On the Non-Effectiveness of Cost Effectiveness Analyses

By ROBERT MCNUTT, MD & NORTIN HADLER, MD Take the example of a middle-aged woman undergoing chemotherapy for breast cancer. Month after month she receives a bill for $16,000. This purchases a monthly infusion of one chemotherapeutic agent.  Much of the bill is paid by her insurance, but her personal checking account will cough up about $1000 per month until she pays down her deductible. The invoice, however, is an illusion. The amount is not the actual number of dollars required to pay for services and materials rendered. Most of the money is diverted in accordance with contractual agreements between the hospital and various agents, brokers, and insurers. The total transfer of those dollars is known but not readily accessible to any who was not privy to the negotiations. The $1000 co-pay is a tithe with totally obscure added value to be paid no matter how painfully. Few of us know the direct cost of any medical intervention. The term “cost” is the money needed to produce a service. For example, the cost of a single chest-x-ray is amazingly cheap, just a few dollars. The materials are inexpensive, the x-ray machine can spit out exam after exam, and one person can service a multitude of patients, making the unit cost a bargain. The cost of many a test is so low that it could be given away without wobbling a hospital’s budget. Researchers have evaluated the true costs of some classes of medications, before marketing, distribution and middle-man charges are added. The...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Uncategorized Source Type: blogs