medical costs

http://economistsview.typepad.com/economistsview/2009/06/are-advances-in-technology-the-source-of-rising-medical-costs.html#more

This link and its comments give some good information on medical costs that most people are not aware of.

Eg.:

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Bruce Webb says...

"US employers who offer health insurance coverage could see a 9% cost increase between 2009 and 2010, and their workers may face an even larger increase."

A 9% increase in premiums does not mean that medical care costs increased by 9%. It may instead simply be a reflection of the hit to the insurance company investment portfolios.

After the tech crash of the late 1990s the insurance premiums for building contractors jumped dramatically, something I saw first hand from my perch at the permit counter in the Building Department, some of the smaller builders (guys who build one or two houses a year and have their wives do the bookkeeping) were forced to the wall. And in reading the newspapers it seems that medical malpractice insurance was jumping at the same time. Even though there didn't seem to be any reporting of a sudden boost in claims. Nope instead insurance companies were rebuilding reserves that had been smacked by the stock market meltdown on the backs of builders and doctors (and no doubt other categories) premiums.

I don't know exactly how you would track real increases in medical costs generally, but if there was ever a case where correlation does not equal causation it would be in the cost of private health insurance.

(A point only reinforced by the recent Congressional testimony that insurance company outlays on actual medical care were known as 'medical-loss' costs.)

Posted by: Bruce Webb | Link to comment | Jun 27, 2009 at 10:51 AM

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http://www.nytimes.com/2004/09/06/books/06masl.html

September 6, 2004

Indicting the Drug Industry's Practices
By JANET MASLIN

THE TRUTH ABOUT THE DRUG COMPANIES
How They Deceive Us and What to Do About It
By Marcia Angell, M.D.

Dr. Marcia Angell is a former editor in chief of The New England Journal of Medicine and spent two decades on the staff of that publication....

Arguing that in 1980 drug manufacturing changed from a good business into "a stupendous one," thanks to changes in government regulations. She adds, "Of the many events that contributed to their sudden great and good fortune, none had to do with the quality of the drugs the companies were selling."

In the past, drug discoveries made through government research remained in the public domain. Beginning in 1980 those breakthroughs could be patented, even if their research was sponsored by the National Institutes of Health. As a consequence, Dr. Angell says, patent shenanigans have reshaped the drug business, as have the recent government regulations that expedite direct-to-consumer drug advertising. "Once upon a time, drug companies promoted drugs to treat diseases," Dr. Angell writes. "Now it is often the opposite. They promote diseases to fit their drugs."

Consider the consumer who exclaims, in Dr. Angell's words, "Omigosh, this Clarinex ad makes me realize I have hay fever!" According to her book, this individual is being snookered in several ways. First of all, there is the drug itself: she calls Schering-Plough's Clarinex a "me too" variant of the same company's popular allergy drug Claritin. But Claritin's patent expired in 2002, so the new version has been heavily marketed.

Dr. Angell maintains that while Claritin was approved as a hay fever remedy, Clarinex is an improvement only because it has been approved for the treatment of both indoor and outdoor allergies. "It was approved for the additional use only because the company decided to test it for that use," she says.

And why all the advertising? "If prescription drugs are so good, why do they need to be pushed so hard?" she asks, citing Nexium, Lipitor and Paxil as other me-too products with whopping ad campaigns. As for Nexium, the new purple heartburn pill meant to replace Prilosec (which went off patent in 2001), Dr. Angell proposes a "big bang theory of Mom's cooking." She invites the reader to imagine a single, protean meal that has spun off "a seemingly inexhaustible supply of leftovers" in the form of renamed and repackaged versions of established drugs. "It wouldn't have done to call it 'Half-o'-Prilosec,' but that is what it was," she says about Nexium.

"The big drug companies are competing not so much to find new drugs but for the limited number of drugs to license," she argues....

Posted by: anne | Link to comment | Jun 27, 2009 at 10:44 AM