By Michael Bertaut, Healthcare Economist
It is very important to us here at Blue Cross and Blue Shield of Louisiana that our members are well informed as to the nature of healthcare costs, and the things that drive their premiums. Understanding how we price our products and spend their money are two rights every Blue Cross member has. This will be the first in a series of blog posts designed to bring more transparency to the things that happen in today’s healthcare world that affect how much you pay for your premium and for medical services in general. Today’s topic: Hepatitis C (Part 1).
Hepatitis C is a form of viral hepatitis spread through infected blood. It causes chronic liver disease and kills more than 20,000 people a year. A few years ago, chronic Hepatitis C was considered nearly incurable. The Hepatitis C virus has leapt into the news over the past year or two because of a couple of important factors:
- More than 3 million Americans are infected, and;
- A new prescription drug can eliminate the virus in 95% of all patients.
However, these headlines just scratch the surface of the entire issue surrounding curing Hepatitis C. Other complex and important matters should be considered.
Let’s start with the new drug. Released under the labels of Sovaldi and Harvoni, this drug replaces a six-month treatment that included injections into the patient’s thigh three times a week, harsh side effects and unreliable results. With Sovaldi and Harvoni, the infected patient takes one pill a day with minimal side effects and likely success when taken as prescribed.
There is no doubt that these new drugs are a godsend for people with Hepatitis C.
The challenge is the cost of these new drugs. Each pill costs roughly $1,000, and the patient takes one pill a day for 84-150 days, depending on the advancement of the disease. That amounts to between $84,000 and $150,000 for one person’s treatment.
It’s easy to see that the cost of this treatment should not be undertaken lightly. Imagine if all 3 million people infected nationwide went to their doctors and were prescribed the new drugs in a single year. The total cost of treatment could easily exceed $300 billion, roughly doubling the entire amount spent on all prescription drugs in the U.S. in a single year.
Imagine that impact on your premiums. On Medicaid (your state and federal taxes). On Medicare (the longevity of the program).
Even more worrisome –ongoing testing in urban emergency rooms has shown that the estimate of 3 million people infected may too low. So far this year, roughly one in 10 people who showed up at the sampled ERs nationwide is infected with Hepatitis C. Only 25% of these infected folks were aware they were infected prior to the ER test. This points to many, many more cases out there than previously estimated. There is a large, growing population of people infected with Hepatitis C who will need treatment going forward.
In my next installment on Hepatitis C, we’ll talk a bit about the risks of treatment and non-treatment, and what various insurance companies are doing about financing the massive costs of these curative treatments.