Even small medical advances can mean big jumps in bills

The New York TimesApril 5, 2014 

CHRONIC ILLNESS COSTS 2

Gabrielle Woodland uses her insulin pump to manage her Type 1 diabetes in Oakland, Calif., March 22, 2014.

NATHAN WEYLAND — NYT

— Catherine Hayley is saving up for an important purchase: an updated version of the tiny digital pump at her waist that delivers lifesaving insulin under her skin.

Such devices, which tailor insulin dosing more precisely to the body’s needs, have transformed the lives of people with Type 1 diabetes like Hayley. But as diabetics live longer, healthier lives and worries fade about dreaded complications like heart attacks, kidney failure, amputations and blindness, they have been replaced by another preoccupation: soaring treatment costs.

“It looks like a beeper,” said Hayley, a 36-year-old manager here for an environmental services company, referring to the vintage 2007 pump on the waistband of her jeans. “It’s made of plastic and runs on triple-A batteries, but it’s the most expensive thing I own, aside from my house.”

A new model, along with related treatment supplies, prices out at tens of thousands of dollars for this year and will cost her about $5,000, even with top-notch insurance. “It’s great,” Hayley said, “but it all adds up.”

Traditionally, insurers lost money by covering people with chronic illnesses, because they often ended up hospitalized with myriad complications as their diseases progressed. Today, the routine care costs of many chronic illnesses eclipse that of acute care because new treatments that keep patients well have become a multibillion-dollar business opportunity for device and drugmakers and medical providers.

The high price of new treatments for diabetes, rheumatoid arthritis, colitis and other chronic diseases contributes mightily to the United States’ $2.7 trillion annual health care bill.

More than 1.5 million Americans have Type 1 diabetes and cannot survive without frequent insulin doses, so they are utterly dependent on a small number of producers of supplies and drugs, which have great leeway to set prices. (Patients with the far more common Type 2 diabetes – linked to obesity – still produce insulin and can improve with lifestyle changes and weight loss, or on oral medicines.)

That captive audience of Type 1 diabetics has spawned lines of high-priced gadgets and disposable accouterments, borrowing business models from technology companies like Apple: Each pump and monitor requires the separate purchase of an array of items that are often brand and model specific.

A steady stream of new models and updates often offer dubious improvement: colored pumps; talking, bilingual meters; sensors reporting minute-by-minute sugar readouts. Hayley’s new pump will cost $7,350 (she will pay $2,500 under the terms of her insurance). But she will also need to pay her part for supplies, including $100 monitor probes that must be replaced every week, disposable tubing that she must change every three days and 10 or so test strips every day.

That does not even include insulin, which has been produced with genetic engineering and protected by patents, so that a medicine that cost a few dollars when Hayley was a child now often sells for more than $200 a vial, meaning some patients must pay more than $4,000 a year. Other refinements have benefited a minority of patients but raised prices for all. There are no generics in the United States.

Companies that produce the treatments say the higher costs reflect medical advances and the need to recoup money spent on research. But David Kliff, a financial analyst who is editor of Diabetic Investor, an independent newsletter on the industry, points out: “Diabetes is not just a disease state; it’s a huge business, too.”

Those companies spend millions of dollars recruiting patients at health fairs, through physicians’ offices and with aggressive advertising - often urging them to get devices and treatments that are not necessary, doctors say. “They may be better in some abstract sense, but the clinical relevance is minor,” said Dr. Joel Zonszein, director of the Clinical Diabetes Center at Montefiore Medical Center.

“People don’t need a meter that talks to them,” he added. “There’s an incredible waste of money.”

Even patients with insurance often feel squeezed by large out-of-pocket costs, and many describe holding old pumps together with duct tape, rationing their test strips and skimping on insulin. Dr. Jeoffry B. Gordon, a family practitioner in San Diego, said he had patients with failing kidneys and others who had ended up in emergency rooms because they could not afford their maintenance care.

“From a guy on the front lines, the improvements have been miraculous,” he said. “But the acquisition cost is very high, and the pricing dictates what treatment you get.”

Complication rates from diabetes in the United States are generally higher than in other developed countries. That is true even though the United States spends more per patient and per capita treating diabetes than elsewhere, said Ping Zhang, an economist at the Centers for Disease Control and Prevention.

The high costs are taking their toll on public coffers, because 62 percent of that treatment money comes from government insurers. The cumulative outlays for treating Type 1 and Type 2 diabetes reached nearly $200 billion in 2012, or about 7 percent of America’s health care bill.

Expenditures could well double by 2030, according to estimates by the CDC, in large part because the number of Americans found to have diabetes has been increasing more than 50 percent every 10 years. Most of the increase is attributable to Type 2 diabetes patients, whom manufacturers are encouraging to try insulin treatment and glucose monitoring, even though that is rarely medically required. Also, the Affordable Care Act requires health insurers to cover people with chronic disease, meaning they will have better access to treatments.

“This is not just a health care crisis,” said Kliff, the newsletter editor, who has Type 1 diabetes. “It’s an economic crisis as well.”

In the United States, each patient with chronic disease must make the cost-benefit analysis of each new high-priced treatment, weighing symptoms, disposable income and insurance coverage. They are often wrenching decisions.

Changing drugs is not an option for patients with Type 1 diabetes, like Hayley. They need insulin.

She is resigned to paying her share of the new Medtronic insulin pump. And she is steeling herself for other new costs that will bring. The pumps are designed to work with yet another new device called a continuous glucose monitor - bought separately - that could be lifesaving for some patients with unstable diabetes, because it sounds an alarm and suspends insulin flow if it detects that blood sugar has dropped dangerously low, which can happen during sleep.

This device has two parts: a disposable probe, which is attached to the body and measures the glucose level in the skin, and a transmitter that attaches to the probe to calculate the results and send to the pump. The probes retail for over $100 and must be changed every six days; the transmitter costs about $600. (Because such devices are not precise enough to adjust insulin doses - they are meant primarily to detect trends - Hayley will have to continue pricking her finger for meter measurements as well.)

She does not yet know how well her insurer will cover those. “You want me to be able to afford good treatment,” she said. “Because otherwise I end up disabled.”

–––––

Keywords:Health

AP-WF-04-05-14 2153GMT

The State is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service