The price of preventing preterm labor is about to go through the roof. A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000. That's because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved. But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena. The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get. None of them anticipated the dramatic price hike, though -- especially since most of the cost for development and research was shouldered by others in the past.
The Food and Drug Administration approved the first new drug for lupus in more than 50 years, a major milestone in the effort to mine data from the human genome to discover and develop new medicines. The drug, called Benlysta, will be co-marketed by Human Genome Sciences Inc., a Rockville, MD, company that has been on a roller-coaster journey for nearly two decades to develop the medicine, and GlaxoSmithKline PLC, whose investment in the biotech company was one of the first big bets a major pharmaceutical company placed on genomic research. Analysts expect the drug to reach blockbuster status, with sales eventually topping $1 billion a year.
It was supposed to be a routine hospital stay. Geraldine Oswald had developed an infection after breaking her shoulder last year, and she was hospitalized in November at Massachusetts General for treatment. But in a tragic mix-up, hospital staff gave the 76-year-old woman far too much of a blood thinning drug, making it impossible for her blood to clot when she began bleeding internally. Hospital officials later acknowledged the mistake and said it could have been prevented. According to her death certificate, Oswald hemorrhaged for 12 hours while in the hospital's care before she died. Family members said they plan to file a lawsuit in Suffolk Superior Court today naming five doctors, two nurses, and Massachusetts General Hospital in the wrongful death of Oswald, saying the Revere woman was supposed to be treated for a common infection, but instead, a nurse gave her a dose of the blood thinner, called Lepirudin, that was 30 times too high.
Watching the blood drive known as the Ultimate Fighting Championship one evening in 2007, Las Vegas plastic surgeon Frank Stile, MD, sat talking to his guests about the unfortunate nature of cuts. Eventually, the question was posed: Wouldn't it be something if he could take out the raw hamburger — OK, scar tissue — that often predisposes skin to lacerations and replace it with something that would have a fighter looking less like a Fangoria cover? His guests agreed wholeheartedly. One of them happened to be MMA, or mixed martial arts, fighter Nick Diaz, who had just suffered his first professional loss by stoppage in a fight against K.J. Noons. With the sharp hands of an athlete dabbling in pro boxing, Noons had sliced Diaz's face to ribbons. It was skill, but it was also the result of dozens of improperly sutured cuts Diaz had previously suffered in his fighting life. They had only healed superficially, leaving behind ground chuck underneath. Stile had a suggestion: What if he dug out the gunk and replaced it with the "fresh" tissue of a cadaver? Sure, the procedure had been used for cosmetic purposes, but never for athletic performance.
Adventist Health System in Florida said it will not appeal the decision that voided its merger with Bert Fish Medical Center -- clearing the way for the New Smyrna Beach, FL hospital's return to public control. Circuit Judge Richard Graham ruled last month that the Fish-Adventist merger resulting from meetings illegally closed to the public was not validated in a subsequent "cure" process. Graham found that a redo of the merger resulting in Adventist Health being chosen again in public meetings was not sufficiently independent of the closed meetings that violated the state's Sunshine Law. Whether the seven-member Southeast Volusia Hospital District board will challenge Graham's ruling remained an open question Tuesday. None of the board members could be reached for comment. In a written statement, Adventist Health officials said although they disagree with the ruling, they were giving up the fight for the good of the hospital.
The American Hospital Association has issued a second report to counter claims that acute care prices are rising as a direct result of hospital consolidations, which enhance providers' bargaining clout with payers.
Rather, the AHA says, hospital prices "are directly related to the costs of providing services to patients and their communities, including wages, capital investment, and the level and specialization of services."
Most important, the latest report "should dispel un- or poorly supported claims that differences in hospital prices are attributable automatically to market power," the group said. The report also shows a link between hospitals' efforts to improve care coordination, reduce costs, and lower prices.
Titled "Assessment of Cost Trends and Price Differences for U.S. Hospitals," the report was prepared in collaboration with economists Margaret Guerin-Calvert and Guillermo Israilevich with Compass Lexecon.
Among the report's findings:
• Hospital costs represent 30% of the nation's healthcare expenditures.
• More than half of hospital costs are due to the cost of labor.
• Labor costs grew by between 5 to 8% a year from 2002 to 2009.
• Medicare patients represent 60% of all hospital admissions, and Medicare has been paying a declining percentage of the cost of care, from 99% in 2000 to 90.1% in 2009. Medicaid paid even less, 94% in 2000 and 89% in 2009.
• Hospital prices are directly related to such costs as those associated with labor and capital and the level and type of care received by the patients treated by the hospital.
• Up to 72% of the differences in non-Medicare prices among hospitals are explained by case mix, regional costs, hospital investments in capital and other improvements, the type of hospital, and other tangible factors.
• The remaining 28% of price differences are linked to the cost of providing higher quality care, including the cost of various state regulatory compliance, various hospital cost-containment strategies or errors and data inconsistencies. "There is no reason to believe that the remaining differences are due to market power."
The two AHA reports refute two studies published last year that concluded higher prices charged by some hospitals are due – to a significant extent – to hospital consolidations and mergers that strengthened hospitals' power to negotiate higher prices with private health plans.
One of the studies, published last year in the journal Health Affairs, was entitled, "Unchecked Provider Clout In California Foreshadows Challenges To Health Reform.
It said, in part, that in California, faced with declining payment rates, hospitals "have implemented various strategies that have strengthened their leverage in negotiating prices with private health plans. When negotiating together, hospitals and physicians enhance their already significant bargaining clout. California's experience is a cautionary tale of national health reform: It suggests that proposals to promote integrated care through models such as accountable care organizations (ACOs) could lead to higher rates for private payers."
The California report suggested that policymakers need to consider price caps and all-payer rate setting, "because antitrust policy has proved ineffective in curbing most provider strategies that capitalize on providers' market power to win higher payments."
The other report,fromthe Office of the Massachusetts Attorney General, concluded in part that "Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers."
It also found that price increases, not increases in utilization, caused most increases in healthcare costs in that state and higher priced hospitals "are gaining market share at the expense of lower priced hospitals, which are losing volume."
The latest AHA report details the rise in hospital costs due to physician services, home healthcare and pharmaceutical costs, but says labor costs, including salaries and benefits for doctors, nurses, and technicians and other numerous personnel account for a large proportion.