In these tough times, among our other economic problems, there has been the beginning of a national discussion about healthcare. Since I’m now a “heavy user” of healthcare, I thought I’d share some prices with you and some thoughts about them. Here’s the skinny on what cancer has cost over the (almost) six months since my diagnosis:
My surgery was laparoscopic (less invasive and leaves a smaller and more beautiful scar), and included 5 days and 4 nights in the hospital (all meals and recreation included). It cost about $40,000. That’s a “top line” number – meaning that’s what the hospital and all the various doctors and tests originally charged. The insurance company rarely pays this amount, usually taking a bit of a haircut. In fact, one bill, included in the number, was incredibly reduced. It was for the insertion of a stent and was billed at $3,000. The insurance company paid about $200! But in most instances, the insurer paid a much larger percentage of the bill.
My chemo and all the associated doctor visits, blood work, scans, etc that come with the treatment plan has cost about $145,000 so far. In addition, I’ve had two separate nights in the Morristown emergency room. The first cost just shy of $5,000. I haven’t gotten the bill for the second, but it will probably come in about the same since I got scanned both times. I have one chemo treatment left before hitting the 6 month mark, which will cost about $6,600, so my 6 month total of chemo plus the ER visits will come in at a little over $160,000! Incredible….
So, why is chemo so expensive? The core treatment for my cancer is the drugs 5FU and leucovorin (which is basically a vitamin). Combined, these meds cost $84 per treatment. Bear in mind that 5FU was invented in the late 1950’s, is very widely used, and is (no doubt) out of patent protection. Oxaliplatin, which I took for the first 6 treatments, is a “new” drug. I’m not sure when it came out but it was within the last 10 years or so. It cost $6,000 per dose. My additional drug (on top of the 5FU/Leucovorin/Oxi protocol, which is known as FOLFOX) is Avastin. Avastin is also a “new” drug and costs $4,300 per dose (and gave me a fissure!) Clearly something is amiss with the economics of the pharma industry when these new drugs cost so much. I understand that they need to recoup the R&D but these prices are incredible!
I also wonder what the “true” cost of the doctors, scans, pathologists, etc is. It seems that they all inflate their costs because they know the insurer is going to only pay a certain amount and they want to make sure their “ask” is higher than the limit. What would they charge if this system didn’t exist?
Now here’s the public policy part – from what I have read, there are about 150,000 cases of colon cancer diagnosed every year and 50,000 deaths. Many of the diagnosed are in lower stages of progression and likely only have 3 months of chemo after surgery. If $40,000 is an average surgery cost and six FOLFOX treatments ensue (at about $14,000 per), then these folks’ treatment plan cost about $125,000. For higher level patients, like me, who will be on chemo for at least 9 months, then the first year of treatment plus surgery comes in at about $200,000. Assuming 50/50 lower and higher need patients, the average first year cost about $160,000. Multiply that by 100,000 (net new cases), and the total cost is $16 Billion! Cut that by perhaps 25% for what the insurers actually pay and you still get $12 BILLION! Per Year! And that doesn’t count treatment beyond the first year or for those who pass away! Now, if colon cancer was a Wall Street firm, perhaps we could get a bailout…but there are plenty of other types of cancer to pay for!
So, the messages of the day are – 1) Thank God for health insurance and 2) What do all those folks do who have no coverage? Do they refuse treatment? Do they get treatment and not pay?
This is why insurance matters…
My surgery was laparoscopic (less invasive and leaves a smaller and more beautiful scar), and included 5 days and 4 nights in the hospital (all meals and recreation included). It cost about $40,000. That’s a “top line” number – meaning that’s what the hospital and all the various doctors and tests originally charged. The insurance company rarely pays this amount, usually taking a bit of a haircut. In fact, one bill, included in the number, was incredibly reduced. It was for the insertion of a stent and was billed at $3,000. The insurance company paid about $200! But in most instances, the insurer paid a much larger percentage of the bill.
My chemo and all the associated doctor visits, blood work, scans, etc that come with the treatment plan has cost about $145,000 so far. In addition, I’ve had two separate nights in the Morristown emergency room. The first cost just shy of $5,000. I haven’t gotten the bill for the second, but it will probably come in about the same since I got scanned both times. I have one chemo treatment left before hitting the 6 month mark, which will cost about $6,600, so my 6 month total of chemo plus the ER visits will come in at a little over $160,000! Incredible….
So, why is chemo so expensive? The core treatment for my cancer is the drugs 5FU and leucovorin (which is basically a vitamin). Combined, these meds cost $84 per treatment. Bear in mind that 5FU was invented in the late 1950’s, is very widely used, and is (no doubt) out of patent protection. Oxaliplatin, which I took for the first 6 treatments, is a “new” drug. I’m not sure when it came out but it was within the last 10 years or so. It cost $6,000 per dose. My additional drug (on top of the 5FU/Leucovorin/Oxi protocol, which is known as FOLFOX) is Avastin. Avastin is also a “new” drug and costs $4,300 per dose (and gave me a fissure!) Clearly something is amiss with the economics of the pharma industry when these new drugs cost so much. I understand that they need to recoup the R&D but these prices are incredible!
I also wonder what the “true” cost of the doctors, scans, pathologists, etc is. It seems that they all inflate their costs because they know the insurer is going to only pay a certain amount and they want to make sure their “ask” is higher than the limit. What would they charge if this system didn’t exist?
Now here’s the public policy part – from what I have read, there are about 150,000 cases of colon cancer diagnosed every year and 50,000 deaths. Many of the diagnosed are in lower stages of progression and likely only have 3 months of chemo after surgery. If $40,000 is an average surgery cost and six FOLFOX treatments ensue (at about $14,000 per), then these folks’ treatment plan cost about $125,000. For higher level patients, like me, who will be on chemo for at least 9 months, then the first year of treatment plus surgery comes in at about $200,000. Assuming 50/50 lower and higher need patients, the average first year cost about $160,000. Multiply that by 100,000 (net new cases), and the total cost is $16 Billion! Cut that by perhaps 25% for what the insurers actually pay and you still get $12 BILLION! Per Year! And that doesn’t count treatment beyond the first year or for those who pass away! Now, if colon cancer was a Wall Street firm, perhaps we could get a bailout…but there are plenty of other types of cancer to pay for!
So, the messages of the day are – 1) Thank God for health insurance and 2) What do all those folks do who have no coverage? Do they refuse treatment? Do they get treatment and not pay?
This is why insurance matters…
6 comments:
Brian
Please let your analysis be heard by all. Print it out and sent it on to Obama and all the politicians, the AMA, the drug companies, the newspapers, particularly the Times and the WSJ.
If AIG and others can make enough noise to get their ways, it is time for the average Joe to be heard and helped. Love, Mom
Yeah, don't get me started on insurance. providers sign contracts with each insurance co and negotiate/agree to payments for each visit/procedure. That's why some providers don't take some insurances. Either their rates suck, or they don't pay/withhold pay. My friend has a patient who is pregnant with her second child and the insurance company hasn't paid the bill for the first one! They should all be arrested for fraud/collusion/breech of contract/ something! Look at the stink they're making about getting paid their contractual bonus obligations! Yes, people go into bankruptcy over healthcare costs (talk to Kathryn about that!) Even people with insurance who are underinsured or have 80/20 coverage. Who has 10s of thousands of dollars laying around...especially when one income (if not both) incomes are gone/diminished?
Don't mean to be a downer I'll shift gears and end on a happier note...I attended a great birth last week. A lovely spanish-speaking woman, who wouldn't push and kept saying "No puedo! (I can't)" After 40 minutes of encouragement (tu peude, Mommy!) I said (through a translator...my Spanish is not this good), "I know it's scary and painful, but it's the way babies were meant to come into this world, so you have to feel your fear and do it anyway. Come on, Mommy, push your baby out!" 20 minutes later, she had a lovely girl named Victoria!!! (Coincidence, I know, but I still did the happy dance when she told me her name!) I told her "Vickys rock!"
All I can say is "wow." The numbers are mind boggling.
Hi Brian,
I hadn't checked in during the last month.
Our family has been very busy negotiating the medical establishment helping out my wife's parents. So your story here of costs was really amazing to think about.
It is really unbelievable and I hope the country can get its hands around tackling this problem.
On a brighter note, in the last month, our boys got to play a lot of good basketball together at the Y!
Hi Brian,
It is totally amazing the costs of treatments and hospitalizations these days. Another thing to add to the eventual costs is the delivery, usage and then disposal of the chemotherapeutic agents. Even studying them in rats is literally triple the cost of regular drugs like cocaine and morphine. That is because of the training for personnel and specialized disposal of the agents. Because not only can they cure cancer, they can cause cancer!
Big pharma is not a good industry to be in these days. R&D for a new drug runs on average 1.5 M per new compound before it even goes to humans in clinical trials. [This cost does not include the amount of the failed drugs that are just absorbed by the company]. The costs of clinical trials at all stages is ridiculous and gets passed along to the consumer. The average cost to get one new drug to market these days is 500 million dollars. That seems crazy to me but you can see where some of the costs are coming from before they even get to the IV bag.
Your chemo nurses are experts with specialized licenses so for them to hook you up is more than the average RN. And all those tech for every single type of scan and tests.
I can't imagine what people do without health coverage. People end up in emergency rooms because they don't have a regular doc or oncologist which is then even more expensive but they can't pay. The costs get passed on to everyone as the costs for the hospitals go up. Last I heard, only 10% of the moms delivering babies at Temple had insurance to pay their bills. The hospitals just suck up the bills because they can't turn people away. That is why so many of Philadelphia's hospitals fail.
Hopefully a restructuring of our health care system will help to stabilize this craziness.
The good thing about living in this country, if you have insurance, is that our doctors have choices for our medications and treatments. Americans use 80% of the world's pharmaceuticals. We use a lot of drugs. If you get cancer in some countries, there is no chemo or even pain medications to ease their passing. All they get is motrin.
But I am really glad you are getting the best treatment health care can buy because it seems to really be working. And that is the bottom line to me.
Hugs,
Ellen
I think you're onto something here. Most people you talk to think the system is broke but the fix is beyond the horizon. Has all the ingredients for an all-american challenge. Timing might be good too...
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