The American prescription crisis is no longer coming. It’s here. And we need to focus on how to address it.
According to a study published in the Journal of the American Medical Association in August, for each person in the U.S., $858 is spent annually on prescription drugs, compared with an average of $400 per person across 19 other industrialized nations. Prescription medications now compose an estimated 17% of overall healthcare expenses.
How did we get here and who is to blame: the manufacturer of the drugs or the American drug distribution channel? Both parties are pointing their fingers at one another, with the flames being fanned by the media and government. Who should the consumer believe?
Unless you are living in a cave, you have heard or read about the EpiPen pricing scandal. The manufacturers’ CEO, Heather Bresch, claims that more than half of the new $608 list price is absorbed by the distribution channel. She says the huge price increases are not her company’s fault and attempts to justify the increased price. Is she right, or is she trying to pin the blame elsewhere for her pricing decisions?
Drug manufacturers, in general, complain that their net incomes continue to remain flat or even decline. They show their financials as evidence and complain about the ratio of the list price of their drugs vs. the realized price, a figure known as “gross-to-net.” When rebates paid by the manufacturer outpace the price increases by the same manufacturer, it is easy to understand why the figure remains flat or even declines.
The pharmacy benefits manager (PBM) serves as the largest component of the manufacturers’ distribution channel, charging a margin/fee as well as collecting a rebate for their services. Somehow, they have redefined the laws of nature by figuring out how to consistently convince their clients that they are saving money, while showing Wall Street steady revenue growth.
The crisis is here, and as an employer you should be up at night wondering how this crisis of prescription costs affects you. The numbers don’t add up, and you are paying for the deficit.
Healthcare is consuming an ever-greater share of corporate America’s balance sheet. According to the latest Kaiser Family Foundation survey, today’s employers spend, on average, $12,591 for family coverage—a 54% increase since 2005.
Some companies have finally had enough. Twenty of America’s largest corporations—including American Express, Coca-Cola and Verizon—recently formed a coalition called the Health Transformation Alliance. They’re planning to pool their four million employees’ healthcare data to figure out what’s working and what’s a waste of money.
Eventually, they could leverage their collective purchasing power to negotiate better deals with healthcare providers.
It’s a worthwhile experiment. The government has largely failed to rein in spiraling healthcare costs; in fact, by over-regulating the healthcare marketplace, it’s largely made the problem worse.
The private sector will have to take matters into its own hands and find ways to creatively deploy market forces to its benefit.
Collectively, U.S. employers provide health coverage to about 170 million Americans. Because many pay part—if not all—of their workers’ premiums, they’ve borne the brunt of the upward march of healthcare costs. According to the Kaiser Family Foundation, premiums for employer-based family insurance have increased 27% over the last five years, and 61% over the last 10.
Unfortunately, this growth won’t slow any time soon. The Congressional Budget Office estimates that average premiums for employer-based family coverage will reach $24,500 in 2025—a 60% increase over premiums today.
Understandably, companies are desperate to find ways to curb their healthcare spending.
Last year, one of every three employers reported increasing cost-sharing for employees, through higher deductibles or co-payments. Another 15% said they cut worker hours to avoid falling afoul of Obamacare’s employer mandate, which requires firms to provide health insurance to anyone working 30 or more hours a week.
But shifting costs elsewhere simply masks employers’ health-cost problem. They’ll have to address inefficiencies in the way healthcare is delivered to bring about savings that will actually stick.
The Health Transformation Alliance sees three primary ways to do so.
First, companies will have to mine their healthcare data for insight, just as they analyze the numbers for sales, operations and other core business functions.
The Alliance will examine de-identified data on employees’ health spending and outcomes. The hope is to determine which providers are delivering the best care at the lowest cost and to then direct workers toward these high-performing providers.
The U.S. healthcare sector today is awash with ambiguity and a lack of transparency. A knee replacement can cost $50,000 at one hospital but $30,000 at another. Two hospitals may offer the same price on a procedure, but one may have a higher rate of infection.
Such differences matter. According to a 2013 report in the Journal of the American Medical Association, an infection can add, on average, $39,000 to a surgery’s price tag.
Second, employers will have to use their combined buying power to secure better deals on healthcare. Tevi Troy, the CEO of the American Health Policy Institute, the organizing force behind the Alliance, said, “If you brought together multiple employers, you would have more leverage, more covered lives, more coverage throughout the country in terms of regional scope.”
In other words, there’s safety—and potentially lower healthcare costs—in numbers.
Third, employers will have to educate their workers about how they can secure better care at lower costs.
Most consumers are clueless about where they should seek healthcare. They may welcome a gentle nudge from their employer toward a high-quality, low-cost clinic or provider. If it saves their bosses some money, all the better.
And as the Alliance hopes to prove, it’s a lot easier to borrow another company’s successful strategy for executing those nudges than to create one from scratch. An educational campaign that resonates with Verizon’s 178,000 employees, for instance, may do just the same with IBM’s 300-some-thousand staffers.
As Marc Reed, chief administrative officer of Verizon, explained, “What we’re trying to do is to make this sustainable so that kind of coverage can continue.”
Corporate America has been saying for years it cannot afford the healthcare status quo, with costs rising ceaselessly. But if employers use their healthcare data wisely—and capitalize on their collective bargaining power—they may discover that salvation from their health-cost woes lies within.
Those are the employers’ problems, but the employers’ problems become the employees’ problems when employees are “voluntarily” forced to submit to programs that are likely to harm them. (As the New York Times recently pointed out, there is nothing voluntary about most of these programs.)
Recently, the head of United Healthcare’s (UHC) wellness operations (Optum), Seth Serxner, admitted that Optum’s programs consciously ignore U.S. Preventive Services Task Force (USPSTF) screening guidelines. Rather than apologize, Serxner blamed employers for insisting on overscreening and overdiagnosing their own employees…and (by implication) overpaying for the privilege of doing so. “Our clients make us do it,” were his exact words.
We asked our own clients who use Optum about why they turned down Optum’s generous offer to do more appropriate screenings at a lower price. None of them remember receiving such an offer.
A UHC executive wrote and said we were making the company look bad. I said I would happily revise or even retract statements about the company if the executive could introduce me to just one single Optum customer — one out of their thousands — who recalls insisting on overscreening and overpaying. Never heard back….
United Healthcare isn’t alone in harming employees. It is just the first company to admit doing so. It is also far from the worst offender, as the harms of its overscreening for glucose and cholesterol don’t hold a candle to the ideas listed below, in increasing order of harms:
We would say: “Someone should inform Provant that you are not supposed to drink eight glasses of water a day,” except that we already did, and they didn’t believe us. Obsessive hydration remains one of their core recommendations despite the overwhelming evidence that you should drink when you are thirsty.
The employee who recorded this blood pressure is essentially dead. Cerner’s diagnosis? Blood pressure “higher than what is ideal.” Cerner’s recommendation? “Talk to your healthcare provider.” A real doctor’s recommendation? “Call an ambulance. The guy barely has a pulse.”
This is not a random mistake. This is the front cover of the company’s brochure.
USPSTF screening age recommendations aren’t minimums. They are optimums, the ages at which screening benefits might start to exceed harms, even if they still fall far short of costs. Otherwise, you are taking way too much risk. This is especially true for colonoscopies, one of this program’s favorite screens — complications from the test itself can be very serious.
Your preventive coverage is not supposed to be “greater than healthcare reform guidelines.” That’s like rounding up twice the number of usual suspects. And you aren’t supposed to waive “age restrictions.” That’s like a state waiving minimum “age restrictions” to get a driver’s license.
Both these outfits pitch exactly the opposite of what you are supposed to do in weight control: unhealthy crash dieting. Attaching money to this idea and setting a start date make the plan even worse: along with crash-dieting during these eight weeks, you’re encouraging employees to binge before the initial weigh-in.
In addition to its wellness program that collects employee DNA (partnered, ironically, with a company called Newtopia) and then makes up claims about savings, Aetna owns the distinction of launching the only wellness program whose core drugs are specifically editorialized against in the Journal of the American Medical Association. This would literally be the most harmful wellness program ever, except that the only employees being harmed are (1) obese employees who (2) answer the phone when their employer’s health plan calls them to pitch these two drugs; (3) who have a doctor who would willingly prescribe drugs that almost no other doctors will prescribe, because of their side effect profile; and (4) who don’t Google the drugs. Presumably, this combination is a very low percentage of all employees.
The good news is that the drugs, Belviq and Qsymia, should be off the market in a couple of years because almost no onewants to take them, so the harms of this Aetna program should be self-limited.
Star Wellness offers a full range of USPSTF D-rated screens. “D” is the lowest USPSTF rating and means harms exceed benefits. Star gets extra credit for being the first wellness vendor to sell franchises. All you need is a background in sales or “municipal administration” plus $67,000 and five days of training, and you, too, can poke employees with needles and lie about your outcomes. Is this a great country, or what?
Also, the company’s vaccination clinic features Vitamin B12 shots. We don’t know which is more appalling–routinely giving employees Vitamin B12 shots or thinking Vitamin B12 is a vaccine.
Angioscreen doesn’t have the most USPSTF D-rated screens. In fact, it offers only one screen in total, for carotid artery stenosis. That screen gets a D grade from USPSTF, giving Angioscreen the unique distinction of being the only vendor 100% guaranteed to harm your workforce.
Angioscreen’s other distinction is that the company admits right on its website that this screen is a bad idea. Angioscreen is probably the only non-tobacco company in America to admit you are better off not using its product.
In addition to the usual assortment of D-rated tests, the company offers screens that the USPSTF hasn’t even rated, because it never, ever occurred to the USPSTF that anyone would use these tests for mass screening of patients or employees. Criticizing the USPSTF for not rating these “screens” (CBCsand Chem-20s) would be like criticizing Sanofi-Aventis for not warning against taking Ambien after parking your car on a railroad crossing.
Let’s leave aside the fact that the majority of its other screens are harmful and focus on its screening for H.pylori, the strain of bacteria associated with ulcers.
Visit our full treatment here. In a nutshell, the majority of us harbor H.pylori–without symptoms. It may even be beneficial. The screening test is expensive and notoriously unreliable, and the only way to get rid of H.pylori is with some very powerful antibiotics, a treatment rarely even used on patients with symptoms, because of its inconvenience, ineffectiveness and potential long-term side-effects.
A Modest Proposal
So how should we as a country protect employees from these harms? Our policy recommendation is always the same and very non-intrusive. We aren’t saying wellness vendors shouldn’t be allowed to harm employees. That proposal would be too radical to ever pass Congress. If it did, the Business Roundtable would pressure the White House again, to preserve the hard-earned right to “medicalize” the workplace and show employees who’s boss.
Instead, we recommend merely a disclosure requirement. The harms of screens or (in United Healthcare’s case) screening intervals that don’t earn at least a “B” from USPSTF should be disclosed to employees, and employees should get a chance to “opt out” into something that isn’t harmful (like Quizzify, perhaps?) without suffering financial consequences.
Call us cockeyed optimists, but we don’t think employers should be able to force employees to choose between harming themselves and paying fines.
Opioids have been used for thousands of years in the treatment of pain and mental illness. Essentially everyone believes that opioids are powerful pain relievers. However, recent studies have shown that taking acetaminophen and ibuprofen together is actually more effective in treating pain. Because of this, it is helpful for medical professionals and patients to understand the history of these opioid medications and the potential benefits of using nonsteroidal anti-inflammatory drugs (NSAIDs) instead.
Extracted from the seedpod of the poppy plant, opium was the first opioid compound used for medicinal purposes. The active ingredients of opium are primarily morphine, codeine and thebaine. Opium and its derivatives have had more impact on human society than any other medication. Wars have been fought and countless lives have been lost to the misuse, abuse and overdose of opioids. It is also clear, however, that many received comfort from pain when there was no other alternative. For thousands of years, opium products provided the only effective treatment of pain and were also used to treat anxiety and depression. Tolerance, dependence and addiction were identified early as a problem with opioids.
In 1899, Bayer produced and introduced aspirin for wide distribution. It became the first significant alternative to opioids for treating pain. Aspirin not only relieves pain but also reduces inflammation and is in the class of NSAID medications. Aspirin was commonly used for mild pain such as headache and backache. Other NSAID medications followed with the development of ibuprofen in 1961, indomethacin in 1963 and many others over the next 20 years. While these drugs are not addictive or habit-forming, their use and effectiveness were limited by side effects and toxicity. All NSAID medications share some of the same side effects of aspirin, primarily the risk of gastrointestinal irritation and ulcer. These medications can also harm renal function.
Acetaminophen was created in 1951 but not widely distributed until 1955 under the trade name Tylenol. Acetaminophen is neither an opioid nor an NSAID. Tylenol soon became another medication that was useful in the treatment of pain, offering an alternative to the opioid medications and to aspirin. Acetaminophen avoids many of the side effects of opioids and NSAIDs but carries its own risk with liver toxicity.
Efficacy in acute pain
Since the development of acetaminophen, medical professionals have had the choice of three different classes of medications when treating pain. Those decisions are usually made by considering the perceived effectiveness of each medicine and its side effects along with the physical status of the patient. For example, acetaminophen should not be taken by someone with advanced liver damage; NSAIDs should not be given to an individual with advanced kidney disease or stomach ulcers; and opioids pose a potential risk to anyone with a personal or family history of addiction.
Although many have long been believed that opioids are the strongest pain medications and should be used for more severe pain, scientific literature does not support that belief. There are many other treatments that should be utilized for treating pain. Studies have shown NSAIDs are just as strong as the opioids.
Number needed to treat
When considering the effectiveness or the strength of pain medications, it is important to understand one of the statistical measures used in clinical studies: the number needed to treat (NNT). NNT is the number of people who must be treated by a specific intervention for one person to receive a certain effect. For example, when testing pain medications, the intervention is the dose of pain medication, and the effect is usually 50% pain relief. That is considered effective treatment, allowing people increased functional abilities and an improved quality of life (Cochrane. org, 2014). So the question becomes, how many people must be treated with a certain dose of a medication for one person to receive 50% pain relief (effective relief)?
A lower NNT means the medicine is more effective. A product with an NNT of 1 means that the medicine is 100% effective at reducing pain by 50% — everyone who takes the medicine has effective pain relief. A medicine with an NNT of 2 means two people must be treated for one to receive effective relief. Or, alternatively, one out of two, or 50%, of people who take the medicine get effective pain relief. An example of a medicine that would not be a good pain reliever would be one with a NNT equal to 10. In such a case, you would have to treat 10 people for one to receive effective pain relief. Basically, the medication with the lowest NNT will be the most effective. For oral pain medications, an NNT of 1.5 is very good, and an NNT of 2.5 would be considered good.
Treating chronic pain
Despite the widespread use of opioid medications to treat chronic pain, there is no significant evidence to support this practice. A recent article reviewing the evidence regarding the use of opioids to treat chronic non-cancer pain concluded, “There is no high-quality evidence on the efficacy of long-term opioid treatment of chronic nonmalignant pain.” (Kissin, 2013, p. 519) A recent Cochrane review comparing opioids with placebo in the treatment of low back pain came to a similar conclusion. This review said that there may be some benefit over placebo when used for short-term treatment, but no evidence shows that opioids are helpful when used for longer than four months. There is no evidence of benefit over non-opioid medications when used for less than four months. (Chaparro et al., 2014)
Several other reviews have also concluded that no evidence exists to support long-term use – longer than four months – of opioids to treat chronic pain. (Kissin, 2013; Martell et al., 2007; McNicol, Midbari, & Eisenberg, 2013; Noble et al., 2010)
Epidemiologic studies have also failed to confirm the efficacy of chronic opioid therapy (COT) for chronic non-cancer pain. A large study from Denmark showed that those with chronic pain who were on COT had higher levels of pain, had poorer quality of life and were less functional than those with chronic pain who were not on COT. (Eriksen, Sj.gren, Bruera, Ekholm, & Rasmussen, 2006)
In the last 20 years in the U.S., we have increased our consumption of opioids by more than 600%. (Paulozzi & Baldwin, 2012) Despite this increase, we have not decreased our suffering from pain. The Burden of Disease study in the Journal of the American Medical Association (JAMA) showed that Americans suffered as much disability from back and neck pain in 2010 as they did in 1990 before the escalation in the prescribing of opioids. (Murray, 2013) A study in JAMA in 2008 found, “Despite rapidly increasing medical expenditures from 1997 to 2005, there was no improvement over this period in self-assessed health status, functional disability, work limitations or social functioning among respondents with spine problems.” (Martin et al., 2008, p. 661)
It is currently estimated that more than 9 million Americans use COT for the treatment of chronic nonmalignant pain (Boudreau et al., 2009). When we consider the proven benefits of this treatment along with the known risks, we must ask ourselves how we can ethically continue this treatment.
The reality is we really don’t know if COT is effective. Anecdotal evidence and expert opinion suggest it may be beneficial in a few, select people. However, epidemiologic studies suggest that it may be doing more harm than good.
The treatment of incurable cancer, end-stage lung disease and other end-of-life situations are notable examples where opioid medications are absolutely indicated. Although opioid painkillers are not very good medications for the treatment of pain, they are very strong psychotherapeutic agents. They are excellent at relieving anxiety and treating depression for a limited time. Opioids cause beneficial changes to brain serotonin, epinephrine, norepinephrine, dopamine and endorphins. For short-term, end-of-life situations, these neuropsychiatric effects are likely beneficial. For terminal care, opioids are the medications of choice.
The opioid medications are often referred to as “powerful painkillers.” In fact, the evidence shows that they are mild to moderate painkillers and less effective than over-the-counter ibuprofen. They have, however, powerful side effects that harm hundreds of thousands of individuals every year in the U.S. Even if one disregards the public health problems created by the use of opioid painkillers, these medications still are not a good choice for the treatment of acute pain — regardless of the severity. In some situations, limited use is appropriate. But in the majority of situations in which opioid painkillers are used today, they are not appropriate.
The standard of care in the practice of medicine today is to provide the best treatment that causes the least harm. When there is a treatment that is proven to be both more effective and safer, it is the treatment of choice. The implication of this data for policymakers is critical. By implementing policy that puts restrictions on opioid prescribing to protect public health, policymakers will also improve the treatment of pain by guiding prescribers to use medications that are more effective. It is also important for the medical and dental communities to address this inadequate and unsafe treatment of pain and change practice standards to guide care that is more appropriate for what our patients need and deserve.
There is overwhelming medical evidence that many diagnostic tests, treatments and surgeries for low back pain are ineffective and waste many billions of dollars a year in the U.S. alone. Yet treatment appears not only to be continuing but seems to be growing and becoming more aggressive. The aggressive treatment of low back pain has become epidemic.
Medical studies on the problem of low back pain were widely reported in the mainstream media in 2007 and 2008. The Wall Street Journal, New York Times and other national publications like Time magazine reported on the Journal of the American Medical Association (JAMA) study that said Americans, “were spending more money than ever to treat spine problems, but their backs were not getting any better.”
The study documented common mistakes doctors make when treating back pain, including:
Ordering excessive X-rays , MRIs and CT scans
Performing invasive surgery too soon
Failing to educate patients about surgical alternatives
Failing to address underlying mental health issues
Also released in 2007 was The State of Health Care Quality report published by the National Committee for Quality Assurance (NCQA). It stated, “back injuries often undergo aggressive treatment when less costly and less complicated therapy may yield similar or better results.”
The NCQA report said that the vast majority of patients with low back pain have no identifiable cause of their symptoms and that less than 1% of X-rays provide useful information regarding the diagnosis of low back pain. Similarly, MRI and CT scanning usually fail to shed light on the causes of low back pain, except when there are red flags such as trauma or indicators for specific diseases. The authors stated that, “Needless tests and procedures that provide no real benefit to the patient can’t do anything but harm.”
The JAMA study also noted the widespread use of needless testing and found that 25% of the patients covered by private health insurance had an inappropriate imaging study, costing, in the aggregate, billions of dollars each year.
There is a wealth of medical evidence that most back and neck pain should be treated sparingly. An editorial in Spine Journal suggested that more than 200 treatments for chronic back pain are currently available in the clinical marketplace and that many of those “do not have a definitive track record in scientific studies.”
The authors of the JAMA study concluded: “If we keep our diagnostic and treatment efforts within well-proven limits, and emphasize the importance of activity and self-care, we suspect we would see better outcomes.”
Yet the total number of some spine treatments — e.g., spinal fusion surgery, spinal injections and the prescription of opiates — has skyrocketed in recent years, according to medical researchers.
There are many potential reasons for this spurt in back treatments, including the heavy commercialization and direct consumer marketing of treatments both old and new. It is hard to read a newspaper, watch TV or surf the Internet without seeing a commercial pop up for the latest treatment for low back pain.
Obviously, there is a lack of definitive evidence regarding many popular treatments, which allows them free rein in the marketplace before the risks and benefits can be scientifically studied and documented.
The JAMA study stated that 60% or more of initial back surgeries have successful outcomes. I am pretty good at math, so that means 40% DO NOT! The study’s authors estimated that the 40% equates to 80,000 “failed back surgeries” a year.
The researchers also observed that the surgical success rate drops to 30% after the second surgery, 15% after a third and 5% after a fourth. The authors believed that many patients were under the care of physicians, “who are unfamiliar with the conditions leading to back surgery, the types of back surgery available and the bestapproaches to diagnosis and management.”
The annual medical cost to American businesses because of low back pain was estimated to be $90 billion in 2008. This does not include the cost of related workers' comp or disability benefits, which also are in the billions, nor indirect costs such as lost productivity.
The medical studies have confirmed what I have known and studied for the past 33 years: Much of the money spent on healthcare — approximately one-third — is wasted on medically unnecessary and potentially harmful procedures.
What has changed in the treatment of low back pain since the release of the studies in 2008?
My bet: Not so much.
In fact, some medical researchers have stated the situation has gotten worse, not better, and that they have not been able to keep up with all the latest trends and back treatments available today.