The conflicting demands afflicting healthcare

Patients now demand faster and better care, made possible by new technologies that are pricier, yet they expect to pay less.

The perennial problem afflicting healthcare the world over is the issue of rising costs.

A previous article explored some of the supply side issues allegedly driving the rise of healthcare costs in Malaysia, especially within the private healthcare landscape.

However, across both the public and private sectors there is a significant increase in costs not attributable to the human resource factor — the fees of health professionals.

The answer? First among these is technological and scientific innovation that have an impact on drugs, equipment, medical devices, tests and consumables. Across the spectrum, there are innovations in all these fields that lead to newer, better strategies to deliver healthcare and improve patient outcomes.

Unfortunately, few of them, if any, are ever cheaper. In most cases, they are more expensive than existing technologies by leaps and bounds.

In fact, as an interesting aside for the reader, for more than a quarter century that I have been in the healthcare landscape I have never witnessed a technological or scientific medical innovation that is cheaper than the prevailing standard of practice that it was intended to replace.

Enough said.

Drug A, for example, would have been used for more than five decades as an antibiotic. Highly effective but causes some side effects.

Today, scientific research and innovation would have led to the development of Drug B for the same purpose; equally effective but with lesser side effects.

The cost? Unfortunately, the price of Drug B would be almost two or three times that of Drug A. This is the price of innovation.

Lest I sound pessimistic and come across as a grouch denying scientific discoveries and how they continue to improve healthcare outcomes, let me also provide this example.

Until the past few years, lung cancer, which continues to be diagnosed largely in late stages in Malaysia, was a disease that could not be managed by existing therapeutic modalities. Patients survived weeks at the most.

It is the entry of innovative therapies such as immunotherapies and targeted therapies that have really changed the landscape, with patients now surviving years and many going into stable conditions, back to living their lives.

Admittedly, the prices of these drugs are in the tens of thousands of ringgit every month, but they save lives every day. What is the price of the life of a loved one compared to this measly monetary cost?

The innovative technologies and therapeutics in the supply side driving healthcare costs are further amplified by the demand side calls for incorporating them into healthcare delivery, which further compounds increases to overall healthcare costs.

Even in the public sector (and of course in the private sector), there is a constant demand to provide newer, more effective treatment solutions.

And at the current rate of healthcare scientific innovation, almost every day there is a new device, drug, test or treatment approved by regulators — improving lives but further increasing the costs.

In the public sector, for example, there are cost-control mechanisms in place to limit the rise of healthcare costs attributable to technological innovation.

One such example is health technology assessment (HTA) mechanisms where the cost-benefit and budgetary impact of each innovation is assessed before being incorporated into daily use within all the health ministry facilities.

The other mechanism is rationing — where a fixed budget is provided for a certain therapeutic area, and thus only certain patients can avail of new therapeutics or treatment due to limited availability of resources.

This is no longer accepted within public healthcare settings, with outcries from various stakeholders including patients and families on why they or their loved ones are not receiving new, top-of-the-line treatments; this is also definitely not going down well within the private healthcare system, where individuals are paying insurance premiums and expecting top-of-the-line treatments as a matter of course.

For insurers to limit access to innovative treatment due to cost-containment measures is something that private health insurance clients (and their prescribing physicians) are not going to stomach. Hence the current disgruntlement.

But insurers are not finding it easy as well. Premiums have been collected based on models for treatments that were cutting-edge at the time these products were designed, in some cases more than two decades ago.

The current prices of new therapeutic treatments have broken all these models.

Therefore, the repricing of premiums, as is now proposed or attempts made to have them implemented, is something existing subscribers are not willing to accept.

This is especially so for those who have been loyally paying premiums worth thousands of ringgit for decades.

The other “invisible hand” driving healthcare costs is something related to both supply-demand curves, namely over medicalisation.

Over medicalisation refers to the overuse of therapeutic solutions for medical conditions that could have been treated with other cheaper or different non-therapeutic solutions.

Over medicalisation includes overdiagnosis and overtreatment, among other conditions, and may be driven both by supplier-induced demand (where physicians are prescribing these treatments) or by demand itself where clients are demanding for quick fixes via therapeutic solutions.

Increasingly, the expectation and pressure from clients and families are also leading many physicians to practise defensive medicine, another facet of over medicalisation, just to ensure that they are not being led down the road to a medicolegal lawsuit.

With rising numbers of medicolegal cases, more and more physicians are practising defensive medicine, and the result of it is often higher healthcare costs.

So in the end, rising healthcare costs are in no small part due to a conflicting demand in the supply-demand curve.

Everyone wants better, more effective treatments, but at a lower cost. This is not a reality achievable in this universe at this time.

Other options? Better cost-control mechanisms, but that is another story for another time. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.