The Health Shopper

Two studies released at the American College of Cardiology suggest that older generics are at least as effective as newer drugs for most patients-and a lot cheaper. One study, of patients who took Vytorin, found that while the two drugs in combination helped reduce cholesterol and other risk factors for heart disease, the combination did not actually do any better than older generics at preventing heart disease. Writing in the New England Journal of Medicine, said that the drugs-which have generated $5 billion in sales in the past few years-should be used as a treatment of last resort.

A second study found that ACE Inhibitors, an older class of drugs used to treat high blood pressure, was as effective as newer ARB drugs at preventing heart attacks and other complications due to high blood pressure. The study, which tracked 17,000 patients over 56 months, found that patients taking the ACE inhibitors did just as well as patients taking ARBs in terms of medical outcomes-at a cost savings of about 20 percent per pill.

California State Senator Ellen Corbett has introduced a bill that would prevent hospitals and health insurers from using non-disclosure agreements when negotiating prices, which would effectively force hospitals to release negotiated prices to the public. Supporters of the bill say that improved price transparency could help consumers shop for care more thoughtfully while weighing both quality and cost. According to California Healthline, Corbett has noted that "consumers can guess the price of a new Honda Accord within $300" but "were off by $8,100" in guessing the cost of four days in the hospital.

The Bush Administration released a report finding that Medicare's hospital trust fund will be depleted by 2019. In addition, Medicare is projected to spend more this year than it receives in dedicated tax revenue, but will be able to make up for the shortfall by using interest from Medicare trust fund investments. According to the New York Times, Treasury Secretary Henry Paulson noted that "Medicare poses a far greater financial challenge [than Social Security funding]."

Medicare has a separate trust fund for physician services and outpatient medical care which also faces financial difficulties. Payments for outpatient medical services can be covered by general funds, however, and Medicare officials can also increase premiums and co-pays for physician services in order to make this part of Medicare more financially stable.    

The Society for Clinical Oncology is developing guidelines to help oncologists discuss the financial costs of chemotherapy drugs with their patients. The specialty group is creating the guidelines in response to the rise in the number of cancer medications that can cost tens, if not hundreds of thousands of dollars, and to an average 15 percent annual increase in cancer treatment costs. Under the proposal, doctors would "treat cost essentially as another side effect to weigh in choosing a therapy" in order to help patients decide if the extra costs make sense medically and financially, particularly for terminal patients who may be balancing quality of life considerations with the potential for drugs to help prolong their lives.

Several insurance companies are placing restrictions on CT scans for policyholders and in many instances are requiring plan members to receive pre-authorizations before undergoing the scans. Insurers are following the lead of Medicare, which announced and then retracted restrictions on CT scans, due to limited clinical evidence supporting their use. At the time of Medicare's reversal, the New York Times noted that "The proposal to curtail payments met with fierce resistance from doctors who perform these scans and companies that make the equipment" who "strongly defended the scans." Medicare alone spent as much as $50 million on the scans in 2006, and in the past six years, their use has been increasing 13 percent annually.

Evidence in favor of their widespread use remains weak, however. A few months ago, Consumer Reports listed CT Scans as one of the ten most overused medical treatments in the United States. A month later, a group of researchers writing in the New England Journal of Medicine found that approximately one third of CT scans were unnecessary, exposing "perhaps 20 million adults and, crucially, more than 1 million children per year in the United States" to a radiation dose roughly equal to 85 to 200 chest x-rays.

The good news is that requiring pre-authorizations seems to work. According to a study by the Robert Wood Johnson Foundation's Center for Health System Change, a health plan that required pre-authorization of the scans successfully reduced the growth rate on scans while denying only 1.5 percent of scan requests. As one insurer said, "We're not saying ‘No' that much, but because people have to now justify what difference the test is going to make, they aren't requesting it as much."

A Committee in Colorado's State House of Representatives voted 6-5 against a bill that would have allowed state residents to purchase individual policies from insurance companies that had not obtained state licenses. Under the terms of the proposal, Colorado's Department of Insurance would form pacts with other states in order to approve plans, which would ultimately have expanded insurance options for state residents. Proponents of the proposal argued that the proposal would have improved consumer choice and expanded coverage, while opponents worried that reduced regulations would have increased the chance for fraud on the individual market.

A new study from the Kaiser Family Foundation has found that the average work-sponsored health insurance policy now costs $2.59 an hour in wages. Between 1999 and 2005, this growth accounted for an "almost 62 percent increase in average costs per hour is much larger than the 23 percent increase in average employer payroll costs per hour for these workers." As a result, more than half of American workers receive more than a tenth of their compensation in the form of insurance and other benefits, rather than as wages. As bad as that figure is, it's worse for lower wage workers. Overall, while workers in sales and service fields received less compensation in terms of health benefits than higher wage workers, their benefits still accounted for a much larger percentage of their income.

A couple months ago, we noted that Fair Issac has partnered with Tenet Hospitals and other partners to develop a medical credit score. Today's Wall Street Journal examines the trend of hospitals examining patient finances after billing, which has drawn complaints from consumer rights groups who worry that hospitals will use credit ratings to determine whether or not to provide elective and other non-emergency care. Consumer groups also worry that hospitals could force individuals to tap into credit lines or other assets in order to cover the costs of bills.

Hospital officials, on the other hand, say that they are not using financial information to deny care but to direct charity care to the neediest patients. For example, one woman qualified for charity care knee surgery after providing a detailed financial history to demonstrate that she couldn't afford to pay the bills on her own. At the non-profit hospital Orlando Regional Healthcare, billing staff are classifying patients by likelihood of paying and focusing on getting "moderate risk" patients to pay their bills before they become delinquent.

Blue Cross Blue Shield of South Carolina has begun to seek partnerships with international hospitals in order to encourage policyholders to seek more cost-effective treatments abroad. The insurer has already established agreements with seven overseas hospitals and hopes to add another five within the year. Blue Cross officials are hoping that encouraging medical tourism for planned medical care will help control costs, since, as Business Week notes, "An insurance company could waive all deductibles and co-pays, offer to cover travel costs for the patient and family members, even throw in a cash incentive, and still save tens of thousands of dollars" without sacrificing quality.

The Wall Street Journal notes that Wal-Mart says it has saved consumers $1 billion by selling prescription drugs for as little as $4. According to the Journal, nearly two out of five prescriptions sold at Wal-Mart cost $4, and that in many instances, uninsured individuals are purchasing the drugs. Wal-Mart is hoping to improve the program by expanding its offerings of generic and low-cost medications.