Archive for category High Cost of Medical Devices

A Design For American Health Care

ahc_logo2What an opportunity!  A design for American Health Care that is badly needed, a blank slate, an open door, a blank check.  So what blogger could resist the obvious invitation.  First is the logo — I hope you like it.  No more Medicare, Medicaid, Indian Health Service, Veterans Administration, Blue Cross or United Health.

Who gets AHC?  Well, every US citizen.

How much does it cost?   The annual out of pocket cost is limited to just $1000.

Is there any paper work?  NO.  No paperwork, no bills, no EOB, and no insurance claims.

What do you need for healthcare?  Just your AHC card.

What is the price list?

  • Office visits:  $25
  • ER visits $50
  • Thirty day prescription $10
  • Surgery  $100
  • Hospitalization $200
  • Medical equipment $75
  • Medical devices $75
  • Ambulance $100

What is the national healthcare budget?  It’s set by congress.  Initially budget neutral at three trillion dollars (or whatever budget neutral at this time).

Where does the money come from?  Taxes.  Instead of insurance premiums it’s included in your taxes.

Do insurance companies go out of business?  No.  They process claims from healthcare providers, pharmacies, hospitals etc.  The person getting healthcare does not need to be involved with all the paperwork.

What government agency runs the program?  Medicare, under the AHC name.  Providers bill the claims processor and AHC pays the processor.

Is great American health research affected?  No.  This is a health care system.  Research is not health care and is outside the system.

Can people obtain health services, like for cosmetic surgery?  Sure.  Any services you want to purchase yourself outside AHC is fine.  But, you still pay the same taxes.  AHC does not pay for private care.

Are the States excluded?  No.  The States are responsible for managing AHC in their States.  The Federal Government sets the standards for the country.  The States make it happen.

Why would national costs be lower?  Because America as a country negotiates prices and because cost would be capped by the congressional budget for care.  The cost would be the same the first year.  Waste is a major problem — with better management of a system waste can be addressed.  Since about one half of US healthcare cost is consumed by waste there is lots of room for improvement.

What about poor people?  The deductible would be lower than $1000 — but because the deductible is low to begin with not many would need this help.

Now would be a good time for the applause.  Your humble blogger thanks you.





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Sleep Apnea — unreasonable testing

manwithcpapU.S. healthcare has gone crazy with testing for sleep apnea!   No wonder:  the standard test for the condition makes sleep specialists $1000 a pop.  Talk about a “hammer”, anyone that snores or is overweight is a “nail”.  People should be asking for 2 things before going down the testing road.


  1. A standard sleep apnea screening questionnaire.
  2. A night-time screening home oximetry test.

If  the questionnaire and the oximetry are called “low probability” then stop the testing.

Sleep apnea is real and the people that suffer from the condition do need treatment.   But, here’s the problem:  mild sleep apnea does not need treatment.  Yet, community sleep specialists have equated any sign of sleep apnea with the need for extensive testing and at least some type of treatment.

Well controlled scientific studies show that testing and treatment for sleep apnea are cost effective.  Indeed, that may be true, but community sleep specialists are not following the guidelines as in the large studies.  And, case-finding by community primary care is mostly based on the presence of snoring.  Once the person is sent to a specialist it seems to be implied that an in-center sleep test (polysomnography) is warranted.

Here are some disturbing facts:

  • 25% of the U.S. population snores
  • 25% of people who start CPAP treatment stop treatment
  • Pre-testing questionnaires are common but testing is done despite a low probability of the condition
  • Sleep specialists only consider the expensive in-center sleep test as adequate for their purposes (other outpatient home tests work well for many patients)
  • Surgery and dental prosthesis fail 50% of the time and are not recommended for first-line treatment.  Yet, people are often sent to surgeons and dentists without trying CPAP (the gold standard) or APAP.


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Insulin pumps for diabetes — the cost of health

insulinpumpElisabeth Rosenthal of the New York Times published her article “Even Small Medical Advances Can Mean Big Jumps in Bills” on April 6, 2014.  Type 1 diabetes is a rapidly fatal illness without insulin treatment.  The discovery of insulin in the 1920’s changed the disease from fatal to treatable and with improved insulin and improved devices to deliver the drug people with the disease now can look forward to a long life.

The article by Ms. Rosenthal points up the cost of current insulin pump therapy.  She lists the yearly cost of insulin treatment for one woman as $26,470 (a large part paid by the woman’s insurance).

Surely, big pharma would not take advantage patients with life threatening illness like diabetes.  Surely, they would not pad the bill with unnecessary equipment or lock-in patients to their brand of insulin with a device linked to that brand.  Surely, US big pharma would not disadvantage US citizens and favor drug plans in other countries.  WRONG, WRONG AND WRONG AGAIN.  It’s the modus operaindi of such organizations and a lack of regulation that allows it to happen.

  • Ms. Rosenthal comments on the fluff added to the bill:  talking pumps with multiple colors and new models every year.
  • The linking of insulin pumps to only one type of insulin (made by the insulin maker).
  • The withdrawal of less expensive insulin from the market.
  • The 70% profit on insulin.
  • The limited number of companies that now make insulin.
  • The sweet deals for countries that drive hard bargains (acquisition cost for a bottle of insulin in the UK $30 but in the US $200).

It seems there is a line to be drawn.  On one side is the unquestionable benefit of research and development that brings fantastic life saving benefit to many patients.  On another side is a business formula for fantastic profit to a few people.  Fortunately, one need not choose either extreme — it is possible to have adequate research and reasonable profit as demonstrated in other parts of the world.

So, what can and should be done?

  1. Break up drug companies to separate the manufacture of insulin and the manufacture of insulin pumps.  The competition in the pump market should not be limited by the drug maker.
  2. Limit drug patents with a strict end point and encourage smaller companies to make generics that may not be an exact copy but simply be similar (bio-similar).
  3. Set prices for drugs and devices based on realistic economic considerations (like limiting profit to 5%).
  4. Allow government sponsored research to compare various types of similar therapy to allow a reasonable choice by patients and providers.
  5. And, allow the government to negotiate prices since the government now pays a big part of health care costs.

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Accountable Prescribing — end does not justify means


Nancy Morden MD MPH with others from the Dartmouth Institute for Health Policy and Clinical Practice published a nice “Perspective” in NEJM 3694;4:299-302.    The essence of the article is the observation that published goals of treatment which don’t specify how to reach the goal lead to prescribers” jumping the gun” with strong expensive medications rather than a prudent step by step approach.

A good example from the article is controlling blood pressure.  Guidelines state the desired blood pressure goal is less than 140/90.  Prescribers tend to skip dietary management, skip lowering the salt intake, skip reducing alcohol consumption and jump right to strong blood pressure medications (with the attendant drug allergies, risks and costs).

Another criticism is stopping a medication too soon.  The example is beta-blocker medication after a heart attack.  It is not enough just to start the medication.  The medication must be continued indefinitely.  Too often the medication is stopped because the reason for starting it is forgotten.

Here are the areas the authors found problematic:

  • Blood pressure control
  • Cholesterol management
  • Diabetes control
  • Clot prevention for occlusive vascular disease
  • Lipid control for coronary artery disease
  • Long term beta-blocker after heart attack
  • Avoidance of antibiotics for acute bronchitis
  • Drug use generally in the elderly

From the patient standpoint:  if a health care provider says you have some condition or diagnosis make sure to ask for a step-wise approach to treatment.  In other words, ask for simple or less expensive things to be tried first.  Then insist on follow-up to see if the first steps work.  If the simple things work, you win.  Make sure to research the diagnosis on the internet to exhaust the simple and low cost alternatives.  Later, if the simple things are not enough move on to the next step.

There are obviously situations where a slow cautious approach is not correct.  If you are having a heart attack or a stroke or a blood clot it’s too late to do simple things.

Make sure to understand how long a medication might be needed — if it is “until something better is found” then stick to it and make sure the providers give a good reason for stopping (particularly if you change providers).

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High Price for a New Hip — charges “because they can”

xray total hip

Elisabeth Rosenthal of the New York Times is the author of the lead story on 8/4/13 “For Medical Tourists, Simple Math” about the high cost of hip surgery in the US with an astounding comparison to the low cost in Belgium.  She quotes US orthopedic surgeon Rory Wright saying that joint makers keep prices high “because they can”, not because of research and development or liability costs.   Once again, the Times presents strong evidence of price gouging in the US health care system.

Below is the cost information presented in the article in US dollars in 2012 — the fees presented reflect the repudiated “chargemaster” fees for uninsured individuals   Belgium has national health insurance with some basis in reality for payments (and some national price and profit restrictions)

Hip Costs US Belgium 2

Below is a table from the Commonwealth Fund on fees paid to doctors by public payers (like Medicare) and private payers (like private insurance)

pc orth comparison

The US makers of knee and hip implants (Zimmer and OrthoWax) pay their CEO’s in excess of $8 million dollars per year each.  In 2007 device makers had to pay $311 million to settle a claim of kickbacks to surgeons.  Artificial hips cost about $350 each to manufacture  but hospitals and insurance companies usually pay between $4,500 and $7,500 each.


  1. People in the US without insurance are at a tremendous disadvantage.
  2. Hip and knee implant manufacturers make huge profits in the US.   Other countries solve the problem with price controls and limits on profits placed on the very US companies that freely gouge US customers and damage the US economy.  Does congress care?
  3. If you live in the US, need surgery, don’t have insurance,  and do have enough money for an airplane ticket then:   go to another country for your surgery (Belgium has a lower infection rate than in the US as another advantage).
  4. Lack of insurance should be a vanishing problem in the US with ObamaCare but the high cost paid by insurance (ultimately paid by everybody) is far too high.
  5. The work of surgeons is undeniably valuable. Somehow many other products and services associated with surgery seem to get paid high fees for no reason.  An operating room is not  surgery, a metal implant is not  surgery, and a hospital room is not surgery.  Those associated services are hugely overpriced and need price controls and profit limitations.
  6. Surgeons get paid much more than primary care providers, which makes sense based on the years of training and experience.  If surgery is really needed  then health systems and patients gladly pay for the talent.

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