If a new cancer drug comes out at a price of $100,000 per person, how many patients likely to benefit will actually get it? How many will drain their entire life savings just to make the insurance co-pays? How many people will go bankrupt to stay alive a few more months? How many people will get overtreated with expensive new meds, when there’s no evidence to support use?
It’s news to nobody that the U.S. healthcare system is an inefficient mess. Yet after all the awareness raised by political and legal wrangling over healthcare the past several years, it’s striking how little real capacity exists for getting answers about cost-effectiveness. This has to change, especially for cancer, the second leading cause of death in the U.S., behind heart disease. Overall healthcare spending has been on an unsustainable trajectory for years, but spending on cancer drugs is growing even faster. It’s on pace to increase by more than 10 percent a year through 2013, according to pharmacy services provider Medco Health Solutions.
Now a small group of researchers in Seattle are planning to tackle these kind of tough questions.
Last week, the Fred Hutchinson Cancer Research Center announced that it is investing some of its own funds to start an institute with a stated goal to “improve the efficiency and effectiveness of cancer prevention, early detection and treatment to reduce the economic and human burdens of cancer.” In a country that’s poured billions into cancer R&D over the past four decades, and has an impressive network of comprehensive cancer centers, the Hutch said it believes this modest initiative will be the first of its kind dedicated to cancer outcomes research.
Lofty as the goal is, the institute, called ICORE, has scraped together a small amount of money to set up a team of about 6-7 faculty members, with additional support staff, who will ask cost-effectiveness questions, according to Scott Ramsey, the health economist leading the institute. Results from its studies will end up being published in peer-reviewed journals, but also put into a free public resource designed to help patients see where the waste is, and where they can find bang for their healthcare buck.
It sounds reasonable, but done well, this effort is bound to ruffle plenty of feathers. The National Institutes of Health focuses mostly on exploration of basic workings of biology, and doesn’t put much grant money to work in cost-effectiveness because “they don’t think quality improvement in cancer is very sexy or research-worthy,” Ramsey says. Hospital networks tend to be leery of anything that might expose their weak underbellies, like disparities in care for people in rural areas or racial and ethnic minorities. Health insurers aren’t exactly champions of transparency in what they do. And drug companies are still mostly allergic to any open and honest public dialogue about whether their products deliver good enough health outcomes to justify their cost.
“There’s a lot of variation in care,” Ramsey says. “That’s potentially a problem for providers and health plans. We’ll have to walk carefully so that others view it as a win-win. Our focus is on improving care for patients.” This won’t be easy. “There will be people threatened by this,” he says.
Every research institute needs money, and ICORE probably won’t get it from many of the deeper pockets in healthcare. The institute hopes to be self-sustaining over time, and to pick up support from foundations, community donors, and agencies like the U.S. Department of Health & Human Services’ Agency for Healthcare Research & Quality (AHRQ), Ramsey says.
While some larger medical practice groups evaluate cost-effectiveness within their networks, nobody is really asking big cost-effectiveness questions in a systematic way, Ramsey says. The institute is starting local in the Seattle area, where Ramsey and his colleagues have access to a database maintained by the National Cancer Institute, which keeps track of treatments patients are given, and their outcomes. But that’s only a piece of the puzzle he’s looking for. To get a more contextual picture of cost-effectiveness, he wants to form partnerships with health providers that have a lot of other data on patients in their electronic medical record systems. And he wants to bring the insurers to the table, too, because they are the ones with another piece of the puzzle: claims records. If you can stitch those things together to get a more holistic view of cost and effectiveness, it could become a valuable resource to educate the public in the Seattle area, and it might even be scalable to the rest of the country, Ramsey says.
“We hope to be able to educate people about value in healthcare,” Ramsey says.
Ramsey has already dug up some disturbing findings about how much money is spent, and how little value is gained. One study showed that among patients who have insurance, almost 40 percent suffered from “severe financial strain” which was defined as re-mortgaging one’s home to afford medication, borrowing money from friends, or using up their life’s savings. Another study found that Genentech’s hit antibody drug, bevacizumab (Avastin), had almost a zero percent chance of being cost-effective for lung cancer patients (actually, it was a 0.2 percent probability). That hasn’t stopped the growth of cancer drug spending. Now that some cancer drugs can routinely cost $10,000 a month, and insurers are looking to shift more of the cost burden onto individuals, individuals are going to feel pressure to pay up at one of the most stressful and scary moments in their lives. The bills can now add up incredibly fast.
“It’s easy to spend $250,000 treating a cancer patient in a short period of time,” Ramsey says.
Even as the costs keep going up, and cancer patients ought to be doing better, deep disparities remain in how cancer patients get treated depending on where they live, how much money they make, and which institution or doctor they originally see. Just by shining a light onto those cost-effectiveness disparities—which Atul Gawande did with McAllen, TX in an influential New Yorker article a couple years ago—could make a huge difference, Ramsey says.
I wouldn’t go so far as to say we need a draconian system to discourage drug developers from creating new products. Drug prices are rising fast, but there are a lot of other factors contributing to increased healthcare spending. Drug companies can, and should, be able to recoup the investments they make in the form of high drug prices. But if you’re going to charge a high price for a drug, I think a company needs to have a much stronger value proposition than “Hey, we shrank tumors in half for 20 percent of patients. Now hand over your $100,000.” It needs to be more like, “Hey, my drug has an 80 percent chance of helping people with this genetic profile, and those people can expect to live an extra year, with high quality of life.” Now you’re starting to really talk about $100,000 of value.
Sadly, drug companies tend to be more interested in satisfying the short-term profit desires of their investors than they are in truly delivering cost-effective care to patients. Ramsey told me about research he’s done into Amgen’s pegfilgrastim (Neulasta), a white-blood cell booster that helps patients fight off infections when their immune systems are weakened by cancer chemotherapy. Ramsey and colleagues wanted to know if this drug—an effective product that generated $4 billion in revenue last year for Amgen—was being utilized among patient groups most likely to benefit. He found it was underutilized among patients at the highest risk of a dangerous complication known as febrile neutropenia, and it may be overused by patients who had a low risk. (Amgen, when asked if it changed marketing practices in response to the findings, said in an emailed statement that the drug should be used in accordance with its FDA approved prescribing information. “Our marketing efforts reflect our emphasis on first and every cycle treatment as the best way to reduce the risk of febrile neutropenia in appropriate patients.”)
Given that we’re in the thick of corporate earnings season, you can expect to hear a lot of companies reporting on all the usual measurements of success to their investors about sales, profits, earnings-per-share. You will not hear companies talking about proper utilization of their products. But pharma companies would be smart to get more engaged with the health economics crowd, which looks at different barometers of success, like how many quality years of life patients can get from certain healthcare interventions.
It’s easy to find drug companies, hospitals, and health insurers that say they are all about improving patient outcomes. Being against cost-effectiveness sounds bad, like being against Mom and apple pie. Nobody wants to say they are against delivering better patient outcomes. But actions, as always, speak louder than words. It’s time for these various profit-minded players to prove their commitment to cost-effective patient outcomes, by getting more serious about asking these kinds of questions. If we don’t, we’ll just end up paying more and more in taxes and insurance premiums for cancer care, with no real idea of whether it’s worth the money.
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