Discussion: Financing of Health CareWith coinciding concerns about health care costs and the imperative to improve quality of care, health care

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Discussion: Financing of Health Care

With coinciding concerns about health care costs and the imperative to improve quality of care, health care providers and others face difficult decisions in the effort to achieve an appropriate balance. Such decisions often are addressed in the policy arena. How do policymakers evaluate which health care services should be financed through government programs? How do ethics-related questions and other considerations play into this evaluation process? Is it possible to contain costs and provide accessible, high-quality care to all, or is the tension between cost and care inherent in the U.S. health care delivery system? These questions are central to health care financing decisions in the United States.

For this Discussion, you will focus on the policy decision-making process that determines what types of care are covered by public and private insurers and the ethical aspects of such financial decisions.

To prepare:

Read the case study “Economic Impact of States Declining Medicaid Expansion”  page 190 of the Milstead text( BOOK :HEALTH POLICY AND POLITIC ATTACHED BELLOW) .

Review the information in the Washington Post article “Review of Prostate Cancer Drugs Provenge Renews Medical Cost-Benefit Debate” in the Learning Resources. ( DOCUMENT ATTACHED BELLOW)

Consider how policy decisions currently are made about what will and will not be paid for and what changes, if any, could improve the process.

Reflect on how the Washington Post example illustrates the tension between cost and care.

Post your analysis and assessment of the ethical and economic challenges related to policy decisions such as those presented in the Washington Post article.

How does this type of situation contribute to the tension between cost and care? Substantiate your response with at least two outside resources.


                             Discussion: Financing of Health CareWith coinciding concerns about health care costs and the imperative to improve quality of care, health care
washingtonpost.com  > Health Correction to This ArticlePrevious versions of this article misspelled the name of Tito Fojo, of the National Cancer Institute. This version has been corrected. Review of prostate cancer drug Provenge renews medical cost-benefit debate TOOLBOX Resize Print E-mail Reprints By Rob Stein Washington Post Staff Writer Monday, November 8, 2010; 7:52 AM Federal officials are conducting an unusual review to determine whether the government should pay for an expensive new vaccine for treating prostate cancer, rekindling debate over whether some therapies are too costly. The Centers for Medicare & Medicaid Services, which dictate what treatments the massive federal health-insurance program for the elderly will cover, is running a “national coverage analysis” of Provenge, the first vaccine approved for treating any cancer. The treatment costs $93,000 a patient and has been shown to extend patients’ lives by about four months. Although Medicare is not supposed to take cost into consideration when making such rulings, the decision to launch a formal examination has raised concerns among cancer experts, drug companies, lawmakers, prostate cancer patients and advocacy groups. Provenge, which was approved for advanced prostate cancer in April, is the latest in a series of new high-priced cancer treatments that appear to eke out only a few more months of life, prompting alarm about their cost. “This absolutely is the opening salvo in the drive to save money in the health-care system,” said Skip Lockwood, who heads Zero – the Project to End Prostate Cancer, a Washington-based lobbying group. “If the cost wasn’t a consideration, this wouldn’t even be under discussion.” Those concerns have been heightened because the review comes after the bitter health-care reform debate, which was marked by accusations about rationing and “death panels.” The appointment of Donald M. Berwick to head Medicare only intensified anxieties. President Obama sidestepped a Senate battle by naming Berwick, who has advocated for scrutinizing costs, when Congress was in recess in July. Because men tend to be elderly when they get diagnoses of advanced prostate cancer, Medicare’s decision will have a major effect on Provenge’s availability. Regional Medicare providers paying for Provenge would have to stop. Private insurers also tend to follow Medicare’s lead. Medicare officials, who are convening a panel of outside advisers to vet the issue at a public hearing Nov. 17, say Provenge’s price tag isn’t an issue. But Berwick and other officials declined to discuss the rationale for the review. “Certainly no one in the Medicare program would publicly state that the price tag would have anything to do with Medicare looking at it. But they are human beings, too. They notice things like that,” said Sean Tunis, director of the Center for Medical Technology Policy and a former chief medical officer at Medicare. Tunis said, though, that other factors, such as the special nature of the therapy and lingering questions about its effectiveness, were probably playing a more crucial role. The review comes as the Food and Drug Administration considers withdrawing an approval for another expensive cancer treatment- Avastin for metastatic breast cancer – which triggered a similar debate even though the FDA too is not supposed to factor costs into its analyses. Medicare usually covers new cancer drugs once they have been approved by the FDA. The decision in June to scrutinize Provenge prompted several members of Congress to question the action. Supporters have inundated the agency with hundreds of thousands of comments. “I don’t want to blame Obamacare, but it just kind of figures that people are taking a look at what the cost-benefit ratios are and all that sort of stuff,” said David Dykes, 69, of Lorton, a retired federal employee who was hoping to try Provenge. “That may sound pretty good to the people who want to cut costs, but it doesn’t sound too good to me. This is something that could extend my life. I’d like to give that a shot.” Some fear the move will discourage pharmaceutical companies from developing new cancer drugs. “It is extremely chilling if, after spending a huge sum of money, time and effort to get a drug through FDA approval, you’ll then have to go through it all again to see if CMS will pay for it,” said Allen S. Lichter, head of the American Society of Clinical Oncology. “Firing a shot across the bow like this is not the way to have an intelligent and meaningful discussion about how we start to address the complex issue of drug costs.” Provenge has long been the center of controversy. The FDA delayed Provenge’s approval in 2007. The rejection triggered outrage among patients, advocates and investors in Dendreon, the Seattle company that developed Provenge. The campaign to win Provenge’s approval included anonymous death threats, accusations of conflicts of interest, protests, congressional lobbying and vitriolic Internet postings. Prostate cancer strikes 192,000 men in the United States each year and kills about 27,000. The only therapies are surgery, radiation, hormones and the chemotherapy drug Taxotere. Unlike standard vaccines, which are given before someone gets sick to stimulate their immune system to fight off infections, Provenge is a “therapeutic vaccine,” designed to attack cancer cells in the body. To produce Provenge, doctors remove immune system cells from patients, expose the cells in the laboratory to a protein found on most prostate cancer cells and an immune system stimulator, and infuse the cells back into the patient in a month-long series of three treatments. In a study involving 512 patients with advanced prostate cancer, Provenge increased median survival from 21.7 months to 25.8 months. “To charge $90,000 for four months, which comes out to $270,00 for a year of life, I think that’s too expensive,” said Tito Fojo of the National Cancer Institute. “A lot of people will say, ‘It’s my $100,000, and it’s my four months.’ Absolutely: A day is worth $1 million to some people. Unfortunately, we can’t afford it as a society.” Others agreed, especially given the modest benefit. “I’d like to think cost doesn’t need to come up when it’s a slam dunk,” said H. Gilbert Welch of the Dartmouth Institute for Health Policy and Clinical Practice. “But when it’s a close call like this, it certainly has to be a factor. That’s $100,000 Medicare can’t spend elsewhere.” But such commentary has caused widespread alarm among patients and advocates. “The men most impacted by prostate cancer are African American men. If CMS doesn’t approve this, then this treatment becomes an exclusive kind of treatment for men who can afford it out of pocket,” said Thomas Farrington, president of the Prostate Health Education Network. Others stressed that many men live far longer on the treatment and that even four months is extremely valuable to some. “Whenever you are faced with a disease where you can lose your life, you really would like to extend it as much as you can,” said Leibel B. Harelik, 61, a prostate cancer patient who is executive director of the Prostate Cancer Resource Center in Austin. Company officials say the cost is not out of line with that of other cancer drugs. Each treatment with Provenge, which the company estimates cost nearly $1 billion to develop, is tailored to each patient. “Because of that, we have higher costs associated with this product,” said Mitchell H. Gold, Dendreon’s chief executive. “Provenge is a unique new medicine that prolongs the lives of patients with late-stage prostate cancer. These patients need access to innovative new medicines.” Whatever the outcome on Provenge, many on both sides agreed that more debate over other new high-tech therapies was likely to come. “At some point, if we keep paying these very high prices for treatments that provide very limited benefit, we’re going to reach the point where we can no longer afford health care,” said Alan Garber, a professor of medicine and economist at Stanford University. “Some say we’re living through that right now.” © 2010 The Washington Post Company

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