Hard Choices in Health Care

The controversy over federal funding for a new drug, effective in the treatment of heart attacks, points to the kind of hard decisions that lie ahead as the nation tries to control the ever-increasing cost of health care. The case is all the more pertinent because it focuses both on the inflationary effect of new technologies and on their potential for reducing overall costs in some cases.

Under a new ruling, the Health Care Finance Administration has refused a request from hospitals to allow an add-on Medicare fee to cover the cost of Activase, a new tissue plasminogen activator (TPA) made by Genentech, reported to be the fastest-selling new drug in prescription drug history. It is effective in reducing blood clotting that causes heart attacks when applied promptly after an attack. A single dose costs $2,332 compared with an average cost of $185 for alternative drugs, such as streptokinase. Medicare pays a flat rate for hospitalization with any given ailment; payments for acute heart attacks average about $6,500. Hospitals assert that the payment does not cover their costs when they use Activase.

Dr. William L. Roper, administrator of the Health Care Finance Administration responsible for both Medicaid and Medicare, concluded that neither the relative merits of the new drug nor the net cost of its use in hospitals has been sufficiently established to justify a special payment. Some proponents of Activase argue that its effectiveness will lead to shorter hospital stays, which could help off-set the high cost of the drug for hospitals.

We think Roper’s caution is justified. He has not closed the door on later acceptance of additional funding for TPA. The drug is authorized for Medicare patients. But he has set a reasonable economic limit until the full story is known.

The economic impact on hospitals may not be as great as forecast. Almost half of the Medicare patients with acute heart attacks are 75 or older, a group for which physicians are instructed to weigh with particular care the risks of the new drug, including that of strokes, against potential benefits.

All health insurers, government and private alike, are coming to recognize that every treatment, every diagnostic tool, every surgical procedure cannot be made available to every person.

Some pharmaceutical manufacturers have helped ease the problem. Last year Merck & Co. made available without charge a drug it developed to prevent river blindness. Earlier this week, G.D. Searle & Co., made available all of its heart-treatment drugs without charge to low-income persons.

Rationing is another means to control costs. Despite the resistance in principle to rationing of health care, it already is part of the American system for an increasing number of people. For some who have health insurance, the rationing is effected by requirements for a second opinion before surgery or the permission of a primary-care doctor to gain access to specialists. For more than 30 million Americans, the rationing is indirect: They have no insurance and therefore no easy access to the system at any level of care.

“We are rationing by default,” according to the keynote address to the recent meeting of the California Medical Assn. House of Delegates. “It’s guided by no social policy. It’s not equitable. We are wasting millions of dollars and thousands of lives. The reason we are rationing implicitly as opposed to explicitly is because we don’t want to come to grips with our own limits.”

That keynote address was delivered by an emergency room physician from Roseburg, Ore., Dr. John Kitzhaber, who also happens to be president of the Oregon state Senate. Furthermore, Oregon is doing something about the problem, making sure at least that prenatal care is available for all before the state undertakes costly transplants for a few.

California state government has yet to take any step along the path to that sort of planning. Nor has the federal government. Problems, such as the supplementary funding for Activase, are certain to multiply. Their solution will only be made more difficult by delaying appropriate global planning for the use of public health-care funds.