Tuesday, March 3, 2009

Medicine's Price Tag Problem (Marin IJ)

Dustin Ballard: Pricey medical care may not mean better care
Dr. Dustin W. Ballard
Posted: 01/18/2009 06:29:52 PM PST

Have you ever bought a bottle of wine, one that you knew absolutely nothing about, because it was expensive? I have.

I am not a wine aficionado, in fact, I couldn't tell you a single difference between a merlot and a cabernet sauvignon and, if I'm called upon to describe a wine's flavor, I will usually respond that it is "slightly dusty with a gravely finish." But, occasionally, I am asked to bring a bottle of wine to a social gathering and in these instances I don't want to disappoint. So, I go to an upscale grocer and look for an upscale bottle: one with an artistic label and a price that will ensure that the hosts do not think of me as cheap.

Now, it is possible that the wine I choose is worth it, but it is also possible that it is not, and it is unlikely that I will be able to discern the difference. Either way, I have fallen prey to a strategy that marketers call "premium pricing," based on generating the impression that because the cost of an item is high, it must have exceptional attributes.

Take a moment and I'm sure you can think of a situation where premium pricing has won you over - a beauty product or accessory perhaps, or choosing high octane gasoline, or justifying an art purchase as "an investment"?

Premium pricing, as it turns out, is everywhere, and everywhere includes the business of medicine. And, as in other industries, there are plenty of health consumers who believe that more expensive medical care must mean better medical care.

Take,for example, a recent study published in the Journal of the American Medical Association (JAMA). Eighty-two paid volunteers were given an analgesic (painkiller) before and after a series of electric shocks (10 volts to 80 volts) to the wrist. The patients were told that the painkiller was similar to codeine, but newer and quicker acting. Actually, it was nothing more than a placebo (sugar pill).

All the study subjects were given the same treatment, but half of them were told that the medicine cost $2.50 a pill while the other half were told that it cost just 10 cents a pill. Even though the therapy (or lack thereof) was completely the same in the two groups, 24 percent more (85 percent versus 61 percent) volunteers in the high-priced group reported a reduction in pain scores after treatment. These results were consistent across all voltage intensities tested.

This finding is quite astonishing; a sugar pill combined with premium pricing will cause more than eight out of 10 people to report a positive effect. The results speak to the power of suggestion and expectation to affect clinical response. And they also help explain why so many patients prefer brand name to generic medicines - even when they are the exact same drug. Or, why patients request newer, more-expensive treatments that are no better (and in some cases much worse) than, older, time-tested treatments; stomach acid reducers (Nexium versus Prilosec) and non-steroidal anti-inflammatories (Vioxx versus Motrin) are great examples.

Not everyone in the business of medicine is too concerned about patients paying more for treatments that could be had for much less; in fact the practice seems emblematic of the largess of our health system as a whole. There is a lot of money to be made through the premium pricing of health care and it is a situation where the psychological impact of the strategy is particularly powerful. No one wants to be cheap about his or her health, or that of a loved one, if he or she doesn't absolutely have to be. And, if a third payer, such as Medicare, is going to cover the bill, there is even more reason not to skimp.

It all makes sense, so long as you know what you are getting. But on the other hand, if enough people choose their therapies based on the same rationale I use to choose my wine, the result will eventually be a bankrupt health system.

Dr. Dustin W. Ballard is an emergency physician at Kaiser Permanente San Rafael and the author of "The Bullet's Yaw: Reflections on Violence, Healing and an Unforgettable Stranger." His column appears every other Monday.