“We’re excited about this new drug,” my wife’s oncologist told us a few months ago. “Studies indicate that it actually extends patients’ lives.” That’s what we wanted to hear, especially since she had already been under treatment for six years.
In the new regimen, there would be two treatments every three weeks. She started in December 2012.
A couple of months later, the paper work started coming so we could see what this drug was costing: statements of charges from the cancer center, explanation of benefits from our insurance company, and bills from providers for the small portion of the total charges that remained for us to pay.
Here’s when sticker shock set in. For the first injection of this life-extending drug, the drug itself was billed at $4,050 and other procedures and medications added $691 to the billing. The total billed charge for this first treatment: $4,741.
Multiplied by 34, the number of treatments we could anticipate in a year’s time, the billed charges would total $161,194. During the course of her treatment, dosage was adjusted downward so that the frequency of treatment could be maintained, and the billed cost was reduced accordingly. Even with the reduced cost of the principal drug, billed costs for a year would be above $100,000. A challenge for any family!
Here’s where our Medicare-based insurance company stepped in. First, it dramatically reduced the charges. The allowed cost of the new drug was reduced by 33%, and other billings were reduced by 66%. Instead of costing the billed charge of $4,741, this one visit to the cancer clinic would cost $3,007.21, with our copayments covering 10% of that amount.
Following this pattern of reduced dosage and discounting of billed charges, the actual cost of treatments from December through February totaled $19,336.12, which included our 10% copayments. Projected for a full twelve months, this treatment regimen would cost about $80,000, of which we would pay about $650 per month.
Pricey! Yes, but it extends life, our oncologist had told us. How much? I wondered.
My online research gave the answer: two and a half months when compared with alternative drugs that oncologists in the studies used.
After four three-week cycles, in which eight doses of this life-extending drug were administered, our oncologist ordered a scan to see how well it was working. It was not, and further treatments with that drug were cancelled.
Our family’s current experience with the medical industry has several positive aspects. Most important is the fact that the skilled care my wife has received has kept her going at a high level despite the life-threatening cancer with which she is living. Furthermore, all of the medical providers, and there have been many of them, have cared for her (and me) in gentle, friendly, supportive, and highly professional ways.
Another positive factor is the fact that Medicare-supported health insurance takes the financial sting out of the costs of our medical care. It cuts through outlandish billed charges, reducing them to bills that are reasonably close to the actual costs of providing the services. Because of our insurance, we can absorb the high cost of living a little longer without jeopardizing our way of life.
This experience with cancer billings, however, raises questions. Most important is this: why is there such a discrepancy between billed charges and cost-based charges for medical care? A more sharply focused question: why are the new “life-saving” drugs priced so high?
The conclusions that I have drawn on the basis of our family’s recent experience are confirmed by an article published in Blood, the journal of the American Society of Hematology. 100 experts in the treatment of chronic myelogenous leukemia have signed this article, among them Brian Druker, a Portland physician who helped develop one of the drugs that he and colleagues around the world discuss in the essay.
Referring to a group of drugs used to treat this cancer, they state their belief that “the current prices of CML drugs are too high, unsustainable, may compromise access of needy patients to highly effective therapy, and are harmful to the sustainability of our national healthcare systems” (essay prepublished online April 25, 2013).
It’s not just the drugs that cost too much. The March 4, 2013, issue of Time published a special report by Steven Brill entitled “Why Medical Bills Are Killing Us.” He examines medical bills from several patients representing important sectors of the medical industry and explains why billed charges and actual costs differ so dramatically.
A much longer, and even more unsettling, discussion of some of the same factors was published in 2011 by Kathleen Sharp in her book, Blood Feud: The Man Who Blew the Whistle on One of the Deadliest Prescription Drugs Ever.
Regardless of our current age and level of health, irrespective of our politics or economic theories, all of us need to give serious attention to these matters. One way to start is to become acquainted with the documents mentioned above. In future postings, I hope to introduce them further.
By the way, my wife has started another treatment program but it’s too early to evaluate how well it’s doing.