A new study that projects what could happen if Pennsylvania covered the costly treatment of hepatits C for everyone in Medicaid yields some surprises for policymakers nationwide: Few lives would be saved. Some patients might actually fare worse. The federal government would likely reap savings, at the expense of the states.

The counter-intuitive findings from the University of Pittsburgh may become part of pitched debates in state capitols and the incoming administration in Washington over health-care costs.

Hepatitis C is an especially difficult issue. An estimated 3 million Americans are infected with the blood-borne virus but most have no idea until liver problems develop after decades. Highly effective treatments have come on the market only within the last few years and cost tens of thousands of dollars.

Medical guidelines issued last year say that anyone who is sick should be treated. But state treasuries can't afford it, and patients report being told that they're "not sick enough" for the medication.  A state advisory panel recommended in May that Pennsylvania's Medicaid program, which has fewer restrictions than most states, cover treatment for anyone who is infected. No decision has been announced.

The new findings, published this week  in the journal Healthcare, are based on complex modeling of multi-year Medicaid claims but are especially influenced by  two factors, senior author Walid Gellad said in an interview Thursday:

  • The disease progresses slowly. As a result, many of those with chronic hepatitis C — Baby Boomers are disproportionately infected — will have aged out of Medicaid, which is jointly funded by the state and federal governments, and into the fully federal Medicare program in time for treatment to prevent serious complications.
  • Medicare already covers treatment for all participants who are infected. The program spent an estimated $9 billion last year on hepatitis C drugs alone, double the 2014 figure.

Gellad, an associate professor of medicine and codirector of Pitt's Center for Pharmaceutical Policy and Prescribing, said the study was the first to consider  the interplay between Washington and the states.

Hepatitis C is the leading cause of liver transplants, and the progression of patients' disease is measured by the degree of liver damage on a scale of 0 to 4. Severe fibrosis — the evidence required for routine coverage by most states' Medicaid programs — is a score of F-3; medical society guidelines say that F-0 merits treatment.

For the study, Gellad's team used Medicaid claims data from 2007 to 2012 to model the effects of different policies decades into the future.  That was well before a phased-in expansion of the program under the Affordable Care Act. And the projections could not account for  the effects of the worsening epidemic of heroin addiction, which spreads hepatitis C through dirty paraphernalia.

With those caveats, among others, the researchers' model estimated that 47,000 participants in the state Medicaid program were infected in 2015. Expanding coverage to include those with mild fibrosis (a score of F-2), which the state actually did a year ago, after the data were collected, would cost the program another $273 million in the next decade "with no substantial reduction in the incidence of liver cancer or liver-related death," the authors wrote.

Expanding it to all participants (F-0), as the advisory committee recommended, would increase Medicaid costs by $693 million but substantially reduce expenditures by Medicare. Even that, however, would have virtually no impact on seriously diseased patients — there would be 11 fewer Medicaid deaths in Pennsylvania over 35 years  (and 30 fewer among the same population in Medicare).

"What was really counterintuitive," Gellad said, was the finding that expanding treatment might crowd out a small percentage of patients. So many people are infected, he said, that "you couldn't treat everybody." The overload would lead to some sick very patients being left out.

The study does not question the need for treating the sickest patients. But the results are likely to be controversial. Most states imposed coverage restrictions — the Medicaid program pays up to $60,000 per patient in Pennsylvania even after steep discounts are factored in — soon after the new drugs started entering the market in 2014. Over the past year or so, patient advocates and infectious-disease doctors have pushed for states to cover everyone who is infected, the norm for most other diseases. The Obama administration has made the same point. It also challenged pharmaceutical companies, which stand to make huge profits, to lower prices.

A legal advocacy center affiliated with Harvard Law School has sued or threatened legal action against several states to force coverage; Delaware agreed in June to loosen its restrictions. New Jersey  is among the majority that has not, according to a national survey published last month by the Center for Health Law & Policy Innovation.

Stacey B. Trooskin, an infectious-disease doctor in Philadelphia who is a vocal advocate for coverage, said Friday that she disagreed with some of the assumptions that were used for the new study and believes that it overestimated the number of patients who would get treatment and how much it would cost. There are significant risks to leaving hepatitis C untreated, she said.

"We can cure a virus.  Cure prevents transmission," said Trooskin who runs a hepatitis C program at the AIDS services organization Philadelphia FIGHT.  If doctors can't get the medication to their patients, she said, "there is a real risk that in the years that follow" they may infect sexual partners, babies during pregnancy or delivery, and people with whom they inject drugs. "We are in the midst of an opioid epidemic.  The public health implications of restricting this treatment are significant."

Trooskin presented her case to the advisory panel that seven months ago  recommended that Ted Dallas, secretary of the Pennsylvania Department of Human Services, drop nearly all restrictions. The  agency has not responded to requests for comment since then. Spokeswoman Kait Gillis said Thursday that her office was trying to get an answer but none came by mid-evening.

The new study is an extension of earlier research by Gellad that was partially funded by DHS in a joint agreement with with his university but he said the state had no role in the projections. Funding also came from the National Institutes of Health.

Many private health insurance plans cover treatment for all subscribers but Gellad cautioned against comparisons because the populations they serve are so different, as are their sources of revenue.

One reason that infectious-disease physicians argue that everyone, including substance abusers, should be treated is the potential for transmission of the virus. The study could not take that potential fully into account, Gellad said.

He also noted that the study made broad statistical projections and would be most useful to policymakers who are trying to decide, with limited data, what they can afford. It is not making recommendations for specific patients or their doctors.

"This is really on a population level," Gellad  said. "If you were that individual of course you would want to be treated right away."