Tuesday, October 24, 2006


Cheap surgery for US workers


Dismayed by high surgical costs in the United States, increasing numbers of American patients are packing their bags to have necessary surgery performed in countries such as India, Thailand and Singapore.

"This is not what is sometimes snootily referred to as 'medical tourism,' in which people go abroad for elective plastic surgery," says Mark D. Smith, MD, MBA, president and chief executive officer of the California HealthCare Foundation in Oakland.

Today's "medical refugees," the term Smith uses in an article published in the Oct. 19 issue of The New England Journal of Medicine, are going to foreign countries for lifesaving procedures such as coronary bypass surgery and heart valve replacement, and also life-enhancing procedures such as hip and knee replacement. "People are desperate," Smith tells WebMD. "This illustrates the growing unaffordability of the U.S. health care system, even to people who are by no means indigent."

The report by Smith and his colleague, Arnold Milstein, MD, MPH, documents the case of a self-employed carpenter who couldn't afford private health insurance and would have faced financial ruin if he had surgery in the U.S. It also shows how some insured workers are being steered toward receiving less-expensive procedures outside the U.S.

Indian Hospitals Booming

Vishal Bali, chief executive officer of the Wockhardt Hospitals Group in Mumbai, India, says there has been a 45 percent increase in the number of American patients seeking care at his 10 Indian hospitals during the past two years.

"Cost is a major factor," Bali tells WebMD. Some examples: Wockhardt Hospitals usually charge $6,000-$8,000 for coronary bypass surgery, $6,500 for a joint replacement, and $6,500 for a hip resurfacing, which represent a small fraction of the typical costs at U.S. hospitals.

"Another major factor is what we call 'the Indian advantage,' " Bali says. "At some point, most American patients have been treated by an Indian physician in the United States and they have tremendous faith in Indian clinicians."

Partly because of the influx of foreign patients, not all of them American, Bali plans to open 10 new hospitals in India during the next two to three years.

Safety Concerns May Be Overblown

"Our American patients don't just pack their bags and fly to India," Bali says. "They have multiple conversations with patient coordinators and clinicians, many of whom have been trained in the U.S. and have American board certifications."

All Wockhardt Hospitals are accredited by the international affiliate of the Joint Commission on Accreditation of Healthcare Organizations, the group that accredits U.S. hospitals, Bali says. More than 80 hospitals in India, Thailand, Singapore, China, Saudi Arabia, and other countries have received this accreditation, according to the new report.

"These institutions are reporting gross mortality rates of less than 1 percent," Smith says. "I'm unaware of any evidence that surgery at these institutions is less safe or of lower quality than that in the average American institution, and there's some reason to believe it may be better."
"The downside, however, is that if you are harmed in an Indian hospital, you have less legal recourse than if you are harmed at an American hospital," Smith says.

To compete with less-expensive offshore hospitals, the U.S. hospitals should do more to reduce costs, improve efficiency, and increase quality, Smith says. "Regrettably, I fear that some people's response to the offshore trend may be to moan and groan and try to shut it down or engage in scaremongering about quality."

A Sign of Globalization

"This trend shows that the world is flattening," Smith says. "We're no longer just outsourcing back-office functions such as the reading of X-rays, medical transcription, and billing. Now it's the actual clinical care that can be outsourced."

The report concludes that the trend is a "symptom of, not a solution to" America's affordability crisis. "I'm not suggesting it'll ever be the main way people get surgery," Smith says. "But it certainly is a wake-up call. If the cost of surgery continues to go up, particularly in settings where there's no relationship between cost and quality, this trend will continue."

Bali believes the trend represents a sea change in global health care economics. "This is only the beginning," he says. "This trend is not going to reverse. It's as strong a trend as the outsourcing of information technology because it is advantageous for patients."

Although most of Wockhardt Hospitals' American patients are uninsured, Bali predicts that will change. "Insurance companies are looking at this trend, their own viability, and the need to save money," he says. "They're telling patients that there are international destinations where they can be treated, which may mean paying much lower premiums than they're paying to receive treatment in the U.S."

A Call for Reform

"The need for American citizens to go abroad for care and their willingness to do so represents a crushing indictment of numerous myths about the U.S. health care system that have gained popular currency in recent years," says Peter Budetti, MD, JD, chairman of the department of health administration and policy at the University of Oklahoma Health Sciences Center. Budetti was not involved in the report.

Budetti says the report dispels the myths that "foreign systems of universal coverage are so flawed that people in those countries who can afford to do so flock to the U.S. for care; that our health care is the best in the world; that everyone in the U.S. will get the care they need whether they can afford to pay for it or not; and, most telling, that increased consumer cost-sharing will reduce cosmetic or other nonessential care, not medically necessary care.

"The profound irony of these myths is a sad commentary on the state of our health care coverage and delivery system," Budetti tells WebMD. "The understandable focus in the past decade or so on improving quality and promoting patient safety may have played a role in distracting us from paying sufficient attention to growing problems with access and equity. Perhaps the emerging sight of Middle America traveling thousands of miles for medical care will spur new attention to the need for universal coverage with adequate benefits in this country."

Saturday, October 21, 2006


Pharma cos--govt strike deal--ignoring consumers

ON 2 October, the Indian pharmaceutical industry voluntarily agreed to cap trade margins on
generic drugs at 50 per cent. This will be done by lowering the maximum retail prices on drugs
produced from that date. It had been under pressure from Union chemicals and fertilisers
minister Ram Vilas Paswan to do so.

Two years ago, Paswan found that some companies, including majors like Ranbaxy
Laboratories and Cipla, were offering margins as high as 1,000 per cent to trade to push
medicines not promoted to doctors
. This measure worked as the retailer often switched doctor
-prescribed brands with these drugs (see ‘Price Goes Before A Fall’, BW, 20 September 2004).
Besides, when consumers went to chemists for drugs for common illnesses, they would be sold
the high trade margin (HTM) generics. But this did not benefit the consumers.

With the cap on margins, volumes from HTM generics could be hit. “Retailers may find the
lower margins not enough inducement to substitute a doctor-prescribed drug,” says S. Sawhney, executive vice-president, Dr. Reddy’s, which did not use the HTM route.

In that case, companies earlier making HTM generics will have to find other ways to push them
via pharmacies. Freebies are a possibility. They are common for doctor-promoted brands as
well. But, the companies get margins of 55 per cent or more from doctor-prescribed drugs
compared with 12-15 per cent from HTM generics. So, giving them for the latter may be
unviable. Says a Ranbaxy spokesperson: “Companies will have to keep investing in brand
promotion to keep sales going.”

But are HTM generics worth the trouble? They make up just 10 per cent by value of the
domestic business of large companies. True, companies manage the segment on a shoestring
budget — manufacturing is often outsourced, there is no sales force, and just four or five people
are assigned to run it. But it has caused significant damage to their image as responsible
marketers. Now even maintaining sales will require more effort.

Yet, companies are unwilling to let go of it completely. Ranbaxy and Lupin, two leading players
still want a finger in that pie. Oddly, Cipla, an early mover in generics, says it is winding down
these operations. “We have been at it for nine or ten months,” says joint managing director
Amar Lulla. But its generics sales still hover around Rs 100 crore.

D.G. Shah, an industry veteran and secretary general, Indian Pharmaceutical Alliance, says it is
best for big companies to exit HTM generics. He says any sop to make up for lower trade
margins will take more out of the companies’ pockets than it will bring in. “Where a generic
sold earlier, a prescribed brand may sell just as well,” he adds.

Indeed, it may be better to exit now than 2-3 years ago. The Rs 25,000-crore pharma market is growing at about 12 per cent, double the rate of a couple of years ago, driven by doctor-
prescribed drugs. So, companies may not feel the pinch of getting out of HTM generics.
More important, it appears that the industry has called truce with Paswan. In return for lower retail prices on what makes up 7 per cent of the pharma market, a more benign Paswan will likely not impose more stringent price controls on the entire industry in the proposed new pharma policy as he had threatened he would.

On the whole, Paswan’s medicine may taste a lot less bitter than it looks (for the companies).

Gauri Kamath Businessworld

Tuesday, October 03, 2006


Early detection of Lung Cancer

Lung cancer is the leading cause of cancer death for both men and women in the United States
and around the world, mainly because lung cancers are found in late stages and the best
treatment opportunities already have been missed. In Kentucky, the incidence of lung cancer is
49 percent higher than the national rate. However, a new blood test being developed at the
University of Kentucky could soon change all that.

For the past five years, Drs. Edward A. Hirschowitz and Li Zhong have led a team developing
the blood test, which could potentially help detect lung cancer in early stages in people with high
risk factors for developing the disease.

"Early detection of lung cancer is the key to improving survival," said Zhong, who was the lead
author of a study appearing in the July issue of the Journal of Thoracic Oncology that described
how the test is 90 percent accurate in correctly predicting non-small-cell lung cancer in patients
years before any CT scan can detect it.

Although the researchers have received almost $1.5 million in funding for the development of
the test from various sources, they recently received an additional $175,000 National Institutes of Health grant to transform the blood test into a format that real-world clinicians could easily
use. And with further studies confirming the reliability of the new format, it could become the
first blood test to predict cancer since the prostate specific antigen (PSA) test was introduced in
the 1970s.

The multi-biomarker blood test, which works by identifying the body's own immune response to tumors, would help diagnose lung cancer at the earliest stage in those with high risk factors such as age, smoking and genetic history.

Globally, lung cancer is by far the biggest cancer killer, with 10 million people diagnosed each
year. In the U.S. alone, the number of lung cancer deaths has risen for each of the past five
years to nearly 164,000. The main reason for such a high fatality rate is that 85 percent of lung
cancers are found in stages too advanced for best treatment opportunities, Zhong said. Half of
all patients die within a year of diagnosis.

For the next two years, the UK research team will collaborate with the private biotechnology
company 20/20 GeneSystems to develop the clinical application for the blood test.

"We are hoping in the next several years this test would become available to the public," Zhong

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