Traditionally, insurers lost money by covering people with chronic illnesses, because they often ended up hospitalized with myriad complications as their diseases progressed. Today, the routine care costs of many chronic illnesses eclipse that of acute care because new treatments that keep patients well have become a multibillion-dollar business opportunity for device and drug makers and medical providers.
The high price of new treatments for diabetes, rheumatoid arthritis, colitis and other chronic diseases contribute mightily to the United States’ $2.7 trillion annual health care bill.
More than 1.5 million Americans have Type 1 diabetes and cannot survive without frequent insulin doses, so they are utterly dependent on a small number of producers of supplies and drugs, which have great leeway to set prices. (Patients with the far more common Type 2 diabetes — linked to obesity — still produce insulin and can improve with lifestyle changes and weight loss, or on oral medicines.)
That captive audience of Type 1 diabetics has spawned lines of high-priced gadgets and disposable accouterments, borrowing business models from technology companies like Apple: Each pump and monitor requires the separate purchase of an array of items that are often brand and model specific.
A steady stream of new models and updates often offer dubious improvement: colored pumps; talking, bilingual meters; sensors reporting minute-by-minute sugar readouts. Ms. Hayley’s new pump will cost $7,350 (she will pay $2,500 under the terms of her insurance). But she will also need to pay her part for supplies, including $100 monitor probes that must be replaced every week, disposable tubing that she must change every three days and 10 or so test strips every day.
That does not even include insulin, which has been produced with genetic engineering and protected by patents, so that a medicine that cost a few dollars when Ms. Hayley was a child now often sells for more than $200 a vial, meaning some patients must pay more than $4,000 a year. Other refinements have benefited a minority of patients but raised prices for all. There are no generics in the United States.