News

YAHOO! FINANCE
Business Wire
July 25, 2001

"Employers faced with rising health care costs and increased employee contributions to pay for those health benefits are finding a win-win solution in supplemental insurance."

Cherie Tibbetts, vice president for products and marketing at Colonial Life and Accident Insurance Company:

"Employees may be forced to select lower levels of coverage or plans with higher deductibles in order to afford their major medical insurance. That can leave them with coverage gaps or increased financial exposure in the event of an accident or serious illness."

http://biz.yahoo.com/bw/010725/2418.html

Comment: Although this press release from Colonial is obviously for marketing purposes, its implications are far more ominous. The current move to "empower" patients in the health care marketplace by making them more sensitive to health care costs through increased cost sharing has created coverage gaps large enough to warrant the opening of the market to supplemental insurance.

We already have extensive experience with supplemental insurance in the form of Medigap coverage for the Medicare program. Medigap has proven to be one of the worst insurance values based on the very high administrative costs compared to the relative paucity of benefits. Also, it is not affordable to those who need it the most, the Medicare beneficiaries who cannot afford the out-of-pocket expenses of the current program, yet do not qualify for Medicaid coverage.

To expand this concept to employment-linked coverage portends disaster. Diverting more health care dollars to this egregiously inefficient, middleman industry removes even more dollars that should be destined for patient care. This deficit will have to be taken up by the patients themselves. The deficits will be large enough to affect the affordability of health care for average-income wage earners. Thus the problems of the uninsured and underinsured will no longer be the exclusive domain of lower income individuals; it will be the problem of Mr. and Mrs. Average America and their children. The only good news about this is that finally the majority of voters will recognize the need to replace our sick system with publicly administered, universal health insurance. Then we'll have decent health care for everyone.

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Los Angeles Times
July 25, 2001
Commentary
by William W. Thomas, Chairman of the House Ways and Means Committee

"Let's pause for a moment in the debate over a patients' bill of rights and go back to the basic premise of health care. It's about helping people. It's about getting the best medical treatment. It's about you and your doctor making decisions that affect your health, your family and your life. It's not about a lawyer making those decisions."

Comment: It is rare for me to agree with the man that would privatize Medicare, and to disagree with our great allies in the cause for health care justice for all. But we should pause and reflect on Rep. Thomas' words.

Most patients that suffer medical injury do not sue and are not compensated for their losses. Most patients that do sue are not victims of malpractice but have suffered a medical maloccurance that is not the result of error in judgment but is merely an unfortunate, fortuitous outcome. The medical tort system is an extremely ineffective system, yet about 10 billion dollars per year are diverted from patient care into this system. Much of this is consumed by the plaintiff's attorneys, defense attorneys, malpractice insurance companies, investigators, and court costs, not to mention the additional waste of unnecessary "defensive medicine." Of the remaining portion that reaches the plaintiffs, a relatively insignificant amount is used to obtain medical care. That 10 billion dollars would be better spent on beneficent programs such as meeting the needs of the uninsured or providing prescription drug coverage for Medicare beneficiaries. Instead, under the cloak of a "patients' bill of rights," Congress continues to debate the expansion of a tort system designed to divert even more funds to this wasteful legal industry. These comments will be challenged by our friends and colleagues on the basis that we need "accountability," but what we really need is an expedited appeals process to gain access to needed care.

Tragically, this ridiculous debate has diverted our national leaders away from the real problems in health care. We desperately need to provide coverage for everyone, and we need to assure that our resources are provided exclusively for the benefit of patients. We can do this best through a publicly administered, universal health insurance program. Let's start the real debate - now!

http://www.latimes.com/news/opinion/commentary/la-000060494jul25.story?coll=la%2Dnews%2Dcomment

Kip Sullivan responds to the quote of Rep. William Thomas and to my comment:

Don,

I agree with portions of your commentary, but I disagree with your characterization of the malpractice that occurs in this country as "a medical maloccurrence that is not the result of error in judgment but is merely an unfortunate, fortuitous outcome."

You are usually a very crisp and precise writer, but the quoted phrase is mushy and, to the extent that I can understand it, wrong. Your phrasing suggests that malpractice is nonexistent (your invented word "maloccurrence" strikes me as almost Orwellian), or, if malpractice is real, it's like gravity -- there's nothing we can do about it and, therefore, there's no point in debating why it happens.

I offer a different point of view. Malpractice is real, some of it is due to system failure, some of it is due to the failings of individuals, and both types of failings are less likely to happen if individuals and systems know they could lose money and reputations in a law suit.

I agree completely with you that the existing malpractice system is highly imperfect. Too many people who shouldn't sue do, too many who should sue do not, and the overhead costs of the system are very high. But we currently have no other system that can deter malpractice, whether by individuals, hospitals, HMOs or any other system.

Overwhelming evidence exists indicating that a substantial portion of adverse outcomes in medicine are the result of malpractice, which the law defines to be the provision of services, or the failure to provide services, that violates a widely recognized standard of care due to negligence of the doc or other provider. (For the sake of simplicity, I'm leaving out a few other elements of the definition of malpractice.) It's true that a substantial body of evidence indicates that many (but not all) of the acts of malpractice should be blamed on the systems in which health care professionals work. I include managed care insurers in my definitions of "systems," something the Institute of Medicine seems incapable of recognizing. According to the IOH, "quality is the problem, not managed care."

But not all plane crashes are due to system failures --some are caused by errors of judgment by individual pilots -- and, similarly, not all medical malpractice can be blamed on the system.

Regardless of where blame should ultimately lie for a given adverse outcome -- on the individual, several individuals, or a system --the threat of a lawsuit will have a deterrent effect on at least some types of negligence. We're already seeing proof of this axiom in the announcements by several HMOs that they are going to back away from utilization review. The plans doing this are claiming they are dropping UR because it wasn't cost effective, but the timing of these announcements robs them of their credibility. UR has been around for three decades. That's plenty of time for the plans to figure out that UR wasn't cost effective. It is the threat of class action suits filed in recent years, and the possibility of many more if the right to sue HMOs is established by Congress, that has caused some HMOs to back off of UR.

Even after we get a universal health insurance system, malpractice will remain a problem. The public needs to discuss both issues --malpractice and universal coverage. They are separate problems.

I just wrote a piece for In These Times asking the question, Is the patient protection debate a waste of time? I don't think it is. I'll email it to you if you'd like to see it.

Keep up your great work.

Kip

Kip's excellent article, "Patients Losing Patience," from In These Times, August 20, 2001, is available at: http://www.inthesetimes.com/web2519/sullivan2519.html

Victor Sidel, M.D., Distinguished University Professor of Social Medicine at Albert Einstein College of Medicine of Yeshiva University, responds to the quote of Rep. William Thomas and to my comment:

Dear Don:

I not only "rarely disagree" with you, but I believe this is the first time I have ever disagreed with you.

I believe you give Thomas too much credit. Of course, lawyers should not be making medical decisions. (Doctors shouldn't be making most medical decisions either, except in rare circumstances, but that's a different topic.) But when managed care or other forms of medical care organization deny needed care to patients, under current conditions in the United States lawsuits are often the only channel for redress. Is that an effective, just, or equitable method for oversight of the U.S.medical care system? Of course not. Does it lead to "defensive medicine"? Of course it does. But until the United States arrives at what we both view as the needed high quality, publicly administered, universal health care system with an expedited appeals process, the tort system may be the only way to force the industry to provide needed care. Is it a diversion? Of course it is. But is it a necessary stopgap while the needed system change is attained? It may be. Tort law has certainly been misused in many instances, but defenders of the environment and of civil rights would be weaker without it.

Thomas opposes the patients' rights bill that includes strengthening tort law methods as one of its provisions because he seeks to prevent needed system change and he views opposition to that bill as a tactic for his purpose. The remainder of his opinion piece makes his tactic clear. He should not be praised for that tactic.

Warmly, Vic

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

The Dallas Morning News
July 24, 2001
Opinion - Letters

First, take a nation without a coherent immigration policy. The border patrol does everything in its power to prevent illegal immigration while American businesses welcome with open arms foreign workers willing to do work Americans aren't willing to do. Add a health care system where access is a privilege, not a right, regardless of one's legal or citizenship status. Add a questionable political/legal opinion this month that illegal immigrants are not entitled to free preventative care. Then stir.

Beyond the terrible human injustice involved, restricting access for necessary medical care – including preventive services – is poor public health policy. Instead of wiping out infectious diseases, we could suffer nationwide epidemics. Imagine instead of eliminating polio epidemics and smallpox, such contagious diseases as hepatitis, AIDS and TB flourished because we decided to only provide access for those who could afford it.

Providing access to necessary medical care for all, regardless of legal or immigration status, is a wise and healthy policy.

JERRY FRANKEL, M.D. Plano, Texas

Jerry Frankel is a board member of Physicians for a National Health Program

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Second Report Documents Industry's Intense Lobby and Political Contribution Campaign to Keep Prices and Profits High

WASHINGTON, D.C. - The pharmaceutical industry spends about one-fifth of what it says it spends on the research and development (R&D) of new drugs, destroying the chief argument it uses against making prescription drugs affordable to middle and low-income seniors, a Public Citizen investigation has found.

The findings are contained in a Public Citizen report, Rx R&D Myths: The Case Against the Drug Industry's R&D Scare Card.

The report reveals how major U.S. drug companies and their Washington lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA), have carried out a misleading campaign to scare policymakers and the public. PhRMA's central claim is that the industry needs extraordinary profits to fund "risky" and innovative research and development to discover new drugs. In fact, taxpayers are footing a significant portion of the R&D bill, which is much lower than the companies claim.

"This R&D scare card is built on myths and falsehoods that are maintained by the drug industry to block Medicare drug coverage and measures that would rein in skyrocketing drug costs," said Frank Clemente, director of Public Citizen's Congress Watch.

Public Citizen based the study on an extensive review of government and industry data and a report obtained through the Freedom of Information Act from the National Institutes of Health (NIH). Among the report's key findings:

¤ The actual after-tax cash outlay - what drug companies really spend on R&D for each new drug (including failures) - is approximately $110 million (in year 2000 dollars.) This is in marked contrast with the $500 million figure PhRMA frequently touts.

¤ The NIH document shows how crucial taxpayer-funded research is to the development of top-selling drugs. According to the NIH, U.S. taxpayer-funded scientists conducted at least 55 percent of the research projects that led to the discovery and development of the five top-selling drugs in 1995.

¤ Public Citizen found that, at most, about 22 percent of the new drugs brought to market in the past two decades were innovative drugs that represented important therapeutic advances. Most new drugs were "me-too" or copycat drugs that have little or no therapeutic gain over existing drugs, undercutting the industry's claim that R&D expenses are used to discover new treatments for serious and life-threatening illnesses.

A second report issued today by Public Citizen, The Other Drug War: Big Pharma's 625 Washington Lobbyists, examines how the U.S. drug industry spent an unprecedented $262 million on political influence in the 1999-2000 election cycle. That includes $177 million on lobbying, $65 million on issue ads and $20 million on campaign contributions. The report shows that:

á The drug industry hired 625 different lobbyists last year - or more than one lobbyist for every member of Congress - to coax, cajole and coerce lawmakers. The one-year bill for this team of lobbyists was $92.3 million, a $7.2 million increase over what the industry spent for lobbyists in 1999.

á Drug companies took advantage of the revolving door between Congress, the executive branch and the industry itself. Of the 625 lobbyists employed in 2000, more than half were either former members of Congress (21) or worked in Congress or other federal agencies (295).

á The industry's $20 million in campaign contributions and millions more in issue ads attacking candidates opposed by the industry aided its army of lobbyists in gaining access to congressional representatives.

"The drug industry is stealing from us twice," Clemente said. "First it claims that it needs huge profits to develop new drugs, even while drug companies get hefty taxpayer subsidies. Second, the companies gouge taxpayers while spending millions from their profits to buy access to lawmakers and defeat pro-consumer prescription drug legislation."

Rep. Pete Stark (D-Calif.), the ranking Democrat on the House Ways and Means Health Subcommittee, added, "Not surprisingly, pharmaceutical companies have been deceiving Congress and the American public for years. I commend Public Citizen for exposing the industry's long-standing attempt to hide the truth about R&D spending."

Sen. Paul Wellstone (D-Minn.), said, "This well-documented Public Citizen report shows just how much the pharmaceutical industry exaggerates its commitment to research and development and focuses instead on the bottom line."

Added Rep. Tom Allen (D-Maine), "Millions of our seniors have paid taxes for decades and contributed to the development of new drugs. Now in their retirement, they pay the highest prices in the world for these drugs. . . . The public deserves better."

Local healthcare, labor and senior citizen groups released both of these reports today in 15 states. Many thanks to those coalition partners in: CA, CT, MA, MN, NJ, NM, NY, NC, ND, RI, SD, TX, UT, VT and WA.

Public Citizen calls on Congress to pass a Medicare-run prescription drug benefit program with strong cost containment that guarantees affordable prices for middle and low-income seniors. Copies of the reports can be found at http://www.citizen.org/congress/drugs/R&Dscarecard.html and http://www.citizen.org/congress/drugs/pharmadrugwar.html

Public Citizen is a nonprofit consumer advocacy organization based in Washington, D.C. For more information, visit www.citizen.org

Guillermo Nicacio, Field Organizer Public Citizen's Congress Watch (202) 454-5136 (202) 547-7392 Fax www.citizen.org/congress

Executive Summary

This new Public Citizen report reveals how major U.S. drug companies and their Washington, D.C. lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA), have carried out a misleading campaign to scare policy makers and the public. PhRMA's central claim is that the industry needs extraordinary profits to fund risky and innovative research and development (R&D) for new drugs. But this R&D scare card - or canard - is built on myths, falsehoods and misunderstandings - all of which are made possible by the drug industry's staunch refusal to open its R&D records to congressional investigators or other independent auditors.

Using government studies, company filings with the U.S. Securities and Exchange Commission and documents obtained via the Freedom of Information Act, Public Citizen's report exposes the industry's R&D canard:

¤ The drug industry's claim that R&D costs total $500 million for each new drug (including failures) is highly misleading. Extrapolated from an often-misunderstood 1991 study by Joseph DiMasi, the $500 million figure includes significant expenses that are tax deductible and unrealistic scenarios of risks.

¤ The actual after-tax cash outlay - or what drug companies really spend on R&D - for each new drug (including failures) according to the DiMasi study is approximately $108 million. (That's in year 2000 dollars, based on data provided by drug companies.) [See Section I]

¤ A simpler measure - also derived from data provided by the industry - suggests that after-tax R&D costs ranged from $69 million to $87 million for each new drug created in the 1990s, including failures. [See Section II]

¤ Industry R&D costs are reduced by taxpayer-funded research, which has helped launch the most medically important drugs in recent years and many of the best-selling drugs, including all of the top five sellers in one recent year.

¤ An internal National Institutes of Health (NIH) document, obtained by Public Citizen through the Freedom of Information Act, shows how crucial taxpayer-funded research is to top-selling drugs. According to the NIH, taxpayer-funded scientists or foreign universities conducted 85 percent of the research projects that led to the discovery and development of the top five selling drugs in 1995. [See Section III]

¤ The industry fought, and won, a nine-year legal battle to keep congressional investigators from the General Accounting Office from seeing the industry's complete R&D records. Congress can subpoena the records but has failed to do so. That might owe to the fact that in 1999-2000 the drug industry spent $258 million on federal lobbying, campaign contributions and ads for candidates thinly disguised as "issue" ads. [See Section IV]

¤ Drug industry R&D does not appear to be as risky as companies claim. In every year since 1982, the drug industry has been the most profitable in the United States, according to Fortune magazine's rankings. During this time, the drug industry's returns on revenue (profit as a percent of sales) have averaged about three times the average for all other industries represented in the Fortune 500. It defies logic that R&D investments are highly risky if the industry is consistently so profitable and returns on investments are so high. [See Section V]

¤ Drug industry R&D is made less risky by the fact that only about 21 percent of the new drugs brought to market in the last two decades were innovative drugs that represented important therapeutic gains over existing drugs. Most were "me-too" drugs, which often represent slight variations of existing drugs. [See Section VI]

¤ In addition to receiving research subsidies, the drug industry is lightly taxed, thanks to tax credits. The drug industry's effective tax rate is about 40 percent less than the average for all other industries. [See Section VII]

¤ Drug companies also receive a huge financial incentive for testing the effects of drugs on children. This incentive, which Congress may reauthorize this year, amounts to $600 million in additional profits per year for the drug industry - and that's just to get companies to test the safety of several hundred drugs for children. [See Section VIII]

¤ The drug industry's real priority is advertising and marketing, more than R&D. Increases in drug industry advertising have averaged almost 40 percent a year since the government relaxed rules on direct-to-consumer advertising in 1997. Moreover, the Fortune 500 drug companies dedicated 30 percent of their revenues to marketing and administration in the year 2000, and just 12 percent to R&D. [See Section X]

Posted by pnhp at 03:31 PM | Permalink | Comments (0)

The Henry J. Kaiser Family Foundation

Report prepared by Public Opinion Strategies and Peter D. Hart Research Associates
July 2001

"1. Overall, seniors are VERY satisfied with the Medicare system." "They do not want structural reform that they perceive might jeopardize what they are already getting."

"2. The generally high levels of satisfaction have a significant impact on the way in which respondents react to words used to describe proposed 'changes' to the Medicare system." "Words like 'strengthened and improved' elicit overwhelming favorable reactions, while words that suggest a more significant departure from the current Medicare structure, such as 'changed' or 'privatized' are very negatively perceived."

"3. Participants suffer a severe case of sticker shock when they consider the price tag of a drug benefit program for seniors." "Overall, participants were much more concerned with the costs to seniors than they were with the cost to the government in providing the benefit."

"4. The budget surplus and the recent tax cut strongly influence perceptions about the affordability of a generous drug benefit." "Given the current environment, participants do not blink at the idea of allocating significant government resources to pay for a new benefit."

"7. Given their quite favorable views of Medicare, participants both presume and prefer that a new drug benefit would be administered within the framework of the current program."

http://www.kff.org/content/2001/6002/Medicare%20Focus%20Group%20Report.pdf

Comment: Americans do want a prescription benefit for Medicare. They believe that the government can afford to pay for it. But they do not believe that drug benefits should be linked to privatization schemes. The message is clear: reject the Breaux-Frist premium support proposal, and enact a bona fide, comprehensive prescription benefit. (Then we can do focus groups on providing public insurance for all of us.)

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

The Orange County Register
July 22, 2001
by Margie Mason, The Associated Press

"About 250 students with dependents received letters earlier this month informing them a new health-care plan would be offered, but a premium increase of as much as 60% was expected. Many students said they can't afford those rates and were embarrassed by an accompanying flyer detailing public-assistance plans available for low- or middle-income families in Santa Clara County."

Jeffrey Martin, an engineering doctoral student with a wife and five children:

"I feel appalled that a world-class university like Stanford would let a situation come about whereby implying students should get public assistance for their dependents."

Comment: Really? The university of such notables as Alain Enthoven and Milton Friedman is endorsing public-assistance health plans for family members of their own students? Surely it must be a practicum in applied economics. They wouldn't really.... Naw, it must be a joke. Some sense of humor!

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Medical Economics
July 9, 2001

A roundtable discussion

Moderator: "What about the proposal that Medicare be used as a model for a new American system?"

George D. Lundberg, M.D., Editor-in-chief of Medscape and former editor of JAMA:

"Medicare could certainly serve as part of our model. It's not a new idea. Some people have said that it should be extended to cover the whole population. Then they made the terrible mistake of calling that a 'single-payer system.' There will never be a single-payer system in this country, because that presupposes people can't or won't use their own money to buy whatever they want outside the system."

http://me.pdr.net/me/public.htm?path=content/journals/m/data/2001/0709/round2.html

Comment: All health care systems, including single payer, allow people to use their own money to buy whatever they want outside of the system. It is long past time to end fighting against reform based on semantic or rhetorical issues, and to begin supporting reform based on sound policy. The words, "single payer," are not the enemy, but reflexive, stilted thinking is. The issues are straight forward. We all agree on the goals of universal access and coverage, free choice, quality, and value in health care. The structural changes required to achieve those goals are simple. Even Dr. Lundberg recognizes that publicly administered insurance, such as Medicare, will provide the reform we need. Call reform single payer or don't call it single payer, just do it!

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Boston Globe
7/19/2001
by Benjamin Gedan

"The governor and state legislators will lose their publicly funded health care in 2004 if they do not provide the same coverage to all state residents - that is, if voters approve a ballot initiative to be unveiled today."

Richard Lord, president of Associated Industries of Massachusetts:

"I think that it's inappropriate to threaten the Legislature in that regard."

Comment: Inappropriate? Why should the legislators be allowed to grant themselves publicly funded health care while denying the same to the voters? Is health care a right for all or only a right for elected officials?

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Bush’s Pharmaceutical Cards
Institute for Public Accuracy Washington, D.C.
http://www.accuracy.org

Thursday, July 12, 2001

Responding to George W. Bush's announcement today supporting discount cards for more Medicare recipients to use while buying pharmaceutical drugs, the following board members of Physicians for a National Health Program (www.pnhp.org) comment:

DON McCANNE, M.D. A retired family physician, McCanne said today: "White House spokesperson Ari Fleischer claims that 'the president is committed to helping seniors get prescription drugs they need and deserve.' But this plan is not a government program. It is merely a private, marketplace scheme that is receiving the personal endorsement of President Bush. The program will be administered by pharmacy benefit managers (PBMs), the prescription drug equivalent of managed care plans. These middleman businesses siphon off health care dollars that should be directed to patient care. The PBMs will sell memberships to Medicare beneficiaries. Providing everyone with a 'discount' is no discount at all. It is merely a price that is below an artificially inflated price set for the purpose of creating a fraudulent 'discount' price. If Mr. Bush really wants to help seniors 'get prescription drugs they need and deserve,' then he would support a bona fide Medicare prescription benefit that minimizes beneficiary cost sharing. Sadly, not even the leading congressional proposals would accomplish this goal."

QUENTIN YOUNG, M.D. National coordinator of Physicians for a National Health Program, Young said today: "The pharmaceutical industry justifies its super profits by pointing to research and development costs, but it actually spends more on marketing than on R-and-D. Canada, Mexico and our own U.S. government Veteran's Administration get deep discounts on pharmaceuticals by negotiating with manufacturers -- up to 60 percent. The White House ... could reduce costs sharply by allowing people in the U.S. to import pharmaceuticals from Canada, where they are substantially lower in cost, but this 'free trade' administration is suddenly for no trade and doesn't want importing of low-cost pharmaceuticals when it curtails the drug companies' profits."

DAVID HIMMELSTEIN, M.D. Associate professor of medicine at Harvard Medical School, Himmelstein said today: "Medicare already covers some prescription drugs -- those administered in a doctor's office. And the Department of Defense, by law, gets the best prices from drug companies. If the administration were actually interested in covering people inexpensively, they could extend Medicare drug coverage to prescriptions administered outside a doctor's office. If they, like the Defense Department, insisted on the lowest prices, this would cut drug prices dramatically. But instead, they are telling people they can go to private drug-buying firms, and these firms would negotiate prices with drug stores and distributors, not the drug manufacturers. This puts a squeeze on the retailers, but lets the big pharmaceutical companies off the hook. This is part of a pro-corporate agenda for health care that has no chance of actual progress. The thrust of where they are taking Medicare is to managed care, which has utterly failed in the Medicare program. Letting the HMOs into Medicare has actually cost money, between $2 billion and $3 billion per year according to the General Accounting Office. This is because the government gives HMOs 95 percent of the average cost for a Medicare recipient for each one an HMO signs up, but of course the HMOs cherry-pick the healthy ones; 18 percent of Medicare patients cost them nothing at all. Then, when HMO customers do get a major illness and start accruing serious bills, they've gone back to standard Medicare. Medicare is actually much more efficient than the HMOs -- it has 2 percent overhead, whereas they have 15 percent overhead."

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

The Associated Press
July 11, 2001
by Ron Fournier

"The plan relies on companies that manage drug benefits to buy prescription drugs in bulk. The companies would sell the cards to Medicare patients, who could use them at any pharmacy to purchase their medicine at a reduced rate."

Ari Fleischer, White House spokesperson:

"The president is committed to helping seniors get prescription drugs they need and deserve."

Comment: The reality:

** The fact that this plan "does not require congressional approval" confirms that this is not a government program. It is merely a private, marketplace scheme that is receiving the personal endorsement of President Bush.

** The plan will "not require federal money." Without use of federal funds, the plan totally depends on the charity of the marketplace to reduce prescription drug costs, a principle based on a law of economics that does not exist.

** The program will be administered by pharmacy benefit managers (PBMs), the prescription drug equivalent of managed care plans. These middleman businesses siphon off health care dollars that should be directed to patient care.

** The PBMs will sell memberships to Medicare beneficiaries. Paying a fee for a "discount" card further strains the budgets of lower income beneficiaries. The Medicare card could be used to establish eligibility for the "discount," without adding further administrative burdens and fees.

** Providing everyone with a "discount" is no discount at all. It is merely a price that is below an artificially inflated price created for the purpose creating a fraudulent "discount" price.

** Bulk purchasing is not unique to PBMs, but is characteristic of the industry. Only patients using the services of the small retailer pay inflated prices since those retailers are not allowed bulk rates. This is yet another example of unfair price discrimination characteristic of this industry.

** Many pharmacies are dependent on the PBM contracts. The PBMs are in a position to force the retailers, contractually, to honor the discount cards, while requiring them to accept the burden of the discounts, threatening the solvency of the retailers.

** Beneficiaries are to have choice between at least two PBMs in each region. Competition didn't stop health care inflation under managed care plans; it won't work for PBMs either.

"Discount" cards are a marketing scheme that have no beneficial impact on true costs. In fact, the administrative burden of these programs actually result in a modest increase in overall costs. Medicare beneficiaries need prescription drug coverage, and they need relief from ever-increasing out-of-pocket expenses that are impairing access to care. If Mr. Bush really wants to help seniors "get prescription drugs they need and deserve," then he would support a bona fide Medicare prescription benefit that minimizes beneficiary cost sharing. Sadly, not even the leading congressional proposals would accomplish this goal.

http://www.washingtonpost.com/wp-dyn/articles/A42753-2001Jul10.html http://www.washingtonpost.com/wp-dyn/politics/news/latestap/A45734-2001Jul11.html

http://www.nytimes.com/2001/07/11/politics/11MEDI.html

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Los Angeles Times
July 8, 2001
Commentary
by John Balzar

"I've been researching opinion polls. Nowhere do I see that Americans are clamoring for more courtroom tedium to heal what ails them. For that matter, nowhere do I see that they're feeling healthier thanks to bewildering insurance paperwork. But in poll after poll, a Top 10 concern of Americans is health care, plain and simple.

"The fan dance now underway in the capital will do nothing except make worse what is already occurring in the nation. Employer-based health insurance plans are eroding. Premiums are soaring. The number of Americans without insurance is climbing, perhaps to 45 million of us. Many cannot afford their medicine."

"Insurance companies do not deliver health care. They are profit-driven bureaucracies. If they had their way, they would insure only the healthy. As soon as we got unhealthy, we'd be uninsured."

"I say, let's collectively hire our own doctors and civil service health administrators. Private sector profits have no place in a business so important as life and death.

"Why are we so afraid of managing our own health care through our government, anyway? Because we don't want heavy-handed, slow-moving decisions. Yet what could be more heavy-handed and slow-moving than the system we have?

"Actually, we are afraid of just the words: Socialized Medicine.

"So let's start by changing terms. Let's call it, American Health Care."

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Portland Press Herald
July 8, 2001
by Allan Drury

An interview with Howard R. Buckley, Mercy Hospital administrator:

Q: How has your thinking evolved over time on the single-payer issue?

A: I have watched the number of uninsured in Maine grow to 150,000 or so. I have felt the atmosphere and environment of distrust grow. I am seeing the rise in concern about health-care costs from small businesses. And the people that we serve no longer trust payers or providers.

People are drawn to work in health care because of its mission - helping patients and families. They become discouraged by the bureaucracy that we have built around that fundamental provider-patient interaction. And finally, I feel that health care isn't a privilege, but a right that belongs equally to everyone. In the end, only a single-payer system will truly change the system for the better.

Q: Maine lawmakers have gotten high marks for extending access to low-income residents, but they haven't done much to contain costs for most people with insurance. Is there anything the state can do about insurance costs for the middle class?

A: I don't believe that anyone can contain costs unless here is a unified delivery system, providing the same health-care program to everyone and paid for by a single payer. If you can't control the system, you can't control the cost.

http://www.portland.com/business/stories/010708buckley.shtml

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Health Affairs
July/August 2001
by Marsha Gold

"By almost any measure, the interim grade for the Medicare + Choice program as of the start of 2001 must be judged a 'D' if not an 'F.' In contrast to the goal of expanded choice, the M + C program has reduced the range of choice that once existed, with existing plans withdrawing, few new participants entering from among the newly authorized types of options, no geographic redistribution of participants to develop choice where none existed, and an increase rather decrease in the inequities in benefits and offerings between higher- and lower-paid areas of the country."

From the editor's prologue to this article:

"Remarkably, the policy community's faith in the competitive model has persisted despite the acutely disappointing performance of Medicare + Choice. Congress has amended the program and enhanced payment levels, but enrollment and plan participation continue to decline. Nor has any alternative approach to restructuring Medicare emerged."

Comment: President Bush and the conservatives along with the "bipartisan" support of Sen. Breaux continue to support privatization of Medicare through premium support legislation that utilizes private health plans. The experience with the Medicare + Choice program has confirmed that the private plans have wasted resources while denying coverage to major segments of the eligible population. Even more outrageous is that the editor of Health Affairs, perhaps the most important publication on health policy, states that no alternative approach to restructuring Medicare has emerged. Okay everyone... Open your windows... Climb out on your rooftops... And scream... WE WANT PRESCRIPTION COVERAGE! WE WANT CARE TO BE ACCESSIBLE AND AFFORDABLE FOR EVERYONE BY ELIMINATING OUT-OF-POCKET EXPENSES!

Of course, those supporting privatization claim that we cannot afford the existing program, much less the expansions. More nonsense. We already are funding the existing program through both the tax system and cost sharing. But cost sharing has had the negative impact of impairing access to care for lower income individuals simply because that care is unaffordable for them. A program of social insurance is clearly defective if it does not assure benefits for everyone. Means testing has been suggested and utilized to a limited extent, but that increases costs, increases administrative complexity, and is demeaning. Cost sharing has been promoted as a means of reducing utilization of health care services. That has essentially no impact on the affluent, but it does cause lower income individuals to forgo beneficial services because of lack of affordability. It has been estimated that the costs of administering cost sharing and means testing programs offset the savings induced by cost sharing. If we can get past our apprehensions about "government" and "taxes," then it would be a greatly improved system of social insurance if we were to place all funds into the same pool and eliminate out-of-pocket expenses.

The prospect of including pharmaceuticals in the Medicare program has produced the predicted outcry that we would be bankrupting Medicare since this sector of health care costs is on a rocket trajectory. But should that be? Why do we accept the fact that physicians, hospitals, laboratories, and other providers of care are mandated to accept controls on their costs, but that we should allow the pharmaceutical industry total freedom, subject only to the dubious forces of the marketplace. When Medicare was first established, physicians were allowed to charge usual, customary and reasonable fees, and what happened? The rocket trajectory. The explosion of costs had to be brought under control through fee controls. (For those that protest government fee controls, keep in mind that the only real impact of managed care has been the imposition by the private, health plan bureaucracies of... guess what... fee controls!) There is absolutely no reason that we should not apply the same cost containment strategies to the pharmaceutical industry, especially now that pharmaceuticals have become an essential, integral part of health care. Much of the research is funded by taxpayers through the NIH. We are entitled to a return on our investment in the form of lower drug prices. The industry wastes tremendous resources in marketing and in production of expensive copycat drugs that add very little value. Let's force this industry to adopt the same efficiencies and fair pricing to which hospitals and physicians must adhere.

Medigap plans are one of the worst insurance values on the market and waste dollars that could be better spent on health care. Many are unable to afford them. If we included pharmaceuticals in the Medicare program, and eliminated cost sharing, Medigap plans would be placed in that trash heap of bad ideas. Now that we know that private Medicare managed care plans have been wasting taxpayer resources, we can throw them on the same trash heap.

Come on! Let's fix our traditional Medicare program by adding pharmaceuticals and eliminating out-of-pocket expenses. And then let's let everyone participate in the single payer plan that's as close to perfect as humanly possible, Medicare for All.

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Newsday
July 6, 2001
Letters

The Patients Bill of Rights debate in Washington fails to address the day-to-day fears and concerns of patients. The bill would force them to go through an internal appeal, an external appeal, find and pay for an attorney and then spend more time waiting to be heard in our overcrowded court system.

They could literally die in the process.

Having the right to sue an HMO is an attempt to seek justice after the HMO has inflicted the harm. We have to prevent the harm.

Even if the Democrats win this battle, it would be the equivalent of applying a Band-Aid to treat a cancer, and will still perpetuate a system that allows patient care to be at the mercy of an industry that has a built-in incentive to deny care. Every dollar of care an HMO can deny to a patient increases the HMO's bottom line. It's time we faced up to this obvious anti-patient structural defect.

Why not use the mechanism that has worked successfully for the patient for 35 years, while performing with a mere 2-percent cost ratio for administration? Extend Medicare to the non-seniors.

Joe Kane

Editor's Note: The writer serves on the executive board of the Long Island Coalition for a National Health Plan

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The New York Times
July 6, 2001
Letters

To the Editor:

In a June 30 letter, a former chairman and chief executive of Aetna Inc. suggests that people pay for procedures not covered by their insurance plan or health maintenance organization. Maybe he can afford this, but most of us cannot. Therefore, insurers are making medical decisions when they deny coverage.

The United States outspends every nation on health care, yet health care here is ranked 37th in quality by the World Health Organization. Most Canadian and British citizens are satisfied with their national health care systems. While Canada often has long waiting lists, this is caused by a small population to share the costs and a shortage of physicians, which the United States does not have.

A single-payer plan is long over-due in the United States. Health care is a basic human right and an essential service well within the scope of government to provide.

ROBERTA PALMER, M.D. Tigard, OR

Comment: The New York Times has published innumerable letters advocating for single-payer health care reform. Isn't it time for their editorial board to sit down with representatives of the single payer movement to consider their own endorsement of this imperative for health care justice?

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RESTON, VIRGINIA

July 5 - In Maine, due to quickly rising premiums, both individuals and small employers are being crunched out of the health insurance market; consequently, one in three Mainers are either uninsured or underinsured. Governor Angus King and the state legislature recently created a commission charged with developing a plan for the implementation of a single-payer, universal health care system in Maine for presentation to the legislature in March 2002.

The American Medical Student Association (AMSA), the nation's largest, independent medical student organization, enthusiastically commends the people of Maine, the state legislature, and the Governor for taking the bold step needed toward ensuring that all Mainers have access to comprehensive, high-quality health care. Maine has always demonstrated a pioneering spirit in health care, and this effort demonstrates Maine's commitment to making high-quality health care accessible to everyone, said Jaya Agrawal, AMSA national president and a fourth-year medical student at Brown University. In a single-payer system, money is dedicated to the provision of health care, not insurance companies' administrative costs, stock dividends, or CEO salaries, Agrawal continued. We know that with Maine's continued determination, they will not merely demonstrate this fact, but ignore the special interests and become the first, but certainly not the last state, to implement a system that provides health care coverage of the highest quality for all residents of their state.

AMSA has supported a single payer health care system for more than 30 years. Just as medical students have been vocal proponents within the medical community of a Medicare-for-all system, Maine has led the nation in creating novel programs that serve as models for increased health care access. Recent studies in both Massachusetts and Maryland have shown that a single-payer system in those states would provide high quality health care for all citizens while saving millions of dollars.

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Government Funds 60% of U.S. Healthcare Costs - Far Higher than Previously Believed

Harvard Study Finds Government Health Spending in U.S. Higher than in Any Other NationÊ
"We Pay for National Health Insurance but Don't Get It"

Government expenditures accounted for 59.8% of total U.S. health care costs in 1999, according to a Harvard Medical School study published today in the journal Health Affairs. At $2,604 per capita, government spending was the highest of any nation - including those with national health insurance. Indeed, government health spending in the U.S. exceeded total health spending (government plus private) in every other country except Switzerland. (Estimated total U.S. health spending for 2002 is $5,427 per capita, with government's share being $3,245.)

The study analyzed data on spending for government health programs like Medicare, Medicaid and the Veterans Administration ($548.7 billion in 1999), as well as two categories that have previously been overlooked in calculating government health costs. (1) Expenditures to buy private insurance for government employees - e.g. members of Congress, firemen and school teachers - at a cost of $65.6 billion in 1999. And (2) tax subsidies for private coverage - which totaled $109.6 billion in 1999. Most of these tax subsidies go to the wealthiest Americans. The study found that government's share of expenditures has nearly doubled since 1965, with tax subsidies and public employee benefit costs increasing fastest.

The hidden government health spending has a major impact on family budgets. In 1999, a family of four with average health costs spent $7,016 for their own health expenses and premiums (including what their employer paid). In addition, they paid $10,416 in health care taxes; $1,578 for tax subsidies, $943 for government workers' coverage, and $7,895 for government health programs like Medicare and Medicaid. Even many uninsured families pay thousands of dollars in taxes for the health care of others.

Dr. Steffie Woolhandler, a study author and an Associate Professor of Medicine at Harvard, noted: "We pay the world's highest health care taxes. But much of the money is squandered. The wealthy get tax breaks. And HMOs and drug companies pocket billions in profits at the taxpayers' expense. But politicians claim we can't afford universal coverage. Every other developed nation has national health insurance. We already pay for it, but we don't get it."

Dr. David Himmelstein, study co-author and a co-founder of Physicians for a National Health Program, commented: "Our study shows that universal coverage is affordable - without a big tax increase. Government already spends nearly enough, but its spending it wrong. National health insurance doesn't mean spending more; it means spending wisely. We spend over $309 billion each year on paperwork in insurance companies, hospitals and doctors' office - at least half of which could be saved through national health insurance. We spend $150 billion on medications, at prices 50% higher than Canadians pay for the same drugs. By slashing bureaucracy and drug prices we could save enough to cover all of the uninsured and improve coverage for the rest of us."

"ItÕs an outrage that the American people pay sky high health care taxes - but 40 million of them are uninsured," said Dr. Quentin Young, Past President of the American Public Health Association. "Health care should be every American's right, just like schools, roads, defense, police and fire protection."

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As the economy slows down, and more Americans are facing the potential financial burdens of inadequate health insurance coverage or no coverage at all, it is urgent that a common plan be formulated to initiate a popular campaign that can finally move society to take action in support of universal health care.

As we have seen, the road to health care reform has had many turns, including many dead ends. Various campaigns and many initiatives have been tried; we traveled in many different directions but have not found the way. Although our vision and determination to make quality health care a right of every citizen is just and unwavering, we have been unable to formulate a plan and unleash a campaign that could move society to take action in support of universal health care. In contrast to past movements for social justice, our efforts to find an effective approach have eluded us for over half a century. Let no one be in doubt - there has been no predominant social movement for universal health care, merely sporadic and episodic campaigns and demands for health care justice, allowed to ignite, flame brightly, sputter, and die out.

The vital approach begins with our willingness to recognize and accept the lessons of past movements for social justice, equality and rights which require that those who support reform must finally agree to seek common ground, unite, plan and act together and move in the same direction in building a uniform popular movement for universal health care. It is only through strategically using combined talents and resources and a central plan that the isolated cries for health care reform can enlist the support and mighty roar of many Americans from coast to coast, thus initiating a true movement.

The whole answer, the whole truth, is no different from before. Our struggle for rights in health care is a part of America's unfinished work; it should be perpetuated in accordance with the nation's long historic journey for justice, and demands - as with past movements -that those whose rights are being denied must take part.

We are trying to determine if you might be interested in being involved in this new effort to seek common ground in order to build a nationwide grassroots movement for universal health care.

Philip Pollner, M.D. Nancy Wooten, Ph.D. Don McCanne, M.D.

Those who are interested please respond by email to leadcoal@aol.com or call Dr. Pollner at 302-266-7373 evenings (EST).

Please forward this message to friends, colleagues and to the leadership of organizations that might share our vision.

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July 2, 2001
Patients' Rights

RAY SUAREZ: Dr. Angell (Marcia Angell, former editor of the New England Journal of Medicine), let me close with you. You've talked a little bit about where incentives, in your view, are misled. What about liabilities?

DR. MARCIA ANGELL: We have to look at the motivations, the incentives that cause care to be denied. If you talk, if you focus too much on the suits after the care has been denied, it's like trying to put a band-aid on a gaping wound. You have to look at why the care was denied in the first place. It's a little late in the day when you get to the point of suing. Now, let me answer Mr. Moffit (Robert Moffit, Heritage Foundation) because while he and I agreed on the diagnosis of patients' rights bills and the fact that it would increase the number of uninsured we certainly disagree on the remedy. And I'm appalled to hear him imply that Medicare is somehow inefficient. It has far lower overhead costs than the private managed care system, far lower, 2 or 3 percent as compared with about 30 percent, and in fact, his solution that you would throw individuals out into this treacherous private healthcare insurance market is a recipe for disaster. What we need, in essence, is Medicare for everyone. We need a single payer system, Medicare for everyone. Medicare is the most efficient part of our health care system and it's certainly the most popular. That's what we ought to be looking toward.

RAY SUAREZ: Well, that places the debate on a very, very different footing, and we're not going to be able to have that one right now, but thank you all for joining us tonight.

The entire transcript and audio is available at: http://www.pbs.org/newshour/bb/health/july-dec01/patients_7-2.html

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The New York Times
July 2, 2001

Uwe Reinhardt, Princeton University, on the patients' rights legislation:

"I think it was a ridiculous diversion of political energy that distracts from the truly shocking problems of the American health care system -- the uninsured, the elderly without drugs and the medical error problem."

http://www.nytimes.com/2001/07/02/politics/02AGEN.html

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