Solution to Rising Cost of Health Care: Bending the Curve Part 2: More Diseases

If you have not read the first part of bending the curve, you should click here to read the introduction before proceeding any further. Anyway, picking up from the Introduction, I can now proceed to discuss the first factor that Fodeman and Book believe to raise the cost of health care: more diseases. According to the previously discussed article from The Wall Street Journal, they wrote "increasing prevalence of disease, whether due to an aging population, unhealthy lifestyle choices, or other factors" as one of the four causes for the rising cost.¹

Natural vs. Artificial

While there is no doubt that rising cost of health care is detrimental to our nation's growth, it can be ironic that nothing else in our society receives as much criticisms for the increase. If we think about the rising cost for a moment, countless goods and services have had significant increases in the cost. Anything from a ticket to a local theatre to tuition fees for colleges no longer costs what it used to be. Furthermore, the baby boom generation needs more and more attention in the health care as those people age. So, to a certain extent, it is a natural phenomenon as well, and we cannot immaturely believe that the health care is the only area in which the cost has risen.

At the same time, there are definitely artificial influences that triggered even more increase in the cost for health care than anywhere else. One critical area is the release of new drugs. In fact, The Wall Street Journal just released an article today analyzing the new drugs approved by Food and Drug Administration (FDA) in 2010. The article stated, "According to the monthly drug-approval reports on the FDA's website, 21 new drugs were approved in 2010, down from 25 in 2009 and 24 in 2008, but higher from a recent low of 18 in 2007."² It is important to note, however, that the total cost involved in the production of drugs does not pertinent to only the year of the approval.

Unlike other industries like automobile or computer where the inspection test can be achieved in a relatively short amount of time, the approval of a pharmaceutical drug can take a very long time, depending on how FDA reacts. For instance, consider Prolia (also known as denosumab), which is produced by Amgen Inc. to treat osteoporosis in postmenopausal women, and approved by FDA on June 2010.³ This drug, however, was essentially rejected by FDA a year earlier, implying unexpected length that the production of a drug can have.⁴

And as we know, these pharmaceutical researches highly depend on funding, which equals enormous amount of money for a very long period of time. Then, even when the drugs are approved, there is a detailed process involving medical insurance companies and physicians to figure out the distribution and sales of the drug. It's far different from seeing the new Lexus release in television and going to the local Lexus dealer to purchase it.

Of course, I am perfectly aware of unexpected situations in other industries, including automobiles as we saw in 2009 to 2010 involving Toyota. Still, while people can choose to abandon a certain car brand and move onto a different one, the analogy fails to work with cancer patients or patients with Parkinson's or Huntington's diseases. These people cannot simply switch to alternate forms of treatment because either there are no other options, or the other options are too expensive and/or not covered by their insurances).

Is There a Solution Then?

Personally, even with the new legislation and attempt to curve the health care cost, there is no way to curtail the rising cost based on the new drugs for existing and nascent diseases. While I do believe that the programs to reduce obesity and steer people away from bad habits like smoking can certainly make the nation healthier, those programs alone would not stop the cost from rising. It is, as I said earlier, a natural phenomenon like the other goods and services in the economy to a certain degree. It is now time to consider the second factor for the possible solution.

¹ Jason Fodeman, M.D., and Robert A. Book, Ph.D. "Bending the Curve: What Really Drives Health Care Spending," The Wall Street Journal, 19 Feb. 2010.

² Jennifer Corbett Dooren, "Drug Approvals Slipped in 2010," The Wall Street Journal, 31 Dec. 2010.

³ Peggy Peck, "FDA Approves Denosumab for Osteoporosis," http://www.medpagetoday.com/Endocrinology/Osteoporosis/20432, 2 Jun. 2010.

⁴ Andrew Pollack, "F.D.A. Says No to an Amgen Bone Drug," The New York Times, 19 Oct. 2009.