Time for Congress to Look at the Real Drivers of Health Costs

No one should have to put a price tag on their life.

In 2014, I was diagnosed with a rare but aggressive form of leukemia called acute myeloid leukemia. According to the New England Journal of Medicine, in people over 60, the survival rate is only 5 to 15 percent, and I am over 60. Besides that, because I had a rare and complicated case, my treatment cost a lot more than average.

How much is a lot more than average? My treatment cost over four million dollars, that’s how much. Four million dollars!

You might think we’re talking about pharmaceuticals because of all the finger pointing, but we’re not. The costs went up because I needed not one, but two stem cell transplants. The first led to a short-lived remission. The next required an experimental umbilical-cord blood transfusion from a donor who was a perfect match to me. Finding one donor is difficult enough, and in my case two cord blood donors were required to get enough stem cells. That meant looking as far as Singapore for a second match, and even then, one of the donors carried an infection that could have been fatal in my case. So you see how the costs began adding up.

Still, patients and politicians blame pharmaceuticals. I spent my career as a high-level executive with multinational corporations working with medical devices, so I know when business statistics are flawed and incomplete. Case in point, congressional committees in both the House and Senate heard testimony that “drugs don’t work if people can’t afford them.”

Of course not.

But let’s look at actual pricing trends and just what are the drivers of this unaffordability. In 2015 prescription drug spending did increase nearly 9 percent. But that was an anomaly driven in part by new drugs to cure — yes, cure — hepatitis C. A year later, in 2016, as the pool of hep C patients shrunk due to treatment and with introduction of competitive medications, prescription drug spending grew only 1.3 percent,  which was more in line with the growth rates between 2010 and 2013. Furthermore, today about 90 percent of all U.S. drug prescriptions are filled using generic drugs with an average out-of-pocket cost of just $8 each.

True, some new “specialty drugs,” that provide dramatic new treatments for small groups of patients make headlines and raise eyebrows, but where do we draw the line? . At a near million-dollar price tag expected for a new gene therapy for a rare form of blindness? At a $475,000 treatment for the childhood leukemia called ALL? This is the first use of an exciting new approach to cancer, CAR-T cells — reprogramming the patient’s own cells to fight the cancer.

So we ask, when is health spending too much and who decides?

As a business executive, I say let’s start by digging a little deeper at the bottom line. In testing, that new $475,000 drug for ALL left more than 80 percent of eligible patients cancer-free within months, and that may offset $5 million in infusions, hospital stays and other types of care over 10 years. Furthermore, it requires huge investments in time and money with substantial risk of failures to develop treatments where none existed before.

That doesn’t mean we should just passively accept whatever health care happens to cost. There are cost drivers that do not contribute to our health or to patient care – unlike those gene therapies for blindness, the new CAR-T cells for cancer, or experimental treatments like my transplants. I refer to the complex web of insurance practices, hospital billing, legal oversight and government regulation that add billions to our health care costs. According to a 2010 workshop from the National Institutes of Health, needless billing bureaucracy costs more than $300 billion, a figure that represents “the time, costs, and personnel necessary to process billing and insurance-related activities.” It’s not their services I’m complaining about, it’s getting to their services with all of the requirements for payment validations, claims processing and treatment pre-approvals that change from one insurance provider and benefits manager to the next. That creates a nightmare of paperwork for professionals who should be spending their time caring for patients.

Yes, we support Medicare proposals to base copayments on the actual price paid by insurance companies, not on the full retail price that don’t reflect discounts insurance pays. We support HR 1409 in the house to block the insurance practice that charges higher copays for drugs taken by mouth compared to better coverage for medicines delivered by the doctor or in a clinic. But it’s just good business to clear up the clutter and the inequities before we start trying to save money by cutting corners or accepting arbitrary standards for so-called “value-based pricing.”

In my case, four years and four million dollars later, I’m alive, I’m active, and I just participated in a webinar for the advocacy/educational organization called Patient Power. I took part to help fellow AML patients and their families understand how to participate in their own care to get the best available treatment for their case. I am using my newfound energy as an opportunity to create the NeuVisium Foundation – building a comprehensive, patient-centric system that will provide essential information to the patient and caregiver on a day-to-day basis, an interactive process to handle emergencies, and a quick guide to needed precautions that are necessary for survival. Because, bottom line, health care is not always about finding a bargain.


Kuldip K. Ahluwalia is an AML Patient Advocate and corporate health care veteran who has spent the past four years experiencing the industry from a patient’s perspective, and whose background includes clinical research and developing and commercializing digital health and medical technology.

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