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Daily News: Disease

'Miracle drug' price raises questions


Foster's Daily Democrat (Dover, NH)

09-06-13

Sept. 05--WAKEFIELD -- Resident Jim Miller has been fighting arthritis since 1989, but it wasn't until 13 years ago he discovered a "miracle drug" that kept his pain at bay, and enabled him to enjoy hobbies such as playing guitar.

Despite the beneficial effects of the drug Remicade, Miller is concerned about the increasing cost of the medication, and the drastic difference in cost between two local hospitals.

Miller, 58, who has psoriatic arthritis, has a Remicade prescription from Dr. Bruce Samuels, of Seacoast Arthritis and Osteoporosis Center, which is owned by Wentworth-Douglass Hospital. The medication cannot be taken in pill form or as a quick shot; rather, the patient has to sit for about three hours, as the medicine slowly drips into the bloodstream by IV.

Miller has been getting infusions of 500 mg of Remicade every eight weeks for about 13 years, and while the procedure had cost about $6,000 in the beginning, when the procedure was done at his doctor's office, the cost for the same infusion last month came close to $25,000, when the procedure was done at Wentworth-Douglass Hospital.

Janssen Biotech, the biotech arm of Johnson and Johnson, charges hospitals about $811 per 100 mg vile of Remicade, according to Megan Farina, director of product communication at Janssen Global Services. Based on this wholesale acquisition cost, 500 mg of the medicine, the amount Miller takes every eight weeks, would cost a hospital about $4,055.

In contrast, on July 9, Wentworth-Douglas Hospital charged Miller's insurance company $24,286 for the infusion.

Miller has not always gone to Wentworth-Douglass Hospital for his Remicade infusions. In the early 2000s, when he began taking Remicade, the medicine was administered at Samuels' office. Samuels retired a few months ago. Back then, the charge for the drug was around $5,000 to $6,000.

After several years on Remicade, Miller was told he had to go to Wentworth-Douglass Hospital for his infusions, and that's when the cost of the drug began to gradually increase, he said. After a September 2008 appointment, the hospital charged his insurance company $15,741 for the visit, and after the May 2009 infusion, the charge increased to $17,327.

By September 2009, Miller, in response to the increased costs, had shopped around at other hospitals, and decided to get his infusions at Frisbie Memorial Hospital, which charged his insurance company around $10,000 for each visit.

Miller's last visit to Frisbie Memorial Hospital, in February, cost about $13,243. A day before his next scheduled appointment in April, Miller got a call from the hospital, informing him that Samuels no longer had privileges at Frisbie, and that Miller now had to go to Wentworth-Douglass for his infusions.

Upon returning to Wentworth-Douglass for treatment, his insurance company has been getting charged around $25,000 for the same infusion of 500 mg of Remicade.

Miller is not the only patient in the area who has questioned amounts hospitals charge for medicine. In April, Foster's published an article about Rochester physician Dr. Terry Bennett, who, after being diagnosed with cancer, began using the promising drug Kadcyla, recently approved for public use by the FDA. After his first IV of the medication, Wentworth-Douglas Hospital charged him almost $44,000 for the infusion.

The amounts hospitals charge for medications is not only a local issue, but of nationwide concern. In May, "The New York Times" published an article about new U.S. government data showing hospitals charge Medicare "wildly different amounts" for the same procedure, according to the article published on May 8. The charges vary widely not only nationwide, but also among hospitals located in the same region.

As an example, "The New York Times" stated that one hospital in St. Augustine, Fla., typically charged almost $40,000 for gallbladder removal, while a hospital in Orange Park, Fla., charged $91,000 for the same procedure.

Miller said in addition to seeing high charges for his medication, he felt his choice had been lost when he could no longer go to Frisbie for his infusions. Michelle Landry, director of marketing and communications for Frisbie, said Seacoast Arthritis never extended its privileges at the hospital, and therefore Miller could not get his infusions there. She said the hospital had sent the center an application to extend its privileges, and Seacoast Arthritis never replied.

Landry said having privileges as a doctor at a hospital means being able to give direction to hospital clinicians for certain treatments, such as infusions.

Luckily, Miller does not have to pay for the medicine out of pocket. The charge is covered by insurance company, Safeco, as part of a workers' compensation claim. But, Miller is concerned such high costs will have a detrimental effect on everyone. Higher costs for treatment, he said, means higher premiums for those with health insurance, and higher medical costs for those with no health insurance.

Steve Ahnen, president of New Hampshire Hospital Association, said many times the amount hospitals charge insurance companies does not reflect the actual amount the insurance companies end up paying. He said typically, after the insurance company is billed, its representatives negotiate on the final price with the hospital.

Ahnen also said the amount hospitals charge depends on a "whole variety of factors." In addition to the actual cost of care and the amount the hospital is charged for a particular drug, hospitals look at how many patients are on programs that reimburse less than the cost of care. He said on average, Medicare reimburses 80 cents on the dollar of the actual cost of care, and Medicaid reimburses 50 cents on the dollar. Because those programs do not pay the whole amount of the cost of care, hospitals find other areas to "offset those losses."

According to Noreen Biehl, vice president of community relations at Wentworth-Douglass Hospital, "our charges increase as our costs increase to provide programs and services for our community including bad debt, charity care, the dental center, medication assistance, the Care-van and for the shortfall for Medicaid and Medicare (that do not cover the cost of care)," she wrote in an email in response to a query by Foster's about the reasons for the higher price of the Remicaid treatment at WDH.

Biehl said Wentworth-Douglass Hospital is a charitable organization, which treats patients regardless of their ability to pay. The mark-up in the treatment costs, she wrote, covers instances such as patients not being able to pay, or choosing not to pay their bills, or times in which insurance programs do not cover the full cost of care.

The mark-up of costs, she said, "is important if we are to remain financially and operationally sound and serve the community with high quality medical service."

"To do this, Wentworth-Douglass Hospital develops a standardized charge structure and applies it across all services," wrote Biehl in the email. "Our fees for services are competitive with other health care institutions and generally fall in the midrange of other hospitals in New Hampshire."

Biehl also said patients without insurance are eligible for a 30 percent discount on their bills, and if they pay within 30 days, they are eligible for an additional 30 percent discount.

___

(c)2013 Foster's Daily Democrat (Dover, N.H.)

Visit the Foster's Daily Democrat (Dover, N.H.) at www.fosters.com

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Copyright Foster's Daily Democrat (Dover, NH) 2013

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