When the (registration required) FDA approves new medical devices for specific conditions, insurers are almost always required to cover them. Even if the approval makes no sense, the device fails in clinical trials, and there is no conclusive evidence of its efficacy.
The cost per case for the device and surgery is about $25,000; over 500 implants have been performed to date (the majority during the so-called clinical study).
Dr. Daniel G. Schultz, director of the Center for Devices and Radiological Health, approved an electrical stimulator for the treatment of depression, despite the unanimous opinion of the Center’s clinical staff that the device had no discernable impact. A Senate committee investigating the FDA could find
“no previous instance in which the director of the center had approved a device in the face of unanimous opposition from staff scientists and administrators beneath him. “(NYTimes)
In fact, in a study conducted by the device’s manufacturer, the device utterly failed to produce any measurable impact on depression in the study group.
Now that the device is approved for treatment of depression, expect manufacturer Cyberonics to put on a full-court press to get doctors to prescribe it. This over the concerns expressed on the floor of the Senate:
“I am greatly concerned the FDA standard for approval may not have been met here, and if that’s the case it raises further difficult questions about whether Medicare or Medicaid dollars should be used to pay for this device now,” Grassley, an Iowa Republican, said during a speech on the Senate floor.” (Reuters)
What does this mean for you?
More of your dollars spent on highly questionable and really expensive technology.

I’ve been avoiding posting on this because there are so many smart people who know a lot more than I about epidemiology, flu transmission, viral mutation, and public health. Thank goodness for that.
But, a post by Revere at EffectMeasure scared me silly.
If this disease mutates (and reports indicate it is only two mutations away from becoming transmissable from human to human) and travels to the US (which it is sure to do) we are going to face not only a public health crisis, but an insurance crisis as well.
Who’s paying for the tamiflu, intensive care, respirators, and hospital charges? Medicare, Medicaid (taxpayers), insurance companies and self-insured employers. The industry has done an excellent job of managing medical loss ratios by negotiating with providers and increasing prices. Many health plans pride themselves on this, and so they should.
What we haven’t done, nor do we have any experience in, is planning for a pandemic. Here’s a few numbers that may do to you what Revere did to me.
If the bird flu is similar to the relatively mild flu pandemic of 1968, the WHO prediction is for between 2-7 million deaths worldwide, and millions more infected. That may be optimistic.
If it is similar to the 1918 flu, projections are for 150 MILLION deaths, and hundreds of millions more infected. Not to mention a tremendous impact on the world economy, transportation, trade,
The US has about 5% of the world population. Extrapolating from the higher number, we could see 7.5 million deaths and tens of millions sickened. Let’s say that number is way too high, as we have an excellent health care infrastructure, lots of money, and lots of docs and pretty good public health. All those positives may reduce the impact by, say, 90%. So, we are left with 750,000 Americans dying and millions more sick.
What does this mean for you?
I don’t see how the US health insurance industry can pay for this.

Cost is preventing cancer patients in both the US and Britain from receiving certain cancer drugs. There are striking parallels between yesterday’s post on the price of cancer drug Avastin and its impact on patients and an article in today’s NYTimes on the decision by Britian’s National Health Service to deny Herceptin (free subscription required) to women with early stage breast cancer.
In both cases, the decision by payers to not cover the full cost of the drugs is based in part on a lack of clinical evidence. Only in part. The other basis for the decision is clearly cost related. Britian’s NHS is under very heavy pressure to keep costs under control. This pressure has come up against patient advocacy groups and physicians who want to be able to treat as they see fit. Eerily similar to the situation on this side of the Atlantic, where patients find themselves unable to afford drugs that their physicians think will help them battle cancer.
The tendency is to personalize the problem by focusing on one patient. While there are individually painful stories, they take away from a very important, albeit painful, discussion that both Britain and the US must have about cost, benefits, and opportunity cost.
The patient profiled in the Times lives in an area administered by the Swindon Primary Care Trust. The Trust is looking at the cost of paying for Herceptin for 20 potential recipients of the drug, balanced against the needs of all 200,000 residents they have to provide care for under a finite budget. There are 20 women with early stage breast cancer that theoretically might benefit from Herceptin; at a cost of $40,000 each, that’s $8 million annually.
For all those that decry the British health system’s inherent rationing of health care, I would ask if it is “better” to spend that $8 million on a drug without proven efficacy for that specific condition for 20 patients, or use it to provide pre-natal care to prevent low birth weight babies; fund an anti-smoking program to reduce future cancers; or perhaps buy vaccines and treatments for the bird flu that is just off Britain’s shores.
Anyone for playing God?