Archives for 2008

Media Release
The University of British Columbia
Jan. 23, 2008

Ten years after BC PharmaCare implemented spending limits for equivalent prescription drugs — a policy known as reference pricing — investments in British Columbia medical research are as strong as ever and continue to increase, according to a UBC study.

The findings from the UBC Centre for Health Services and Policy Research (CHSPR) demonstrate B.C.-based pharmaceutical R&D grew from $16 million in 1994, the year before B.C. changed its policy on drug coverage, to $50 million in 2005. This news comes one week before a special task force is to report on drug coverage policy in B.C.

“The research disproves claims that pharmaceutical cost-controls impact investment in local research and development initiatives,” says CHSPR’s Steve Morgan, lead author on the study published today in Healthcare Policy. “These potentially surprising results are actually consistent with business fundamentals: firms locate R&D based on the cost and productivity of scientific activity in a given area.”

Beginning in the 1990s, BC PharmaCare — the provincial government drug plan in B.C — refused to pay more for newer brand-name drugs unless manufacturers could prove that such products produced better results than older generic ones.

The UBC researchers studied whether pharmaceutical R&D in B.C. had fallen behind other Canadian provinces as a result of the policy change. On a per capita basis, pharmaceutical R&D grew more rapidly in B.C. than in the rest of Canada, suggesting that reference pricing did not affect R&D investments.

The UBC researchers also reviewed international economic literature and compared both pharmaceutical and non-pharmaceutical R&D data from other provinces. The economic literature showed that the location of R&D is driven by the availability and cost of scientific infrastructure and skilled workforces, and the proximity to pharmaceutical headquarters. The data also demonstrated that B.C.-based biotechnology investment far surpassed most other provinces, putting B.C. among the top centers for biotech research worldwide.

Spending on prescription drugs in Canada topped $21 billion in 2006, or nearly $650 per capita. Prescription drug costs in B.C. are just under $570 per capita, or 12 per cent below the national average. “Reference pricing and other government policies are among the reasons for relatively low spending in B.C.,” added Morgan. “Government estimates suggest that reference pricing has saved approximately $10-million per year since its introduction in the mid 1990s.”

A 2002 study by Canada’s Patented Medicine Prices Review Board had shown that global pharmaceutical R&D is highly concentrated in specific countries. In 2000, pharmaceutical companies invested the equivalent of $30 per capita on R&D conducted in Canada, compared to $52 per capita in Germany, $75 per capita in France, $108 per capita in the UK, $118 per capita in the US, $164 per capita in Sweden and $386 per capita in Switzerland.

According to Morgan, “While B.C. can’t change its geographic location relative to dominant pharmaceutical industry centres, it has been wise to control drug spending while simultaneously investing public funds into the scientific infrastructure and personnel necessary to attract world-calibre investment into strategically focussed areas like biotechnology.”

The article is available for free at the journal’s website:
Healthcare Policy / Politiques de Santé: Longwoods Publishing
www.longwoods.com/pages.php?pageid=108&cat=247.

By Alice Dembner
The Boston Globe
January 24, 2008

Spending on the state’s landmark health insurance initiative would rise by more than $400 million next year, representing one of the largest increases in the $28.2 billion state budget the governor proposed yesterday.

The biggest driver of the cost increase is projected growth in the number of people signing up for state-subsidized insurance, which now far exceeds earlier estimates.

State and federal taxpayers are expected to bear nearly all of the additional cost.

Although the price tag for the initiative is ballooning, the governor yesterday reaffirmed the state’s commitment to ensuring that nearly every resident is covered.

“We have fully-funded healthcare reform,” Governor Deval Patrick said at a news conference. Patrick listed the initiative among several programs started by previous administrations that he supports.

But the long-term cost of the insurance initiative continues to concern pol icy makers and analysts, who are worried that it may become unaffordable.

“These increases are more than anticipated, so we absolutely have to find ways to hold down the rate of growth in future years,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded budget watchdog that has supported the initiative.

This year the state is expected to exceed the initial budget for the health insurance initiative by about $245 million, and next year’s budget would boost spending by another $400 million.

The budget now goes to the Legislature, which last year accepted the governor’s recommendations on funding the health insurance initiative. A final budget is expected to be approved by the end of June.

The state’s top budget official, Leslie Kirwan, said yesterday that projecting costs for the health insurance initiative is difficult because the state is in “uncharted territory.”

“We’re ultimately working with a lot of uncertainty about the number of uninsured that remain out there in the population,” said Kirwan, secretary of administration and finance and chairwoman of the state panel overseeing the health insurance initiative. “Every significant decision we’ve made in healthcare reform” that draws on enrollment projections is based on “our best educated guess.”

The administration is currently working to develop a better way to count the uninsured.

When the law mandating that nearly all Massachusetts residents have health insurance was signed into law by then-governor Mitt Romney in April 2006, the state estimated that about 400,000 residents were uninsured.

Census estimates of the uninsured were far higher – about 650,000 – and many independent observers suggest that the truth lies somewhere in between.

Officials had projected that about 140,000 would enroll in the new state-financed insurance plan, called Commonwealth Care, which provides full or partial subsidies.

But by the end of last month, 169,000 people had signed up for Commonwealth Care, and the state is now estimating enrollment will reach 225,000 by June 2009, the close of the next fiscal year.

More than 70,000 have obtained Medicaid coverage since the law passed expanding eligibility, and the cost for covering those additional people, plus rate increases for hospitals, doctors, and others, is projected to grow significantly above this year’s spending.

Those who don’t qualify for subsidies or Medicaid are expected to buy private insurance or remain uninsured. Illegal immigrants are not subject to the insurance mandate or eligible for state insurance, but they can qualify for free care.

When the initiative was approved, the state expected that over time there would be a significant drop in spending on healthcare for the uninsured. The initial funding plan counted on shifting a significant portion of those “free-care” costs to pay for insurance subsidies.

But that shift is not going to happen to any large extent in 2009, according to the proposed budget.

To fund the overall increases, the state is counting on getting about half from the federal government. But officials have just begun negotiations on how much Massachusetts will actually receive.

Patrick said he is optimistic about federal support, but acknowledged that “nothing is certain.”

Separately, the state is counting on $5 million in revenue from businesses that don’t provide insurance for their employees, down from the $24 million included in this year’s budget that has not materialized.

Alice Dembner can be reached at Dembner@globe.com.

Note: The following New York Times editorial on emergency room delays (January 19, 2008) is based on research by PNHP member Dr. Andy Wilper, PNHP co-founders Drs. Steffie Woolhandler and David Himmelstein, and other Harvard researchers.

Editorial
New York Times
January 19, 2008

The nation’s failure to provide health insurance for all Americans seems to be harming even many of those who do have good health coverage. That is one very plausible interpretation of a disturbing increase in waiting times at emergency rooms that are often clogged with uninsured patients seeking routine charity care.

An analysis by researchers at the Cambridge Health Alliance and Harvard Medical School, found that the median waiting time to see a physician in hospital emergency departments jumped from 22 minutes in 1997 to 30 minutes in 2004.

For the sickest heart attack patients, according to results published in the journal Health Affairs, wait times more than doubled. In 1997, half of them got to see a doctor within eight minutes; in 2004 it took 20 minutes. For a quarter of the heart attack patients, the wait reached 50 minutes or more — a particularly disturbing lag when every minute of delay increases the likelihood of death.

The researchers attribute the longer waits primarily to an increase in the number of emergency room visits coupled with the closure of many emergency rooms. Both factors are driven by the lack of universal health coverage. Uninsured patients — and those who have no primary care doctor — flock to emergency rooms for routine coverage, clogging the system. Meanwhile, hospitals lose so much money dispensing charity care through emergency rooms that many collapse into bankruptcy or give up emergency care.

Emergency rooms are further overburdened, caring for seriously ill patients who can spend hours or even days there waiting to be admitted to inpatient or intensive care units. That is because many hospitals are either short on beds or have decided to allocate many beds to patients who pay top dollar for elective care.

The Institute of Medicine, a unit of the National Academy of Sciences, warned two years ago that the nation’s emergency rooms were at a breaking point. It called for better systems to route patients to the least crowded emergency rooms and an infusion of money to bolster emergency care. The Cambridge Health Alliance doctors call for expanding insurance coverage and primary care for the poor to provide alternatives to overcrowded emergency rooms for those seeking routine care. That is the best way to ensure that all the people who truly need emergency care get it when they need it.

Letter to the Editor
Palm Beach Post
Wednesday, January 23, 2008

The writer of “Candidates give too few details on universal care” (Dec. 19 letter) marshals forceful arguments based on false assumptions.

1) “A national plan would undoubtedly require restrictions on doctors’ incomes … ” The universal health-care plan drawn up in HR 676 would have the contrary effect. The U.S. National Health Insurance Act, if enacted, would eliminate the excessive drainage of money that has nothing to do with providing care. The huge sums now going to the sales forces, advertising budgets, lobbying campaigns, shareholder dividends, and huge executive salaries and bonuses would be saved. These expenditures are the root cause of the present attempt to reduce the fees Medicare pays doctors. Their elimination would halt the process. The writer’s use of the word undoubtedly magnifies the assumption’s baselessness.

2) “In a national plan, millions of Americans would not be able to obtain the same level of medical care they now enjoy … ” I can’t calibrate the level of care the 47 million uninsured Americans now enjoy. I do know, from my experiences on the lecture platform, that the over-65 generation feels blessed with the level it enjoys. When the question is put, the response is a practically unanimous, enthusiastic “God bless Medicare!” The goal of the plan is to make everyone lucky enough to be included in that same plan.

3) “It is bad enough that Congress refuses to deal with the Medicare … crisis, but to ask them to legislate a national health insurance plan as a replacement … is hard to imagine … ” I agree. It is hard to imagine, since the proposal isn’t to replace it but to make it Medicare for everyone. He is wrong about the “huge tax increase that would be required.” According to the Congressional Budget Office, eliminating all of the excessive administrative spending in our current system would save up to $400 billion. The prospect of a huge tax increase scares people, but the reality is that there is no need for it.

Let’s stop muddying the waters and trying to scare people with nonexistent goblins. The urgent need is the adoption of the same type of responsible program the rest of the developed nations have. We can’t afford to allow our elected officials to propose feeble patchwork instead of the expansion of Medicare. Let’s demand a show of leadership that will get us a system already in operation that we know works well and that can easily become the entire, one-tier national system.

H. DAVID PRENSKY
Palm Beach

By Craig Axford
The Salt Lake Tribune
01/17/2008

What constitutes a great health-care system?

Watching the Republican candidates during their final debate in New Hampshire I was hardly surprised by their statements regarding America’s health-care system. To a man, they all insisted we had “the best health-care system in the world”.

This has become predictable rhetoric, particularly from the right. To the extent flaws within our health-care system are acknowledged, the focus is on cost, frequently with particular emphasis on the cost to business as opposed to the very real and painful, sometimes even fatal implications for average Americans.

To be sure, the cost of health care in America does set us apart from the rest of the world. What puzzles me is how one can argue that a health-care system is best that covers least while also costing most?

France, Germany, the United Kingdom and Canada all spent 10.5 percent or less of their gross domestic product on health care in 2004. All provided universal coverage for their citizens. The United States spent 15.4 percent of its GDP on health care that year, while roughly 15 percent of our population went uncovered.

Sen. John McCain spoke for a more “outcome”-focused system. Most, if not all, of the industrialized world has lower infant mortality rates and longer life expectancies. When it comes to health-care outcomes, a longer life should be an “outcome” of paramount importance. Any system that falls short in that regard can hardly be argued to be the “best.”

According to a study released since the New Hampshire debates the United States ranks 19th in treating preventable illnesses. Health Affairs reported on Jan. 8 that the United States ranks behind Australia, Greece, Ireland and Portugal, among others. This, as health-care spending in America broke $2 trillion for the first time in 2006.

America will never solve its health-care problem so long as we insist on arguing our crisis is inferior to the crisis everywhere else and therefore our system is superior to everyone else’s. One is not being unpatriotic when pointing out other nations have managed to do some things better.

A case in point is our neighbor to the north. When wanting to diminish the threat a health-care reform proposal poses to the insurance or pharmaceutical lobbies, one need only refer to the supposedly numerous Canadians flocking to America to pay considerably more for services virtually all of them could get for far less in Canada.

Again, McCain argued during the debate that any serious reform of our system would deny these good Canadians a place to come to receive adequate health care, though he later implied that Canadians shouldn’t reform their system or Americans would be denied a far less expensive source for prescription drugs.

In 2004 the U.S. and Canadian governments conducted a joint survey to determine the level of satisfaction citizens in both nations had with their respective health-care systems. Thirteen percent of Americans reported having “unmet medical needs during the past 12 months,” while only 11 percent of Canadians reported the same. Not a statistically significant difference, but not a statistic that leads one to believe any more Canadians are coming here than Americans are likely to be heading north for needed treatment.

Thirty-two percent of the 11 percent of Canadians complaining of an “unmet need” cited the much ballyhooed waiting period as the barrier to treatment – or about 3 percent of the total population. Of the slightly larger segment complaining of unmet needs in the U.S., 53 percent cited cost as being a barrier to receiving care they felt they needed. This does not sound like a nation sending hundreds, if not thousands of patients south to have “unmet needs” met here.

The point of all this is not simply that claims regarding the excellence of the American system are exaggerated at best, though obviously they are. The point is, Americans and the media need to wake up to where claims regarding the inadequacies of other systems are coming from and why they are being offered to the American electorate as fact. The insurance, pharmaceutical and other lobbies with a huge financial stake in maintaining the status quo want us to believe, as bad as our system may be, it is better than all other alternatives tried.

No health-care system is or can be perfect. However, politicians who are willing to simply parrot the false talking points offered by the insurance industry and others intent on preserving record profits, often at the expense of human life, are not the type of people we want dealing with our growing health-care crisis.

Trusting them with health-care reform is truly turning the hen house over to the foxes, and we can ill afford the continued luxury of believing their rhetoric regarding the alleged virtues of the status quo in the United States when it comes to health care.

CRAIG AXFORD has worked as an environmental activist, ran for Congress in 2002 and currently works for the Democratic National Committee as party organization director for Utah.