Comment by dabinat
1 day ago
I’m currently on Spravato, which is fully emblematic of how broken the incentives in the US healthcare system are.
Spravato is esketamine - a modified version of ketamine. Ketamine is made up of mirror image molecules and esketamine is the right-handed molecule. They did this because ketamine is off-patent so they needed to modify it in order to patent it, however there is evidence that esketamine is a less effective treatment than ketamine.
It’s very cheap for me but my insurance company pays about $17k a month for this treatment. Ketamine would be a more effective treatment that would be super cheap for them, but they don’t do it because it’s not FDA-approved. So they’re paying a fortune for a less effective treatment.
It would be in the insurance companies’ interests to band together to fund the research so they can save huge amounts of money in the long term but they do not do this.
> It would be in the insurance companies’ interests to band together to fund the research so they can save huge amounts of money in the long term but they do not do this.
Insurance companies do not want cheaper care.
In the US, insurance companies must spend 80% of premiums on care. So if you pay $1k/mo, they have to pay out at least $800/mo in care. (Not to you specifically, but averaged out across all subscribers.)
This is a cap on their potential profits. They always have to pay out 80% of premiums for care, so how do they make more money?
Well, imagine care is twice as expensive. Instead of paying $800, they have to pay $1600. That sounds worse, but, instead of $200/mo, they now $400/mo for themselves!
So, no, paradoxically, it is not in the interest of people paying for the treatment to save money. Quite the opposite.
It's worse than this. Their cap is 80% of the Insurer's profit. Not the Insurer's Parent company. So often the parent company will own the Insurer as a subsidiary and own the Pharmacy, Hospital, Healthcare etc under the parent company.
This way as costs go up, it's really just bypassing the 80%. Because the hospital can charge the insurance subsidary X amount, and then the hospital profits to the parent company.
There needs to be a law in the US that health insurance organizations cannot be owned by anyone who owns a healthcare provider. Nor can the insurance company own healthcare providers.
We've allows the Ma Bell of healthcare to exist.
I tried to explain to people in The Netherlands this exact problem when they were thinking about switching from single-player to a commercial insurance company model.
Insurance companies always have an incentive to make healthcare services expensive. They have even more incentive to make healthcare expensive and do deals on the backside where their suppliers give them a kickback. Even better if said kickback comes via a side door.
So we went for the commercial insurance companies. It took them 4 years before they change the drug choice from decentralised (Pharmacies deal with drugs companies, received small discounts which funded a good quality of care) to centralised (Insurance deal with drug companies, receives kickbacks) and the Pharmacies funding was drastically cut leading to worse quality of care and more drugs being used. Double-whammy because in the previous system the Pharmacy did medication reviews which almost always result in a reduction in drugs (the thing with drugs is that quite a lot of them are given to reduce side effects of other drugs, the original drug gets cancelled but the side effect reducer gets forgotten and just continues ad infinitum).
Health insurance has been super inflationary since then when controlled for quality of care.
> Insurance companies always have an incentive to make healthcare services expensive.
No, it's when their profits are capped by regulation that they have this incentive.
Insurance of other types absolutely seeks to reduce claims payouts.
> So, no, paradoxically, it is not in the interest of people paying for the treatment to save money. Quite the opposite.
I'll assume they're on company insurance. Which is often "self-insured" in that the company actually foots the bill as opposed to the insurance company.
Why don't corporations just drop insurance companies that decide to not allow cheaper medicines?
UNH is so big because its customer Apple has its own pool. Apple deducts $24k/y for your healthcare. Healthy 29 year old male doesn't use anything. UNH denies the claims anyway. It gives that money back to Apple, which doesn't give it to you.
The 80% rule has a lot of loopholes. It doesn't apply to employer funded plans. There's a reason UNH is so big!
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Large swaths of US insurance are underwritten by employers, with the insurance companies acting as contracted administrators. Employers don't have the incentives you list.
Great, just work a well paying megacorp white collar job and you'll get slightly less fucked on healthcare.
What about the other 90% of the country?
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They operate with similar supply and demand constraints and competition, even with prices increasing
>Insurance companies do not want cheaper care.
Why is there a continuous stream of healthcare providers threatening to or becoming out of network for various managed care organizations because they cannot come to an agreement on healthcare prices?
I suspect it's because the insurance companies are not in control. The idea would be to drive up costs when they profit on both sides (example: United and OptumRx) and push down reimbursements elsewhere.
We baked the snake charmer problem into the law?
Good lord.
> snake charmer problem
Perhaps you mean the "cobra effect" [0]? I think that's an apocryphal story about killing snakes, rather than using them in a performance.
[0] https://en.wikipedia.org/wiki/Perverse_incentive#Historicity...
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What’s so interesting about this that I just learned after googling about Spravato that ketamine is a treatment for serious depression. Why? That’s fascinating! Is it the dissociative effects?
A significant effect is through opioid receptor activation, as demonstrated by Williams et al. <https://doi.org/10.1038/s41380-019-0503-4> by blocking the receptor with naltrexone, which attenuated the antisuicidality effects.
The Huberman Lab episode Ketamine: Benefits and Risks for Depression, PTSD & Neuroplasticity <https://www.hubermanlab.com/episode/ketamine-benefits-and-ri...> and the referenced journal articles (including the above) have a lot of detail on it.
Blame the FDA on that one.
The FDA's policy for the last couple of decades is that mixtures of mirror images will not get FDA approval unless there is a strong rationale for it.
Racemic mixture of ketamine was approved decades ago. If you want a new indication for ketamine, you will need to get approval for a single mirror image, as the FDA won't approve the old drug.
They did this because there are numerous examples of racemic mixture drugs having increased side effects from the less active mirror image, so the FDA decided no more racemic approvals.
My guess is your insurer would be happy to pay for the old version, but your doctor is heavily incentivized to use the new version as the markup on the drug is much, much higher.
Thalidomide being one of the more notable ones (though apparently neither chirality is truly safe)
It's worth noting that thalidomide is still approved, but only for leprosy and certain types of cancer.
>but your doctor is heavily incentivized to use the new version as the markup on the drug is much, much higher.
I don't think it is normal/usual for doctors to receive any benefits or profits from which drugs they prescribe. Other than golf outings with the drug company reps? Is there something I'm missing?
For drugs administered in office, doctors can markup the cost and insurance pays it. Even Medicare pays 4.3% extra.
For oncologists, it’s most of the revenue for their office since consults pay very little.
The money made on administering $5 worth of ketamine is far less than a $1500 bottle of eskatamine.
The NHS in the UK refuses to cover it in part because of the absurd cost.
So in Ketamine approved as a treatment in other countries but not in the US?
> Ketamine is made up of mirror image molecules and esketamine is the right-handed molecule.
Esketamine is their cutesy way of saying the word s-ketamine. The s- comes from the Latin word "sinister" which means this is the left-handed enantiomer, not the right-handed one.
It is stupidly expensive, given how generic ketamine itself is. In our case, sleep apnea treatment proved to be a much better option than that drug, as it was just hiding an underlying condition and the treatments only last for maybe a week or two anyway.
I think there have been some people using ketamine off-label, but I don't know much about that. It does need to be tightly controlled because it can cause breakthrough psychosis in some patients. They try to screen those out, but that's not as effective as one might hope given my experience of seeing that fail. And it that was very nearly a fatal mistake.