The JAMA has a good article on how Hep-C should be treated from a cost effectiveness and quality of life point of view. *
We simulated 1000 individuals, but present the results normalized to a single HCV-infected person. In the base-case analysis, among patients receiving 8 or 12 weeks of sofosbuvir-ledipasvir treatment, treating all fibrosis stages compared with treating stages F3 and F4 adds 0.73 QALYs and $28 899, for an ICER of $39 475 per QALY gained. Treating at stage F2 (portal fibrosis with rare septa) costs $19 833 per QALY gained vs waiting until stage F3; treating at stage F1 (portal fibrosis without septa), $81 165 per QALY gained compared with waiting until stage F2; and treating at stage F0, $187 065 per QALY gained compared with waiting until stage F1. Results for other regimens show a similar pattern. At base-case drug prices, treating 50% of all eligible US patients with HCV genotype 1 would cost $53 billion. In sensitivity analyses, the ICER for treating all stages vs treating stages F3 and F4 was most sensitive to cohort age, drug costs, utility values in stages F1 and F2, and percentage of patients eligible for 8-week therapy. Except for patients aged 70 years, the ICER remains less than $100 000 per QALY gained. A 46% reduction in cost of sofosbuvir-ledipasvir therapy decreases the ICER for treating at all fibrosis stages by 48%.
Conclusions and Relevance In this simulated model, treating HCV infection at early stages of fibrosis appeared to improve health outcomes and to be cost-effective but incurred substantial aggregate costs. The findings may have implications for health care coverage policies and clinical decision making.
There are a couple of take-aways from this. The first is that the new Hep-C drugs should be made readily available to individuals who don’t have current significant damage to their liver. The second is that we need to find ways to push pricing down hard on these drugs and treatment regimes. The third is that the early intervention prevents a lot of suffering at an efficient price. The fourth is that early intervention to avoid long term costs is a massive risk adjustment problem.
I want to focus on the fourth.
Paying for Hep-C cures for people who are not in crisis and are not crashing is a prime example of a payer paying a lot of money and seeing very little of the gain being captured. It is not cost effective for most insurers to pay $80,000 for gains that will occur when the patient is no longer covered by that insurer.
For Medicare, this is not that big of a deal. Once someone ages into Medicare, they stick in Medicare. Medicare can internalize the costs of treatment of sickly 65 year olds over the next 15 years. Their risk adjustment process for Medicare Advantage will claw back money that would have followed an untreated Hep-C beneficiary while fee for service Medicare will see the claims never hitting the system.
For CHIP, the incidence of Hep-C is so low, it is a rounding error.
Medicaid is a bit messier as people who are Medicaid eligible especially in expansion states will see people go on and off Medicaid and to other insurers multiple times over the recapture time period. However, again risk adjustment payments are made in the background.
People who are on Exchange policies will see risk adjustment payments follow them for the year of the cure but the payment is insufficient to cover the full incremental cost of treatment even if the person stays with the same insurer for several more years. As we discussed earlier this week, the Exchanges are still very churny.
The biggest issue is private market employer sponsored coverage. An individual who gets an $80,000 treatment where the pay-offs aren’t accumulating for several more years is highly likely to be at a different company when those benefits start to accumulate. From a payer point of view, an ESI covered individual is all cost with very low gains. And since ESI is a special snowflake, there is no risk transfer payments to get insurers to maximize F2 treatment rates; instead the basic incentive is to treat the very ill, and minimize the number of doses that are given to the minimally visually ill in the hope that a large number of people from the F-2 cohort leave and are not replaced by other people switching out from other insurers who are doing the same thing. In this case, pushing people with F-2 scores from ESI into Exchange or any other risk adjusted program starts to make sense even if they are still to be covered by the same insurer. The tail cost is far less.
Ideally, there would be a $50 billion bill working its way through Congress which would be sufficient to treat everyone with Hep-C at severely discounted prices, full funding for needle exchange, and several other public health measures so that Hep-C could be effectively minimized to an annoyance problem in the United States with a very small potential infection carrier pool instead of an expensive and recurring problem as the carrier pool is not shrinking all that fast. But that would require spending money to utilize the federal government’s very long shadow to the future and risk bearing capacity to capture long term social benefits.
We can’t have that…..
*Chahal HS, Marseille EA, Tice JA, et al. Cost-effectiveness of Early Treatment of Hepatitis C Virus Genotype 1 by Stage of Liver Fibrosis in a US Treatment-Naive Population.JAMA Intern Med. 2016;176(1):65-73. doi:10.1001/jamainternmed.2015.6011.
Fair Economist
So, basically, the drugs are worth using, but just barely. I guess this shouldn’t be a surprise – it means the companies successfully calculated exactly how much they could extort when they put these drugs on the market.
Benw
I’m tired of adding kludges to a ridiculous system, but now that the ACA keeps people on insurance, what about a law requiring a company that authorizes a procedure like this get a “kickback” from subsequent insurers who are getting the cost benefit of the treatment if the patient switches plans?
But we can’t even get something like that, let alone Richard’s $50B Bill, because when we get Hep-C, we are supposed to have a bake sale and go to the emergency room, the way Paul Ryan pulled himself up by his bootstraps.
Scamp Dog
I think QALY stands for quality adjusted life years, but I’m having trouble with ICER. Incremental Cost something something?
Edit: through the wonders of Wikipedia, I found out it’s Incremental Cost Effectiveness Ratio. Hope this helps others.
mclaren
I have a better idea for treating Hepatitis C.
The president of the united states declares a national health care emergency and nationalizes all big pharma companies by executive order. The NIH then takes over all drug development and makes all current drugs available at cost of production, circa 1/10 of a cent per pill.
Congresswhores and Big Pharma and AMA lobbyists storm the capitol and demand the impeachment of the president and the reversal of the new system. Tens of millions of parents whose kids have been saved by the new affordable medicine wade in against the lobbyists and AMA shills with axe handles and blood floods the street. The president calls out the national guard to restore order and the medical-industrial whores drag their crippled lobbyists to the nearest hospital for treatment.
They are informed that they are guilty of “material support in aid of terrorism” and will be medically treated at Guantanamo Bay.
Problem solved.
Denali
@Mclaren,
I am glad you are thinking outside of the box.
Stillwater
@Fair Economist: Thing is, FE, it’s not extortion for a company to price a drug at marginally below the average cost incurred by a disease under current protocols. It’s actually smart business. The real problem, seems to me, is that the pricing calculus is already distorted by a “market” which has no price discovery or competition. (Docs/hospitals +/- stipulate price which carriers agree to and then pass onto customers as price hikes (whatever) on next year’s premiums.
The problem I have with Richard’s solution (ie., to subsidize the drug price at $50 billion) is that such a solution creates a ratchet effect by which price becomes even further removed from cost and competition, not just for these drugs but for expensive drugs and treatments generally.
Really, single payer is about the only solution to these types of problems, but given the political culture in the US that option doesn’t really exist. I also think the US gummint has demonstrated that it’s functionally incapable of running such a program effectively.
It all gets me pretty damn frustrated, actually.
Roger Moore
@mclaren:
And mclaren can finally get much needed mental health services.
Mike J
@Stillwater:
I wouldn’t look to David Cameron to handle it. Who do you think should handle a single payer system in the US?
Benw
@mclaren: I’m not sure BJ is really the right forum for your healthcare-themed slashfic. But in this case your plan checks out: let’s get it on the president’s docket, stat.
Stillwater
@Mike J: The states. If anyone.
Linnaeus
My father was recently diagnosed with hepatitis C, and the bill they’re quoting him for treatment with the new therapy is about $100,000. He certainly doesn’t have that kind of money.
Richard Mayhew
@Linnaeus: Several questions
a) Is he currently insured?
b) what is his F-Score?
b) Can he sign up for an Exchange plan (I recommend a platinum plan if his F-score is high enough to get one of the Hep-C specialty drugs where he pays a high premium for the year but very low cost-sharing.) If his F-score is low (0 or 1) then sign up for what he can afford to pay every month.
c) Is he medicaid or medicare eligible?
Richard Mayhew
@mclaren: How do you get the votes? And what happens when the President of an opposing party uses this extremely expansive new executive power on things you don’t like?
opiejeanne
This new treatment plan is really interesting, but the price! So few have insurance that will cover it. I heard about it a year ago when we were on a tour of Italy and two of the others were doctors; they told me all about it and wanted to hear about my own treatment, nearly 10 years earlier. A lot has changed; they aren’t using any of the same materials and the treatment is much faster.
I was diagnosed with and treated for Hep C in 2005. It was a new protocol then, 5 fat Ribavirin pills in the morning, another 5 in the evening, and once a week an injection of Interferon. Then throwing up, falling down a lot, and lying in bed a lot, unable to eat or do much except for sleep. After two weeks of this I was dangerously anemic so they added a weekly shot of Procrit, a really nasty thing to inject, hurts like the devil but it steadied me until the next injection of Interferon.
My husband gave me all of the injections for the year I was treated. I was with Kaiser and my bill for the pills and interferon were about $35/mo, but I got a look at what it was costing them and was shocked. The first month total was over $5k, but by the end of that year it had fallen to just under $3k.
I have to thank the heavens for Kaiser because not only was I covered for the ridiculous costs, but they had treated several thousand patients for Hep C and had set up a great program for treatment. They assigned a Nurse Practitioner to check on me every three weeks, ran blood tests every three weeks, and were very supportive.
Even though they had treated thousands by then, I was only the 8th Type 4 they’d run across. Type 4 was at that time the rarest in the US but fairly common in Northern Africa and the Middle East.The docs wanted to know if I’d been traveling there, ever. I’d had it for 20 years, best estimate, and 20 years earlier I’d had 4 pints of blood transfused when I hemorrhaged following surgery. I figure someone who sold blood to the blood bank had shared a needle when he was in Marrakesh, but I wouldn’t curse him because he saved my life when I needed that blood.
I got lots of bad advice and discovered that it just wasn’t to be talked about, as if it were a venereal disease; people just couldn’t wrap their heads around the fact that it was not contagious, tried to insist that it was spread by sexual contact, gossiped about it without understanding it. My husband was tested and he didn’t have it so I didn’t get it from sex, and the CDC has never recorded a single case of sexually transmitted Hep C (but they still think it’s possible).
One idiot told me he got it from mosquito bites. I could see the needle tracks on his arms so I have an idea how he got it. At that time that was the most common way to get it. After that it was dentists and tattoo artists who didn’t clean or change their equipment correctly (autoclave, not bleach or rubbing alcohol).
It was an interesting year.
opiejeanne
@Richard Mayhew: What is an F-score? That’s not terminology that was used in front of me 10 years ago.
Richard Mayhew
@opiejeanne: Fibrosis score (level of scarring/damage on the liver) 0 is minimal 4 is Oh-shit
opiejeanne
@Richard Mayhew: Ok, thanks; I don’t remember, maybe they called it something else like stage 0-4. I never had the needle punch in the liver test (thank God). They just looked at my slightly elevated liver enzymes, ran the blood test 4 times to be very sure, and said, “Let’s treat this!” They could tell from the enzymes that I had some damage but was nowhere near the F-4 stage. I don’t remember but I was probably at 1 or 2.
People on a Hep C board I was reading for info (I read everything I could find) went ape when I told them my dr didn’t bother with that test; “It’s the gold standard!” Yeah, well it turns out that the people barking that at me didn’t actually have Hep C and so were not in fact going to have this very painful procedure, but were there in support of someone else, and I told them they could just shut up since I was going to be treated. I had already noticed that there was a lot of enthusiasm for alternative meds; I realize that desperation probably inspired this before they combined Ribavirin with Interferon, because up until then the cure rate was less than 3% on Interferon alone (before Ribavirin was approved in this country), but I am not a big fan of the woo. I like my medicine to be based on science.
Fair Economist
@opiejeanne:
It’s rampant in the sexually active gay community. Seems like it would have to be transmittable that way, at least by practices in the gay community.
opiejeanne
@Fair Economist: It’s rampant among the sexually active drug using community, some of whom are gay; and yes, at one time there was a lot of drug use among gay men. It’s probably shared needles, but you can get it from something as simple as sharing a toothbrush with someone who has it, if you happen to have a gum inflammation.
Yes, it seems like something that should be transmitted sexually, but like I said, they still don’t have any proof at all. Their site used to have a disclaimer that you were more likely to get it if you were promiscuous than if you only had sex with your infected partner. That makes no sense whatsoever, and it was before they noticed the tattoo parlor and dentist issues. It’s a blood to blood transfer; you usually don’t get that during sex.
Jim
The whole long-term-payoff-short-term-cost aspect of the ACA appears to be taking on a life of its own, and is something I don’t remember being raised early in the law’s existence. The obvious answer is single payer, but we know that’s not going to be taken seriously, at least in what’s left of my lifetime. Stay on top of this one, Richard. The story has legs.
Linnaeus
@Richard Mayhew:
Good questions. I know that he’s insured and he’s on Medicare. I don’t know any more beyond that, but will try to find out.
Hob
Hmm – tried to leave a comment, don’t see it. Richard, am I in moderation?
delk
I guess my $3600.00 a month prescription bill is cheap!
Ruckus
@Stillwater:
The states? The ones who would not accept medicaid? It wouldn’t be single payer if there were 50 payers. It would be a fucking jumbled mess. The government runs SS and Medicare and the VA pretty well, given the funding that congress allows. The states? I live in one of the most liberal states, CA and I would trust them to run a system well but they wouldn’t have the power of say, the VA, which is as I understand it the largest medical provider in the world. Single payer would be bigger, and therefore have better buying power and control than 50 separate operational units would.
The states? Alabama? Mississippi? Florida? You want them to be in charge of your health?
Dave
@Ruckus: Well, sure, Mississippi and Alabama might make a hash of things, but I’m sure we could trust a bluish state like Michigan to do a bang up job of running single-payer!
farmbellpsu
Richard, are you going to be participating in the CMS Risk Adjustment conference?
Richard Mayhew
@farmbellpsu: Unfortunately no, I am not officially on the Exchange team at my office, so no need for me to sit in on that set of fun meetings