Wellpoint Peddles False Claims About the Value of Cancer Care

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  • 06/14/2013
Here's the standard HMO excuse for rationing access to new cancer medicines.    

“The overarching issue that brings us to the AVBCC Annual Conference is that rising healthcare costs are unsustainable,” said Jennifer Malin, MD, PhD, Medical Director of Oncology at WellPoint, Inc, who spoke at the Third Annual Conference of the Association for Value-Based Cancer Care from the perspective of managed markets.

“In 5 years, premiums and out-of-pocket costs for a family are projected to equal half the median household income,” she noted. “Our challenge is to come to terms with this and continue to innovate in ways that ensure patients have high-quality care.”

This is pure hyperbole designed to set up your straw man argument in favor of rationing access new cancer drugs and forcing patients to pay out of pocket for such breakthroughs including oral therapies.

We've heard the alarms about rising health care costs being unsustainable for decades.  Here's a quote that may sound familar:

"If you put technology costs and wage costs together, the inflation rate will be 5 1/2 percent to 6 percent a year in real terms. Population growth will add to health care costs by 1 1/2 percent to 4 percent a year in excess of G.N.P.

With technology, even when something is cheaper we will be using it more. Wages are also increasing. This problem is dramatically illustrated by the shortages of nurses and lab technicians. Wages are going up, and we will have to pay people more to maintain the current level of quality. I am sceptical about anyone bringing down costs."

That was from the NY Times.  It was written in 1988. 


There was also a president who summoned a joint session of Congress to talk about massive crisis in health care spending.  That was Nixon in 1970.

In fact, over  the past 20 years health care costs in the US have increased more slowly than they have in many Western countries

Further, out of pocket costs for families have actually declined in the past decade except for the sickest patients with cancer who are forced to pay half the cost of oral therapies by companies such as Wellpoint.    Here's a WashPo article making just that point.


As for premiums, well,  I am sure the fact that premiums increase faster than health care spending per capita is something Dr. Malin  could explain.  Rather, after raising false alarms and making inaccurate statements about the health care cost 'problem' she then pivots and seek to pin the blame on the cost of cancer drugs.

Here are the facts:

Spending on all cancer care has been about 5 percent of total health care spending each year for the past decade.  

Cancer drugs are about 2 percent of total health care spending and about 23 percent of all outpatient drug spending.  That's about what is spent on other chronic diseases.  And by definition, most tumors are chronic conditions. 

As for new cancer medicines introduced since 2000,  they make up a little over 1 percent of all health care spending.  In the meantime, I shouldn't have to remind you that their use corresponds with the faster decline in cancer death rates in history.  Since 1990, the number of cancer survivors has doubled and the 48 million additional life years of cancer patients has generated nearly $4.7 trillion in income.   If we didn't add a new medicine since 1990, it wouldn't save a dime.  Indeed,  unless health plans are in the business of euthanizing cancer patients, it would have to hospitalize individuals.  Given that the average length of stay and the number of hospitalizations for cancer has declined since 1990,  I estimate that treating people with tools introduced before then would cost us an additional $200 billion.  

Which leads me to her claim that doctors are only  3 percent of spending on cancer care and that it reflects a problem.  Hospitals and doctors are the biggest contributors to health care.  A dollar of spending on new medicines, particularly cancer therapies, reduce spending on other services by about $7.   Even the CBO, which is reluctant to claim that increasing spending on one service can save money, has said that new spending reduces health care costs.   Which explains why as the Medicare prescription drug benefit was introduced, Medicare spending rates began to slow. 

I won't challenge her claim about oncology treatments making up about 40 percent of the cost.  Indeed,  I see that as a sign that Wellpoint is doing right by patients.   What bothers me most is the use of data on treating NSLC in 2006 as an example of how new treatments aren't really worth the money compared to old and more toxic treatments.  Malin used average overall survival derived from randomized clinical trials.   Is this how Wellpoint practices oncology?

I was at ASCO and met with researchers who are screening lung tumors using multiplexed assays for mutations in KRAS, EGFR, HER2, BRAF, PIK3CA, AKT1, MEK1, and NRAS and are using flourescence in situ hybridization (FISH) for ALK rearrangements and MET amplifications. The most common mutations found so far have been KRAS (23 percent) and EGFR (17 percent).  At a time when all cancer patients, including NSLC, are defined by their driver mutations, Wellpoint's use of one size fits all data to justify outdated clinical pathways is very troubling. 

I'd be interested in knowing if Wellpoint requires cancer patients to 'fail first' on cheaper cancer drugs (which are in short supply) without regard or use of genotyping and tumor profiling.   Also,  does Wellpoint pay for new and off-label indications for cancer based on such such genetic analysis or does it require randomized clinical trials before paying for targeted treatment?

Indeed, in another article Dr. Malin is quoted as saying: " In colon cancer, for example, the costs of care are $80,000 with cetuximab (Erbitux) and $91,000 with bevacizumab (Avastin) for less than a 2-month improvement in survival. “We are questioning whether the costs associated with this relatively modest improvement in survival is worth it,” Dr Malin said.

Setting the cherry picking of overall survival data , where is the discussion of using a combination of BRAF and EFGR inhibitors in patients with a BRAF mutation?  Doing randomized studies on patients without regard to mutations is immoral.  So is treating cancer without regard to these variations.

Where does that put talking points that seek to blame the 2 percent of health care dollars we spend on new cancer medicines for an explosion in health care spending and out of pocket costs that does not exist?

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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