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Brainstorm Health: Hospital Bills, Novartis Virtual Trials, FDA Chief on Drug Prices

Hello Dailies. Happy Wednesday. STAT News has a good op-ed today from an ER doc who let her health insurance lapse between jobs. Then she got pneumonia.

The story—a quick one—details what happens next: a $10,282.34 bill for emergency treatment after she put off care for too long.

“Although I was previously aware of the many social circumstances affecting my patients’ access to care and the circumstances contributing to their overall health,” writes Jessica K. Willett, a California physician, “I’m now able to relate to it on a more personal level. Now when I ask the question, ‘Why did you wait so long to see a doctor?’ I can also say, ‘Yes, I absolutely understand why.’”

But as satisfying as the commentary is from a “Hey, now I get it,” point of view, it also raises another oft-raised issue: Why was that ER bill $10,282.34 to begin with?”

Among the detailed charges are a $30.13 expense for an “Ibuprofen 600 MG tablet” and a “routine venipuncture” (translation: blood draw) for $353.00. One of the more astounding charges is for a “Hydrate IV Infusion, Add-On” (an extra bag of saline solution), for which the hospital billed a ridiculous $342.00. For comparison, in the state of California, Medicare pays between $16 and $20 for the same exact thing (see billing code: 96361).

Hospitals often defend such outrageous charges with the equally outrageous argument that traditional payers (insurers and Medicare) don’t actually pay those prices. But some people do get stuck paying them. And tellingly, even insurers are fighting back.

This week, UnitedHealth Group, the country’s biggest health insurer, said it would review and, if necessary, adjust “facility claims for the most severe and costly ED visits for patients enrolled in the company’s commercial and Medicare Advantage plans,” the trade publication Modern Healthcare reported today. This follows the far more severe (and widely discussed) move by another insurer, Anthem, to deny claims (in certain states) for emergency room care that are later deemed not to be emergencies. That radical policy shift has been sharply criticized by many, including by physicians and some lawmakers.

Still, it’s not hard to see why insurers don’t feel somewhat aggrieved by such routinely sky-high medical bills, just as the rest of us do. No, the answer isn’t to deny care—or to adopt policies that discourage it.

But it also doesn’t make sense to talk about our runaway national healthcare bill…without mentioning the bill itself.

Clifton Leaf, Editor in Chief, FORTUNE
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

Novartis is taking the clinical trial digital. Swiss drug giant Novartis is partnering with California-based Science 37 in an effort to expand clinical study participation (while lowering the costs of such studies) through “virtual” trials. The idea here is that Science 37’s platform, which can reduce the need for patients to schlep to clinics and hospitals via telemedicine and apps, may both boost the number of people who want to access clinical trials while cutting the cost of conducting them. (Reuters)

INDICATIONS

FDA commish takes aim at health industry over drug pricing. Food and Drug Administration Commissioner Scott Gottlieb decried what he called a “Kabuki” drug pricing construct between pharma companies, pharmacy benefits managers, insurers, and others during a health insurance conference. Gottlieb suggested that this opaque structure ultimately leads to higher costs by thwarting competition, and argued for broader adoption of “biosimilar” drugs to bring down drug prices. (Reuters)

THE BIG PICTURE

Study: Opioids no better that common painkillers. A new government-funded study suggests that addictive opioid painkillers may not be better than other, non-opioid kinds of drugs for treating chronic back pain and arthritis. In fact, opioid medications were found to be somewhat worse by certain metrics, such as controlling pain intensity, according to the research published in the journal JAMA. (Fortune)

UnitedHealthcare to pass drug rebate savings onto some patients. The nation’s largest health insurer made a striking announcement Tuesday: UnitedHealthcare will begin passing on its drug rebates savings to a slice of its plan holders. These rebates, struck between drug makers, pharmacy benefits managers, insurance companies, employers, and others, are largely negotiated in the background; but they don’t necessarily trickle down to patients and consumers themselves. That design can hit Americans with high deductibles who rely on high-cost drugs especially hard. (Washington Post)

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Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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