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If America adopts Canada's health care system

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E.R. Campbell said:
The fear mongering about American medical care, which is just about the only system in the OECD with higher costs and worse outcomes than ours, doesn't help anything. No one in their right mind is suggesting that Canada adopt the US model: we need to look at some European and some Asian countries for guidance. But first we have to understand that the Canadian, single payer, medical 'insurance' system is senseless.

Absolutely - no one in their right mind would look to the American system as a model for anything - but there are a number of European systems which could provide us with insight.  It is precisely this opportunity to look to other systems to build a new system that the Americans seem intent on squandering.
 
Right wing, left wing. Doesn't matter. Health care is never going to be cheap in Canada, as long as we're a Timbits Nation.
 
Another defeat for Trudeaupia?

An illegal immigrant has no right to free medical intervention or ongoing health care under the Charter of Rights, the Federal Court of Appeal has ruled in a precedent-setting decision.

The ruling will help protect Canada from medical tourism, when people come to Canada expressly to get medical treatment paid for by the government, an immigration specialist said.

http://news.nationalpost.com/2011/07/08/illegal-immigrants-have-no-right-to-free-health-care-court/
 
Hurricanes are natural occurrences.  Medical losses and claims investigators are how the insurance injury works.  Paying out any benefits cuts into their profits, and any way they can reasonably find to reduce the amount they have to pay, they will avail themselves of.  That's the problem - the interests of insurers are necessarily, diametrically opposed to those of consumers.

My point was (and I'm sure you know it) that you were making it out like the rule, rather than the exception. A common occurrence. Regardless of the sampling size, my real-life experience, almost two decases' worth - and of every person I know or work with - doesn't demonstrate your assertion to be true.

Anyway, I'm done with you. Back on "Ignore".
 
muskrat89 said:
My point was (and I'm sure you know it) that you were making it out like the rule, rather than the exception. A common occurrence. Regardless of the sampling size, my real-life experience, almost two decases' worth - and of every person I know or work with - doesn't demonstrate your assertion to be true.

Anyway, I'm done with you. Back on "Ignore".

Never did I assert it to be universally true - for routine claims in most casees there's no issue - and realistically only a small percentage of a population will find themselves in a catastrophic health case.  So when it happens rarely, but would only apply to rare cases to begin with it's worth looking at - and there's a rational economic argument as to why it's done.

My wife grew up in the US - and remains in contact with most of her friends there, including a couple who've battled serious health issues which have led them into struggles with their insurers to get things covered.  From that I can't say it happens to everyone, but similarly, I can't say it happens to no one.
 
There are indeed things insurance companies won't cover. Considerr:

http://washingtonexaminer.com/politics/2011/07/fresh-doubt-cast-obamas-health-care-story

Fresh doubt cast on Obama's health care story
Read more at the Washington Examiner: http://washingtonexaminer.com/politics/2011/07/fresh-doubt-cast-obamas-health-care-story#ixzz1Ru2ZbW7r
By: Byron York | Chief Political Correspondent Follow Him @ByronYork | 07/11/11 8:05 PM

Then-Sen. Barack Obama (D-IL) addresses a rally in the gymnasium of Concord High School January 4, 2008 in Concord before the 2008 New Hampshire primary, where the Democratic presidential hopeful made this remark examined by Examiner columnist Byron York: "She was in her hospital room looking at insurance forms because the insurance company said that maybe she had a pre-existing condition and maybe they wouldn't have to reimburse her for her medical bills."During the 2008 presidential campaign, Barack Obama often discussed his mother's struggle with cancer. Ann Dunham spent the months before her death in 1995, Obama said, fighting with insurance companies that sought to deny her the coverage she needed to pay for treatment.

"I remember in the last month of her life, she wasn't thinking about how to get well, she wasn't thinking about coming to terms with her own mortality, she was thinking about whether or not insurance was going to cover the medical bills and whether our family would be bankrupt as a consequence," Obama said in September 2007.

"She was in her hospital room looking at insurance forms because the insurance company said that maybe she had a pre-existing condition and maybe they wouldn't have to reimburse her for her medical bills," Obama added in January 2008.

"The insurance companies were saying, 'Maybe there's a pre-existing condition and we don't have to pay your medical bills,' " Obama said in a debate with Republican opponent Sen. John McCain in October 2008.

It was a simple and powerful story, one Obama would tell many more times as president during the national health care debate. But now we're learning the real story of Ann Dunham's health coverage is not quite what her son made it out to be.

The news is in "A Singular Woman: The Untold Story of Barack Obama's Mother," a generally admiring new biography written by former New York Times reporter Janny Scott. According to the book, Ann Dunham, an anthropologist who spent most of her working life in Indonesia, moved from Jakarta to New York in 1992 to work for a nonprofit called Women's World Banking, which encouraged micro-lending in Third World countries. Unhappy in New York, in 1994 Dunham took a job with an American company called Development Alternatives, which had a contract with the Indonesian State Ministry for the Role of Women. Dunham returned to Jakarta to work, and Scott reports the job provided Dunham with health insurance, a housing allowance, and a car.

At the time she took the job, Dunham was increasingly worried about her health; she was suffering from intense abdominal pains. In November 1994, Dunham went to an Indonesian doctor who diagnosed appendicitis. As Dunham debated whether to leave the country for surgery, she called her boss at Development Alternatives. "You've got health insurance, that's taken care of," the boss told her. "We can cover the airfare."

Dunham decided to stay in Jakarta, where she underwent an appendectomy. But the pain did not go away, and Dunham feared, correctly, that she was terribly ill. In January 1995 she left Indonesia to go home to Honolulu, where she was diagnosed with advanced uterine and ovarian cancer. She began a regime of surgery and chemotherapy.

That is the time during which Obama says his mother battled insurance companies to cover her illness. But Scott, who had access to Dunham's correspondence from the time, reveals that Dunham unquestionably had health coverage. "Ann's compensation for her job in Jakarta had included health insurance, which covered most of the costs of her medical treatment," Scott writes. "Once she was back in Hawaii, the hospital billed her insurance company directly, leaving Ann to pay only the deductible and any uncovered expenses, which, she said, came to several hundred dollars a month."

Scott writes that Dunham, who wanted to be compensated for those costs as well as for her living expenses, "filed a separate claim under her employer's disability insurance policy." It was that claim, with the insurance company CIGNA, that was denied in August 1995 because, CIGNA investigators said, Dunham's condition was known before she was covered by the policy.

Dunham protested the decision and, Scott writes, "informed CIGNA that she was turning over the case to 'my son and attorney, Barack Obama.' " CIGNA did not budge.

In September 1995, Dunham traveled to New York for an evaluation at the renowned Memorial Sloan-Kettering Cancer Center. Returning to Hawaii, she began a new course of treatment. She died in November.

A dozen years later, her son turned her ordeal into a campaign pitch for national health care. But the story Obama told, Scott writes, was "abbreviated" -- the abbreviation was to leave out the fact that Ann Dunham had health insurance that paid for her treatment. "Though he often suggested that she was denied health coverage because of a pre-existing condition," Scott writes, "it appears from her correspondence that she was only denied disability coverage."

That's a different story altogether. One the president never told.

Byron York, The Examiner's chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears on Tuesday and Friday, and his stories and blogposts appear on ExaminerPolitics.com.

Read more at the Washington Examiner: http://washingtonexaminer.com/politics/2011/07/fresh-doubt-cast-obamas-health-care-story#ixzz1RtzyGFAC
 
including a couple who've battled serious health issues which have led them into struggles with their insurers to get things covered

My wife is a quadriplegic with SMA. My daughter was a preemie and for a time they thought she had megalencephaly so she was tested extensively for the first few years of her life. (She's fine). Not trying to out-do your friends, just saying that in my own micro-sampling of the healthcare system, over the past decade and a half with several different insurance companies - there have been plenty of opportunities for us to get jerked around and it hasn't happened. Nor has it happened to anyone I know personally.

 
We need to be careful about pretending that Canada and the U.S. represent examples of the public versus the private model. Canadian health care has a lot of capitalism in it. And American health care has a lot of socialism in it. Neither is pure. Either system could have its faults ascribed to the capitalistic influences, or to the socialistic influences.
 
toyotatundra said:
And American health care has a lot of socialism in it.

Please explain to me where the American system has "Socialism" in it?
 
Ever hear of Medicare or Medicaid?  Aware that hospital emergency departments are required to treat irrespective of ability of patients to pay?
 
Medicare and Medicaid are only part of the American health care system. And I wouldn't say that would constitute "a lot of socialism". Those of us who pay for health care insurance would definitely prefer a more socialist model that the free enterprise model we have now.

As for hospitals, the are only obligated to provide as much care as is necessary to stabilize the patient to a point where they can move on to find an affordable means of care from another facility. And if you cannot cover the cost of treatment, arrangements for payment are made through payment plans, or sent to collections, etc. when the patient fails to pay for coverage, the cost is passed on to the other patients.
 
The US 11th circuit court has ruled that Obamacare is unconstitutional. Perhaps this will break the logjam and innovative new ways of looking at healthcare (besides huge centralized bureaucracies) can be entertained:

http://pajamasmedia.com/tatler/2011/08/12/breaking-11th-circuit-rules-individual-mandate-in-obamacare-unconstitutional/?print=1

Breaking: 11th Circuit Rules Individual Mandate in ObamaCare Unconstitutional (Updates)

Posted By Bryan Preston On August 12, 2011 @ 10:23 am In Politics | 29 Comments

The news is just now breaking, so no wire stories have popped up yet and the decision, said to be about 300 pages, has not been posted. Look here for links as the news rolls in.

Update: Here we go.

    An appeals court ruled on Friday that President Barack Obama’s healthcare law requiring Americans to buy healthcare insurance or face a penalty was unconstitutional, a blow to the White House.

    The Appeals Court for the 11th Circuit, based in Atlanta, found that Congress exceeded its authority by requiring Americans to buy coverage, but also ruled that the rest of the wide-ranging law could remain in effect.

That last part makes little sense, since the law had no severability clause in it. Kill one part, you kill it all has been the theory. Kicking out the mandate but leaving the rest intact makes things even messier, in my opinion.

Anyway, everyone knows this thing is headed to the Supreme Court, where Anthony Kennedy’s mood will determine whether the interstate commerce clause can be used to force people to buy a product that they cannot buy across state lines.

Update: This ruling concerns the multi-state lawsuit against ObamaCare.

    The case stems from a challenge by 26 U.S. states which had argued the individual mandate, set to go into effect in 2014, was unconstitutional because Congress could not force Americans to buy health insurance or face the prospect of a penalty.

    “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives,” a divided three-judge panel said.

    Obama and his administration had pressed for the law to help halt the steep increases in healthcare costs and expand insurance coverage to the more than 30 million Americans who are without it.

The decision was 2-1.

Update: Legal Insurrection has more.

Article printed from The PJ Tatler: http://pajamasmedia.com/tatler

URL to article: http://pajamasmedia.com/tatler/2011/08/12/breaking-11th-circuit-rules-individual-mandate-in-obamacare-unconstitutional/
 
Thucydides said:
The US 11th circuit court has ruled that Obamacare is unconstitutional. Perhaps this will break the logjam and innovative new ways of looking at healthcare (besides huge centralized bureaucracies) can be entertained:

http://pajamasmedia.com/tatler/2011/08/12/breaking-11th-circuit-rules-individual-mandate-in-obamacare-unconstitutional/?print=1

Read it again, what the court said was that the personal mandate was unconstitutional, but the remainder of the law was.

"The Appeals Court for the 11th Circuit, based in Atlanta, found that Congress exceeded its authority by requiring Americans to buy coverage, but also ruled that the rest of the wide-ranging law could remain in effect."

It over ruled the lower court's finding that the individual mandate could not be separated from the rest of the law and that invalidated the entire law. The Appeals Court found that the individual mandate could be separated from the rest of the law. As such. it now limits the overall question to whether the individual mandate violates interstate commerce laws and states rights. All other challenges either upheld the entire law, or declared only the individual mandate to be invalid.

About the only thing the quoted text had right is that this will be going to the Supreme Court, and then it will be anyone's guess as to the final outcome.
 
Since the law, as written, has no severability, the effect of the ruling is to kill the law either way. Read "The Merchant of Venice" (Act IV, Scene 1) and the entire concept will become clear....

 
Thucydides said:
Since the law, as written, has no severability, the effect of the ruling is to kill the law either way. Read "The Merchant of Venice" (Act IV, Scene 1) and the entire concept will become clear....

Since this is one of many rulings going either way, its impact, like the others, will likely be nil.
 
More actual costs. The best part about this report is it comes from Obamacare backers; who demonstrate how it will bend the curve upwards...

http://reason.com/blog/2011/09/06/whoops-obamacare-backers-in-wi

Whoops! ObamaCare Backers in Wisconsin Produce Report Showing That the Health Care Overhaul Will Make Health Insurance More Expensive

Peter Suderman | September 6, 2011

When Wisconsin’s Department of Health Services, which manages health programs within the state, wanted to get a better sense of how last year’s health care overhaul would affect insurance coverage within the state, they turned to Jonathan Gruber, a health policy expert at the Massachusetts Institute of Technology who served as a consultant on both Mitt Romney’s Massachusetts health care overhaul and (somewhat controversially) President Obama’s nationwide successor program.

Gruber! (Hans)Gruber is a frequent defender of ObamaCare as well as one of its architects. And the report was ordered under Wisconsin’s departed Democratic Governor Jim Doyle, who, after leaving the governor's office, signed on to an ObamaCare agitprop mill dedicated to highlighting “the stories of the millions of Americans who are already benefiting from this important law and how it will benefit millions more in the coming years.” So it's not exactly a hit job.

The report Doyle ordered before leaving office certainly reveals something about how the law will affect hundreds of thousands of individuals in the state he used to govern, it's not all flattering. Indeed, it’s telling that despite bring ordered and authored by true-blue ObamaCare backers, a big part of what this report suggests is that the law will ultimately raise the health insurance costs for large numbers of the state’s residents.

Naturally, Gruber’s leads with a smiley face, noting for the umpteenth time that the law is expected to increase health insurance coverage; approximately 340,000 of the state’s residents are expected to gain insurance coverage by 2016. Of course, about 170,000 of the newly covered will be shuffled into Medicaid, a program that’s wrecking state budgets and providing, at best, uncertain health benefits.

Meanwhile expanding the state’s health insurance coverage will come at a significant cost to hundreds of thousands of individuals, especially within the individual market, where the law has the greatest effect. Gruber projects that the average individual market health insurance premium will cost about 30 percent more than if ObamaCare had never passed. For most individual market enrollees, the average premium increase will be even higher: 87 percent of the individual market is projected to see a premium price increase of 41 percent.

Defenders of the law might note that more than half—about 57 percent—of those who get their insurance through the individual market will benefit from the law’s generous health insurance subsidies. But even discounting the enormous public cost of financing those subsidies (which account for roughly half of the law’s $950 billion price tag over the next decade), it’s still not much consolation for the majority of individual market enrollees.

That’s because more than half the individual market will still end up paying more: “After the application of tax subsidies,” the report projects, “59 percent of the individual market will experience an average premium increase of 31 percent.”

Gruber! (Mac)One factor in the price increase is the addition of new coverage mandates that will make health insurance more expensive: An estimated 40 percent of the Wisconsin’s current individual market enrollees don’t carry coverage that meets ObamaCare’s minimum coverage standards. Thanks to the law, they’ll be required to purchase more expensive coverage.

Small businesses and their employees, meanwhile, will face a sort of coin flip—but one that’s weighted against them. Thanks to the law, 47 percent are expected to see their premiums drop by an average of 16 percent. But the other 53 percent are expected to see their health insurance premiums rise by 15 percent as a result of the law. That’s good news for those small employers who costs will go down, I suppose. But it’s not-so-good news for the even larger percentage of small businesses whose costs are projected to go up. Somehow I doubt that Doyle, the state’s ex-governor and recently minted ObamaCare propagandist, will find time to highlight their stories.

Thanks to NCPA President John Goodman for pointing out the report.
 
The sad reality of Ontario after multiple billions have already been spent:

http://www.healthzone.ca/health/article/1058357--seniors-languish-in-hospital-beds-waiting-for-proper-care-hushed-report-says

Seniors languish in hospital beds waiting for proper care, hushed report says
September 22, 2011

Comments on this story Comments(0)

Theresa Boyle
HEALTH REPORTER

Ontario has the dubious distinction of having the worst hospital bottlenecks of any province, says a much-anticipated report prepared for the government.

More than 4,500 seniors are stuck in hospital beds even though they are in need of “alternate levels of care,” such as intensive home care, said Dr. David Walker, former dean of health sciences at Queen’s University and the report’s lead author.

The findings echo a Star investigation last winter.

The report was turned in on June 30 but was quietly posted on the health ministry’s website two months later, on the eve of the current election. Opposition critics Thursday accused the government of hiding its findings.

According to the report, the health of too many Ontario seniors is needlessly deteriorating in a system that relies too much on hospitals and not enough on community care, just as the Star’s Begging for Care series detailed last February.

Because seniors aren’t properly cared for in the community and by family doctors, they end up becoming sick and going to emergency departments. Then they are hospitalized, sometimes for more than a year, because there is nowhere else for them to go.

In hospital, they become even more frail because they don’t get the intensive rehabilitation they need and are at risk of acquiring superbug infections and falling. The sad deterioration continues as they move permanently into long-term care homes, “an outcome that could often have been avoided,” Walker writes.

While the report says the government has made some strides in tackling the problem, it says not enough is being done and notes that hospital backlogs have barely budged since 2008.

“Although pockets of success and improvement exist, these strategies alone will not meet the ever-growing demand nor solve this problem,” the report states, noting that seniors are growing in number, living longer and preferring to stay at home.

Without a fundamental transformation, Walker warns, “We will experience a wave of frail older Ontarians receiving poor care in the wrong environment amongst those ill equipped to provide it, with resultant disruption of the engines of health care designed for other purposes.”

PC Leader Tim Hudak charged that the Liberals purposely hid the report because they didn’t want it to be an election issue.

“Dalton McGuinty has to come clean and explain why the Liberals tried to bury this report. There was no announcement, it was hidden away on an obscure website,” he said. “This very much looks like a government that is on the run and trying to bury reports critical of its mismanagement of the health-care system.”

Health Minister Deb Matthews denied her government sat on the report.

“If we are hiding it, we are hiding it online. It has been posted since August,” she said.

She noted that she even referred to the Walker report in a May speech, although it hadn’t been released then. And she said many of the Liberal’s campaign commitments on seniors’ health are drawn from it.

“I think it is a fantastic report,” Matthews said. “The whole thing is how can we keep people healthier and in their own homes as long as possible. What are the supports we need to provide to people to keep them out of hospital and out of long-term care.”

The Liberal government’s $1 billion Aging at Home strategy was intended to do just that, but as the Begging for Care series revealed, seniors receive community support only after becoming ill and ending up in hospital. The original intent was to provide seniors with community support to keep them healthy in their homes so that they wouldn’t become acutely ill and need hospital care in the first place.

“We started with the Aging at Home strategy and had some very important lessons from that,” Matthews acknowledged. “As the program rolled out, we maintained the community-based supports to keep people healthy in the community, but you are right, we did turn the focus to getting people out of hospital.”

In addition to shifting resources into community care, Walker says family doctors should be held accountable for early identification of seniors at risk and proactive management of their challenges.

He calls for a change in a culture that currently emphasizes “permanent” placement in long-term care homes. Instead, there should be “assess-and-restore” programs at long-term care homes, complex continuing care facilities and rehabilitation hospitals where seniors could regain their health, return home and stay out of hospital.
 
Shoving health care providers into "ACO's" will be as ineffective as HMO's or other bureaucratic trickery, this article in the Atlantic Monthly shows why:

http://www.theatlantic.com/national/archive/2011/09/poster-children-for-new-health-care-model-wont-participate-in-model-program/245840/

Poster Kids for New Health-Care Model Won't Participate in Model Program
By Megan McArdle

Sep 28 2011, 12:10 PM ET 68
The administration has been pushing very hard on the Accountable Care Organization (ACO) model, which is a somewhat nebulous concept, but which is broadly supposed to save money by streamlining services and coordinating care.  It's one of the centerpieces that pro-Obamacare wonks point to as a real source of cost savings and improved services.  Exhibits A and B are usually Mayo and the Cleveland Clinic, with a few others occasionally thrown in.

However, when the administration rolled out its new ACO program last March, the poster children declined to participate, and an organization that represents large provider groups sent a letter to the Center for Medicare and Medicaid Services indicating that most of their members would not participate.  The reporting requirements, and the financial penalties for ACOs that didn't achieve savings, were simply too onerous.

In response, in May the administration created a new ACO program called Pioneer for "mature ACOs".  Unfortunately, it looks like the poster children have again refused to become a part of the demonstration project:

    During the health care debate, the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare were repeatedly touted as models for a new health care delivery system.

    Now, they have something else in common: All four have declined to apply for the "Pioneer" program tailor-made by the Obama administration to reward such organizations.

    "When the poster boys ask that the posters be taken down, you have a problem," says Michael Millenson, president of Health Quality Advisors LLC. The lack of participation, he says, suggests that "somebody messed up": either the government didn't make the rules appealing enough, or "when push came to shove, the big players didn't want to play by the rules."

    The four health systems are considered the most promising models for "accountable care organizations," a new approach to delivering health care services that rewards doctors and hospitals for providing high-quality care to Medicare beneficiaries while keeping costs down. The ACO provision became one of the most highly anticipated elements of the health care overhaul, and providers embarked on a frenzied race to join in as quickly as possible.

ACOs--or at least some of the features that the administration envisions--may well be the future of Medicare, for all I know.  But it was always folly to point to places like the Mayo Clinic as an example of what was possible for national health care reform.

Mayo is the best in the world at what it does.  This allows it to give all sorts of rewards to doctors that compensate for not being richly remunerated gunslingers: the status of working at Mayo, the excitement of being near the cutting edge, the reward of working with other tip-top physicians.  You can no more replicate that nationwide than you could turn every college in America into Harvard.  Hell, you could build a scale replica of Harvard, put every last one of its rules and policies into effect at your new school, and hire Harvard-trained anthropologists to observe how people at Harvard act, and teach people at the new school to behave the same way.  You could put into place an elaborate system of incentives designed to reward people who act like Harvard people, and punish those that don't.  And at the end of the day, it still wouldn't be Harvard.  It probably wouldn't even be a second-tier state school.  It would be expensive performance art.

There's a clue to this in the fact that the top models for ACOs don't want to join the program.  Doing so would kill the autonomy and flexibility that makes the institution great--and that standardization would rob the institution of the status that lets it attract top talent.  It's also possible that they don't think that threats would make their doctors better at their jobs.

I've written before about the difficulty of replicating successful small-scale programs into large-scale transformation of the health care system.  It continues to be very difficult.
 
http://www.cnn.com/2011/10/14/politics/health-care-program/index.html?hpt=hp_t2

WASHINGTON (CNN) -- Citing cost concerns, the Obama administration said Friday it has halted a long-term care insurance program that was part of the massive health care law passed in 2010.
Called the CLASS Act (Community Living Assistance Services and Supports), the program was canceled by Health and Human Services Secretary Kathleen Sebelius after a 19-month effort to find a way to make it financially viable.

That didn't take long...
 
I know Americans buy Rx Drugs from Canada (or used to) also, in addition to Mexico. It's no wonder why.  Here's an interesting article, Reproduced under the Fair Dealings provisions of the Copyright Act


http://www.azcentral.com/business/articles/2011/11/10/20111110scorpion-drug-cost.html

When the federal government approved a scorpion antivenom in August, it was hailed as an important tool to protect vulnerable victims from scorpion stings.

But as doctors and patients are now discovering, the fast-acting serum for those who are stung by scorpions comes at a very steep price.

Metro Phoenix hospitals are billing as much as $12,467 per vial of the antivenom approved to help children, the elderly and others quickly recover from severe reactions from scorpion stings.

With a typical dose of three to five vials to counteract the venomous sting, hospital bills for patients and their insurance companies can exceed $62,000.

The high price of what can be a swift, effective treatment has shocked doctors and scientists, who say the drug is too expensive. People may not be covered by their insurance company because insurers are still trying to figure out a reasonable price for a drug that has been used for years in Mexico at a fraction of the U.S. price. But the situation is a classic example of why rare drugs can be so expensive in the United States.

"The price is ridiculously high," said Dr. Alejandro Alagón, a scientist who advises Mexico-based Instituto Bioclon, which makes the drug.

The Mexican biotechnology company produces more than 250,000 vials for Mexican residents, who are charged about $100 per vial at pharmacies or even less at government-funded clinics for a drug that is administered intravenously, Alagón said.

But the cost inflates when the serum is sold in the United States. Each link in the U.S. pharmaceutical supply chain, from the Mexican factory to Arizona patients, raises the price.
Health-insurance companies still are trying to figure out a fair price to reimburse health providers.

Hospitals say they are billing patients to cover their own costs, but they acknowledge that in many cases, they don't expect patients to pay the entire billed amount.

Drug-company representatives say the price of the antivenom represents market reality when introducing a new drug for a rare disease or medical condition. Because the price is so high, doctors say they are forced to discuss the drug's costs before giving it to people they feel could benefit.

"The problem right now is that it's a new drug. Third-party payers (insurance companies) are not paying for it, and the patients are getting stuck with the bill," said Brian Tiffany, an emergency-medicine doctor.

Tiffany was a researcher for antivenom clinical trials that enrolled more than 450 patients at Chandler Regional Medical Center and Mercy Gilbert Medical Center. Patients who participated in the study received the antivenom for free. Now that it has been approved, patients must pay for the antivenom.

Tiffany said he often discusses the price of the drug with adult patients and parents of children who need the drug. If patients with severe reactions decide to skip the drug, they may require time in the hospital's intensive-care unit, which is also expensive. A bark scorpion sting can cause muscle twitching, slurred speech, involuntary eye movement and breathing difficulty. Without the antidote, patients may require sedatives and a breathing machine.

"I can put a (patient) in the emergency room with all that wasted time and effort, or I can give them an incredibly expensive drug," Tiffany said. "It is a horrible position to put you (the patient) in."

Distributor explains
The drug, Anascorp, has been used in Mexico for years, but it is in its early stages in the U.S. market. After clinical trials led by the University of Arizona and conducted at Arizona hospitals, the FDA announced on Aug. 3 that the drug was approved for use by patients suffering the effects of scorpion stings.

Traditional pharmaceutical development calls for creating and marketing a drug to a large segment of the population. The large group of potential users helps pharmaceutical companies recoup the money spent on research, discovery and testing such cutting-edge therapies.

But when a therapeutic is developed for a small number of people -- so-called orphan drugs for scorpion stings, rare genetic disorders or some cancers -- drug costs can skyrocket. Drug companies market orphan drugs to a limited population, but they still must pay research, development and regulatory costs.

Rare Disease Therapeutics, a Tennessee-based company, has the U.S. rights to Anascorp through a joint development and distribution agreement with Instituto Bioclon.

Although Rare Disease Therapeutics did not pay for research and discovery of the drug already used in Mexico, it did fund the clinical trials needed to approve the drug for sale in the United States.

Milton Ellis, president of Rare Disease Therapeutics, said the company established the drug's price based on several factors, including its own costs and expected revenue from the drug.

Rare Disease Therapeutics sells the drug for $3,500 per dose to Accredo Health Care, a Memphis, Tenn.-based specialty pharmaceutical company that distributes the drugs to Arizona hospitals.

Several Arizona hospitals said they are charged about $3,780 per dose of Anascorp. Hospitals then add their own markup to cover extra costs such as patients who don't pay their full bills.

Ellis said his company established the price for the drug with the expectation that it would sell only 300 to 400 doses each year in desert regions with scorpion populations: Arizona, New Mexico and the Las Vegas area.

The FDA has granted Rare Disease Therapeutics the exclusive right to sell the antivenom in the United States for seven years. Other drug companies may petition the FDA to sell the drug after that seven-year period. However, because the market for scorpion antivenom is so limited, it's uncertain whether any generic company would seek to compete with Rare Disease Therapeutics.

The drug is intended for young children, the elderly and adults who suffer complications or reactions following a scorpion sting

Although Ellis would not reveal the privately owned company's expenses, he said the company paid for clinical trials at Arizona hospitals that tested the drugs, liability insurance and costs related to the Food and Drug Administration's inspections of the Mexican factory where the drug is made.

The company also may need to pay for FDA user fees if the company's totalrevenue surpasses $50 million.

The FDA assesses user fees to drug and medical-device makers to expedite the federal agency's approval process. But companies that sell orphan drugs such as Anascorp are exempted from FDA user fees if the company's revenue from all products is less than $50 million.

Rare Disease Therapeutics, which has other antivenom products, has not yet reached that revenue threshold, so it does not pay those fees.

If Rare Disease Therapeutics reaches $50 million in revenue, the FDA user fees could cost the company $800,000 or more each year, Ellis said. He wants to make sure the company has enough revenue through drug sales to handle those costs.

Based on those expenses, Ellis said he believes his company charges a fair price that patients and insurance companies ultimately will be willing to pay because the drug is effective.

Infants, young children and the elderly who do not receive the antivenom may require breathing assistance and sedatives in a hospital's intensive-care unit, and those costs would likely exceed the price of the drug, Ellis said.

"People realize it is going to save the state of Arizona a lot of money," said Ellis, who added that Rare Disease Therapeutics will not change its price. "If you are in a hospital without it (the drug), you could possibly be in intensive care for two to four days."

Hospital prices vary
More than one dozen metro Phoenix hospitals now carry the antivenom. Infants and toddlers, the elderly and other patients who experience severe reactions following a scorpion sting typically get three doses of Anascorp. If their symptoms persist after the first three doses, doctors will give a fourth or even a fifth dose.

The price can vary from hospital to hospital. Banner Health, which carries the antivenom at all of its metro Phoenix hospitals except Banner Ironwood in Pinal County, bills $7,900 per vial. Maricopa Medical Center bills $9,077 per vial, and John C. Lincoln bills $12,467 per vial. John C. Lincoln previously charged $15,120 per vial, but the hospital reviewed and dropped its price after an Arizona Republic inquiry.

Representatives of Chandler Regional Medical Center and Mercy Gilbert Medical Center, two of the busiest clinical trial sites, would not say what they charge patients. Phoenix Children's Hospital also would not disclose its pricing.

Hospital representatives said they often collect just a fraction of the amount they bill. Maricopa Medical Center does not expect its patients will pay the full amount billed; the hospital often collects based on a patient's ability to pay. The prices also may change after insurers set their own reimbursement rate for the drug.

John C. Lincoln based its price on the amount that it was charged to buy the drug. Still, the hospital acknowledged the drug is expensive, and it will seek to lower its price even more, a John C. Lincoln spokeswoman said.

Despite the amount it bills patients, John C. Lincoln so far has not been able to recover its costs for the medicine. That is common for hospitals that administer such rare drugs to patients.

John C. Lincoln has treated five patients with the serum since August. The hospital spent $68,040 on antivenom doses given to those patients, but it has collected only a total $10,047 from the three patients who have paid their bills.
Doctors and hospitals say the cost of Anascorp may be a more controversial issue next spring when scorpion stings begin to surge again. Relatively few patients are stung by scorpions during the fall and winter.

Michelle Ruha, a Banner Good Samaritan Medical Center Poison and Drug Information Center physician who participated in the clinical study, said a study needs to evaluate the cost of treating patients with antivenom compared with the cost of treating patients through other means in a hospital emergency room.

There is often little debate when children under the age of 2 are stung by a scorpion. An estimated 80percent of children younger than 2 have a severe reaction from a scorpion sting.

"You don't want to look at a parent who has a very sick child in the ED (emergency department) and say we can give you one treatment and it will cost you this, or we can give you another treatment and it will cost you that," Ruha said. "It's not just the cost that's important. If you use the antivenom, children will be able to go home in most cases."

Insurers wait
Blue Cross Blue Shield of Arizona, the state's largest private insurance company as measured by premiums, said it is still evaluating the new treatment.

The insurer will establish a fee for the drug once insurance codes are developed by the American Medical Association and a private company called Practice Management Information Corp.

Once the billing codes are established, Blue Cross Blue Shield will review medical literature and determine whether coverage should be limited to certain groups of patients such as children and the elderly.

The drug may be a hot-button issue for the state's Medicaid system, the Arizona Health Care Cost Containment System. Rare Disease Therapeutics estimates that 40 percent of Anascorp doses will be given to patients enrolled in the state's insurance program for low-income residents.

Alagón, who conducted research on the serum in Mexico, said he is surprised when people ask him whether he is making a lot of money now that the drug has reached the U.S. He explains that he has no control over the price of the drug and gets no financial benefit.

"We, as a country, lost control of our products," Alagón said. "I am upset about that, especially because they are charging so much. They are not being sensitive."



Read more: http://www.azcentral.com/business/articles/2011/11/10/20111110scorpion-drug-cost.html#ixzz1dgo14RHz
 
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