The Problem Of Rising Treatment Costs

By Author: Marcus Stalder
Total Articles: 491
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In the good old days, those who could afford insurance for their essential treatment could be reasonably confident the policy would cover the cost of continuing treatment. So, those who were unlucky enough to have diabetes, could pick up their regular supplies of insulin and carry on a "normal" life. For the unlucky who were diagnosed with more serious diseases like cancer, there were no cures. The best people could hope for was a reasonably painless departure. Times have changed. We have seen many medical marvels emerge from the laboratories of Big Pharma. With an early diagnosis, the symptoms that would develop into heart disease can be controlled. Even the treatment for cancer has started to improve. Surgical techniques have been refined and there is a new range of drugs. All this would be wonderful for society were it not for the cost.

Focussing on cancer, there has been a minor revolution as treatment is slowly moving from chemo- and radio-therapy to include the new oral medications. But the cost of these drugs is high. There are high development costs to recover and many are complicated to manufacture. Because these ...
... are still protected by patents, there are no cheaper generics. When you put these three factors together, the price tag for the drugs is high. Given the need to administer these drugs over long periods of time, the burden on insurers has been too much. The companies have been taking "hard" decisions to protect their profitability. They have been redefining the treatments they will approve within the existing plans or imposing increasingly high out-of-pocket payments on policyholders. This has been making treatments unaffordable and creating hard" decisions for cancer patients.

There's a real risk of bankruptcy facing even the middle-income patients with good levels of savings and a high credit score. This is not a disease where, if you spend the money, you will get the cure. When the patient may only be buying a few extra months of life, the question of value-for-money arises. Medical science is wonderful, creating opportunities that did not exist even last year. Marketers "sell" the idea of the product. Cancer patients come to feel they are entitled to have these treatments. Worse, after heart disease, cancer is the biggest cause of death in the US. There are a lot of customers demanding the treatment. In 2010, the total cost of cancer treatment and care was more than $124 billion. This will rise fast as new drugs come on to the market. Except with higher co-payments, people may be forced to choose a quicker death. When you add up travel to and visits with doctors, lost pay, hospital costs and then the prescription drugs, patients and their families find they cannot afford food.

The health insurance industry cannot deal with this problem on its own. This is a political problem for politicians to solve. Which is more important? That the rapid increase in costs be controlled so that the benefits of treatment can spread across the community, or that Big Pharma's profits are protected? Until this question is answered, group and individual health insurance premiums will continue to rise year on year, with more expected from you as out-of-pocket expenses.