NySiai - A Medical MRI Scan Resource

From the New York Times: Co-Payments Soar for Drugs With High Prices

No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis

C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without. Insurers say the new system keeps everyone’s premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year.

My take:

It is understandably tragic for sick individuals to be forced to pay for extremely expensive medications, especially when the medications could potentially save their lives. However, there is someone who ultimately has to pay for these treatments, whether that is an insurance company of the federal government, and it is no longer economically feasible for insurers to assume almost 100% of the cost in covering high-risk individuals. In the long-run, this will decrease prescription-healthcare costs by decreasing the incentives of moral hazard.

It is possible that overall healthcare costs will decrease as well, but it is also possible that the increase in untreated individuals will lead to more hospitalizations and higher healthcare costs. From an economic point of view, we have recently seen how preventive medicine actually costs more in the long-run; so, keeping people alive through extremely-expensive drugs might not be the most cost-effective strategy.

At the risk of sounding heartless, I want to make it clear that I am speaking entirely from an economic standpoint. I, like most other people, would want the sick to be healed and for death to be delayed for all patients; unfortunately, we live in a world dominated by economic realities which prevent all patients from getting all treatments possible. Out of control pharmaceutical usage-costs are part of the reason why healthcare is so expensive in this country, and a step such as increasing coinsurance rates is a good way to start reducing overall costs, in the hopes of putting more money elsewhere. It will be interesting to see what effects these changes will have in future healthcare.