HJBR Jan/Feb 2024

CHANGING THE CARE: LIVER DISEASE 20 JAN / FEB 2024 I  HEALTHCARE JOURNAL OF BATON ROUGE   companies. But the point is that it is nuanced and multi-faceted, and rather than there being a good “light” side comprised of hospitals and providers versus an evil “dark” side comprised of health insurers, it is really a million shades of gray running along a highly complex spec- trum of medical appropriateness versus clini- cally unwarranted practice pattern variation. Short-Term Versus Long-Term So, rather than it being a case of good versus evil or light versus dark, if there is a problem to be had it is more in the domain of short-term versus long-term thinking. I’m currently read- ing the book, Plunder: Private Equity’s Plan to Pillage America , by Brendan Ballou. The book goes into excruciating detail of how, in many cases, private equity seeks short-term extrac- tion of financial value for itself at the expense of causing harm to the companies they buy. According to Ballou, in many cases, private equity manages to capture value dispropor- tionately to the value they create through a variety of schemes, including leasebacks, divi- dend recapitalizations, forced bankruptcies, forced partnerships, tax avoidance, rollups, and layoffs. Even in their companies that don’t go bankrupt, private equity often changes their cultures from ones focused on long-term to the short-term, from investment to extraction, and from responsibility to recklessness. We see this same type of short-term financial value extrac- tion run rampant in healthcare. Warren Buffett, the renowned investor, and CEO of Berkshire Hathaway Inc., describes our healthcare system as a “tapeworm in the American economy.” Tapeworms are parasites that cause harm to their host by extracting vital nutrients at the host’s expense for their own survival. While Buffett’s assessment may be viewed by many in healthcare as overly harsh, it is supported by a recent report from The Commonwealth Fund, which reveals alarming statistics about the U.S. healthcare system. Despite spend- ing more on healthcare than any other high- income country, the United States has the lowest life expectancy at birth and the highest rate of people with multiple chronic diseases. 2 The report also highlights that the U.S. has the highest rates of deaths from avoidable or treat- able causes as well as the highest maternal and infant death rates compared to peer nations. people with MASLD do not have liver inflam- mation, and fat in the liver without inflamma- tion is considered a relatively benign condition. However, 5 to 12% of the U.S. population has fatty liver with inflammation, known as meta- bolic dysfunction-associated steatohepatitis or MASH, formerly known as nonalcoholic ste- atohepatitis or NASH. A significant number of people with MASH will experience progressive disease with their inflammation causing scar- ring, fibrosis, and cirrhosis of the liver. MASLD and MASH are consequences of the obesity epidemic that we’ve been discussing in the past few issues, and as the epidemic expands, these liver diseases will become increasingly common. Current projections are that MASH will become the leading cause of liver failure and the need for liver transplantation over the next decade or so, overtaking both alcohol- induced cirrhosis and hepatitis C. And unfor- tunately, unlike hepatitis C, there is no cure. MASH is a very difficult disease to treat phar- macologically, largely due to a lack of validated biomarkers, as well as a lack of understanding of the precise mechanisms of disease. Neverthe- less, there are multiple classes of agents in de- velopment that are aiming to reach the market for approval. While the prices of these agents are yet to be determined, I have heard esti- mates that they would be priced in the range of $40,000 to $50,000 per year. And keep in mind that these agents are not curative. So, unlike a one-time investment of $84,000 for Solvaldi to cure a disease, these drugs would be taken in- definitely. From a pharmacoeconomic perspec- tive, forecasts show that the current address- able market for MASH treatment is already over $5.2 billion and is anticipated to reach $48.3 bil- lion by the end of 2035, growing at a compound annual growth rate of 18% during this period. 3 With those types of dollars on the line, it should be quite evident that there will be nu- merous players vying for a share of those dol- lars as a source of revenue for themselves. And if short-term thinking dominates when it comes to treatment of MASH, then healthcare is sure to get even more outrageously expen- sive than it already is. The players vying for a portion of those dollars will not only include pharmaceutical companies that manufacture the drugs, but also traditional health systems, commercial payers, and an entity that we have No matter how wonderful the people who work at commercial health insurers may be, they are led by a group of executives whose job is to demonstrate profitable margins year after year whether they improve the health of their members or not. It requires a short-term focus that may result in the doubling of finan- cial valuation of their company, while the health of their state and their millions of members fails to improve, in some cases consistently re- maining near the bottom of national rankings. Coverage of an exorbitantly expensive drug like Solvaldi can be an example of this type of short-term thinking. While a one-time $84,000 investment may very well prevent spending of hundreds of thousands or even millions of dollars in healthcare expenditures, the actu- arial analysis of that decision is not nearly so simple. The payer must also base its cover- age decision on the lifetime value of each customer and how long that member will be covered under their plan. Since members may change jobs and health insurers frequently, the health plan runs the risk of investing in expensive treatments where another payer eventually reaps the return on investment. The same principle holds true for all their cover- age decisions. Any substantial investments in the long-term health of their members might ultimately accrue to one of their competitors, and that reality can sometimes tilt the balance from long-term investments in health to short- term extraction of dollars. Fortunately, the cost of drugs that cure hepatitis C infection has come down over time, leading to improved coverage and increasing cure rates, but there is another type of liver disease on the hori- zon that could dwarf the costs of hepatitis C. “Fatty” Liver Disease An estimated 2.7 to 3.9 million people in the United States have chronic hepatitis C. Of those, the risk of progressing to cirrhosis ranges from 15% to 30% within 20 years. Formerly known as nonalcoholic fatty liver disease (NAFLD), metabolic dysfunction-associated steatotic liver disease (MASLD) is now the most common cause of liver disease in the world. Some 30% of the US population may have this condition, or nearly 100 million people. Hepatic steatosis refers to fat in the liver or “fatty” liver, and fat in the liver can be inflammatory. Fortunately, most