Avoid crisis with policies that keep hospitals from choosing among patients

Escalating costs, dwindling supply force hospitals to ration’ drugs

Since the shortage of intravenous immunoglobulin (IVIG) reached a crisis point last year, McDonough District Hospital in Macomb, IL, has been struggling to obtain sufficient quantities of the drug. This struggle comes at a time when the price of the therapy is skyrocketing and reimbursement for its use is plummeting. The hospital’s ethics committee since has grappled with a problem facing more hospitals across the country: how to devise an equitable policy concerning rationed medications or treatments.

Unfortunately, the health care industry is just as susceptible to the laws of economics as other industries. The shortage of IVIG, for example, is the result of the tenets of supply and demand. The supply of plasma products in general underwent a 10% reduction in 1997 after many of the blood products used to make these medications were removed from the market due to increased fears of the transmission of Creutzfeldt-Jakob syndrome.

In addition, several manufacturers of IVIG were unable to meet regulations imposed by the U.S. Food and Drug Administration in Rockville, MD, and halted production. The regulations, called Good Manufacturing Practices, establish manufacturing standards on food products and pharmaceuticals. The six remaining suppliers of the drug have been unable to meet demand and have instituted restrictions on the instances in which they will make the drug available.

Consequently, the cost of the drug has ranged from $30 to $150 per gram, with the average treatment requiring a five-day course of 35-50 g per day. In most cases, the suppliers will provide IVIG only if the therapy is intended for an inpatient, explains Ron Green, chaplain at McDonough and convener of the facility’s ethics committee.

"Treatment can run anywhere from $15,000 to $40,000," he explains. In addition to being unable to obtain the drug for patients treated on an outpatient basis, the hospital also has run into significant difficulty getting reimbursed for the high cost of providing the therapy. "We treated a patient here a month ago, our cost for the drug was $40,000 and Medicaid reimbursed us $2,000."

This was a turning point in the 158-bed hospital’s struggle over IVIG, Green says. The hospital, along with several others across the country, since has decided to adopt guidelines indicating which patients are eligible to receive the drug and how much the hospital will keep in supply.

VHA guidelines endorsed

After looking at what other institutions were doing, McDonough’s committee decided to recommend the hospital adopt VHA guidelines on providing IVIG therapy, he says. Those guidelines recommend a three-tiered set of criteria for availability based on the hospital’s supply of the drug. The VHA is a national network of community-owned hospitals, health systems, and affiliated physicians.

If the hospital determines the supply is good, the drug’s use is left up to physician discretion; this is the first tier. If the supply is limited but not critical, the drug should be provided for a certain set of serious but not life-threatening autoimmune illnesses, the second tier. In the third tier, if the supply falls below a certain level, the drug will be provided only in life-preserving situations, Green says. These conditions are listed in the VHA guidelines,which allow individual facilities to set amounts (in grams) for each tier. The ethics committee recommends that the hospital keep enough of the drug on hand to meet the needs of patients whose conditions are listed in the third tier.

"This is not a drug that is heavily used in small hospitals, and we are finding that it is very hard to get," he says. "That is all we are able to keep in supply."

McDonough officials felt it was necessary to come up with a set of clinical criteria for who would get the drug, instead of leaving it up to chance — whichever patient needed the drug and could be admitted to the hospital, says Green.

One of the main problems with IVIG, in addition to the shortage, is that the list of conditions it is being used to treat is growing just as the supply is drying up, he adds. "Patients who have conditions who fall into the middle category are actually shopping around for providers, hospitals, and physicians who will give them IVIG for these conditions. We recently got a call from outside our normal service area. The patient called our pharmacy directly and said, Do you have IVIG?’ And if we had been able to say yes, then he was going to call a local doctor and say, Will you admit me to this hospital and give me this drug?’"

Advances could lead to rationing

As new drugs and medical technologies are developed, health care providers — ethics committees included — are increasingly going to have to make these kinds of tough decisions regarding the availability of medications and services, says Howard Brody, MD, PhD, professor in the department of family practice and director of the Center for Ethics and Humanities in the Life Sciences at Michigan State University in East Lansing, MI.

"The providers are in a bind, but it is a bind we are all in at this point because in our society we want to have our cake and eat it too," he says. "We want health care available right this very minute, we want it to be affordable, and we want the best technology available."

As health care systems and third-party payers become overburdened with the high cost of all these new technologies, the country will be forced into continuous debates over the best use of limited financial resources.

The situation at McDonough is a good example of using precise clinical criteria to determine who will benefit most from a scarce treatment and then reserving it for that population, Brody says. "I think that this is where you are going to see rationing in the future, it will be more fine-tuned."

Health care already is being rationed whether the American public likes to think of it that way or not, he adds. "The economists’ definition [of rationing] is virtually any time you have a scarce resource and you have any kind of system at all, including the free market, that determines who gets the resource and who doesn’t. Right now, we do it mostly by ability to pay and who you work for."

The good news in the rationing dilemma is that hospitals are getting help from professional organizations that are incorporating the problems into recommendations regarding new treatments and medications. Increasingly, physician organizations are considering financial and reimbursement issues when making clinical recommendations, an indication of their recognition of the "real-world" impact of these decisions.

The American Academy of Pediatrics in Elk Grove Village, IL, for example, recently issued its endorsement of the new rotavirus vaccine RotaShield with a caveat. RotaShield is manufactured by Wyeth-Ayerst Laboratories in Philadel phia and marketed in the U.S. by subsidiary Wyeth Lederle Vaccines. Included in the organization’s recommendation that the vaccine be provided to infants at 2, 4, and 6 months of age was a statement that implementation would "require reconciliation of related economic issues."

"Remember, vaccines are preventative rather than treatment for a condition. We try to demand of our vaccines that they be cost-effective," says Jon Abramson, MD, chair of the department of pediatrics at Wake Forest University Medical Center in Winston-Salem, NC. Abramson also is a member of the American Academy of Pediatrics’ committee on infectious disease.

When the rotavirus vaccine was released, its cost was much higher than many had hoped, averaging $38 per dose for three required doses, he notes. Most of the vaccines recommended by the American Academy of Pedia trics’ committee save about $13 in health care costs for every dollar spent, he says. With RotaShield, the overall health care costs saved would be almost equal to the amount spent on the vaccine.

Rotavirus causes severe diarrhea and most severely affects children under age 2, Abramson says. "In the United States, we have about 50,000 hospitalizations related to rotavirus each year, and it kills about 20 children per year in this country and even more in developing countries." However, because the vaccine is so expensive, the cost of treating children who get the disease is just about the same as the cost of providing the vaccine.

In addition to these problems, many health plans have either decided not to cover the administration of the vaccine, or they are reimbursing providers at a cost well below the cost of the drug. The American Academy of Pediatrics’ position acknowledges the clinical use of the vaccine while accepting the reality of the situation, Brody says. "In the real world, if the reimbursement is not available, of all the things your patients should do with their money, should you encourage them, especially the poorer patients, to run out and buy this drug?"

The advisory committee on immunization practices at the Centers for Disease Control and Pre- ven tion in Atlanta usually negotiates with vaccine manufacturers to obtain the drug at a discount for the federal Vaccines for Children pro gram, says Abramson. Administered individually in 17 states across the nation, the program provides vaccinations to children free of charge, although eligibility requirements for the program vary.

In North Carolina, every child is eligible to receive vaccines through this program. In Abramson’s opinion, some large payers may be waiting to see whether the rotavirus vaccine will be included in the federal program before deciding on coverage. Once providers decide to give this vaccine to their patients, it must be offered to all patients, not just those with insurance that will reimburse for the cost.

The American Academy of Pediatrics’ strategy of alerting members also might function to put pressure on the pharmaceutical industry, Brody says. "It’s their way of saying, We would really like to recommend this vaccine in the future, although we really can’t now because of the reimbursement problem.’ It is a signal that says, We don’t have to be in any hot hurry to provide this vaccine.’ So there is conflict because this almost seems to be directed at two audiences."

Currently, the rotavirus problem is in the early stages, he says. It may be that the vaccine will be covered and reimbursed at an adequate rate by most payers, and manufacturer Wyeth-Lederle may agree to a lower cost for the public sector.

"This is not that uncommon," he notes. "It usually takes about a year for [vaccine] recommendations to be fully implemented. It may become somewhat problematic if the issue of whether or not it is really a cost-effective treatment isn’t addressed."


For more on developing policies and procedures for rationed medications or treatments, contact:

The American Academy of Pediatrics, 141 N.W. Point Blvd., Elk Grove Village, IL 60007-1098. Phone: (847) 228-5005. Fax: (847) 228-5097. Web: www.aap.org.

Jon Abramson, MD, Chief of Pediatrics, Wake Forest University School of Medicine, Medical Center Blvd., Winston-Salem, NC 27157. Phone: (336) 716-2011.

Howard Brody, MD, PhD, Professor, Depart ment of Family Practice, Director, Center for Ethics and Humanities in the Life Sciences, B-100 Clinical Center, Michigan State Univer sity, East Lansing, MI 48824. Phone: (517) 353-3544.

Ron Green, Chaplain, McDonough District Hospital, 525 E. Grant St., Macomb, IL 61455. Phone: (309) 836-1577.