The $1,000 Wire

health20care20reformI was recently performing radio-frequency on a neck joint and a reusable little wire broke after being used one too many times. The OR nurse complained that the surgery center would have to get a new one at a price of about a thousand dollars. I stared in astonishment at the wire. This little wire is nothing to write home about, a thin little piece of metal that connects the radio-frequency machine to the disposable needle. Even if it was made to the highest possible medical or research standards, it could easily be made in China for perhaps a few dollars. I then realized that this little wire, like the $600 toilet seat or the $1,200 hammer from the 19080’s discussions on military contracting was a great metaphor for why our health care system is so broken. As a doctor who has to wade in this system every day, it was worth my two cents. I thought to myself that if I can explain how this crazy little wire got to $1,000, the man on the street could get handle on health care costs. So here goes:

1. Regulatory Insanity: We have by far the world’s most expensive drug and device approval system that continuously fails to produce safe drugs and devices. Nobody argues that there should be a process to produce safe drugs or devices sold in interstate commerce, however our system is frequently gamed by big pharma to get drugs to market. The costs of this system aren’t in keeping with the results. Meaning part of our $1,000 wire has to do with the fact that the manufacturer had to jump through ridiculous hoops to get the wire in the hands of the doctor.

2. Lack of Connection of the Costs to the Consumer: If this wire was made to the world’s highest manufacturing standards and was instead used in an auto repair shop as part of a diagnostic machine, it’s cost likely could never exceed $50-100. Why? The cost of the thousand dollar wire would be passed directly onto the consumer. Since this is a “medical” wire, an insurer is footing the bill. This means the consumer has no sense of the cost of the radio-frequency procedure, the hospital fees, and ultimately the wire. Great msnbc article on similar issues.

3. Insurance Company Involvement: Two decades ago the insurance companies began to demand data showing that medical treatments were effective. The concept was admirable and made sense as they didn’t want to pay for ineffective care. Over the years the insurance bar for the research needed to get insurance approval has been raised higher and higher. At first blush this makes sense too, as none of us wants to be treated with some procedure or medication that doesn’t work. The problem is that the costs involved in pushing this evidence rock uphill have skyrocketed into the millions to hundreds of millions. This means that only the medical care with the best business models can pass the test. As an example, we’re all told that if we have high cholesterol, we should take statin drugs. Turns out the science behind this reccomendation is now being significantly questioned (this link demonstrates that scientific weakness). One government study has now pegged the NTT (number to treat to prevent a heart attack over a 3 year period) as 250-meaning you need to have 250 patients on statins to prevent one heart attack. In addition, much has been published on serious side effects like cognitive decline in women, severe muscle weakness and inflammation, etc… With the science falling apart, why are these drugs still on the market? Business plan. Statins and other “lifetime” drugs are fantastic business. The business plan drives the medicine. Because the business plan is so good, big pharma has been able to run it’s own studies and present the results to insurers in such a way as to make the use of statins seem like a no brainier. Pharma has also been able to seed NIH and other advisory boards (Harvard medical students have rebelled against these conflicts of interests). In summary, our $1,000 RF wire can be a thousand dollars because it has a great business plan behind it, much better than the other treatments we could offer the patient for the same condition. Because the business plan is good, the manufacturers can convince insurers to cover the procedure, thus leading to their ability to charge $1,000 for a three dollar wire.

So in the end, how did our health-care system get so broken? Take a good, hard look at the thousand dollar wire. If we’re going to fix it, physicians will have to wrestle control of medicine from big pharma and insurance.


I was recently asked by some readers to post the most interesting part of the cholesterol lowering drugs article on the blog, so that more can see it, even if they don’t check out the link. Here goes (from Businessweek 2008):


The second crucial point is hiding in plain sight in Pfizer’s own Lipitor newspaper ad. The dramatic 36% figure has an asterisk. Read the smaller type. It says: “That means in a large clinical study, 3% of patients taking a sugar pill or placebo had a heart attack compared to 2% of patients taking Lipitor.”

Now do some simple math. The numbers in that sentence mean that for every 100 people in the trial, which lasted 3 1/3 years, three people on placebos and two people on Lipitor had heart attacks. The difference credited to the drug? One fewer heart attack per 100 people. So to spare one person a heart attack, 100 people had to take Lipitor for more than three years. The other 99 got no measurable benefit. Or to put it in terms of a little-known but useful statistic, the number needed to treat (or NNT) for one person to benefit is 100.

Compare that with, say, today’s standard antibiotic therapy to eradicate ulcer-causing H. pylori stomach bacteria. The NNT is 1.1. Give the drugs to 11 people, and 10 will be cured.

A low NNT is the sort of effective response many patients expect from the drugs they take. When Wright and others explain to patients without prior heart disease that only 1 in 100 is likely to benefit from taking statins for years, most are astonished. Many, like Winn, choose to opt out.

Plus, there are reasons to believe the overall benefit for many patients is even less than what the NNT score of 100 suggests. That NNT was determined in an industry-sponsored trial using carefully selected patients with multiple risk factors, which include high blood pressure or smoking. In contrast, the only large clinical trial funded by the government, rather than companies, found no statistically significant benefit at all. And because clinical trials themselves suffer from potential biases, results claiming small benefits are always uncertain, says Dr. Nortin M. Hadler, professor of medicine at the University of North Carolina at Chapel Hill and a longtime drug industry critic. “Anything over an NNT of 50 is worse than a lottery ticket; there may be no winners,” he argues. Several recent scientific papers peg the NNT for statins at 250 and up for lower-risk patients, even if they take it for five years or more. “What if you put 250 people in a room and told them they would each pay $1,000 a year for a drug they would have to take every day, that many would get diarrhea and muscle pain, and that 249 would have no benefit? And that they could do just as well by exercising? How many would take that?” asks drug industry critic Dr. Jerome R. Hoffman, professor of clinical medicine at the University of California at Los Angeles.

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Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications. View Profile

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