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Lowering the Cost of Health Care

Wednesday, February 15, 2012
Merrill Goozner, senior correspondent for The Fiscal Times, recently spoke to a group of health care industry professionals and students at Marymount University’s Reston Center. The author of The $800 Million Pill: The Truth behind the Cost of New Drugs provided insights on the cost of health care in the United States and how it might be reduced.

He pointed out that the United States spends more on health care than any other country. Even with spending top dollar, Americans have a lower life expectancy than a number of countries that spend considerably less. The fact that health care costs are too high and continuing to grow is something that everyone can agree upon. But there the agreement also ends.

Goozner sees part of the problem in how we define value in health care. He gave an example of how the drug industry determines value. “If a patient were compliant [taking a prescribed drug], they show that more would be saved in other health care costs,” he explained, adding, “But are decreases in other costs the only valid measure? Shouldn’t it also be measured against other medications or approaches to solving a medical problem to see which one works better and which one is most cost-effective?”

He pointed out that cost-effectiveness analysis is not used in the U.S., and Medicare is prohibited by law from considering cost in making payment determinations. The cost-effectiveness studies that are done are mostly funded by industry. Goozner emphasized, “A lot of studies are not done because they don’t want to know the answer.” He added, “Also, the instinct in the marketplace is to say that if it’s brand new, it must be better.”

“I’m a big supporter of prevention,” Goozner stated. “Some say that prevention doesn’t save money. Of course not; every intervention costs money,” he acknowledged. Quality of life -- or “Quality-adjusted life years” (QALY) -- is what’s at issue. We should be interested in comparing the cost for achieving a QALY for two treatments. In the 1990s, NIH funded a three-year study on diabetes prevention, comparing intensive counseling on how to improve diet and lifestyle to giving Metformin, a drug for lowering blood sugar. From a comparative cost-effective perspective, the intensive counseling was far more cost-effective – reducing the odds of developing diabetes by 58%, while Metformin reduced the odds by only 31%.

Clearly what is an effective treatment for one person may not be for another, but cost-effectiveness research can provide useful information for both patients and doctors – leading to more informed decisions.

Goozner suggests that we look at “ways to reward improving population health, not just find lower-cost ways for treating sickness.”
Merrill Goozner’s presentation was the first in a “Thought Leaders” speaker series offered by Marymount University’s Reston Center.

MU’s Reston Center is a student-centered learning environment, designed to meet the needs of adult learners through undergraduate, graduate, and certificate programs. The Center also offers customized educational partnerships to area organizations.

PHOTO 1 – Merrill Goozner, senior correspondent for The Fiscal Times, speaking at Marymount University’s Reston Center
PHOTO 2 – (left to right) Rachel Cathey, a senior in Marymount’s Accelerated Bachelor of Science in Nursing program, talks with Merrill Goozner and Dev Raheja, a healthcare safety and reliability consultant