Want to fight chronic disease? Stop subsidizing drug companies

By Merrill Goozner

Healthcare systems have made great strides in recent years in learning how to use their medical records and claims data to identify patients at high risk of contracting chronic diseases such as diabetes. Unfortunately, under fee-for-service medicine, doing something with that information is rarely a smart move financially.

Providers are reimbursed for some effective prevention measures. For instance, Medicare is expanding its Diabetes Prevention Program, a proven, low-cost counseling intervention currently run by the YMCA. By reducing obesity in people with elevated blood sugar, the DPP slows or eliminates their progression to full-blown diabetes.

But the income providers derive from counseling is far less than what they get for treating acute-care episodes associated with the poor management of diabetes. The worst effects of persistent high blood sugar—kidney failure, neuropathy and eye failure—are treated with some of the most expensive interventions in medicine: dialysis, amputation and pricey eye drug injections.

The toll is enormous. The CMS estimates that 25% of Medicare beneficiaries who are diabetic consume an additional $42 billion more a year in services than non-diabetic beneficiaries. Given that an estimated 86 million Americans are now pre-diabetic, according to the CDC, that total is expected to grow to an alarming half of the Medicare population by 2050.

To ensure the program’s long-term financial stability, Medicare must find a cost-effective way of reducing the number of people on the glide path to diabetes. This would be especially beneficial to states such as Alabama, Louisiana, Mississippi and West Virginia, which already have obesity rates over 35%.

This requires reaching out to people—many of them uninsured—before they reach 65 and join Medicare. Finalizing the rules for an expanded DPP is just step one. Another strategy is for the government to give grants to health systems to hire nurse practitioners to do community outreach in states at the epicenter of the obesity epidemic.

Their job would include fanning out to diabetics’ and pre-diabetics’ homes to offer dietary advice, counseling and help with medication adherence. Small pilot projects have demonstrated that locally hired, culturally sensitive community outreach workers can be an effective weapon for reducing disease incidence and improving chronic disease management among those who are already sick.

Such a program wouldn’t come cheap. My back-of-the-envelope estimate is that a small army of 20,000 nurses would cost about $3 billion a year. But with reasonable caseloads, they could reach as many as 2 million people a year with monthly visits and make a major dent in the problem.

A National Institutes of Health-funded study released last week provided a road map on how to raise the funds for such a program. A comparative-effectiveness trial of the three eye medicines on the market for diabetes-related macular edema showed each was equally effective in treating the disease.

Previous trials have shown that the three drugs are also equal when it comes to treating diabetic retinopathy and age-related macular degeneration, which is the major cause of sight deterioration and blindness in the elderly. These results aren’t surprising since each of the drugs has the same mechanism of action—they are biologics that inhibit the hormone that stimulates blood vessel formation in the eye.

There is a major difference in cost, however. Two of the drugs—Eylea from Regeneron and Lucentis from Roche—are priced at about $1,850 per monthly shot. The other—the off-label use of the cancer drug Avastin—costs about $60 a shot.

If Medicare were to require that all physicians use Avastin instead of the pricier drugs, it would reduce its costs by over 96%. Medicare paid over $3 billion for the more expensive drugs in 2015.

The healthcare system needs to stop paying exorbitant prices for medicines that have cheaper alternatives. It needs those resources to make the cost-effective, job-creating investments in public health that are the best hope for reversing the chronic disease epidemic in America.

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