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Biotech / Medical : NSIX -- Neuromedical Systems, Inc.
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To: David and Elena Krikorian who wrote (19)10/2/1997 12:24:00 PM
From: Sigmund   of 137
 
I read an analyst's report where he attempted to quantify the economics of paying more for a Pap test that was more accurate and therefor resulted in savings on future medical expenses. I thought his analysis was that something like $15 (please don't hold me to this) was the breakeven point. But even this assumes:

* Enlightened insurance companies

* Viewing the thing on an industry wide basis.

A better test will cost the insurance company more. The benefit of reduced future medical expenses may be a savings to some other insurance company if the person changes insurers i.e. changes jobs.

I have in the past done some work looking at the public policy issues of information technology and health care. This reimbursability issue is a major factor retarding the application of information technology to health care. I think that eventually the insurance companies will realize the benefits to them of reducing future costs. Part of the benefit of a more accurate test is not cost reduction but a longer life for the patient and less serious medical treatment. This is certainly important with respect to the Pap smear in that my understanding is that often early intervention can prevent the entire problem.

But the benefit to the patient (aside from the cost reduction potential) is of little concern to an insurer. If the patient is not willing to pay part of the cost for a better test, there is no one to absorb the higher cost.

I still don't understand the logic of such an expensive test.
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