Desperate for Funds: Are We Spending Enough on Health?

Listener 6 November 1999.

Keywords Health

Most of us are aware of Multiple Sclerosis victims in wheelchairs or with walking sticks. In fact the disease may have affected the sufferer up to two decades earlier, initially with a loss of muscular coordination – perhaps at first vision, then isolated numbness, to a progressing weakness in the legs. It does not much affect life expectation, nor does it affect intellect. The sufferers know that they will experience an increasing loss of muscular control.

The causes and pathogenesis of MS are “unknown” poorly understood. It is an inflammatory disease of the central nervous system, which affects the sheath around the nerve fibres. It appears to be partly hereditary – the Maori is less likely to suffer from it. It is also environmental, apparently related to temperature – the incidence is about double in the Bluff relative to Kaitaia. Women are about twice as likely to experience MS as men. Perhaps one in a thousand people are likely to suffer from MS.

Although the symptoms can be ameliorated, there is no cure. Recently some drugs have appeared which may slow down the progress of the disease. We cannot be sure because they have not been around long enough for their long term effects to be evaluated. But for some people the medication appears to mitigate substantially the side effects of the disease in its early stages. A particular form of early stage MS involves episodic “relapses” of up to a fortnight in which the sufferers lose muscular control. (Such acute attacks usually resolve themselves over the next month or so, but it appears the more attacks the faster the deterioration.)

The effect of the new drug – it goes by a number of names but I’ll call it interferon-beta – can be remarkable. Marie, a 39 year old mother of two, told a seminar I was at how her life was disrupted by these attacks. “As far as the quality of life goes, I literally wiped out that entire year. Friends were always coming around and helping out, as I wasn’t functioning. I was in and out the hospital all the time.” Her children had to be fostered. She went onto interferon-beta. The relapses stopped. After a month of treatment she was back at work and contributing to her family again. Today she runs a business from her home. Ken, in his early 20s, is back at work too, after a year of regular hospitalisation and a miserable quality of life.

Great news for both of them, except interferon-beta is not publicly provided for the New Zealand health service, so they have to pay for it privately. Since it costs around $20,000 a year, they are at an enormous financial handicap. Presumably others who could benefit are missing out because they cannot find the $400 a week.

The Multiple Sclerosis Society of New Zealand asked me to look at the economics of the drug. My conclusion, based on overseas case studies is that the overall benefits from the drug are insufficient to justify the substantial expenditure. Pharmac, the government agency responsible for paying for free-to-patient pharmaceuticals, has come to a similar conclusion. The detailed analysis is larger than this column can accommodate, (1) but the issue is quite general. One complication is that not enough is known to target only the Maries and Kens, so that much of the use of the interferon-beta will be wasted. But the basic problem is the drug is very expensive. If Pharmac was to fund this drug (it could cost them up to $10m a year), it would have to cut its funding for other drugs (or the Health Funding Authority cutting other services). These drugs are more cost effective than interferon-beta although, of course, they are for other diseases.

It is an uncomfortable story is it not? Here is a drug which can substantially increase some people’s quality of life, and it is a drug which is free in most other countries (Marie initially got her supply free from Australia).

It is not merely a matter of handing over the $10m (or less) to Pharmac and directing them to provide the interferon-beta free, for they will tell you there are others suffering other diseases who are also missing out on treatment which is more cost-effective than interferon. Other health areas are desperate for funds too. (Mental health has just made a plea for $188m over the next three years; alcohol and drug treatment is short by at least $29m a year.) In the long run the cost of interferon-beta will come down, and doctors will learn how to target more precisely. But a lot of MS sufferers will be worse off in that interim.

True, there is an unlimited demand for health care services if the government provides them free. The government is going to have to place some limitations on what it can supply. More public health spending means higher taxes. Looking at Marie and Ken, one cannot but ask “are we spending enough?”

1. A version of the technical paper Who Should Be Treated? Interferon-β for Multiple Sclerosis is also on this website.