Consolidation in Healthcare: 3 Statistics
Written by Ayla Ellison July 01, 2014
The number of mergers and acquisitions in the healthcare industry are poised for substantial growth over the next year, according to a new study from the Nashville, Tenn.-based law firm of Bass, Berry & Sims.
For the study, titled Healthcare & Life Sciences M&A Outlook, the law firm commissioned Mergermarket to interview 50 corporate and private equity respondents from the healthcare and life sciences sectors.
More than 85 percent of the survey respondents said they expect mergers and acquisition activity to increase in healthcare and life sciences in the coming year. Eighty-four percent of the respondents said they expect private equity activity to increase in relation to strategic mergers and acquisitions.
Companies are looking to consolidate to build infrastructure, get access to new technology and increase market share, and rising demand for facility and equipment improvement was cited as the top strategic driver for mergers and acquisitions by 46 percent of survey respondents.
"Consolidation is driven by a desire to achieve economies of scale and enhanced bargaining power," said Leigh Walton, an attorney at Bass, Berry & Sims, in the study. "The Affordable Care Act's roll out has accelerated this trend as the law demands accountable care and cutting edge technology at lower reimbursement rates."
Everyone knows that so we know the Affordable Care Act that does just that to health care will end with global health systems that act like Wall Street banks. This is what has happened these few years since Obama and neo-liberals passed ACA. I remind people----this is a Republican plan so the answer is not to vote Republican because they will make this worse. We need the people's party back to reverse these policies.
The article below states the obvious-----when a hospital is allowed to merge with insurance corporations it has the power of becoming payer and supplier. What could go wrong with that? They say-----THIS IS ALL ABOUT EFFICIENCY------
NO, THIS IS ALL ABOUT CAPTURING MARKET SHARE AND GIVING CONSUMERS NO CHOICE ALL TO MAXIMIZE CORPORATE PROFITS IN THE HEALTH CARE INDUSTRY.
People may be impoverished by predatory banks allowed to commit massive fraud but people will die from lack of ability to access basic health care procedures so that health institutions like Johns Hopkins and MedStar can maximize profits and expand globally. Below you see studies telling us this will indeed happen but your pols knew this was the goal of Affordable Care Act----
THAT'S A NEO-LIBERAL FOR YOU----WORKING FOR WEALTH AND PROFIT. THEY ARE NOT DEMOCRATS!
'The study shows the integration may be bad for consumers because when hospitals buy health insurers, the plans offered have higher premiums. The study also found 70 percent of the additional premium cost is not attributable to higher quality care'.
You see as well religious institutions are joining in with what they too know will dismantle access to health care------these institutions supposedly protecting people are leading in the creation of these profit-driven corporate health systems. I'm going to shout to the Catholic Church right now for not only this attack on US health care access but they are the ones leading the privatization of public education with charter schools and national charter chains. This is why it is not good for organizations tasked with protecting the people to be handed all of public sector work and the funding to do this-----they start to work for the money and not the people!
THERE IS NO WAY TO PUT LIPSTICK ON THIS PIG OF A POLICY-----IT IS ALL ABOUT PROFIT AND CONTROL OF MARKET SHARE.
Hospital Transactions & Valuation Issues
5 Things to Know About the Merger of Health Systems and Insurance Providers
Written by Ayla Ellison June 06, 2014
Becker's Hospital Review
Traditionally, healthcare delivery and health insurance existed as two separate types of business, but there is a new trend in the healthcare industry of hospitals and health systems buying insurance companies.
Here are five things to know about healthcare organizations merging with insurance providers.
1. Many healthcare organizations are seeking to become both the payer and provider to offer better care and cut costs. Health reform is increasingly focused on population health management, and many healthcare organizations are trying to improve quality of care through the use of value-based systems that employ quality measures. Hospitals that enter the insurance business may be able to better design quality care programs by becoming a unified organization and removing competing incentives.
2. Becoming the provider and payer can also cut costs for healthcare organizations. As part of the transition to pay-for-performance, the healthcare industry has become more focused on preventive care with the goal of keeping patients healthy. Providing more preventive care to patients can lead to dramatic costs savings, and by merging with health insurance companies, healthcare organizations can change the way they are reimbursed to make providing more preventive care a doable feat.
3. Choosing to act as both payer and provider, in 2012, Detroit Medical Center announced it had purchased ProCare Health Plan, a Detroit-based Medicaid HMO. More recently, in April, a subsidiary of Englewood, Colo.-based Catholic Health Initiatives reached an agreement to acquire QualChoice Holdings, a health insurer based in Little Rock, Ark., pending regulatory approval. In May, St. Louis-based Acension Health — the nation's largest nonprofit and Catholic healthcare system — announced it is considering buying an undisclosed insurance company.
4. The trend of health systems and health insurers merging has caught the eye of antitrust regulators because the mergers can lead to a reduction in competition by limiting entry or expansion of third parties into the market. By putting competing organizations at a disadvantage or even driving out competition all together, the unified organizations would be able to raise members' premiums. Although it would be costly to gather and analyze data concerning hospital-offered health insurance plans, antitrust regulators and health economists believe the research is necessary to address the effects of these plans on healthcare quality and costs.
5. The one major study directly related to hospital-insurer integration with quality and premiums was published in 2013 in the journal Health Services Research. The study shows the integration may be bad for consumers because when hospitals buy health insurers, the plans offered have higher premiums. The study also found 70 percent of the additional premium cost is not attributable to higher quality care. Even though consumers rate hospital-offered insurance plans as higher-quality than other plans, researchers have been unable to find any evidence showing a correlation between the higher premiums charged and superior quality of care.
Deregulating the health care industry as was done with the financial industry will lead to the same situations for consumers. As these US health systems look for more profit they are going to health tourism----Johns Hopkins leads in this policy here in Maryland. You see in the article below the idea of outsourcing average patients coming to the emergency room frees a hospital's doctors for doing routine surgeries. Yet, what they are not telling you is these hospitals are now marketing oversees to attract foreign health consumers to these US hospitals taking the doctor's time from ordinary community care. They do this because the charges for this bring more and more money while outsourcing allows for selective acceptance of emergency room patients. Outsource those patients with difficulties that cost the hospital more.
Meanwhile, the patient is sitting without care......being shifted to multiple places trying to get care......and often are subjected to poor care. All of this breaks down the ability for oversight and accountability as multiple players are now in the process. Think of this as the complex financial instrument model of health care and it is designed to do the same thing Wall Street financial instruments do---
THIS IS WHAT THE AFFORDABLE CARE ACT IS DOING AND YOUR POLS KNEW THIS WAS THE GOAL WHEN THEY PUSHED IT. SO DID PRIVATE NON-PROFITS LIKE MARYLAND HEALTH CARE FOR ALL-----
Simply demand Expanded and Improved Medicare for All in your state!
'In this regard PlacidWay has also made a major contribution towards improvement in medical tourism around the globe'
Welcome to PlacidWay
PlacidWay, a leader in the medical tourism industry, is a dedicated portal for up-to-date, reliable and accurate information regarding foreign medical travel, international medical providers, treatments and procedures, as well as destinations for international medical travelers.
PlacidWay has joined hands with over 250 accredited and renowned medical facilities from more than 30 countries. We are able to help patients from all over the world have access to personalized, safe, successful, close to home and affordable medical care, no matter where they are from, no matter of their budget. The company's goal is to help each patient make the right decisions when it comes to choosing health care options abroad.
We are seeing more and more of these kinds of complaints about health care in the US and it is driven by the very policies of outsourcing surgery as the article below describes. As well, these policies of outsourcing have two factors at play----first, there is a backlog of patients waiting in the emergency room of one hospital because other hospitals have been closed----often public hospitals forcing people to fewer locations. Then, to alleviate this overflow they create the need to outsource.
WE ALL KNOW WHAT HAPPENS WITH OUT-SOURCING----LESS QUALITY, LESS OVERSIGHT, MORE FRAUD AND CORRUPTION.
Placidway, Kentucky Complaints & Reviews - Placidway Lies!
I must mention that my experience with the plastic surgeon recommended by Placidway - www.placidway.com was terrible by all means.
The clinic looks absolutely terrible! Nothing like the gorgeous pictures you can see posted about this clinic at Placidway's web page. They do not even bother to check if what they are selling is real or not!
The doctor looked totally inexperienced. As soon as I saw him I decided to cancel my procedure, he could hardly speak 10 words in English! It was a lie!
Monica from placidway told me the doctor was English fluent. She lied to me.
After taking almost a 18 hour flight and traveling almost half a word away from NC to get my cosmetic surgery procedure I decided at last that I should take a chance and do it.
My surprise was terrible when I woke up from the anesthesia and I felt the lack of aftercare. I felt alone. Began to cry. Maybe was the anesthesia effect. But I really felt so alone! Placidway told me very clearly there was going to be always someone there to take care of me! I tried desperately to get in touch with Placidway, with Monica and I send her at least 30 e-mails. I was also in so much pain! And the response I had from Placidway was ZERO.
No response at all! Placidway was lovely at first when they were trying to sell me idea to go see this doctor! but after the first problem I encountered they played deaf!
Also must mention the extra 12% the doctor charged me so he could pay placidway! That is what he told me! That he had to pay commission to Placidway and he charged ME!
I tried to contact Placidway thousand of times so I can get a refund of the 12% I was overcharged and of course I never got an answer from them. I feel abused in many ways! This company lies about their services!
I am totally disappointed.
It's a good solution says this Medical Center-----
Emergency Surgery Outsourcing May Improve More Than Just Coverage, Study Finds
Written by Ellie Rizzo July 07, 2014
Outsourcing surgery relieves burdens on staff physicians and even improves key metrics like costs, length of stay complications, one new study finds.
When Sacramento, Calif.-based Sutter Medical Center's general surgery department was regularly overwhelmed by patient capacity, it quickly became a problem. The hospital started having trouble covering surgical call weekends and evenings at their emergency department. "We had to transfer patients away, and that was not good for the patients or for our facility," says Richard SooHoo, CFO of the hospital.
With patient transfers undesirable, Mr. SooHoo and Sutter's assistant administrator Tim Daley sat down to create a plan for approaching coverage solutions, taking stock of available models and thinking about medical groups in the area. Then, they settled on an unusual strategy: they contacted the group helping their hospital competitor, Surgical Affiliates.
Surgical Affiliates is a surgical hospitalist group that employs the acute-care surgery model — an integrated team approach to serve the type of acutely ill surgery patient that often presents to the ED. The group installs teams of providers to handle the kind of 24-hour call coverage that can overextend the hospital's employed surgeons, leaving the hospital's surgeons to focus exclusively on elective surgeries.
"We were approached by Mr. SooHoo about a model that would help Sutter, a very busy tertiary hospital, with call challenges. We separated the issues of emergency and elective surgery, a task that can be quite challenging," says Leon Owens, MD, founder of the company. For the ED physicians at Sutter, the support was welcome.
"This had a huge impact on the ED, having this coverage. Without it patients would have to sit in ED longer. It also decreased inpatient length of stay and improved ED throughput," said Mr. SooHoo. These developments, however, were not necessarily at the forefront of Sutter's problem-solving process, according to Mr. SooHoo, who says he and Mr. Daley were mostly focused on how to fill the coverage gap as quickly as possible.
All told, the extra coverage decreased length of stay by one day, cost per case by between $3,000 and $4,000 and lowered surgical complications nearly 10 percent. Selecting out patients will do that!
A study detailing the surprisingly far-reaching improvements of the collaboration has just been published in the July issue of Journal of the American College of Surgeons. According to Dr. Owens, the study is the first of its kind, filling in the gaps between some of the core concepts involved in splitting elective and emergency surgery. "No one had done a prolonged study that investigated all aspects of [this approach] in general surgery," he says.
The model seems to work in other places and at other scales, as well. Surgical Affiliates is now in nearly 20 facilities, including rural hospitals, which can often have a difficult time covering emergency surgery. The "halo effect" of improvement, as Dr. Owens calls it, is present every time. Improved capacity leads to shorter stays, lower costs, more successful surgeries and happier patients. Surgical Affiliates has also expanded the model to other service lines, including orthopedics, trauma and neurosurgery.
Of the model, Dr. Owens notes the importance of collaboration to its success. "Teaming up physicians with executives and C-suites who see the problem and can work hand-in glove has been one of the main keys to success, but you have to choose the right kind of practitioners," he says. "We use physicians who are oriented to working on a team. Often the great pride of surgeons is eccentricity, which is not a good fit with our model."
He also admits that the model is in a constant state of improvement. "We know what we do is not the best practice — it's the best we've done so far. We try to do things the same way each time with lists and algorithms that, when used appropriately, have produced these same results," he adds.
Mr. SooHoo notes another reason he believes the model was so successful within Sutter's culture is because it dovetails well with the hospital's strategic roadmap of 3C’s: collaboration, creativity and compassion. "The model we put together embodies the three Cs, thinking creatively on how to solve problem our call coverage, working collaboratively with a community partner and that third C, compassion, which ties to quality and outcomes," he says.
Dr. Owens is proud of the results of the collaboration: "At the end of the day the purpose was to get call coverage at a busy urban hospital and do it 24-7. We can do it at decreased costs, improved outcomes and higher patient satisfaction, all of which mean better results for the patients."
Here we see this policy is widespread in Maryland. People affiliated with these corporations are not necessarily bad people as I always say-----it is the policy that is bad and we know the effects on health care for all is diminished by these policies. They are only meant to capture US doctors to these growing health systems spending a good deal of their time marketing overseas for foreign patients. Just as with our higher education system-----we are watching as Americans are being denied basic rights to vital services in health and education so that costs can rise and profits expand.
- 1Surgical Care Affiliates LLC4800 Hampden Ln, #200Bethesda(240) 482-0609
- 2Surgical Care Affiliates46 W Gude DrRockville(301) 294-6049
- 3Care Affiliates Surgical510 Idlewild AveEaston(410) 822-8406
- 4Mavanur, Arun Dr-Surgical Oncology Associates2401 W Belvedere AveBaltimore(410) 601-8317Closed now
- 5Affiliated Foot Centers527 Maple Ave E, Ste 204Vienna(703) 281-4500
- 6Aygun, Cengiz Dr-Radiation Oncology Center9105 Franklin Square Dr, Ste 100Rosedale(410) 682-6805Radiation Oncologist
- 7Zarkoob, Khadijeh Dr-Radiation Oncology Center9105 Franklin Square Dr, Ste 100Rosedale(410) 682-6805Radiation Onc
Now, many of these outsourcing corporations are global. They say it lowers prices for procedures but if you look at the statistics the quality, access, and outcomes have dropped. RADAMERICA does not handle the more expensive cancer treatments leaving patients not having a strong health insurance policy out of luck with hospitals tied to RADAMERICA----as with Maryland's MedStar. Add to that the need for volume these outsourcing corporations have to be profitable and you see why Medicare and Medicaid fraud soared after 2000. The problem goes further than that as we see the Affordable Care Act excluding procedures for cost------successful oral treatments for cancer are being left uncovered forcing many people into more invasive cancer treatments----like those RADAMERICA offer. As with all outsourcing of public sector services-----private contractors always take quality and access away in the efforts at profit-making and we see this more with health care. Cancer Centers of America----another example of making cancer a for-profit business is riddled with fraud and abuse. It too took market share from local hospitals performing good work.
Access to cancer treatment in Maryland is very limited for those having Medicaid, Bronze, and even Silver plans because public hospitals taking all patients have been eliminated by Maryland's private and profit-driven state health system. This is only one disease vector---this of course has happened to medical specialty across the board.
The Cancer Center at MedStar/RADAMERICA
Good Samaritan Hospital received a score of 34 out of 100 from US News. This score is compiled from various individual scoring measures, including reputation, survival, safety, patient volume, and nurse ratings. This score does not necessarily indicate how equipped this cancer center is to deal with a particular kind of cancer; it is simply a measure of the overall hospital quality.
Locations All of our centers are located in conjunction with MedStar Health and other hospitals, and conveniently located with free parking for your visit. Our goal is to provide quality radiation oncology care, using the most advanced and effective treatment options, procedures and technology available so that you can return to your normal daily activities with a minimum of discomfort. We look forward to serving you.
This article from 1997 shows how neo-liberals and neo-cons in Maryland introduced these for-profit corporations in order to force deregulation of the health industry. Remember, this was when Clinton deregulated and pushed global markets and corporations and what happened here was happening with the banks as well. Prices that are lower do not equate into better care. It does create the dynamic needed to put public-oriented health care out of business.
Did you know that simply replacing Maryland's private and profit-driven state health system with Expanded and Improved Medicare for All will allow all people all the care they need while allowing these global health corporations to market overseas all they want. Rebuild our public health system!
Low-cost rivals force GBMC to cut rates Unregulated centers spur hospital unit to slash fees 21%
July 05, 1997|By M. William Salganik | M. William Salganik,SUN STAFFGreater Baltimore Medical Center has seen an increase in radiation oncology business since it cut its rates by 21 percent two months ago.
The price reduction illustrates the tensions when Maryland hospitals -- with rates set by a state commission -- compete for managed-care business against unregulated competitors.
GBMC already had the lowest state-approved rate of any hospital in the metropolitan area for cancer radiation treatments.
But it was losing business to radiation therapy centers located near hospitals but not actually in the hospitals. Such centers are not regulated by the state, and can offer volume discounts and other pricing options to HMOs and other managed care insurers.
"We have to treat everybody the same," said Gary Terrinoni, GBMC's controller. And, "we have to get alternate pricing approved."
As recently as five years ago, GBMC's radiation oncology department treated 150 patients a day. But as unregulated competitors opened, that dropped to 62 a day, according to Russ Frank, vice president of business development and corporate strategy.
"In a competitive health care market, it's of interest to us to be able to negotiate lower prices as long as the quality is equal," said Dr. Bernard J. Mansheim, chief medical officer for United HealthCare of the Mid-Atlantic.
"Over the last several years, we've seen a slow attrition in patients that we've been able to treat, because their insurance plans are allowing doctors here to treat them, but they could not get radiation here because of the rates," said Dr. Robert Brookland, chief of radiation oncology at the Towson hospital.
In cutting its rates, Terrinoni said, "the thinking here is volume" -- that GBMC can bring in as much income by treating more patients at a lower unit charge, using the same equipment and staff.
On the other hand, if volumes don't increase, GBMC stands to lose a million dollars a year in revenue, said Frank. In the first few weeks, volumes in radiation oncology were up about 10 percent, to about 68 patients a day, although it is too early to tell whether the trend will hold up, he said. The hospital needs to sustain a rate of 74 patients a day to break even on the rate cut, he said.
The new rates also led to four new contracts with insurers -- no surprise, since GBMC set its rates to meet what insurers are willing to pay.
The edge that unregulated centers have is not so much lower prices as it is that "in general, we have more flexibility in how to charge," said David Spearman, president of Radamerica, Inc., which operates three unregulated centers. It also has contracts to run regulated radiation oncology centers in Mercy and Good Samaritan hospitals.
The rate approved by the state's Health Services Cost Review Commission is based on a measure called "relative value units."
Charges for treatments and for other services, such as planning and constructing customized metal blocks to protect a patient receiving radiation, are based on estimates of how many "relative value units" (RVU) each is worth.
GBMC lowered its rate from $12.10 per RVU to $9.57. Approved rates at other hospitals range as high as $27.70. The hospital asked the cost review commission for approval for the lower rate, but the action on the request has been on hold as the commission reviews its overall method of calculating inflation adjustments to hospital rates.
Robert Murray, executive director of the commission, said GBMC cannot be penalized for charging less than the approved rate, but it cannot adjust its rates later to recover lost revenue. Terrinoni said the hospital expects to maintain the lower rate: "Once you've established a market price, you don't want to go back to the payers."
Gerard J. Schmith, deputy director of the commission, said GBMC is the only hospital to seek such a large decrease in its radiation oncology rate. However, he said, there has been a competitive scramble among hospitals to make their rates competitive in other areas where they have unregulated competition.
"It's not just a radiation oncology thing," said Frank. "What I think you're going to see, at least among the community hospitals. I don't want to say a price war, but they will look at other hospitals, at their charges and their filed rates."
"Any time you don't need a person to stay overnight, the insurance companies are trying to keep patients outside of hospitals," said David Levy, a professor of economics at University of Baltimore who has studied the Maryland rate regulation system. Hospitals, he said, have higher overhead costs, covering such areas as care for the uninsured, capital expenses and the costs of maintaining teaching programs.
Along with allocating the cost of taking care of the uninsured, unregulated competition is "one of the two biggest problems" facing Maryland's rate-setting system, Levy said.
"Even in a regulated environment, said Mansheim of United HealthCare, "things are beginning to loosen up."
Many hospitals, for example, with the state commission's approval, are offering "case rates," fixed-price packages for specific diagnoses that include hospital stays and doctor services.
The rate-setting commission held a hearing in March, in which a number of hospitals -- generally supporters of rate regulation -- called for some deregulation of outpatient rates.
The unregulated centers, however, say it would not be fair to deregulate outpatients rates, while allowing hospitals higher regulated rates on inpatient services.
"If you deregulate one end of the table, the table's going to tilt," said Dr. Lawrence Pinkner, a plastic surgeon and president of the SurgiCenter of Baltimore in Owings Mills.
Pub Date: 7/05/97
Winners and losers -----the Affordable Care Act will leave people unable to buy a one-size-fits all-----families will be having to choose what diseases they should cover....what kinds of treatments should they cover.....what kinds of health centers they want to access. You are covered for this cancer but not that. You can use this treatment method and not that. You can get treatment for this disease but you must drive 100 miles to the one facility that does it and cheaply enough. None of this has anything to do with making health care more affordable to the American people---it is only about allowing health corporations a pathway to maximized profits.
Cancer Patients' Dilemma: Expensive Pills Vs. Invasive Chemo Treatment
By Sandra G. Boodman
Apr 27, 2010
Gaps in insurance policies make oral drugs too pricey for some patients, including Jere Carpentier. She was treated last year for advanced colon cancer. (Christina Koch Nernandez for KHN)
When Jere Carpentier learned last year that she had advanced colon cancer -- her third malignancy in a dozen years -- she worried about spending hours in a clinic tethered to an intravenous line, enduring punishing chemotherapy that would make her hair fall out. Her veins ruined by earlier treatments, Carpentier was elated when her oncologist said this time she could avoid needles and take a pill at home that would specifically target the cancer cells and spare her hair.
"I let that be the thing that made this okay," she recalled.
But the former human resources manager, who lives in San Jose, soon discovered that her insurer would not pay for the pill called Xeloda, which cost $4,000 per month, because a cheaper IV drug was available. So instead, she underwent surgery to implant a port in her chest through which she received 46-hour-long chemotherapy infusions, mostly at home. One night the device, which included a large needle that constrained her every move, sprang a leak and began emitting a shrill alarm, requiring a race to the emergency room. "It was the scariest thing that happened to me," Carpentier, now 60, recalled, "and I'd been through two cancers."
Scary and also unnecessary, in Carpentier's view. "Surgery for the port and the ER visit alone cost more than it would have for them to cover the damn pill," she said.
Like Carpentier, a growing number of patients are being denied access to newer oral chemotherapy drugs or are required to shoulder hefty out-of-pocket costs, sometimes thousands of dollars a month, for cancer pills with annual price tags of more than $75,000. The reason is rooted in a reimbursement system that covers IV chemotherapy as a medical benefit but considers less-invasive oral chemotherapy to be part of a patient's drug plan, which tends to be far less generous. Some plans cap drug benefits at $5,000 annually, which can amount to less than a month's supply of chemotherapy pills. The disparity is likely to affect increasing numbers of cancer patients, because 25 percent of 400 chemotherapy drugs in the development pipeline are oral.
A recent report by the consulting firm Avalere found that oral cancer drugs, which account for about 10 percent of chemotherapy treatments nationwide, are typically placed in the most expensive price tier in insurance and Medicare Part D drug plans, where out-of-pocket costs can reach 35 percent. People covered by Part D plans in 2010 must shell out $4,550 before they get through the coverage gap called the doughnut hole, after which they pay 5 percent.
"If a drug costs $3,000 a month, most of the patients we help cannot afford to come up with $1,000 a month," said Nancy Davenport-Ennis, founder of the nonprofit Patient Advocate Foundation of Newport News, Va., which helps people pay for treatment. Most cancer patients, she notes, take several medicines, not just one. The new health-care coverage law will close the doughnut hole by 2020, but it does not specifically address the financial obstacles to oral chemotherapy, oncologists say.
Although some new oral drugs have demonstrated only incremental benefits, extending life for several weeks, others represent genuine advances and have transformed once rapidly fatal cancers into manageable diseases.
"I've got two grandkids, and I thank the Lord every day I wake up and get to see them," said William Bunch, 65, a former factory mechanic in Suffolk, Va. On Christmas Day 2000, Bunch was told he had chronic myelogenous leukemia (CML) and a life expectancy of about two years. Soon afterward he began taking a then-experimental drug called Gleevec, which he has been on ever since. "Without it I'd die," he said.
"Gleevec is the treatment for CML: There is no IV alternative," said oncologist Douglas Blayney, medical director of the Comprehensive Cancer Center at the University of Michigan. "It can really give people their lives back."
But growing numbers of leukemia patients are having trouble obtaining the drug because they can't afford it. The Government Accountability Office recently reported that the average annual negotiated price of Gleevec in Medicare Part D plans jumped 46 percent between 2006 and 2009, from $31,200 to $45,500, raising the average out-of-pocket cost for a year's supply from about $4,900 to more than $6,300.
Insurance industry officials say that the high cost of oral drugs, not paltry reimbursement rates, are the primary obstacle. "If you look at a drug that costs $60,000 a year, the real question is, 'Why does it cost $60,000 a year?' not 'Why doesn't a plan cover it?,' " said Susan Pisano, a spokeswoman for America's Health Insurance Plans, the industry trade association. "Our member companies are trying to do everything they can, but I would say this is a real hardship for people."
But Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, the trade association for drug companies, defended the price of oral chemotherapy drugs, citing the "very long, risky and expensive" process of developing them. Cancer drugs "deliver good economic value" and "represent a small share of health-care costs overall," he said in a statement. Patients who need help paying for them can receive free or low-cost medicines through programs sponsored by drug companies, he said.
To Brian Durie, a hematologist-oncologist at Cedars-Sinai Hospital in Los Angeles who specializes in the treatment of multiple myeloma, the debate about cost obscures a stark reality. "Myeloma patients need access to all the drugs," he said. "They've got two choices: an oral drug or death." Some myeloma patients need an oral drug called Revlimid, which can cost more than $7,000 per month, after an IV drug stops working. The pill enables some patients to continue working and to live normal lives.
"Some of the saddest stories are patients who say, 'I don't want to die and leave my family with a bundle of debt,' " Durie said. "These are people with a lethal disease, and it is so, so stressful" for them to also wrestle with the question of how to afford potentially life-saving medication.
The issue of "chemo parity," the requirement that insurers cover oral and IV chemotherapy equally, is popping up in legislatures across the country. Rep. Brian Higgins (D-N.Y.) introduced federal legislation last year, and parity measures have been considered in more than 20 states and adopted by several, as well as the District of Columbia. Oregon's law, which was the nation's first when it took effect in 2008, has expanded access to oral chemotherapy and appears to be working well, insurance regulators and oncologists in that state say.
"We need to level the playing field," said Baltimore oncologist Paul Celano, president of the Maryland-D.C. Society of Clinical Oncology. Celano recently testified in support of a parity bill in the Maryland General Assembly; the measure did not come to a vote.
Pisano of AHIP says insurers are opposed to such mandates "because they make health care less accessible rather than more affordable" by raising costs.
Medicare officials say they are aware of the problem, but constrained from doing much about it. Medicare has little sway over drug prices, said spokesman Peter Ashkenaz. Solving the problem of unaffordable co-pays and co-insurance would require putting more money into the system or persuading drug companies to reduce prices, he said.
'That'll Be $10,000'
Steve Yarrington of Topeka, Kan., knew that the Temodar pills his doctor prescribed last year, two weeks after his surgery for a malignant brain tumor, were very expensive. But Yarrington, an unemployed automobile dealer, was shocked when he went to pick up the first month's supply and was told by the pharmacist, "That'll be $10,000."
There must be some mistake, Yarrington said; the pharmacist insisted the amount was correct. "You can just keep it and I'll go home and die," Yarrington replied, walking out empty-handed. His wife, Kaye, who recounted the experience in an interview and in January before a Kansas Senate committee considering parity legislation, said he ultimately obtained the drug for free from the manufacturer, after his oncologist interceded.
Cancer specialists say such stories are typical. "We have to hire people to get free drugs for patients," said Montana oncologist Patrick Cobb, president of the Community Oncology Alliance, a lobbying group composed of cancer doctors. Restricting access to oral drugs is a false economy, in Cobb's view. Some patients denied oral drugs may deteriorate "and then go on to maybe have a bone marrow transplant for $1 million," he said.
Jere Carpentier said she and her husband considered taking out a loan to pay for her chemotherapy pills, but decided against it. She thinks they made the right decision: Carpentier wound up needing more rounds of chemo than doctors first thought, and last November, her husband lost his job.
"It would have cost us $24,000," she said. "That was just too big."