US, found the following cash price for a month’s supply of an  average dose (dosage  is individualized) of  30 tabs :  GLEEVEC 400 MG TABLET      $6,264.59

While Novartis is continuing its drag on its patent fight to combat the imatinib generics already on the market in India, these cannot yet be exported to the US.  The original  US patent for Glivec expires in 2015. In 2009, Sun Pharma  filed for and received tentative FDA approval for a generic imatinib for when that day comes.

Given the power of the pharma lobby the future remains very uncertain for any relief on the price of Gleevec , but the clamor of voices from the grassroots is a healthy development.

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