List of procedures that cost Medicare (and patients) the most money

Data from the recently released Medicare provider utilization and payment data contain cost information for over 5000 procedures performed for seniors in the United States in 2012. The data is a little complicated and contains some biases. However, with a little care it is possible to identify the most expensive procedures and get an understanding of the monetary value our healthcare system has assigned to human life.

The costs that are reported in the data set are for a single procedure. However, if a course of therapy requires that a procedure be repeated multiple times, then the real cost is higher. In order to get an understanding of annual cost, we need the number of procedures in a course of therapy. To get this we divide the number of times a procedure was completed by the number of unique patients receiving that procedure (both available in the data). This is still an underestimate because we only have data on procedures performed in 2012 while the course of therapy may have extended into either 2011 or 2013.

The table lists 37 therapeutic options that cost more that $10,000 for a course of therapy in 2012. Focusing just on treatments for cancer that are listed in the table (in orange) we see that the value of a month of life varies from $2,333 for Oxaliplatin to treat colorectal cancer to $29,709 for Ipilimumab to treat melanoma.

By not specifically setting a price on human life, we are allowing the free(ish) market to make those decisions. That isn't inherently good or bad, but free market in the American healthcare system is distorted by perverse incentives and high levels of information asymmetry. The patients, physicians, payers and makers of therapeutics all have vastly different levels of understanding of the value and cost of therapies. In a later article, we will look at some specific examples of how this leads to therapeutic decisions that aren't necessarily optimal for patients.

Expensive Therapeutics. Rows colored in orange are cancer medications, rows in blue are not medications. The value "continuous" in the column "boosted overall survival" means that the drug must be taken continuously for the life of the patient. Overall survival is drawn fromcancer.gov and therapeutic indication is drawn from the FDA label for the medication.

Originally published on EHR Analytics, 2014.