Thursday, July 23, 2015

7 solutions to the high cost of physician services

Apropos of comments from oncologists about high cancer drug prices*, here are my seven solutions to the problem of high physician service prices: 
  1. Create an independent federal agency that requires submission of all new medical procedures and proposes a fair price. 
  2. Further cut Medicare prices for physician services. 
  3. Focus the Patient-Centered Outcomes Research Institute, created by the PPACA, to evaluate the benefits new medical services provide for the money.
  4. Allow people to import cheaper doctors from Canada or Mexico for personal use. Force them to live on Canadian or Mexican wages while working in the United States. 
  5. Passing new laws to make it easier for nurses, nurse practitioners, general contractors and other allied medical personnel (or just plain interested amateurs) to perform medical procedures. 
  6. Make it more difficult for physicians to find other sources of income, such as supplements, ancillary services or daytime television talk shows. 
  7. Encouraging organizations like the American Chemical Society to protest high physician wages. 
(Note: this is satire. I do not actually support any of the above. I think protests like these are something that pharmaceutical companies will have to live with as long as they decide to price debatably lifesaving treatments at stonkeringly high numbers. I am merely irritated, because I see this as a PR move on the part of physicians. I don't see them advocating for a cut in their wages** to help out patients, but they sure don't mind trying to cut mine.)

*Here's a good and serious Matt Herper piece on it. I want to think about his piece more. 
** The median oncologist made about $290,000.


  1. What about death panels? Where is the death panel suggestion? Oh, I forgot, that's already part of Obamacare.

    Importing cheaper physicians from Canada is a bad bad idea: there's a reason Canadians live, on average live to only 82 compared to the impressive 79 here.

    USA! USA! USA!

    1. Hypothetically reductions in high cost of physician services could be addressed through recruiting more physicians in this country.

      Unfortunately because of overly intrusive and punitive government involvement, this is not feasible. The high cost of physician services is inflated by government and its intermediaries, and government regulations and documentation themselves impose an irrecoverable cost. Undue and inappropriate litigation has also driven up costs of providing medical care - this succeeded only in driving doctors to Texas, where there is a cap on awards. The ridiculous cost of medical school has only been heavily inflated by availability of student loans. Finally, Obamacare is the coup de grace to medicine in the US, and will deliver diminishing service and availability to a population that will pay through the nose.

      Consequently doctors are leaving the profession. Either they're retiring early or quitting outright. Students are seeking either less problematic professions in health care, or avoiding it altogether. The US will *not* be able to attract them back until it reduces the ridiculously excessive levels of handout-seeking bureaucrats and paper-pushing involved with US medicine, at a minimum.

  2. Isn't the USA already full of Canadian MDs? There are probably thousands of Canadian-trained doctors in the USA.

  3. How much of the bill is drugs? (I think about 10% - citation needed, though). Doctors (and hospitals, and their administrators) seem to be forgetting their own not insignificant contributions to health care costs. It seems like a grand current tradition, though, to ask that everyone else give you what you need for cheap or free while you continue to make money (*cough*universities*cough*).

    On the other hand, there is a problem with the rate of increase of drug prices, particularly for oncology.. Dr. Lowe put it well - if this is what drug companies charge for marginal improvements, what happens when the actual cures come along? (This seems particularly true in cancer - hepatitis C drugs are an actual cure, and while they're expensive, they probably aren't a significant portion of one's remaining life earnings.) The linked pharma person acknowledges this, but hopes/believes that the market can solve these issues. However, health care isn't a real market - I can't comparison shop, generally, and I have only one life to live and without it, nothing else is valuable, so its value to me and its financial value are likely to differ. In some cases, the ability to compare (even were ideal information available) is nil. I don't think the market can correct it, but I'm not sure what will.

  4. "I think about 10% - citation needed, though"

    Almost spot on:

  5. Someone correct me if I'm misinformed, but aren't the prices which pharma companies can charge for their drugs negotiated with the individual countries where they are being offered, for example EU countries or Canada? If so, then in the US we have no-one else to blame except for our politicians, regardless of their political affiliations.

    1. In the US, individual health care plans and some gov't organizations can negotiate prices of drugs, while Medicare cannot. As the chance of getting cancer rises exponentially with age, cancer drugs are a huge boon for the pharmaceutical industry who can charge ridiculuous prices that are 80% covered by the US taxpayer (if the person is on Medicare), and the individual with cancer appears to be quite willing to bankrupt themselves to cover the 20% out-of -pocket.

      If I find I am very ill, I'm going to ask how much its going to cost the taxpayer and myself. My continued life for a few months to a year is not worth the contributing to the bankruptcy of this country.

    2. NMH, if "individual health care plans and some gov't organizations can negotiate prices of drugs, while Medicare cannot", then the issue would seem to be that our society is treating government as if it were a private company, which it's not. I am pretty certain that drug companies in other western democracies MUST negotiate with the government, and those governments certainly don't let themselves get run over roughshod by some corporation.

      Maybe the readers of this blog who are e.g., Canadian or from the UK could comment on the accuracy of what I have just written?

    3. Medicare (the Pharmaceutical perscription benefit, or Section of D in Medicare) makes it illegal for the Medicare to negotiate drug prices. This happened because of effective lobbying of the pharmaceutical industry of politicians who voted it into law. The republican that pushed the legislation through (Billy Tauzin) when he decided to leave politics became the multi-million dollar CEO of PhRMA (I wonder if our libertarian troll will critize him?)

      On the other hand, if the taxpayer didn't subsidize the Pharmaceutical industry as much as it does because of this, there would be even more unemployed chemists and biologists.

      Not sure what the solution is, except we need far fewer chemists and biologists. I need to find another career.

  6. PMS (Peoples' Medical Service) is the answer. Import thousands of specially trained Chinese medical personnel who, before the recent economic problems, were producing things like Cross pens. Unfortunately the downside is waiting room music will be just one song - "Papa-Oom-Mao-Mao.

    @CJ  "Stonkeringly". Good one!

  7. crosseyed and painlessJuly 24, 2015 at 8:29 AM

    So, do drug companies have to disclose prices? Hospitals have fought for years the idea of disclosing prices to patients, why should drugs have that 'burden'?
    Second question: can anyone tell me why, if drug companies disclose prices, they don't talk about the cost of the services that they replace? HCV cures seem like the perfect opportunity to bring this up, as I would expect that 20 years of hospital visits for interferon injections, and hospitalizations after those fail and liver transplants and immunosupressive drugs and ... would be more than just a little above 100-150k.

  8. I didn't mind paying high prices for drugs back in the day, when the money was reinvested in research, but I have trouble believing that claim in 2015 now that most of the chemists have been Pfizered.

  9. The real issue is optics. The people in the direst straits (cancer or other debilitating long term illnesses) are the ones who get charged the most. So people see things like viagra makes a ton of money and my uncle only pays x for it, why should groundbreaking chemotherapeutic in the NYT be $100k for a course of treatment. As we get further down the rabbit hole of personalized medicine I fear it will get worse. The drugs may improve in efficacy but they'll be sold to smaller and smaller markets. How can the cost to patients be balanced against recouping research costs?

    1. Love the blog name. I have a wonky calf that I'm feeding currently.

      That aside, "optics?" No. No, the sad fact is that most of the people in the direst of straits (e.g. cancer or other debilitating and long-term illnesses) are the ones who get charged the most, because
      1) these diseases are the hardest to treat (e.g. cancer);
      2) these diseases are long-term or recurrent;
      3) they require multiple procedures;
      4) they require multiple diagnostics before and over the course of treatment;
      5) more often than not, they require multiple treatment programs (pharmaceutical regimes, therapy, use of equipment, et al.)
      6) more often than not, they require multiple opinions on best course of treatment and possible options;
      7) more often than not, there is an element of medium-to-long-term care involved that really breaks the bank, unless family is able to step in (and even then...).

      Contrast this with something like Viagra, which really requires none of the above.

      But don't worry, we have a government in town that wants to spread the costs - after they take a cut to cover costs of administration.
      Everyone's insurance and medical costs will rise, but the government guarantees that there will be no discrimination on the basis of race, political affiliation, or national origin.
      It's such a good plan, that even our legislators are covered by it... oh, wait...
      It's such a good plan, that our legislators passed it without knowing what was in it.

  10. As a Canadian I can comment that my family doctor made $550,000 last year, I think he would be hardly struggling in the US with that salary.

  11. As a Canadian and a medical student, I can comment that the take-home pay of Canadian family docs is generally not public info. Their total billing is, - and this is a source of confusion for many - but that has to cover office space, 1-2 staff, and other costs associated with running a small business

    If your family doctor is in fact bringing home half a million, they're doing something more/other than family doctoring.