Tracy Pike was a 45-year-old father of three when he was diagnosed with Stage-4 stomach cancer. Chemotherapy reduced the size of his tumor, but his doctor recommended an aggressive treatment, combining surgery and intensive chemotherapy at the MD Anderson Cancer Center. His health insurer later denied the treatment:
The insurer ruled Pike’s treatment was “not medically necessary” because it was “experimental, investigational and unproven,” documents show.
Cancer experts counter that the therapy, which has been around for more than 20 years, is not experimental. Rather, they claim it’s a mainstream cancer treatment. Attempts to get Pike’s health insurer to approve the treatment were unsuccessful and Tracy Pike later died. There are too many anecdotes like Pike’s.
An NBC News investigation found that a cancer diagnosis, already a crushing blow to patients, is often compounded by insurance company denials of treatments and screenings recommended by a patient’s physician.Cancer patients and their families said that protracted peer review processes, where insurers require a physician to discuss a patient’s case with a doctor paid by the insurance company, are harrowing. The insurance company doctor, not the patient’s personal physician, rules yes or no on a procedure. Prescribing doctors characterize these processes as interference.A study published last year in JAMA Network, a publication of the Journal of the American Medical Association, found that 22% of cancer patients did not receive the care their doctors prescribed because of authorization delays or outright denials.
These statistics raise some serious issues that go beyond health insurer denials. Cancer treatment is a huge money machine for hospitals, which have gone on an acquisition binge buying oncology practices lately. As I’ve written about before, cancer is not one disease that can be treated by any given cancer specialist. Large cancer centers have entire teams of cancer specialists, each of which often specializes in one type of cancer and even one subtype of cancer. In addition, cancer drugs are costly. Danyelza (neuroblastoma) and Kimmtrak (uveal melanoma) costs $1.2 million and $1.1 million, respectively. The average annual cost of a new cancer drug is more than $250,000. Nearly half (44%) of new cancer drugs are priced at more than $200,000. Numerous cancer drugs cost $70,000 to $120,000 a year. Insurance companies catch flack for delaying or denying cancer treatments (and many other treatments) while hospitals and drugmakers largely escape criticism for outlandishly expensive therapies with marginal benefits.
One recent analysis found that new cancer drugs only extend life by roughly three months. A back-of-the-envelope calculation suggests the cost of those three months can be anywhere from $25,000 a month, to $80,000 a month just in drugs alone. I’ve often heard it said that when caught early cancer is easy to kill. If caught late, it’s almost impossible to kill. An important question is: how much money should insurers have to spend on marginal care that’s only likely to extend life by one, two or three months?
One argument goes that health plans should pay for hyper expensive oncology drugs that barely extend life because technological advances usually come in small incremental changes. One way of looking at it: if we aren’t willing to pay $1,000 a day (or $10,000 a day) to extend life by 100 days we will never be able to extend life by 1,000 days or 10,000 days. Another way of looking at it is that if we aren’t willing buy General Motor’s overpriced lemons, they won’t make good cars later on. Perhaps a more realistic approach would be something in between these two arguments.
I’m just guessing, but perhaps insurance companies would not play hardball if the costs were not so high, and the likelihood of success often low. It’s easy to blame stingy health insurers, but don’t forget to also heap some blame on price-gouging hospitals and drugmakers for the dilemma we currently find ourselves.
Terrific article, thanks for posting.
I just saw the article on a website called Feedspot.
Some huge issues here, let me make some small comments:
1. On the issue of bone marrow tranplants some years ago, the insurers were proved correct on the ineffectiveness of the treatment.
They are still hated for saying no, but so be it.
2. Some nations will not pay a super-high price for drugs that are only proven to extend life a relatively short time. We should do the same.
3. One of the stupid moves in the ACA was to mandate that all insurance policies have no lifetime limit. Yes, that does keep a tiny number of cancer patients alive. But it causes higher premiums to millions who do not have cancer.
When the ACA was passed I complained about the ban on lifetime caps to some insurance brokers I knew. They were not concerned, claiming it was very rare for an enrollee to exceed their lifetime cap of $1M or $2M. I told them medical bills of $1M, $2M or higher would become increasingly common now that there’s a market for them. That’s why we have drugs that cost $1M or more.