Saturday, December 24, 2011

Drug Price Control 22: Comparing Prices of Drugs, Diagnostic Tests, PFs

When I experienced frequent LBMs after a possible food poisoning three days ago, I went to Iloilo Mission Hospital’s ER if they accept Maxicare card, they said Yes. I went through different procedures: body temperature, blood pressure, pulse rate, then they also requested blood test for nitrogen and potassium (N,K) and fecalysis. Here’s the cost:

 ER fee + feces sample container        P   349
 Laboratory (blood, fecalysis)             P1,154
    Total                                      P1,503

I paid nothing of course, thanks to my HMO. While waiting for the lab test results, the physician in the ER prescribed the following medicines for me to take immediately (I was weak and shivering a bit then even if I have no fever):

Glucolyte (ORS) 250 ml                                             P  61.95
Hidrasec ((Racecadotil?) 100 mg                               P  32.50
Ciprbay (Cefloflaxin?) 500g P41.90 x 2                     P  83.80
                Total                                                              P177.25

I bought Glucolyte and Hidrasec from Rose Pharmacy, and Ciprbay from Mercury Drugstore. I don’t know how their prices compared with other drugstores. I took the medicines and ORS around 5pm, I felt the relief several minutes after, then slept for two hours. Woke up feeling better, took the rest by 10pm, slept well and my LBM was gone the next day.

When I checked the lab results the next day, it said

a. Blood chemistry: sodium and potassium, within range.
b. Stool examination: negative for intestinal parasites

In short, no problem. Meanwhile, check the above costs: ER fee + laboratory fees + medicines = P1,680. Medicines share is only 10.5 percent and almost 90 percent is for laboratory and ER fees. Which shows one again:

1. Cost of medicines is not the biggest share in proper healthcare, preventive or curative, and
2. Prescribing medicines is not the first thing that good physicians do. It’s ordering various tests first (at least for any fever, high bp and pulse rate; blood and urine/stool tests if necessary) then prescribe the appropriate medicines after.

In cases of hospital confinement, they usually make follow up tests in blood, urine, stool, etc. to see if the patient’s situation has improved after taking the earlier batch of medicines. If the patient’s condition has not improved, then physicians have to change the medicines and other treatment. It’s often the frequent or repeated laboratory and diagnostic tests, plus PFs, that take up a huge cost of hospital and healthcare.

In a related post below, PhilHealth Watch 10: Hospital Bill Deductions, I gave a breakdown of the confinement bill of my daughter at the same hospital. Drugs and medicines -- mainly the intravenous (IV) fluid inserted in her hand to control dehydration – constituted 26 percent of total bill, which is similar to the 26 percent share of PF and hospital room and board.

But many groups including legislators insist that medicine prices are the single biggest cost of healthcare. It might be true for a few cases but I think that in most medical cases, it’s not true. So do we hear them calling for price control of fees for laboratory and diagnostic tests, price control for high professional fees, price control for rates of hospital rooms and other hospital facilities?

Nope, we do not hear such clamor. We only hear clamor for drug price control, which I have argued in many blog posts here, is wrong. My book, Health Choices and Responsibilities, has explored in greater details, why the policy is wrong.

In addition, taxes on medicines (3-5 percent import tax + 12 percent VAT + local government taxes) is one of the major contributors for high drug prices here. The governments of Taiwan and Malaysia, among others, do not slap any tax on medicines. The Korean government slaps zero or small tax. The Philippine government slaps almost 20 percent tax which distort drug prices upwards, then the same government complains of expensive medicines and slapped drug price control policy.

And this goes to show the rather segmented or parochial view that many groups have taken in healthcare. There is big focus on medicine prices. Irrational drug use, substandard or fake drugs, the rising cost of diagnostic tests, PFs, the need for healthy lifestyle and preventive healthcare, among others, very often do not get equal high attention.

On another note, I saw this in The Economist magazine. They made a good observation: drug spending may appear "high" for some economies, but they help improve health outcome, which prevents hospitalization of the people.

Pharmaceutical spending

It is no secret that rich countries spend lots of money on health—9.6% of GDP in 2009. Drugs’ role in driving this spending is more complex. Consumption of drugs has risen, as there are more types of pills and more old patients to pop them. In 2009 OECD countries splashed out more than $700 billion on drugs, nearly one-fifth of all health spending. But without drugs health costs might have been even higher: pharmaceuticals can prevent costly hospitalisations. From 2000 to 2009 spending on drugs grew at a slightly slower pace than total outlays on health. This picture masks substantial variation. The average American shelled out $947 for drugs in 2009. Just across the border, the average Mexican spent just $249.

See also:
Drug price control 18: Wikileaks and former US Amb. Kenney on price control, September 28, 2011
Drug Price Control 19: Why is the Policy not Withrawn Yet, November 08, 2011
Drug Price Control 20: Competition, not Price Regulation, November 10, 2011
Drug Price Control 21: Illegalities in the Implementation of the Policy, November 14, 2011

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