Can AI Reduce Healthcare Costs?
Every month, High Lantern Group shares a collection of the most interesting perspectives on the healthcare industry’s trends and developments. We are happy to share them with you — and hope you share your thoughts with us.
Dear clients and friends: Given your interest in health and medicine, we would like to share with you our collection of the most interesting perspectives on our industry's trends and developments. We are happy to share them with you — and hope you share your thoughts with us.
1. The DEA and the Shortage of ADHD Meds
Is the DEA to blame for the persistent shortage of ADHD medications? Yes, in part, according to New York Magazine. As demand for ADHD treatment rose during COVID, the DEA shut down Ascent, a primary manufacturer of generic ADHD meds. The closure was part of the DEA’s tough-knuckled fight against opioids:
The DEA has accused Ascent of shabby record keeping that might have allowed millions of pills to go unaccounted for…Ascent has said that its paperwork is in order and has sued the Department of Justice to get its assembly lines working again. A resolution doesn’t seem likely anytime soon. In the meantime, the company is producing zero ADHD meds. If its claims are true, that’s 600 million doses per year missing from the market…“About 25 percent of the generic market would pass through this machine,” says CEO, Sudhakar Vidiyala. “But we didn’t make a single pill in 2023.”
2. Coming Soon to Primetime: Drug Price Negotiations
By allowing Medicare to negotiate drug prices, “Joe Biden accomplished what none of his predecessors could.” But voters don’t seem to care, writes The Atlantic. Expect chest-beating to soon commence:
For the White House, the task of getting the word out may become easier in the coming months, as voters finally begin to feel the benefits of the administration’s policies. The cap on annual out-of-pocket drug costs kicked in only at the beginning of the year; presumably some Medicare-enrolled voters will notice as their medication costs hit that number. In September, just in time for the election, Biden will announce new prices for the 10 drugs currently being negotiated.
Another assist could come from efforts to stop the law from taking effect. Last year, multiple pharmaceutical companies and industry lobbying groups filed lawsuits, many in jurisdictions with Trump-appointed judges, to prevent Medicare from negotiating drug prices.
3. The Sad Truth of Organ Donation
Writing in The New York Times, Dylan Walsh argues people should be compensated for donating kidneys: "One approach is to make the federal government the sole purchaser of kidneys. Donor and recipient would never meet. Compensation would be fixed, haggling impossible. After the kidney is acquired, the transplant process would unfold in the typical manner."
Not so fast! Over on the blog Statecraft, an advocate and policy wonk point out that 25% of donated kidneys end up in the trash:
Organs are literally lost and damaged in transit every single week. The OPTN contractor [who runs a monopolistic system on transporting kidneys] is 15 times more likely to lose or damage an organ in transit than an airline is a suitcase. That should be shocking. Think about a donor family agreeing to organ donation on the worst day of their life, and what it means if their loved one's kidney gets left on the airport counter in Atlanta, or gets delayed and then thrown in the trash in another part of the country. And then, of course, what that means to one of the 100,000 Americans waiting to get that call for a lifesaving transplant.
4. Modest Mouse Brain
In another reminder of the incredible complexity of the brain – and the herculean complexity to treat it – Nature details a research program that needed $100 million to recreate 0.2% of a mouse brain:
A cubic millimetre is a tiny volume — less than a teardrop. But a cubic millimetre of mouse brain is densely packed with tens of thousands of neurons and other cells in a staggeringly complex architectural weave.
Reconstructing such elaborate arrangements requires monumental effort, but the researchers affiliated with the Machine Intelligence from Cortical Networks (MICrONS) programme pulled it off. It took US$100 million and years of effort by more than 100 scientists, coordinated by 3 groups that had never collaborated before. There were weeks of all-nighters and a painstaking global proofreading effort that continues even now — for a volume that represents just 0.2% of the typical mouse brain.
5. Can AI Reduce Healthcare Costs?
The Economist is skeptical. AI can “boost” and “transform” and “enhance.” But can it save?
Saving money using innovation is tricky. Health systems are set up to use it to improve care, not cut costs. New technology may account for as much as half of the annual growth in health spending. Layering on new systems will increase costs and complexity. But redesigning processes to make efficient use of ai is likely to be resisted by patients and medics. Though AI may be able to triage them over the phone or provide routine results, patients may demand to be seen in person.