This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
UnitedHealthcare Sues Dialysis Chain Over Billing
By Reed Abelson and Katie Thomas
The New York Times, July 1, 2016
Private health insurers can pay more than $4,000 for each dialysis treatment. Government health plans like Medicaid pay around $200.
That gaping price difference was the motivation for a scheme, orchestrated by a for-profit dialysis chain, that illegally pushed poor people in Florida and Ohio out of inexpensive government programs and into expensive private plans sold by UnitedHealthcare, according to a lawsuit the giant insurer filed in federal court on Friday. UnitedHealthcare says the arrangement needlessly exposed the patients to medical bills.
The suit accuses American Renal Associates, a public company that operates nearly 200 dialysis clinics across the country, of fraudulently billing millions of dollars since the beginning of the year. UnitedHealthcare is trying to recoup that money.
The insurer argues that the effort was aided by the American Kidney Fund, a nonprofit patient advocacy group, which paid the patients’ premiums for private insurance. The insurer said American Renal Associates “earmarked donations” to the kidney fund to pay for the coverage, violating anti-kickback laws in the process.
The kidney fund, which is not listed as a defendant in the lawsuit, is overwhelmingly financed by dialysis companies.
People who need dialysis and have end-stage renal disease are eligible for Medicare coverage, even if they are under 65. If they are poor, they may also qualify for Medicaid.
At the same time, UnitedHealthcare has a keen financial interest in keeping very ill patients, like those who need dialysis, out of its private plans. Under the federal health care law, insurers must cover everyone, no matter how sick they are.
According to the lawsuit, American Renal Associates devised a clever plot aimed at converting patients over to private plans.
The company identified poor patients in rural areas of Florida who did not have a nearby dialysis clinic in UnitedHealthcare’s network, the suit says. The centers then persuaded these patients to switch to UnitedHealthcare plans, using the American Kidney Fund’s program to pay their premiums.
Finally, the centers billed UnitedHealthcare out-of-network prices of about $4,000 per dialysis treatment, compared with just $200 under Florida’s Medicaid program, the suit said.
Because the UnitedHealthcare plans required greater out-of-pocket contributions than Medicaid’s coverage, the centers waived any part of the dialysis bill that was not paid by the insurer.
In this scheme a dialysis chain was able to increase Medicare payments twenty fold for dialysis treatments, thus cheating the taxpayers who fund Medicare. The scheme was made possible because Congress continues to push us toward privatization of Medicare by overpaying the private Medicare Advantage plans designed to displace our traditional Medicare program.
Its important to understand how this this scheme works because it epitomizes the irrationality of insisting the we use private insurers in our health care financing instead of a single payer Medicare program. Whereas the traditional Medicare program covers all physicians and hospitals, except the few who opt out of the program, the private insurers, such as those providing Medicare Advantage plans, use limited provider networks in order to contract for more favorable rates.
In this case, UnitedHealthcare was not able to contract with dialysis providers in some regions thus they were forced to pay out-of-network prices instead of what would have been contracted prices. American Renal Associates thus jumped at the opportunity to transfer their traditional Medicare patients, for whom they were receiving $200 a treatment, into the private UnitedHealthcare plan, wherein they could demand an out-of-network payment of $4000.
If instead we had a Medicare for all program, payments might have been slightly more than $200 if the dialysis centers were at risk of closing down due to inadequate revenues, but clearly they would not have approached anywhere near $4000. One of the most important features of a single payer national health program is that payments are fair, both for the providers and for the taxpayers funding the program.
The villains here? The dialysis chain gaming the system, the private insurers using schemes such as limited networks to leverage the system in their favor, and our legislators who are forcing on us their ideology favoring market solutions for health care financing when the government is best suited to ensure an efficient and equitable system of health care financing for all. Perhaps it is us who carry the greatest blame by not insisting that our elected representatives fix this system. Both major political parties have excluded single payer from their platforms, and we do nothing about it, except whine.
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Anthem, Express Scripts Face Legal Challenge Over Prescription Drug Prices
By Julie Appleby
Kaiser Health News, July 1, 2016
Anthem and its pharmacy manager Express Scripts overcharged patients with job-based insurance for prescription drugs, alleges a lawsuit that seeks class action status for what could be tens of thousands of Americans.
It’s the latest wrinkle in a battle that has already pitted the major national insurer and its pharmacy benefit manager (PBM) against each other in dueling legal actions — and further illustrates the complicated set of factors that determine what consumers pay for prescription medications.
The case alleges that insured workers paid too much because Express Scripts charged “above competitive pricing levels” and Anthem, in effect, allowed those higher prices as part of a 10-year contract deal with the pharmacy management firm.
Recently, some independent pharmacists have complained that some PBMs are charging insured consumers more than the cash price for some generic drugs.
And for years, questions have been raised about whether the industry fully discloses how much it is actually saving insurer and employer clients — and what portion of those savings are actually passed along to consumers.
“It’s such a complicated web of intermediaries that stand between consumers and the prices they pay,” said Erin Fuse Brown, an assistant professor of law at Georgia State University College of Law. “As a result, no one knows if they’re getting ripped off.”
Anthem’s lawsuit aims to end its contract with the PBM and seeks $15 billion in damages for what it alleges was the PBM’s failure to renegotiate lower prices for prescriptions. Anthem used to run its own PBM, but sold it to Express Scripts in 2009 as part of the contract deal, court documents show.
In its counterclaims, Express Scripts said the insurer rejected several proposals to renegotiate prices. In addition, Express Scripts’ legal document says Anthem was offered a choice of “less money up front but lower pricing” or a bigger upfront payment “with higher pricing for Express Scripts’ services.” It chose the higher prices over the course of the contract in exchange $4.6 billion more in upfront fees, according to the PBM’s counterclaim. That money, Express Scripts’ documents allege, was then used by Anthem to buy back its own stock, rather than passing it along to health plan members. The stock buyback “applied upward pressure to Anthem’s stock price, thereby enriching shareholders and management,” the filing alleges.
Decoding Big Pharma’s Secret Drug Pricing Practices
By Robert Langreth, Michael Keller and Christopher Cannon
Bloomberg, June 29, 2016
The pharmaceutical industry has long said that list prices aren’t a reliable indicator of what Americans pay for prescription drugs because big customers, including health insurers and pharmacy benefit managers, negotiate discounts. But a Bloomberg analysis of 39 medicines with global sales of more than $1 billion a year showed that 30 of them logged price increases of more than double the rate of inflation from 2009 to 2015, even after estimated discounts were factored in. Only six drugs had price increases in line with or below inflation.
(A large number of specific examples are provided in the article.)
Pharmaceutical companies, insurers and pharmacy benefit managers each conspire, with each other and independently, to get the maximum financial gain that prescription drug market dynamics will allow. Health care funds pour into these industries, and patients end up the losers.
What would it be like if pharmaceutical firms all converted to non-profit status and then negotiated earnestly with the public stewards of a single payer national health program? Health care funds would no longer be drained off to passive investors and to exorbitant executive salaries and benefits, and patients would end up the winners.
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
The Biggest Obstacle to the Health-Care Revolution
By David Blumenthal
The Wall Street Journal, June 28, 2016
The digitization of our health-care system is well under way, but several obstacles frustrate efforts to take full advantage of the health information revolution. Perhaps the most important is our difficulty moving patients’ data, so that records can follow patients as they go from one site of care to another.
Moving health data goes by the technical term “health information exchange” or HIE. There are some technical barriers to HIE, but they are not the big problems. The big problems are economic and cultural.
The American health system consists of competing economic entities: health systems, hospitals, nursing homes and doctors, to name a few. State and federal authorities zealously enforce antitrust laws to assure that local health-care competition remains strong. But health providers’ data about their patients is a valuable economic asset that some doctors and hospitals are understandably reluctant to share with their competitors down the street. Many patients stick with clinicians and hospitals in part because that’s where their records are. If the records can travel, so may patients, taking their business with them. Also, many providers believe that they – not patients — own that information, and have no obligation to share it.
A recent federal report cites this “information blocking” by providers as an important obstacle to HIE. Legislative and regulatory remedies to information blocking are under review, but there may be another, equally powerful route to HIE: giving patients their records so they can decide who can have them and when.
The idea is simple. Under provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), providers must share patients’ records within 30 days on request. Instead of doctors or hospitals totally controlling their health information, patients could take charge. Managing this information may be challenging for some patients, but they could retain third parties that, for a fee, would steward and distribute health-care data as directed. Patients could designate particular clinicians or institutions, or family members and caretakers, as entitled to access. If so inclined, patients could also share their health information with researchers or public health authorities. Some call this “consumer-mediated health information exchange.” A robust new business sector could provide these data services to interested patients.
To move forward with consumer-mediated HIE, several steps will be required. First, the federal government needs to more aggressively enforce HIPAA’s information-sharing provisions. Second, we need a new cohort of health-data stewards who can help patients manage their own data. Some process of private certification or public regulation will likely be necessary to assure that these new entities can be trusted to discharge this sensitive and complex responsibility. Third, we will need to perfect the technical ability of these new data stewards to access the electronic-data repositories of health-care providers.
Dr. David Blumenthal is the president of the Commonwealth Fund, a national health-care philanthropy based in New York. From 2009 to 2011, he served as the National Coordinator for Health Information Technology, with the charge to build an interoperable, private, and secure nationwide health information system and to support the widespread, meaningful use of health IT.
We have some serious problems in health care that need our immediate attention such as administrative excesses, wasteful spending, impaired access, maldistribution of health care resources, and financial barriers to care. But the health policy community is entrenched in efforts to expand the administrative oversight of our system as somehow being the solution to problems they seem not to have defined. They are adding to the problem of administrative excesses while ignoring what really needs to be done.
David Blumenthal, having been our National Coordinator for Health Information Technology, seems to define the problem as a lack of health data management through a health information exchange. He would create a “robust new business sector” – a “consumer-mediated health information exchange” – providing data services to patients. Just what we need – more administrative excesses!
Right now our government and the health care industry are deeply involved in drafting rules for the Merit-based Incentive Performance System (MIPS) and the alternative payment model (APM) option as more studies are showing that such efforts are impairing professional satisfaction and increasing physician burnout – more administrative excesses with detrimental outcomes!
We need to start thinking about the patients and a health care system that would best serve their needs. A single payer national health program is specifically designed to address the real problems noted in the first paragraph above. Patients are not looking to interact with personal data managers; they want health care, and they want it now.
Low Prices for Vaccines Can Come at a Great Cost
By Austin Frakt
The New York Times, June 27, 2016
A $30,000 price tag for cancer drug therapy that extends life only a few weeks is understandably alarming. But a $2,000 price tag for all childhood vaccines — credited with eradicating smallpox, preventing a million or more cases of other diseases and averting thousands of deaths each year — is a bargain. In fact, the price of childhood vaccines may be too low for our own good because it contributes to shortages.
Vaccine shortages have popped up in the United States many times over the past 50 years. In 2001, eight of 11 recommended childhood vaccines were unavailable or in short supply.
Vaccine prices have gone up over the years, in large part because of newer vaccines that command higher prices. The number of recommended vaccine doses has also increased, which pushes up the overall cost of full vaccination. Still, vaccines are inexpensive relative to their value. A typical dose costs $50 and, apart from an annual flu shot, only a few doses are required over a lifetime. According to the Duke study, vaccines with lower prices were more likely to be in short supply than those with higher prices. There were no shortages of vaccines with a price per dose above $75.
Commercial market vaccine prices are higher than government ones, but not by enough to prevent shortages.
We probably don’t need to raise vaccine prices by a factor of 10 to promote new vaccine investment and stabilize supply. According to one study, a doubling in price would incentivize new vaccine research, development and production.
For drugs as valuable as vaccines, that might be a price worth paying.
NYT Reader Comment:
By Don McCanne
San Juan Capistrano, CA
Are vaccines developed primarily to move wealth from the masses to corporate executives and passive investors? Or are they developed to reduce grief and suffering for all of us?
As a child, I remember putting dimes in the March of Dimes cardboard donor cards, because it was the right thing to do. As a medical student, I remember the iron lungs at San Francisco General Hospital. I remember Jonas Salk saying to Edward R. Morrow about polio vaccine, “There is no patent. Could you patent the sun?” It has been decades since I’ve seen an iron lung.
Piketty and Saez have shown us what happened: We have moved from the post-war egalitarian society in which our nation thrived by directing production to the common good, and now onto a society that transfers income and wealth to the richest amongst us, even if that means that many will have to do without vaccines because they are not affordable.
Would Jonas Salk rather have been known as a person who became wealthy from a patent on a vaccine, or as a person who helped virtually eliminate polio from the earth? Altruism is still out there. We need to unlock it from from the shackles of the rent seekers.
Dealing with vaccine shortages: current situation and ongoing activities
By Dr. Oleg Benes
World Health Organization, April 12-14, 2016
The way forward…
* Global solutions to address global challenges
* Strategic supply management vs transactions
Risk management ESSENTIALS
* Identification & assessment & management
* Articulated policy & strategies
* Monitoring & early-warning systems
Commitment & collaboration
* WHO, Member States, regional institutions, partners & industry
CDC Vaccine Price List
One of the problems with the U.S. health care system is our heavy reliance on private market dynamics. This has resulted in our exceptionally high prices in health care. The role of our public health system has somewhat moderated price increases for vaccines, but the CDC price list reveals that the costs of vaccine in the private sector are considerably higher than the costs for vaccines provided for our public immunization programs.
Vaccine shortages do occur. Given that we rely on markets, it is understandable why a respected health researcher such as Austin Frakt would reach a conclusion that we need to provide greater financial incentives – higher prices – to motivate vaccine manufacturers to ensure that supplies will not run short.
But how does the rest of the world do it? They cooperate rather than compete. In describing the way forward, the World Health Organization suggests commitment and collaboration. Absent from their list is a suggestion that we should drive prices up until the manufacturers are quite pleased with the cushy margins they would like to have, yet, in the U.S. private sector, we yield to their demands.
My comment in The New York Times is a plea to replace rent seeking in health care with a system based on altruism: We do it because it’s right, and it makes us feel proud (and maybe even begin to associate greed with shame). Altruism is much more likely to occur when we shift from market driven financing to a government health care financing system (again, compare CDC vaccine prices with market based prices – link above).
Medicare, an effective program that needs expansion
By Jack Bernard
The Atlanta Journal-Constitution, June 24, 2016
I have been amazed at the number of negative Medicare-for-all attack pieces printed in various respected papers over the last few months, making me wonder why primarily liberal economists would be attacking a program that progressives have been trying to enact since Truman.
The underlying implication is that the current private system is more effective than a federal government run single-payer model. As a Republican former elected official with a very conservative spending record, I too believe in eliminating governmental waste and in utilizing the private sector when it is more effective.
Therefore, my record makes some citizens surprised when I advocate for Medicare for all. Objectively, the U.S. healthcare system is and has been severely broken. Despite our spending far more per capita, our country is far behind all developed democracies, which scoff when our politicians make the false claim that we have the best healthcare in the world.
Taxpayers are beginning to see the benefits of single-payer versus the ACA. In May, Gallup reported that “58 percent of U.S. adults favor the idea of replacing the law with a federally funded healthcare system that provides insurance for all Americans.”
For the most part, it can be funded in much the same way as Social Security, through a payroll tax, with additional funding coming from a variety of other sources. More detail on this subject can be found on the Physicians for a National Health Program website (www.pnhp.org).
But Republicans just continue to repeat their worn-out talking points about our current system being perfect — so long as we repeal the ACA. The Democrat front-runner is little better, supporting the ACA but having no clear plan to cover the 27 million Americans still without coverage or the millions more with inadequate insurance.
Given that special interest groups are making billions from our broken system, and contributing heavily to both parties to keep health insurance private, the real question is “will politicians in both parties ever have the courage to act?”
Jack Bernard, the first director of health planning for Georgia, has been an executive with several national health care firms. A Republican, he’s a former chairman of the Jasper County Commission.
The original intent of the architects of Medicare was to eventually expand the program to cover everyone. Yet the Republicans have been reluctant to do so, and now the Democrats have specifically excluded it from their party platform. The leadership of both parties need to listen to conservative Republican Jack Bernard, an expert in our health care system. His full article is available at the link above.
Minnesota Blues’ decision to alter ACA plans mirrors stampede to narrow networks
By Bob Herman
Modern Healthcare, June 24, 2016
Blue Cross and Blue Shield of Minnesota is cutting back its participation in the state’s Affordable Care Act insurance exchange next year after losing nearly $300 million in the individual market in 2015.
However, the large Blues insurer is not completely exiting the state-based marketplace. Fully withdrawing has its consequences: Federal law bars insurers from re-entering the marketplaces for five years, assuming they discontinue all types of individual policies.
Instead, Blue Cross and Blue Shield of Minnesota is dropping health plans with the broadest networks sold on and off the exchange and will push people toward its narrower HMO option called Blue Plus, according to the Star Tribune.
Blue Cross and Blue Shield of Minnesota’s decision is not unprecedented and has been embraced by other insurers around the country. The Blues plans in Illinois, New Mexico and Texas—all of which are owned by Health Care Service Corp., a giant Chicago-based company that has lost billions of dollars on ACA plans—abandoned their broad-network exchange plans in favor of the narrow-network HMOs.
Dropping broad-network plans can also be seen as a controversial risk dump for insurers. The sickest people who cost the most to insure often chose plans with higher monthly premiums to gain access to broader provider networks and fewer out-of-pocket costs. In Minnesota next year, those people may opt to buy those plans with other carriers, immediately benefiting the Blues’ bottom line while redirecting the insurance risk elsewhere.
The individual insurance market has always been unstable. The struggles insurers face are not only how they can make their products more effective and accessible to more individuals, but especially how they can ensure that revenues exceed expenditures. So what can we learn from the response of Blue Cross and Blue Shield of Minnesota to unfavorable market conditions?
Most importantly, they are dumping risk onto other insurers. That places a burden on the other insurers which then translates to even higher premiums, higher cost sharing, fewer benefits, or any combination of these for individuals already enrolled in the other insurance risk pools. That’s not good.
In order to maintain a presence in the market, they are continuing to offer its narrow network HMO option. Those who transfer into that plan will have more limited choices of health care providers, perhaps losing coverage for their current health care professionals and institutions. That’s not good.
This instability in coverage is a defining feature of private health insurance plans. The insurers will always continue to introduce innovations as they compete for an advantage in the marketplace. When their products appeal to people who have greater health care needs, their model doesn’t work, and they pull out. What is working now is passing more costs onto the patients through greeter cost sharing, and limiting access to care by narrowing the networks of covered providers. That’s not good.
What seems obvious is that we have selected the wrong intermediary for financing health care. The private insurers function with a business need requiring costly administrative excesses, and they have a need to conform their products to meet business goals rather than patient service goals. That’s not good.
What would work best for patients would be a single payer national health program – an improved Medicare for all. But the Republicans are opposed, and the Democratic platform committee just voted to exclude single payer from their platform, and no other political party has enough traction to prevail in the elections. That’s not good.
Even though the Medicare for all concept remains popular, it seems that we will not have single payer in the foreseeable future. Churchill and others have said that a democracy is the worst form of government other than all of the others, but sometimes you wonder.
Kip Sullivan submitted the following comment on CMS’s proposed MACRA rule.
I am not a doctor. Nor was I trained in establishment health policy ideology by a graduate school of economics or health policy. I state that I am not a doctor not because I hold the condescending view of doctors held by CMS and those who enacted MACRA, but because I want to make it clear I cannot be accused of having the bias that CMS and other MACRA proponents allege that doctors have. I have spent the last quarter-century studying and teaching health policy for non-profit citizen organizations.
I have described the most important defects in the proposed MACRA rule in three articles I posted on The Heath Care Blog (see links below). Those defects are (1) CMS’s inability to measure cost or quality of medical services accurately, which means “value” cannot be measured accurately, and (2) the failure of ACOs and “medical homes” (the “advanced APMs” that CMS relies on to make the APM program work) to save money for Medicare. These defects guarantee CMS’s MACRA rule will fail.
Exactly how it will fail is difficult to say because it is so complex. It may fail by raising Medicare’s costs; by raising physician and hospital costs so high providers avoid APMs or Medicare patients; by damaging quality of care for patients whose care is not measured because doctors “teach to the test” (that is, they move time and resources from patients whose care is not measured to patients whose care is measured); by worsening physician burnout; by worsening health disparities as those doctors who treat sicker and poorer patients are punished by CMS’s crude attribution and risk-adjustment algorithms; and/or by accelerating the consolidation of the health care system and thereby making it even less likely that either competition or regulation can hold physicians and hospitals “accountable” for anything.
But MACRA’s failure is certain. Failure is guaranteed by this simple fact: For feedback to be useful, it must be accurate and intelligible. The feedback CMS will give doctors under MACRA – the financial feedback and the periodic reports CMS proposes to send to doctors – will be grossly inaccurate and unintelligible. CMS’s feedback will be grossly inaccurate because neither CMS nor any other group of human beings can “attribute” patients accurately to most doctors, and, even assuming the attribution problem could be fixed, neither CMS nor any other group of human beings can adjust physician cost and quality scores for factors outside physician control with anything resembling accuracy (with the possible exception of simple and condescending process measures, such as, Did Dr. X advise Patient Y to stop smoking?). CMS’s feedback will be unintelligible not only because it will be inaccurate, but because the composite score will consist of many bits of noisy data arbitrarily crammed into a single score.
CMS’s inability to attribute patients accurately and to risk-adjust accurately are in turn major factors in the failure of CMS’s ACO and “medical home” demos to work as advertised.
CMS should acknowledge its inability to measure cost and quality accurately. Instead CMS whistles past the graveyard. CMS and Congress pretend CMS’s measurement systems are ready for prime time when they are not. CMS and Congress do a profound disservice to America’s doctors and patients by taking such a cavalier attitude toward these fundamental and intractable issues. CMS should tell Congress MACRA must be postponed so that CMS, MedPAC and others can evaluate honestly and thoroughly the stew of “value-based purchasing” programs CMS has already implemented (PQRS, ACO, “medical home,” etc), none of which are working well. To drop MACRA on the nation’s doctors now given what we know already from the numerous “value-based purchasing” experiments CMS has conducted, not to mention commonsense, would be irresponsible.
Kip Sullivan, J.D. is a health policy expert and frequent blogger living in Minnesota. His articles have appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.
What would Brexit mean for the NHS?
By Denis Campbell
The Guardian, June 14, 2016
Alongside the economy and immigration, the NHS has emerged as a key battleground in the EU debate. That is because the leave campaign decided early on to deploy the health service as a core argument in their plea to voters. Leave leaders Boris Johnson and Michael Gove have said consistently since campaigning began in April that Brexit could free up up to £8bn extra a year to spend on the NHS.
Leaving the EU would not, however, provide more money to spend on the NHS, according to the Institute of Fiscal Studies. “Rather, it would leave us spending less on public services, or taxing more, or borrowing more.”
Labour has dismissed the leave campaign’s claim of a bigger NHS budget as “misleading, simplistic and complete and utter nonsense”. Its own analysis concludes that a post-Brexit economic slump could force the government to cut the Department of Health’s budget by £10.5bn – the equivalent of every hospital in England having to shed 1,000 nurses and 155 doctors.
And last week, Tory MP and former GP Sarah Wollaston defected from the Vote Leave campaign saying its claim that Brexit would unlock up to £350m a week for the NHS “simply isn’t true”.
Pharma, researchers, NHS face uncertainty after Brexit win
By Helen Collis
Politico, June 24, 2016
Britain’s Brexit result today ignites a long period of uncertainty in the health sector, on the relocation of the European Medicines Agency, on staffing the National Health Service and on funding research.
EU referendum: Nigel Farage backtracks on Vote Leave’s ‘£350m for the NHS’ pledge hours after result
By Jon Stone
Independent, June 24, 2016
Nigel Farage has disowned a pledge to spend £350 million of European Union cash on the NHS after Brexit.
The Ukip leader was asked on ITV’s Good Morning Britain programme whether he would guarantee that the money pledged for the health service during the campaign would now be spent on it.
Speaking on the morning of the referendum result he however said he had never made any such pledge.
When it was pointed out that Vote Leave emblazoned the £350 million claim onto the side of a tour bus and drove it around the country, Mr Farage said: “It wasn’t one of my adverts – I can assure you! I think they made a mistake in doing that.
There was certainly no uniformity of opinion on what impact Brexit might have on their National Health Service. Now that the results are in, we still will not know until the destabilization begins to settle down.
So what is the most likely outcome? The basic structure of their revered health system will likely remain intact, but it may be subjected to tweaking, the nature of which will depend on the ideology prevalent in the political environment after the shakeup occurs, already beginning with the announcement that Conservative Prime Minister David Cameron will resign.
What impact will this have on health care reform in the United states? Virtually none. The probable Democratic presidential nominee has said that she will perpetuate the current system, adding minor beneficial tweaks. The probable Republican presidential nominee will likely accept the recommendations in the white paper released by the House Republicans which basically proposes perpetuating the current system with tweaks that they consider to be beneficial from a conservative perspective.
Bernie Sanders and colleagues are attempting to shift the Democratic platform to a position of support for a single payer national health program – Medicare for All – but Hillary Clinton has already made it very clear that she would not support such a change.
We can sympathize with the difficulties faced by the Europeans as they work out the Brexit problems and what is to follow. But if we are to learn from this, we must understand how important it is to be informed on public policy and then to elect politicians who will carry out a pledge to make our nation work well for all of us. We don’t seem to be doing that now. We do not have the prospect of a Usexit since we have nowhere to go.
New Directions in Health Care Podcast: Controlling Rising Drug Costs
By Sandy Hausman
The Commonwealth Fund, June 22, 2016
Prescription drug spending, a significant driver of overall health care costs, has been rising rapidly over the last few years. This episode explores the reasons for higher drug prices, including the introduction of new high-value medications, potentially inefficient research and development, and a lack of price regulation. Producer Sandy Hausman interviews Commonwealth Fund President David Blumenthal, M.D., Duke-Margolis Center for Health Policy Director Mark McClellan, M.D., and Johns Hopkins University School of Public Health Professor Gerard Anderson about the underlying causes and potential solutions.
At Johns Hopkins University’s School of Public Health, Professor Gerard Anderson argues government should more aggressively regulate drug prices.
“There are no rules. There’s no legislation. You just basically, as a drug company, have the ability to set the price, and if the government has given you a monopoly – and that’s what a patent is – then there are no competitors for your drug, and so you can charge essentially whatever you want. You don’t have to worry that a lot of people won’t have access to the drug, because you’re going to make a lot of money on a few people, and that’s exactly what happens.”
He adds that even generic drug makers may be charging too much.
“Five drugs companies—and soon it will be four—in the generic drug industry control over half of the market, and the reason why generic drugs have been inexpensive in the past is pure price competition. They’re selling exactly the same product. That’s what a generic drug is, but they’re selling it on the basis of price competition, but if there’s not a lot of competitors, then you don’t get very good price competition.”
But Mark McClellan warns against the imposition of price controls, since they may limit patient access to certain medications.
“In the United Kingdom, which has significantly lower drug prices than the United States, there is a government body set up that reviews whether or not the price set by a manufacturer is worth it for certain kinds of patients, and in some patients makes a decision that the price is not worthwhile. That’s negotiating leverage. That means that unless the price comes down, people don’t have as much access to the drug.”
As that debate continues, Dr. Blumenthal says the federal government has found some ways to negotiate for better prices.
“The Veterans Administration and the Department of Defense negotiate drug prices and have the statutory authority to set an upper limit on drug prices — that is the lowest amount that any single purchaser can get from a drug company, and there are other drug price controls that are imposed, for example, by states on behalf of their Medicaid programs. When you put California and New York together — two blue states that often pioneer with these kinds of new programs — those are big parts of the national market.”
As usual, Professor Gerard Anderson is right again. Between patents for brand products and consolidation in the generic market, drug prices are out of control. He argues that the government should more aggressively regulate prices.
You may remember Anderson as coauthor with Uwe Reinhardt et al. of the classic Health Affairs article, “It’s the Prices, Stupid.”
Mark McClellan argues that government involvement in setting drug prices risks impairing access to higher priced drugs, but it is the excessive prices in the United States that creates much greater access problems because of the lack of affordability.
David Blumenthal points out that the Veterans Administration, the Department of Defense, and some state Medicaid programs have been effective in limiting drug prices, thus the government does have the potential to play a very important role in combating price gouging by the pharmaceutical industry.
And, of course, with a well designed, government funded and administered single payer system our drug costs would be brought down to reasonable, fair levels – for all of us, collectively.
A Better Way to Fix Health Care
By Speaker Paul Ryan
abetterway.speaker.gov, June 22, 2016
In a confident America, everyone has access to quality, affordable health care.
Obamacare is making things worse by the day. It drives up premiums and deductible costs for individuals, families, and businesses. It forces people off the plans they like. It fuels waste, fraud, and abuse. And it cannot be fixed. Its knot of regulations, taxes, and mandates cannot be untangled. Obamacare must be fully repealed so we can start over and take a new approach.
Over the years, House Republicans have put forward hundreds of ideas to improve health care, ranging from targeted proposals to full alternatives to Obamacare. This is the first time we are unifying these efforts into a single health care plan.
This isn’t a return to the pre-Obamacare status quo. And it isn’t just an attempt to replace Obamacare and leave it at that. This is a new approach. It’s a step-by-step plan to give every American access to quality, affordable health care.
Our plan recognizes that people deserve more patient-centered care, not more bureaucracy. That means more choices, not more mandates. You should have the freedom and the flexibility to choose the care that’s best for you. Insurers should compete for your business, and treat you fairly—no matter what. You and your family should have access to the best life-saving treatments in the world. And as you get older, Medicare should give you more choices too. At every step, you should be in the driver’s seat. This is a better way.
A Better Way to Fix Health Care – Snapshot (3 pages):
A Better Way: Health Care – Policy Paper (37 pages):
As their vision states, the House Republicans have organized their previous concepts on health care reform into a single policy paper. It is heavy on rhetoric that is deceptive and bordering on dishonesty in that their proposals are cloaked in language suggesting that these are beneficial policies when many of them are actually detrimental.
The report includes a rehash of familiar proposals: health savings accounts, selling insurance across state lines, association health plans, medical liability, Medicaid block grants, and converting Medicare to a premium support program. There is really not much new here.
But what is missing are the details that would allow for an objective analysis of the impact were these polices converted into legislation. However, it is easy to translate their rhetoric into what they are really proposing: they would reduce the role of the federal government in financing health care, shifting responsibilities to the states and especially to the the markets, while sharply increasing the financial burden on patients. Since more of the responsibility for paying for health care would shift to the individual, it is likely that the greatest impact would be to significantly impair access to health care due to financial barriers, especially the lack of cash on hand.
Just one example of their rhetoric:
“Currently under Medicare, for example, beneficiaries and physicians (and other providers) are not allowed to agree to a different treatment regimen for a Medicare covered service. Our plan would develop a personalized care demonstration program that would give beneficiaries and health care professionals the ability to voluntarily enter into an arrangement for items and services outside of the Medicare system. While participating in this voluntary demonstration project, Medicare beneficiaries would still retain their Medicare benefits. With the proper oversight, this is a common-sense approach to giving our seniors the opportunity to make medical financing decisions with their physicians without direct interference from Washington. These freedoms can also help to ensure that Medicare beneficiaries maintain the access to health care professionals they deserve by increasing flexibility and thus the number of physicians who participate in Medicare.”
Sounds great – freedom to purchase the care you want instead of that dictated by the federal government. No, that isn’t the point. The policy they advocate for here is to allow physicians to charge Medicare patients full fees for authorized services. That currently is not allowed unless a physician totally opts out of the Medicare program – not a practical consideration for most physicians. Why do they have this rule? Without it a two-tiered Medicare program would be created – a concierge tier for the wealthy, and an underfunded welfare program for the rest of us.
But how about a little perspective here? The Republicans propose repealing the Affordable Care Act and then replacing it with slight variants of many of the policies contained in the act. They leave in place most of the health care financing infrastructure: Medicare, Medicaid, employer-sponsored plans, individual plans with public and private exchanges, and private payment. They merely tweak the existing system. The tweaks cause private insurance to become even less effective in providing financial security; the profound administrative waste is perpetuated, and oversight of the outrageous pricing in health care is reduced.
We’ve already had enough of this. It’s time – past time – to demand reform that works, that would make health care affordable for everyone who needs it. It’s time for a single payer national health program – an improved Medicare for all.
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