PNHP

Vermont tests single payer and the country is watching

Vermont tests single payer and the country is watching

By Darshak Sanghavi, M.D., and Sarah Bleiberg
KevinMD blog, Jan. 28, 2014

While the Affordable Care Act, or Obamacare, has been criticized by its opposition as “socialized medicine,” it relies heavily on private health insurance. On the other end of the political spectrum is the idea that a government-run single payer system, similar to Canada’s, is the best way to deliver health care. (This is sometimes shorthanded in the U.S. as “Medicare for All.”) However, this system has been believed politically impossible here—until now. In May 2011, Governor Pete Shumlin of Vermont signed into law “An Act Relating To A Universal And Unified Health System,” House Bill 202 (HB 202), establishing a single payer health care system beginning in 2017. In passing this legislation, Vermont has become a closely watched laboratory for health reform.

What are the pros and cons of a “single payer” system?

In general, single payer health care means that all medical bills are paid out of a single government-run pool of money. Under this system, all providers are paid at the same rate, and citizens receive the same health benefits, regardless of their ability to pay.

There are a number of proposed benefits to a single payer system. Currently, providers must follow different procedures with each of many insurance companies to get paid, creating an enormous amount of administrative work. Under a single payer system, providers might reap significant savings from reduced administrative expenses, and be able to focus more on delivering care. As with Medicare, a single payer system may also give the state stronger leverage to negotiate lower rates for drugs, medical devices, payments to providers and other expenses, resulting in lower overall costs. Additionally, a single payer system provides universal access to health insurance, which eliminates the problem of the uninsured.

However, Vermont’s innovative proposal still leaves room for further improvement. Specifically, a single payer system alone does not address “fee-for-service” reimbursement for providers, which may encourage overuse and does not recognize quality and value. Other concerns also exist. Generally, private insurance rates have been substantially higher than Medicare rates, and providers worry that universal rate setting may lead to overall lower revenues. Others have worried that Vermont does not have enough doctors, and an influx of newly insured citizens may result in longer wait times and inability to access health care when necessary.

What does Vermont’s law actually do?

HB 202 established Green Mountain Care (GMC) and sets Vermont on track to have a single payer health care system beginning in 2017.

Here’s how it will work: All Vermont residents will automatically be eligible for GMC. Private insurance companies will no longer sell insurance in the state, but federal employees as well as employees of self-insured companies, will continue to receive their employer sponsored plans. In these cases, their health insurance will be supplemented by GMC. When a patient with GMC goes to the doctor, hospital or other caregiver, all of their expenses will be billed to GMC. Someone with GMC as their secondary coverage will have this option available to them if their primary insurance is not as comprehensive as GMC.

On the back end, GMC will combine the money Vermont currently receives from Medicaid, other federal funding available through the Affordable Care Act, and a yet-to-be-determined new tax on individuals and employers. For now, Medicare funding will remain separate. However, Vermont may choose to fold this funding into GMC as well, in the future.

The Green Mountain Care Board (GMCB) will control GMC. They will oversee the development and implementation of new payment models, provide a recommendation to the legislature on the benefit package and budget for GMC, and set rates for provider reimbursement. Parts of GMC will also be contracted out to private companies including claims administration and provider relations.

For now, Vermont is still required to set up a health insurance exchange available to all residents, in accordance with the Affordable Care Act. But when GMC rolls out in 2017, the exchange will either be eliminated or may still be available in some form if GMC ends up offering multiple benefit plan options.

What obstacles remain?

To begin with, HB 202 requires the GMCB to certify that Vermont’s plan meets a number of conditions before it can be implemented: GMC will not negatively impact the economy, GMC will reduce the rate of growth of Vermont’s health care costs, the financing plan for GMC will be sustainable, administrative costs will be reduced, all Vermonters will have health insurance that covers at least 80% of their health care costs, and providers will be reimbursed at a reasonable rate. Additionally, Vermont will need to apply for waivers from the federal government, as well as the Medicare and Medicaid programs in order to combine all of the funding it receives from these programs into GMC. These requirements pose a serious challenge to the implementation of GMC. While the state has begun working towards these goals, several uncertainties remain.

First, the state needs to figure out how much the plan will cost. A report from the University of Massachusetts Medical School estimated that the total cost of the healthcare system in 2017 will be $5.9 billion. This number is based on the assumption that GMC would pay providers at 105% of what Medicare currently pays them, which is more than they receive from Medicaid but less than what they currently receive from private payers. Using this estimate, the state would need to raise $1.6 billion to supplement the funding it will receive from the federal government, Medicare and Medicaid. An opposing group, including providers, payers, and the business community commissioned its own report which assumed the rates would be between 115% and 125% of Medicare, raising the cost estimate to between $1.9 and $2.2 billion. The differing estimates in these reports mostly demonstrate the increasing concern from various healthcare stakeholders regarding the Shumlin administration’s plan. However, they also make the point that much is still unknown about how much GMC will cost in 2017.

Second, the state hasn’t decided how to raise this money. The report they released stated that there were a number of possible revenue sources that require further study before a final decision is made. However, Governor Shumlin has indicated that that a payroll tax (similar to the one funding Medicare now) would likely play a large part in the final financing plan. Based on an estimate from the UMass report that a 1% payroll tax could raise $119 million, a financing plan would have to include a fairly large payroll tax or a combination of taxes to cover the $1.6 billion that is estimated to be necessary. (Any tax would be in place of the current premiums and other health insurance costs that individuals and employers pay.) Governor Shumlin has said that he will announce his financing plan in a year, but some believe this is too long to wait. Senator Peter Galbraith, a Democrat, introduced a bill proposing an 11% payroll tax on employers and a 2% payroll tax on individuals, combined with a tax on other earnings such as capital gains, to fund GMC.

Third, planning and execution must proceed in an orderly manner. As the recent Obamacare exchange roll-out demonstrated, this can be a difficult process. Still, such planning has begun. In addition to the looming issues of how much it will cost and where the money will come from, the legislature is beginning to look at when to begin collecting funds, how much providers will be paid, malpractice reform, a benefits package, and many other pertinent issues.

Vermont has committed to an innovative path, even though much is still up in the air as to what Green Mountain Care will actually look like in 2017. One thing is clear, the rest of the country will be watching Vermont’s success or failure closely.

Darshak Sanghavi is a pediatric cardiologist and fellow and managing director, Engelberg Center for Health Care Reform at the Brookings Institution.  Sarah Bleiberg is a research assistant, Engelberg Center for Health Care Reform.  They can be reached on Twitter @BrookingsMed.

http://www.kevinmd.com/blog/2014/01/vermont-tests-single-payer-country-watching.html

Medical school students lobby Albany for single payer health plans

By Kyle Hughes
The Oneida (N.Y.) Daily Dispatch, Jan. 28, 2014

ALBANY, N.Y. — A group of 70 medical school students held their first-ever Capitol lobbying day Tuesday, calling for universal health care, medical marijuana and reining in insurers that now account for a third of the cost of healthcare here.

One of the organizers of Medical Student Advocacy Day, Albany Medical College student Ajay Major, said he was inspired by the problems he said first-hand among backstretch workers at Saratoga Race Course.

“When I was in college I volunteered as a public health worker and an interpreter at the race track up in Saratoga,” Major said. “These workers, most of whom were shipped up with the horses, (who are) from Central America, live in small concrete cubes with minimal pay, long hours and a dangerous job. They have no formal healthcare in this country for their acute or their chronic conditions.”

“Local physicians, public health workers and social workers created a two bed clinic run out of an old double-wide trailer,” the Indiana resident added. “The clinic, supported by donations from local hospitals, was entirely free of charge to its patients. The clinic provided the entire spectrum of care … I’m here today because I was inspired by my colleagues at the race track who understood that it was their duty as healers to provide for their patients.”

He said those kinds of selfless acts of providing healthcare is viewed as extraordinary when it should be the norm.

“Not only is the U.S. the only developed country without universal healthcare, we’re also paying twice as much per capita on healthcare as other industrialized nations,” said student Xin Guan, who came to study at Albany Med from California. “Does this mean we provide better care? No, in fact we are falling behind in all measures of morbidity and mortality.”

She said medical bills are the reason behind 62 percent of all personal bankruptcies, and noted that even with Obamacare, about 30 million people in the U.S. will lack health insurance. “Thirty-one percent of every healthcare dollar goes into private insurance bureaucracy,” she said.

Another student, Phyllis Ying of Seattle, said when she volunteered at farmers markets, doctors organized to bring healthy food to poor residents of Albany’s South End. “For our patients, being their advocate is essential,” she said. “As one of the South End parents said to me, ‘we need this.’ “

The bills the group lobbied in favor of Tuesday included:

• A4440/S2397: Prohibits participation in torture and improper treatment of prisoners by health care professionals, a measure that has been introduced in part as a response to post 9/11 actions by the U.S. government. The bill memo says “There is very strong evidence that U.S. health professionals have been directly engaged in or complicit in torture and other cruel, inhuman or degrading treatment of prisoners and detainees. The situation does not appear to be that of a few errant individuals, but a more systemic problem, facilitated by official policy.”

• A5389/S2078: Establishes the New York Health program, a comprehensive system of access to health insurance for New York state residents. The bill “would create a universal single payer health plan — New York Health — to provide comprehensive health coverage for all New Yorkers.” It would replace private insurance and be financed by a combination of state funds and payroll taxes. “Every New York resident would be eligible to enroll, regardless of age, income, wealth, employment, or other status. There would be no premium, deductibles, or co-pays. Coverage would be publicly funded.”

• A2889/S2717: Directs the commissioner of health to promulgate rules and regulations for the labeling of prescription drugs in languages other than English.

• A7648/S4283: Requires gluten contamination safeguards in food establishments owned, operated or leased by any department or agency of the state or SUNY. The bill mandates cross contamination safeguards to provide food safety for those with allergies or celiac disease.

• S1682: Provides for medical use of marijuana. The bill sets up a legal medical marijuana system for certified patients.

Kyle Hughes writes for NYSNYS News, a news service about government and politics based in the New York State Capitol, Albany.

http://www.oneidadispatch.com/general-news/20140128/medical-school-students-lobby-albany-for-single-payer-health-plans-medical-marijuana

Oncologists Call for a Single-Payer Healthcare System in US

By Roxanne Nelson
Medscape Medical News, Jan. 28, 2014

The Patient Protection and Affordable Care Act (ACA), known as Obamacare, will not solve the healthcare crisis that cancer patients face. The only real solution, according to 2 oncologists, is a single-payer system of national healthcare insurance.

The crisis in healthcare is felt “more acutely” by cancer patients because the cost of cancer care, particularly new cancer drugs, has soared in recent years, say Ray Drasga, MD, a community-based oncologist in Crown Point, Indiana, and Lawrence Einhorn, MD, professor of medicine at Indiana University Hospital in Indianapolis.

In a report published in the January issue of the Journal of Oncology Practice, Drs. Drasga and Einhorn call on their fellow oncologists and American Society of Clinical Oncology (ASCO) to advocate for a single-payer national health insurance program.

The medical system needs to be oriented toward caregiving, not toward maximizing investors’ profits, they say.

“We cannot in good conscience stand by and remain silent,” they write. “Life is short, especially for some patients with cancer; they need help now.”

“All of our patients deserve dignity,” they conclude. “It is our moral and ethical obligation as physicians to advocate for universal access to healthcare. Oncologists, working in conjunction with ASCO, are well positioned to educate legislators about single-payer national health insurance. The time to start is now.”

A single-payer system is one in which a public or quasipublic agency handles all healthcare financing. Depending on the particular system, healthcare delivery can remain in public or private hands. The system endorsed by the authors is basically “improved Medicare for all” and, in a number of ways, would resemble the current arrangement in Canada.

There would be universal, comprehensive coverage with free choice of providers, and all medical care would be covered, including provider visits, hospital care, prescription drugs, and rehabilitation, they explain. Copayments, deductibles, insurance premiums, and out-of-pocket expenses would be eliminated.

Cancer Care in Crisis Mode

Oncologists are finding it more difficult to care for patients because of the rising cost of treatment and the high prevalence of patients who are uninsured or underinsured, the authors note. Increasingly, oncologists are having to compromise on therapies so that patients can afford the treatment regimen.

“With the costs of cancer care skyrocketing out of control, most people with cancer are burdened not only physically, but also financially,” said Dr. Drasga in a statement. “They delay or do not receive care due to their inability to pay.”

Cancer patients feel the crisis in healthcare more acutely because of the high cost of drugs, tests, and procedures, he added. “For example, the cost of a new cancer drug has increased to a median price of $10,000 per month since 2010, and some drugs cost much more.”

The cost of care has been a continuing challenge for patients and their physicians. As previously reported by Medscape Medical News, oncologists often do not discuss the cost of drug therapy with their patients. Many are also unaware of how much medication actually costs their patients.

In 2011, Richard Sullivan, MD, from King’s Health Partners Integrated Cancer Centre in London, United Kingdom, and colleagues concluded that the cost of cancer care in high-income countries is becoming “unsustainable” ( Lancet Oncol. 2011;12:933-980). They noted that cancer care is rapidly becoming beyond the reach of all but the most affluent and the well-insured Americans, and that a drastic shift in cancer policy is needed to rein in current costs.

Dr. Drasga agrees. “The situation is worsening,” he said. “We need a fundamental shift in our approach to funding healthcare in the United States.”

In the United States, the healthcare system, including cancer care, has major problems. Millions are either uninsured or underinsured, the cost of medications is higher than in any other developed country, and the healthcare delivery system has transformed into an investor-owned business, Drs. Drasga and Einhorn point out.

Situation Will Worsen Under ACA

The ACA is not going to solve these issues, they note. It will not “remedy the problems of the uninsured, the underinsured, rising costs, [or] growing corporate control over caregiving.”

The authors note that 48.6 million people were uninsured in 2011. Although the ACA is expected to lower that number, the Congressional Budget Office estimates that 31 million Americans will still be uninsured in 2023.

Similarly, the issue of underinsurance or insufficient coverage is likely to persist, if not worsen. “Insurance plans with limited networks of providers, along with high deductibles, copays, and out-of-pocket costs, are making underinsurance the new normal,” they say. “The most affordable plans on the state health exchanges, the bronze and silver plans, leave 30% or 40% of healthcare costs, respectively, to be paid by policyholders.”

In the ACA, the private insurance industry remains at the center of the health system. Drs. Drasga and Einhorn believe that the current trend toward high-deductible health plans, underinsurance, and cost shifting to patients will almost certainly get worse.

With the initiation of a single-payer plan, administrative overhead, which places an enormous economic burden on both physicians and facilities, would be dramatically reduced, the authors point out. Currently, 31% of every healthcare dollar in the United States is used for administrative overhead, which is double the rate in Canada. Although Canada has a separate insurance plan in each province, the situation in the United States is even more complex.

Each of the hundreds of insurance companies and thousands of different private plans has departments for marketing, eligibility determination, claims processing, and use review, not to mention profits to fund.

“As a result, private insurance overhead averages 14.0% of premiums, compared with the traditional overhead of Medicare of just 1.4%,” they note.

“Overhead accounts for more than one quarter of all hospital spending in the United States because of the need to generate itemized per-patient bills for a plethora of plans and haggle over how much insurers will pay,” they add.

The ACA has failed to address many of the problems in the American healthcare system, and years of solutions emanating from the private sector have failed. Therefore, there needs to be a “major paradigm shift” in the approach to funding healthcare, Dr. Drasga and Dr. Einhorn conclude.

The authors have disclosed no relevant financial relationships.

J Oncol Pract. 2014;10:7-11. Abstract

http://www.medscape.com/viewarticle/819839

Discretionary Deeming: How One Town Got Improved Medicare

By Kay Tillow
Firedoglake, Jan. 6, 2014

Buried deep in the health reform law is Section 10323. It amends the Social Security Act to extend Medicare coverage to individuals exposed to environmental health hazards in the region defined by the Emergency Declaration of June 17, 2009. That declaration limits this benefit to the area around Libby, Montana.

Section 10323 of the Affordable Care Act (ACA) calls it “deeming of Individuals as eligible for Medicare benefits.” People do not have to be age 65, or wait two years following disability, or to have paid into the Medicare system. The victims of asbestos in Libby were simply “deemed” to be eligible for Medicare. It was described as “discretionary deeming.”

Senator Max Baucus, Chair of the powerful Senate Finance Committee, who hired insurance executive Liz Fowler to write the health reform act, slipped Section 10323 into the law assuring that all those with asbestos-related conditions in the community around Libby, Montana get into Medicare, our single payer program for all those over 65. Further, for this designated group of Montanans, Baucus arranged additional special benefits not normally available to Medicare patients.

Baucus “deemed” single payer off the table

It’s true. Senator Baucus “deemed” single payer off the table during the 2009 health care debate. He had physicians and others arrested for insisting that single payer be included in the nation’s discussion. Baucus effectively locked out any consideration of such a plan. But he gave our country’s single payer program, Medicare, to the people of Libby.  And they got free drugs, too.

The victims of asbestos exposure in Libby, regardless of age, are eligible for traditional Medicare, plus, under an additional program that Baucus included in the ACA, the government also pays for services not included under Medicare, such as home care, medical equipment, counseling, help with travel, and medications not covered by Medicare prescription plans.

Insurance companies use co-pays to exclude the sick

Coverage of drugs can be crucial. Outrageous drug prices continue to threaten all who depend on costly medications.  While the ACA bars health insurance plans from refusing to cover those who are sick, insurance companies have found ways to keep patients with cancer, Multiple Sclerosis, AIDS, and other conditions out of their plans. Some insurance companies have made the co-pays on the drugs needed by such patients as high as $1,000 to $6,000 a month, effectively excluding those with pre-existing conditions.

Goodness knows the people of Libby deserve to have Medicare—with free drugs and home care and medical equipment and help with travel and much more. After all, the W. R. Grace company whose vermiculite mine poisoned their entire region left thousands, not just the miners, suffering and dying.

But the senator who helped Libby also made certain that all the rest of us would be left out—that the nation could not even consider the merits of HR 676, the Expanded and Improved Medicare for All Act, that would free our country from the health insurance companies that continue to hold us hostage.

The Libby solution, single payer

As health reform rolls into a new stage where some who have been left out find help but millions more, both insured and uninsured, find the costs of care still beyond their means, let us look to the Libby solution, publicly-funded single payer, for the answer.

Medicare spends more than 98 cents of every dollar on actual health care, while insurance companies spend only 80 to 85 cents on health care. Under the ACA insurance companies still victimize all of us as their narrow networks deny us access to the doctors and hospitals we need. The insurance companies retain their power to deny tests, procedures, and treatment making life miserable for both patients and doctors.

The United States spends about twice as much per person on health care as the rest of the industrialized world.  Yet our life expectancy, infant mortality and other health outcomes lag far behind. As the policy experts of Dartmouth and MIT search in vain for ways to cut health care costs while retaining the profit makers, let us keep in mind that unless we remove the private for-profit insurance companies from our health care, any cut in costs means a cut in care.

HR 676, Expanded and Improved Medicare for All

To expand care while cutting costs, we have to go to a single payer plan—like HR 676, Expanded and Improved Medicare for All, a bill introduced into every congress since 2003 by Rep. John Conyers, Jr. (D MI). With HR 676, we could save over $500 billion a year while expanding coverage to everyone and improving care to assure dental and eyeglasses and hearing aids and drugs and long term care and all the things we need that are not normally covered. And this coverage would remove all co-pays and all deductibles.

Health care would be paid for publicly and in advance with no payment at the point of care. Patients will choose their doctors and hospitals. When we seek care, the question will not be “How will you pay?” but “Where does it hurt?”

This simple legislation would fix our damaged health care. Medicare was rolled out in six months with only index cards in the time before computers. No need to ask how much you make—it is available to all. That’s what we need–not the twisted double-dealing that wins something special for a few, but, instead, a magnanimous, simple, bold, inclusive plan that finally will allow all of our people to enjoy the life-giving benefits that a wealthy and compassionate nation can offer.

Let us dedicate this new year to building the single payer movement that will make this plan possible.

Kay Tillow is coordinator of the All Unions Committee for Single Payer Health Care, which builds union support for H.R. 676, and an activist in Kentuckians for Single-Payer Healthcare. She lives in Louisville, Ky.

http://my.firedoglake.com/kaytillow/2014/01/06/discretionary-deeming-how-libby-montana-got-improved-medicare-with-free-drugs/

Republican “Replace” proposal

Dr. Coburn Unveils Obamacare Replayment – Patient CARE Act – with Senators Burr and Hatch

Senator Tom Coburn
January 27, 2014

Today, U.S. Senators Richard Burr (R-N.C.), Tom Coburn, M.D. (R-Okla.), and Orrin Hatch (R-Utah) unveiled the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act – a legislative plan that repeals Obamacare and then replaces it with common-sense, patient-centered reforms that reduce health care costs and increase access to affordable, high-quality care.  In contrast with Obamacare and its government centered mandates and regulations, the Senators’ proposal empowers the American people to make the best health care choices for themselves and their families.

http://www.coburn.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=bd2f1e3a-3c25-4ea2-80a0-25b0753bcc6a

The Patient Choice, Affordability, Responsibility, and Empowerment Act

January 2014

(All section numbers of the proposal are listed, with each followed, in parentheses, by a brief and admittedly biased description by Don McCanne.)

Title 1: Repeal the President’s Health Care Law

  Section 101: Repeal Obamacare

(The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act would be repealed with no proposal as to how the many provisions already implemented would be undone.)

  Section 201: Adopt Common-Sense Consumer Protections

(The Act would prohibit lifetime limits, guarantee renewability with restrictions, prohibit unfair terminations, and change the aged-based premium ration to 5:1, from 3:1, resulting in higher premiums for older individuals.)

  Section 202: Create a New Protection To Help Americans With Pre-Existing Conditions

(Individuals with pre-existing conditions would be guaranteed coverage but only if that coverage were continuous. Lapses in coverage – an inevitability for some – would subject individuals to medical underwriting, making plans unaffordable for those with pre-existing conditions.)

  Section 203: Empowering Small Business and Individuals with Purchasing Power

(Individuals and employees of small businesses would be eligible for tax credits to help purchase coverage, but these credits would be lower than the ACA subsidies which are already inadequate for many.)

  Section 204: Empowering States With More Tools to Help Provide Coverage While Reducing Costs

(States could use auto-enrollment for individuals who do not select a plan, though the individual has the option to refuse the plan – an arrangement that is sure to leave tens of millions uninsured.)

  Section 204 (sic): Expand and Strengthen Consumer Directed Health Care

(Some restrictions would be removed from health savings accounts, but there are no new proposals to help fund these accounts. An empty HSA is of little benefit to patients who cannot pay the high deductibles of the HSA-eligible plans.)

Title 3: Modernize Medicaid to Provide Better Coverage and Care to Patients

  Section 301: Transition to Capped Allotment to Provide States with Predictable Funding and Flexibility

(Federal funding of state Medicaid programs would be changed to a system that would have an impact similar to block grants, plus the states could issue the equivalent of vouchers allowing Medicaid beneficiaries to purchase private plans. This would further reduce federal funding to this already underfunded program, shifting more costs to state governments, and, even worse, to the Medicaid beneficiaries who have incomes near or below poverty.)

  Section 302: Reauthorize Health Opportunity Accounts To Empower Medicaid Patients

(Health Opportunity Accounts are health savings accounts for Medicaid patients. To show how ridiculous this concept is, a demonstration program was set up that would allow ten states to establish them, but only South Carolina did, and only five patients enrolled.)

http://www.gao.gov/products/GAO-12-221R

  Section 401: Medical Malpractice Reforms

(Perpetuates the fiction of junk lawsuits, although a compensation system modeled after workers’ comp is suggested.)

Title 5: Increasing Price Transparency to Empower Consumers and Patients

  Section 501: Requiring Basic Health Care Transparency to Inform And Empower Patients

(Empowering patients to be price shoppers perpetuates the fiction that there is a price-sensitive market in health care delivery. As Kenneth Arrow explained to us, there isn’t.)

Title 6: Reducing A Distortion in the Tax Code That Increases Health Costs

  Section 601: Capping the Exclusion of An Employee’s Employer-Provided Health Coverage

(They would reduce, rather than eliminate, tax expenditures for employer-sponsored plans – still deductible to the employer, but partially taxable to the employee, thereby increasing workers’ costs for health care.)

http://www.hatch.senate.gov/public/_cache/files/bf0c9823-29c7-4078-b8af-aa9a12213eca/The%20Patient%20CARE%20Act%20-%20LEGISLATIVE%20PROPOSAL.pdf

Comment:

By Don McCanne, M.D.

The Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act is a white paper that is being touted as the “Replace” part of the Republican Repeal and Replace answer to the Affordable Care Act (ACA). It has some similarity to ACA in that it would leave in place much of our dysfunctional health care financing system. Although some of the measures of ACA are beneficial, they are far too feeble compared to what we actually need. CARE would set us even further behind, leaving tens of millions more without insurance, and exposing insured patients to even greater costs when accessing the health care that they need.

This is another “if we don’t enact this, we’ll end up with single payer” proposal. Let’s hope so.

Republican “Replace” proposal

Dr. Coburn Unveils Obamacare Replayment – Patient CARE Act – with Senators Burr and Hatch

Senator Tom Coburn
January 27, 2014

Today, U.S. Senators Richard Burr (R-N.C.), Tom Coburn, M.D. (R-Okla.), and Orrin Hatch (R-Utah) unveiled the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act – a legislative plan that repeals Obamacare and then replaces it with common-sense, patient-centered reforms that reduce health care costs and increase access to affordable, high-quality care.  In contrast with Obamacare and its government centered mandates and regulations, the Senators’ proposal empowers the American people to make the best health care choices for themselves and their families.

http://www.coburn.senate.gov/public/index.cfm/pressreleases?ContentRecor…

The Patient Choice, Affordability, Responsibility, and Empowerment Act

January 2014

(All section numbers of the proposal are listed, with each followed, in parentheses, by a brief and admittedly biased description by Don McCanne.)

Title 1: Repeal the President’s Health Care Law

Section 101: Repeal Obamacare

(The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act would be repealed with no proposal as to how the many provisions already implemented would be undone.)

Section 201: Adopt Common-Sense Consumer Protections

(The Act would prohibit lifetime limits, guarantee renewability with restrictions, prohibit unfair terminations, and change the aged-based premium ration to 5:1, from 3:1, resulting in higher premiums for older individuals.)

Section 202: Create a New Protection To Help Americans With Pre-Existing Conditions

(Individuals with pre-existing conditions would be guaranteed coverage but only if that coverage were continuous. Lapses in coverage – an inevitability for some – would subject individuals to medical underwriting, making plans unaffordable for those with pre-existing conditions.)

Section 203: Empowering Small Business and Individuals with Purchasing Power

(Individuals and employees of small businesses would be eligible for tax credits to help purchase coverage, but these credits would be lower than the ACA subsidies which are already inadequate for many.)

Section 204: Empowering States With More Tools to Help Provide Coverage While Reducing Costs

(States could use auto-enrollment for individuals who do not select a plan, though the individual has the option to refuse the plan – an arrangement that is sure to leave tens of millions uninsured.)

Section 204 (sic): Expand and Strengthen Consumer Directed Health Care

(Some restrictions would be removed from health savings accounts, but there are no new proposals to help fund these accounts. An empty HSA is of little benefit to patients who cannot pay the high deductibles of the HSA-eligible plans.)

Title 3: Modernize Medicaid to Provide Better Coverage and Care to Patients

Section 301: Transition to Capped Allotment to Provide States with Predictable Funding and Flexibility

(Federal funding of state Medicaid programs would be changed to a system that would have an impact similar to block grants, plus the states could issue the equivalent of vouchers allowing Medicaid beneficiaries to purchase private plans. This would further reduce federal funding to this already underfunded program, shifting more costs to state governments, and, even worse, to the Medicaid beneficiaries who have incomes near or below poverty.)

Section 302: Reauthorize Health Opportunity Accounts To Empower Medicaid Patients

(Health Opportunity Accounts are health savings accounts for Medicaid patients. To show how ridiculous this concept is, a demonstration program was set up that would allow ten states to establish them, but only South Carolina did, and only five patients enrolled.)

http://www.gao.gov/products/GAO-12-221R

Section 401: Medical Malpractice Reforms

(Perpetuates the fiction of junk lawsuits, although a compensation system modeled after workers’ comp is suggested.)

Title 5: Increasing Price Transparency to Empower Consumers and Patients

Section 501: Requiring Basic Health Care Transparency to Inform And Empower Patients

(Empowering patients to be price shoppers perpetuates the fiction that there is a price-sensitive market in health care delivery. As Kenneth Arrow explained to us, there isn’t.)

Title 6: Reducing A Distortion in the Tax Code That Increases Health Costs

Section 601: Capping the Exclusion of An Employee’s Employer-Provided Health Coverage

(They would reduce, rather than eliminate, tax expenditures for employer-sponsored plans – still deductible to the employer, but partially taxable to the employee, thereby increasing workers’ costs for health care.)

http://www.hatch.senate.gov/public/_cache/files/bf0c9823-29c7-4078-b8af-…

The Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act is a white paper that is being touted as the “Replace” part of the Republican Repeal and Replace answer to the Affordable Care Act (ACA). It has some similarity to ACA in that it would leave in place much of our dysfunctional health care financing system. Although some of the measures of ACA are beneficial, they are far too feeble compared to what we actually need. CARE would set us even further behind, leaving tens of millions more without insurance, and exposing insured patients to even greater costs when accessing the health care that they need.

This is another “if we don’t enact this, we’ll end up with single payer” proposal. Let’s hope so.

One uninsured member in family can cause hardship for all

Financial Burden of Medical Care: A Family Perspective

By Robin A. Cohen, Ph.D., and Whitney K. Kirzinger, M.P.H.

Centers for Disease Control and Prevention, National Center for Health Statistics, January 2014

Recently published data from the National Health Interview Survey (NHIS) found that 1 in 5 persons was in a family having problems paying medical bills, and 1 in 10 persons was in a family with medical bills that they were unable to pay at all. NHIS defines “family” as an individual or a group of two or more related persons living together in the same housing unit. The family perspective is important to consider when examining financial risk because significant expenses for one family member may adversely affect the whole family. Health insurance coverage is one way for a family to mitigate financial risk associated with health care costs, although health insurance status may differ among family members. This report explores selected family demographic characteristics and their association with financial burdens of medical care (problems paying medical bills, paying medical bills over time, and having medical bills that cannot be paid) based on data from the 2012 NHIS.

Percentage of families that had any financial burden of medical care in the past 12 months, by family health care coverage status: United States, 2012

20.9% – All members have private insurance

21.1% – All members have public coverage

35.8% – Some members have private insurance, and some members have public coverage

39.7% – All members are uninsured

46.0% – Some members are insured and some members are uninsured

Summary

Previous reports based on data from NHIS examined financial burdens of medical care from a person-level perspective. One strength of NHIS is that information on insurance and financial burden is collected at the family level, giving analysts the ability to look at both family-level and person-level data. The family perspective is a useful expansion of previous research because having one family member who contributes to the bulk of the financial burden for medical care may place the entire family’s ability to pay medical bills and overall financial well-being at risk. From a family level, this report found that levels of financial burden of medical care were greatest for families with incomes at or below 250% of the FPL, those with children, those with mixtures of coverage types, and those in which at least one family member was uninsured. Often, persons in families with more than one member can financially benefit from shared income and household expenses. However, when one family member experiences a financial burden of medical care, the entire family may be at risk for financial burden.

http://www.cdc.gov/nchs/data/databriefs/db142.pdf

Comment:

By Don McCanne, M.D.

This report confirms that members of insured families who all have the same health care coverage still have a one in five chance of experiencing a financial burden from medical care. What is new in this particular report is they showed that fragmentation of coverage within families produces a greater risk of financial burden, with almost half of families adversely affected if some family members are uninsured. That refers to all family members, not just the uninsured.

Fragmentation of coverage within families is not only perpetuated under the Affordable Care Act (ACA), it may be even worse than before because of the new rigid, complex rules for eligibility for various forms of coverage.

We already know that about 31 million individuals will still not be insured when ACA is fully implemented. Again, this report shows that even if other family members are insured, it is not just the uninsured member who is financially vulnerable, the entire family is.

An employed individual may or may not be covered under an employer-sponsored plan, and coverage of other family members under the same plan is also unreliable because of either affordability or eligibility considerations. Individuals with very low incomes may be eligible for Medicaid in some states but not in others. Children in the family may be eligible for Medicaid or CHIP in some states but not in others. Even if the children are eligible, the adults may not be. Even a determination of whether or not individuals living together in a housing unit constitutes a family can influence eligibility determinations. Many individuals will find that their eligibility status for whatever program for which they may be considered may leave them with unaffordable requirements for premium contributions thereby qualifying them for hardship status which provides them with the privilege of remaining uninsured without having to pay a penalty under the ACA mandate. (The complexity of ACA leads to sentences like this.)

Factors influencing eligibility for various programs such as employment, income, residence, and modification of eligibility rules and income thresholds can vary considerably over time for any given family. The point is that far too many families have and will continue to have fragmentation of their health care coverage and one-third to one-half of them will experience financial burdens as a result.

This injustice would disappear under a single payer national health program – an Improved Medicare for All. What do you think the chances are that President Obama, during his State of the Union address this evening, will recommend health justice for all through the enactment of a single payer system? Even the oddsmakers won’t take that one since they don’t deal in zeros.

Two goals, neither achieved

By Bill Davidson, M.D.
CommonSense2, January 2014

In creating the Affordable Care Act (ACA) President Barack Obama had hoped to accomplish two goals. The first was to secure his legacy as the president who achieved quality, affordable health care for all Americans. His second objective was to reward and assure for his Democratic presidency the continued support of the private insurance and pharmaceutical industries as well as their Wall Street patrons. Unfortunately, the two objectives are mutually incompatible and as a result neither will be achieved.

When Barack Obama ran for president in 2007 there were 50 million uninsured Americans, over half a million medical bankruptcies, and by many standards of quality America trailed the rest of the industrialized world. Correcting these woes was certainly a worthy goal and one that could have secured Obama’s favorable place in history.

Unlike most of his predecessors, Barack Obama came to the presidency with an understanding of how that goal could be achieved. As a little known senator from Illinois, he had learned about and then advocated for a single-payer solution, i.e. Medicare for All.

He knew that every other industrialized country in the world employed a single-payer system, which delivered universal care at an affordable price without compromising on quality. He knew that Medicare, America’s single-payer system for the elderly, worked well and was extremely popular. He was also aware that the Veterans Administration’s single-payer system delivered great care at lower prices, because it could group negotiate with the drug and medical technology companies.

As his presidency began, Obama’s party held majorities in both legislative houses and prospects looked good for achieving his first goal. But he wanted more.

To achieve his second goal of currying favor with the insurance and pharmaceutical industries, he turned his back on a single-payer solution and chose instead the individual mandate paradigm, which compels everyone to buy private health insurance.

Almost immediately, the Congressional Budget Office informed the administration that unlike a single-payer system, the individual mandate would leave 20 million Americans uninsured and that number might rise even higher with “red state” governors resisting Medicaid expansion. Would that damage Obama’s legacy? Probably not. Those left uninsured would be the working poor who are politically “invisible.”

Obama also needed to cut a deal with the pharmaceutical industry which would allow them to continue to be the most profitable business in the U.S. Like his predecessor, George W. Bush, Obama did this in secret behind closed doors and the chance to bargain effectively for lower prices was lost. Again, this was a risk to his legacy worth taking as most Americans were use to extravagant prices for medicines and unaware that the rest of the world gets drugs for half as much.

The real threat to Obama’s legacy has only just begun. The computer glitches are indicative of a system that is incredibly complex and dysfunctional. Prior to Obamacare, 1 out of 3 dollars spent on health care went to administer it. Adding another level of bureaucracy, Obamacare will make that administrative burden even more onerous and expensive.  The failure to bend the cost curve will ultimately doom Obama’s legacy, but there will be an additional factor that will soon become apparent. The insurance products that are being peddled by the industry come with such high deductibles and co-pays that our citizens will soon learn that they cannot afford to get sick and their health insurance is an illusion.

Obama is learning that the insurance industry support is capricious. Numerous variances have been granted to accommodate their avarice. Had the industry been willing to upgrade their woefully inadequate policies he could have avoided the embarrassment of “having lied” to the American people about “keeping their insurance.” In the end, the insurance industry will abandon him for a more lucrative deal with other politicians.

By abandoning a single-payer approach to health care reform, Barack Obama will have neither a worthy legacy nor political support.

Dr. Bill Davidson is a retired cardiologist who now works part-time at the Veterans Administration hospital in Lebanon, Pa.

http://commonsense2.com/2014/01/healthcare/two-goals-neither-achieved/

Shumlin: Timing Key For Single-Payer

By Chris Fleisher
Valley News (White River Junction, Vt.), Jan. 28, 2014

HANOVER, N.Y. — The biggest challenge in moving Vermont toward a single-payer health care system is time, while the political will to achieve it still exists at the state and federal levels, Gov. Peter Shumlin said Monday.

“Governors have very short shelf-lives. We really do. And we also know that in order to get what we need to get done… we don’t want to have to work with a president that we don’t know,” Shumlin told a crowd of 120 health experts at Dartmouth College Monday evening. “In other words, we want to work with what we’ve got. We can’t gamble this plan on someone elected after 2016.”

The Affordable Care Act helped expand insurance coverage to many people who were previously shut out of the system, but it is not a solution to creating a sustainable health care system, Shumlin said. Vermont will design the template for the rest of the nation on health reform, Shumlin said, even as he acknowledged that a great deal of work — including figuring out how to pay for it — remains to be done. He implored the health professionals in the room to take up the challenge with him.

Shumlin made the remarks before students in Dartmouth’s Master of Health Care Delivery Science program, which marries the expertise of the business world with health care, and includes professionals from around the world and close to home. Indeed, Shumlin’s director of health care reform, Robin Lunge, was part of the first graduating class last year.

If successful, Vermont would be the first state in the nation to achieve single-payer health care, Shumlin said, a road that the Green Mountain State has been on since 2011. A single-payer health care system is one in which the government, rather than private insurers, pays for all health care costs.

But Shumlin acknowledged the limitations of this vision and said that true reform would require the efforts of health care leaders, including the people in the audience, to create a sustainable system.

“It doesn’t matter what payment system we come up with,” he said. “If costs keep rising as they have, there is no system that will finance the (costs)… I will not push send on a payment system if we can’t deliver on a delivery system.”

Earlier this month, Shumlin said that he was squarely focused on creating a single-payer health care system in Vermont even as he faces more immediate problems with the insurance marketplace website, VermontHealthConnect.gov, a provision of the Affordable Care Act.

As elsewhere in the nation, Vermont’s online marketplace has had technical difficulties that have prevented people from enrolling for coverage. Shumlin has acknowledged the problems and vowed that they would be fixed. But, on the first day of the legislative session earlier this month, Shumlin said that he would not be “so easily deterred” from his larger goal to implement a single-payer system by 2017.

The relative lack of special interest groups in Vermont, a network of ambitious health care providers and the state’s small size make it a good laboratory for the rest of the U.S., Shumlin said Monday, adding that there is growing interest among his peers in what Vermont is doing. Shumlin is chairman of the Democratic Governors Association and said he has spoken with California Gov. Jerry Brown, New York Gov. Andrew Cuomo and Massachusetts Gov. Deval Patrick about Vermont’s progress on health reform.

“There are a lot of folks who will come on board,” Shumlin said. “The question is who’s going to do it first.”

Still, plenty of questions remain, including how a single-payer system will be financed. Republicans have said there is little to discuss about single-payer until Shumlin’s administration can present a plan to pay for it.

In response to one audience member’s question about the financing issue, Shumlin stepped aside and let his “money man” answer for him.

Michael Costa, deputy commissioner for health care reform, said the details would be worked out this year. But whatever the system’s design, it would not cost any more than Vermonters are paying now, he said.

“As far as how to pay for it overall, I’d say you’re all paying for it today,” Costa said. “We’re not talking about new dollars at all. We’re talking about the same amount of money that you pay now (for insurance premiums) put into a publicly financed system. And for people who are concerned about what that new funding mechanism might be, they should be outraged by what they pay now.”

That conversation would happen over the coming months, Costa said, and a proposal would go before lawmakers in January 2015. Until then, he said, “I would say stay tuned.”

http://www.vnews.com/news/10411862-95/shumlin-timing-key-for-single-payer

One uninsured member in family can cause hardship for all

Financial Burden of Medical Care: A Family Perspective

By Robin A. Cohen, Ph.D., and Whitney K. Kirzinger, M.P.H.

Centers for Disease Control and Prevention, National Center for Health Statistics, January 2014

Recently published data from the National Health Interview Survey (NHIS) found that 1 in 5 persons was in a family having problems paying medical bills, and 1 in 10 persons was in a family with medical bills that they were unable to pay at all. NHIS defines “family” as an individual or a group of two or more related persons living together in the same housing unit. The family perspective is important to consider when examining financial risk because significant expenses for one family member may adversely affect the whole family. Health insurance coverage is one way for a family to mitigate financial risk associated with health care costs, although health insurance status may differ among family members. This report explores selected family demographic characteristics and their association with financial burdens of medical care (problems paying medical bills, paying medical bills over time, and having medical bills that cannot be paid) based on data from the 2012 NHIS.

Percentage of families that had any financial burden of medical care in the past 12 months, by family health care coverage status: United States, 2012

20.9% – All members have private insurance

21.1% – All members have public coverage

35.8% – Some members have private insurance, and some members have public coverage

39.7% – All members are uninsured

46.0% – Some members are insured and some members are uninsured

Summary

Previous reports based on data from NHIS examined financial burdens of medical care from a person-level perspective. One strength of NHIS is that information on insurance and financial burden is collected at the family level, giving analysts the ability to look at both family-level and person-level data. The family perspective is a useful expansion of previous research because having one family member who contributes to the bulk of the financial burden for medical care may place the entire family’s ability to pay medical bills and overall financial well-being at risk. From a family level, this report found that levels of financial burden of medical care were greatest for families with incomes at or below 250% of the FPL, those with children, those with mixtures of coverage types, and those in which at least one family member was uninsured. Often, persons in families with more than one member can financially benefit from shared income and household expenses. However, when one family member experiences a financial burden of medical care, the entire family may be at risk for financial burden.

http://www.cdc.gov/nchs/data/databriefs/db142.pdf

This report confirms that members of insured families who all have the same health care coverage still have a one in five chance of experiencing a financial burden from medical care. What is new in this particular report is they showed that fragmentation of coverage within families produces a greater risk of financial burden, with almost half of families adversely affected if some family members are uninsured. That refers to all family members, not just the uninsured.

Fragmentation of coverage within families is not only perpetuated under the Affordable Care Act (ACA), it may be even worse than before because of the new rigid, complex rules for eligibility for various forms of coverage.

We already know that about 31 million individuals will still not be insured when ACA is fully implemented. Again, this report shows that even if other family members are insured, it is not just the uninsured member who is financially vulnerable, the entire family is.

An employed individual may or may not be covered under an employer-sponsored plan, and coverage of other family members under the same plan is also unreliable because of either affordability or eligibility considerations. Individuals with very low incomes may be eligible for Medicaid in some states but not in others. Children in the family may be eligible for Medicaid or CHIP in some states but not in others. Even if the children are eligible, the adults may not be. Even a determination of whether or not individuals living together in a housing unit constitutes a family can influence eligibility determinations. Many individuals will find that their eligibility status for whatever program for which they may be considered may leave them with unaffordable requirements for premium contributions thereby qualifying them for hardship status which provides them with the privilege of remaining uninsured without having to pay a penalty under the ACA mandate. (The complexity of ACA leads to sentences like this.)

Factors influencing eligibility for various programs such as employment, income, residence, and modification of eligibility rules and income thresholds can vary considerably over time for any given family. The point is that far too many families have and will continue to have fragmentation of their health care coverage and one-third to one-half of them will experience financial burdens as a result.

This injustice would disappear under a single payer national health program – an Improved Medicare for All. What do you think the chances are that President Obama, during his State of the Union address this evening, will recommend health justice for all through the enactment of a single payer system? Even the oddsmakers won’t take that one since they don’t deal in zeros.

Bayer designs its products for the market, not for poor people

Buffering the Pharma Brand: Restoring Reputation, Rebuilding Trust (A panel discussion)

Financial Times
FT Global Pharmaceuticals & Biotechnology Conference 2013, December 3, 2013

With recent surveys revealing pharmaceutical companies now ranking in trust perceptions below producers of spirits and tobacco, and physicians basing prescribing decisions as much on brands as on products, the need for pharmaceutical companies to understand and address the factors contributing to poor reputation has never been greater. How can pharma companies restore reputation and increase trust?

Marijn Dekkers, Chairman of the Board of Management, Bayer:

India for us was an unusual situation. Our patent was not questioned. I mean, other companies patents are questioned. In our case. the Indian government said, “No, no, your patent is valid.” – and this is a product for kidney and liver cancer – “Your patent is valid. We just think that you charge too much, and because you charge too much you have to do a mandatory license to a generic company in India that is now going to make this drug and sell it, and on that low price that they will sell it for, you will get six percent royalty.” And that was a government decision. So, we had a patent, but somebody else is allowed to make this product, and because there is not enough access to this product for poor Indians. I don’t know if you have ever been to India. There are a lot of poor Indians obviously, and the hospitals aren’t that close by (laughs) where they live. So we found that this was extremely politically motivated and essentially, I would say, theft of the Indian government of a capability of a company that has patented and therefore a patent right. So, now is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market – let’s be honest – we developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product. But, you know, the risk in these situations is always spillover. A generic Indian company is now going to sell this product, in South Africa, and then in New Zealand, you never know how this is going to spill over. That puts the whole industry, and the patent right of an industry, at risk.

https://www.ft-live.com/ft-events/ft-global-pharmaceuticals-biotechnology-conference-2013/sessions/buffering-the-pharma-brand-restoring-reputation-rebuilding-trust-panel

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‘We didn’t make this medicine for Indians… we made it for western patients who can afford it’: Pharmaceutical chief tries to stop India replicating its cancer treatment 

By Daily Mail Reporter
Mail Online, January 24, 2014

The CEO of phamaceutical giant Bayer has sparked fury after announcing one of the firm’s drugs was for ‘western patients who can afford it’.

Marijn Dekkers made the inflammatory comments after the Indian company Natco Pharma Ltd. were granted a government licence to produce a copy of Bayer’s cancer drug Nexavar which they will sell for 97 per cent less than the original product.

Under Indian law the government grants compulsory licenses to domestic firms to produce copies of drugs if the original isn’t available locally at a reasonable price, regardless of whether they are under patent.

Mr Deekers, who has previously described India’s patent laws as ‘essentially theft’, said: ‘We did not develop this medicine for Indians. We developed it for western patients who can afford it.’

Nexavar, which is also known as Sorafenib, has been approved for the treatment of kidney cancer, advanced liver cancer (hepatocellular carcinoma), and thyroid cancers that are resistant to radioactive iodine treatment.

Currently a kidney cancer patient would pay $96,000 (£58,000) for a year’s course of the Bayer-made drug. However the cost of the Natco version would be around $2,800 (£1,700).

http://www.dailymail.co.uk/news/article-2545360/Pharmaceutical-chief-tries-stop-India-replicating-cancer-treatment.html

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Does Pharma Only Develop Drugs For Those Who Can Pay?

By John LaMattina
Forbes, December 5, 2013

At the Financial Times Global Pharmaceutical & Biotech Conference this week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western patients that can afford it. That’s a pretty provocative comment. At a time when Pharma’s reputation is suffering, Dekkers’ comment does not help matters. Rather, it reinforces the notion that Big Pharma is only interested in profits and those in need are out of luck when it comes to life saving medicines.

Reader Comments:

Marijn Dekkers:

John,

You write that I could have been more circumspect with my remarks.

I regret that what was a quick response from me within the framework of a panel discussion at the recent FT Pharma conference has come across in a different way as it was meant by myself. It could not be more opposite to what I want and we do at Bayer.

Let me confirm that Bayer as a company wants to improve people’s health and quality of life with innovative therapies and we would like all people to share the fruits of medical progress, regardless of their origins or income.

However, I was particularly frustrated by the Indian government’s decision, to not protect a patent on Nexavar that was given to us by the Indian patent authority. This was a unique event against Bayer’s intellectual property. But as you know best, the protection of our IP is so vital to our ability to fund and advance new innovations to help address some of the worst diseases in the world such as cancer.

I am very passionate about our ability to innovate and in the open and candid discussion at the conference, as I was expressing my fundamental frustrations, I should have made this more clear.

However, I remain firm that there is no excuse for any country to weaken the intellectual property rights. Without new medicines people in developing countries – as well as those in the more prosperous countries – ultimately will all suffer. Bayer, like any other private company, needs a sufficient return on investment to allow for future research and therefore innovation. Generic manufacturers have a critical role to play – but generic companies do not invest in researching and developing and therefore don’t ever bring any new innovative cures and treatments. Not for the developing nor the developed markets!

Marijn Dekkers

Chairman of the Board of Management of Bayer AG

And…

Dr David Hill, Chief Executive

World Innovation Foundation

It should be quite clear now that big pharma is ‘only’ interested in vast profits and basically has no empathy with humankind other than it being an immense cash-cow for them. Their actions and out-of-court settlements speak volumes and where history cannot lie.

For the major drug companies throughout the world are continually being found out for criminal and fraudulent activity in order to sell their pharmaceuticals. Not me saying this but the world’s media coverage and the out-of-court agreements that they have settled and where in the past 5 years alone fines in excess of $17 billion have been agreed between authorities and the big drug companies. These include but where they are not a fully exhaustive list of examples,

$2.2 billion and $2.5 billion by J&J (2013),

£3 billion by GSK (2012),

$762 million by Amgen (2012),

$1.5 billion by Abbott (2012),

$95 million by Boehringer Ingelheim (2012),

$109 million by Sanofi-Aventis (2012),

$950 million by Merck (2011),

$520 million by AstraZeneca (2010),

$750 million by GSK (2010),

$423 million by Novartis (2010),

$460 million by Allergan (2010),

$2.3 billion by Pfizer (2009),

$1.42 billion by Eli Lilly (2009)

and $425 million by Cephalon (2008) – Source for all from the US ‘Department of Justice’ and reinforced by Wikipedia listing. Note also that all of these actions had criminal activity as part of their respective settlements. But because these huge global concerns make so much money out of selling drugs, these fines have apparently now become an in-built expense in the corporate cost of their drugs. Indeed in GSK’s 2012 case in the USA, nearly $30 billion was sold and where it was estimate that even after the $3 billion fine was deducted, a profit of $11 billion was made.

Therefore it certainly appears that the accepted corporate environment that these giant corporations have structured internally for themselves has created these illegal activities and where it is of their own making and not predominantly the countries that they operate within – but I have to say though, that it does help if there is government and internal corruption to boot. But possibly the biggest sadness to date has to come out yet in India where over 20,000 of the poorest children in the world (between the ages of 10 and 14) have been used as human guinea pigs for Big Pharma – http://www.bbc.co.uk/news/magazine-20136654 . Indeed over the past seven years, nearly 2,000 trials have taken place in the country and the number of deaths increased from 288 in 2008 to 637 in 2009 to 668 in 2010, before falling to 438 deaths in 2011, the latest figures available. Therefore the drive for corporate profits has a very dark side to it and everyone should be fully aware of this fact. Apparently this is not a problem for big pharma and where vast profits and greed rise above human life itself. Governments just have to get to grips with these huge corporations and fine then not just a small percentage of their profits but all the estimated total profit. That is the only way that they will ever alter their corporate mind-set and strategic blue-print.

http://www.forbes.com/sites/johnlamattina/2013/12/05/does-pharma-only-develop-drugs-for-those-who-can-pay/

About The World Innovation Foundation:: http://www.thewif.org.uk/wif.php?xy=1440&pl=macintel

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NICE (National Institute for Health and Care Excellence)

Results for Sorafenib (Nexavar):

NICE does not recommend sorafenib for people with advanced hepatocellular carcinoma. Sorafenib does not provide enough benefit to patients to justify its high cost, even when special considerations were applied, so NICE did not recommend it.

Bevacizumab, sorafenib and temsirolimus are not recommended as first drug treatments for people with advanced and/or metastatic renal cell carcinoma. Sorafenib and sunitinib are not recommended as second drug treatments for people with advanced and/or metastatic renal cell carcinoma.

http://www.nice.org.uk/Search.do?x=-987&y=-75&searchText=Sorafenib&newsearch=true

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MSF response to Bayer CEO statement that medicines developed only for western patients

By Dr Manica Balasegaram, Executive Director, Médecins Sans Frontières Access Campaign
Médecins Sans Frontières (Doctors Without Borders), January 23, 2014

The Bayer CEO going on record to say that they did not develop a cancer medicine for Indians but only for ‘western patients who can afford it’ sums up everything that is wrong with the multinational pharmaceutical industry. Bayer is effectively admitting that the drugs they develop are deliberately going to be rationed to the wealthiest patients.

This is a side-effect of the way drugs are developed today.  Pharmaceutical companies are singularly focused on profit and so aggressively push for patents and high drug prices. Diseases that don’t promise a profit are neglected, and patients who can’t afford to pay are cut out of the picture. Drug companies claim to care about global health needs, but their track record says otherwise.

It doesn’t have to be this way. Medical innovation can be incentivised differently, and research paid for in ways that deliver drugs but without high prices that exclude millions of people from access.  Instead of being part of the problem, drug companies should work to be part of the solution and change the dire state of medical research and development today.

http://www.msfaccess.org/content/msf-response-bayer-ceo-statement-medicines-developed-only-western-patients

Comment:

By Don McCanne, M.D.

Bayer Chairman Marijn Dekkers wants to be honest with us when he tells us that Nexavar (sorafenib), an expensive drug for certain liver and kidney cancers, was developed for Western patients who can afford it, but not for poor people such as much of the population of India. Should markets be the controlling factor?

Today’s New York Times reviewed the 2014 Rolls-Royce Wraith, a spectacular two-door sedan available for $372,324, with the $12,925 option of a headliner with 1,340 LEDs that provides the ambiance of a night sky filled with stars. Transportation is an important public policy issue, but, I dare say, the sale of a Rolls-Royce should be left to market dynamics. http://www.nytimes.com/2014/01/26/automobiles/autoreviews/the-ecstasy-of-excess-the-agony-of-the-sticker.html

What about health care? Should it be left to markets? Let’s look at the corporate market mentality in the case of Bayer’s Nexavar. It was not developed for all patients with hepatocellular or renal cell carcinoma; it was developed only for those who could afford it. It was developed for private markets, not for public health. It was intended that it be priced near the maximum that the market would bear, rather than being priced based on costs plus fair profits. The fear and grief of cancer patients are used to leverage higher market prices for oncology drugs. Thus the price of Nexavar was set at $96,000 – a price at which Bayer decided that there was a large enough market of wealthy individuals with these cancers who would willingly pay that amount.

Should the government intervene when drug pricing prevents access for most patients? India thinks so. Bayer could, but won’t, produce the drugs for a much fairer price (since they didn’t design it for the poor people of India). So India is licensing generics, while honoring Bayer’s patent by giving them a six percent royalty for nothing other than owning the patent.

In the United States, we have decided to leave much of the pricing of drugs to the market, except for government programs such as the VA and Medicaid. Although insurers and pharmacy benefit managers do some negotiating, they are still part of the marketplace, and they are very weak negotiators at that. Thus we pay much higher prices for prescription drugs than do all other nations.

There is another point to be made when using the example of Nexavar. England’s NICE evaluates the benefits and costs of various therapeutic measures, and they have decided that this drug is not recommended for either advanced hepatocellular carcinoma or advanced renal cell carcinoma. So why would anyone want to be treated with this medication? One report submitted to NICE showed that Nexavar “on average improves overall survival by 83 days” for hepatocellular carcinoma with Grade A liver function, but “available evidence does not indicate that it delays symptom progression or improves quality of life.” Prolonging life at well over $1000 per day might be worth it to some even if symptoms progress anyway and quality of life does not improve. http://www.journalslibrary.nihr.ac.uk/__data/assets/pdf_file/0009/65295/FullReport-hta14Suppl1-03.pdf

The British and the Indians seem to understand the issues better. Maybe someday we will too, but not until we get a better grasp on the proper role of markets and the government. Markets will get you a Rolls-Royce or 83 days of poor quality life, if you can afford it. The government would get all of us the health care that we really need, if only we would change our politics to make it happen.

But that Rolls… with its 624 horsepower 6.6-liter twin-turbo V12, you can go from a standstill to 60 miles per hour in only 4.4 seconds… an American dream! (Forget about the American nightmare of our health care system.)

Keeping Hope Alive for Single-Payer System

By Robert Fulton
California Health Report, Jan. 23, 2014

Considering the prospects of a United States single-payer health care system, physician Matthew Hendrickson quipped: “Americans will always do the right thing, only after they have tried everything else.”

His message: Single-payer systems are the only surefire way to provide health care coverage to all while also controlling costs, and are bound to take root in the U.S. eventually.

Simply put, a single-payer system is government-run health insurance, with no premiums and no co-pays. Variations include the socialist British structure where providers are employed by the state; the Canadian version that has the government directly reimburse private-sector providers; or the French and German system, where the state pays providers through highly regulated insurance companies.

“I want to emphasize that single-payer is inevitable,” Hendrickson said during a talk at the California Health Professional Student Alliance’s Southern California Conference at UC Irvine Medical School in November.

The California Health Professional Student Alliance (CaHPSA) is a 5,000-member student-run, statewide non-profit that advocates for universal health care. The organization is a chapter of Physicians for a National Health Program, of which Hendrickson is a member.

The message of the conference, titled ACA 2.0, is that current reforms don’t go far enough.

“Our whole stance here on the Affordable Care Act is that it’s great that we’re expanding health care to more people, but it could go further,” said Irmina Haq, a recent graduate of Jefferson Medical College in Philadelphia, and a recruitment outreach coordinator for CaHPSA. “It needs amendment and it needs changes.”

Haq feels that the ACA doesn’t do enough to cover everyone nor contain costs, and that the only way to do so is through a national health-care system.

“I think we should cover everyone,” Haq said. “I think that currently we’re getting a lot of people signed up, but we’re still missing a lot of people. I think secondly, the ACA doesn’t do much about cost containment. Unless you do something to keep down costs, this whole thing is not going to work.”

Hendrickson believes that, on one hand, the Affordable Care Act has moved the United States closer to single-payer. According to Hendrickson, because of the Medicaid (Medi-Cal) expansion and additional federal health care subsidies, 70 percent of health care spending originates from tax dollars. On the other hand, Hendrickson also sees the ACA as a life raft for the insurance industry. More public funding funneled through the privately controlled insurance companies further entrenches the status quo.

“I don’t think it’s clear,” said Hendrickson, who works as an emergency physician in Los Angeles and Fresno. “The amount that the public is spending to cover health care is going to increase, but it’s all going to be funneled through the private insurance industry. So you’re really actually strengthening the current cancerous system that we already have. In the long term, it’s inevitable that we’re going to move to some single-payer system because the costs are unsustainable.”

Chuck Nguyen, who recently completed his post-doctorate studies at UCSD and is applying to medical school, recently had knee surgery. His school insurance has run out, so he’s trying to get insurance for him and his mother through Covered California.

“It’s so complicated,” Nguyen said. “I came (to the conference) hoping to know, is there an alternative, is there anything better? What’s the point of this? What can we do and basically how can it get better? How is this going to benefit me and my mom or people who can’t afford insurance?”

The possibility of a national single-payer health care system, a long-time dream of progressives and considered nearly impossible in today’s political environment, may be more realistic than some realize, at least in California. Ironically, the ACA may be the reason.

Written into the Affordable Care Act is a provision effective in 2017 that, according to the Kaiser Family Foundation, will “permit states to obtain a five-year waiver of certain new health insurance requirements if the state can demonstrate that it provides health coverage to all residents that is at least as comprehensive as the coverage required under an Exchange plan and that the state plan does not increase the federal budget deficit.” Supporters see this provision as a catalyst to launch a statewide single-payer system.

Further buoying supporters’ enthusiasm are a handful of close calls California has seen recently in the pursuit of a single-payer system. In 2006 and 2008, State Bill 840, also known at the California Universal Healthcare Act, made it through the legislature only to be vetoed by Governor Arnold Schwarzenegger. Focus on the ACA and political haggling have pushed a single-payer bill off the radar, but with super majorities in both houses and a Democratic governor, a single-payer bill could be resurrected.

Bill Zimmerman, a partner at the progressive advertising firm Zimmerman and Markman and long-time supporter of universal health care, explained the tightrope single-payer advocates must walk in their support of the ACA. If the Affordable Care Act is a resounding success, the public may not see the need for further reform. But if it’s a resounding failure, the public may be skeptical of further government involvement in health insurance.

“I believe it can be a stepping stone if it’s used that way, but it’s also speed bump in the sense that it’s going to make some people more skeptical about government involvement in health care,” Zimmerman said. “We’ve got to fight against the perception that the problem can’t be solved.”

Keyon Mitchell graduated from the University of Southern California with a Masters in social work, and is applying to medical school. He’s currently the Shearer Student Fellow for CaPHSA.

Mitchell grew up in parts of Los Angeles designated by the Department of Public Health as Service Planning Areas 4 and 6, and had limited access to health-care services. He grew up with Medi-Cal and remembers waiting months to see his primary care physician and receiving immunizations from free clinics. Mitchell said it took him more than two months to get an MRI at a local clinic after breaking a bone in his foot sustained while playing basketball in high school.

Based on his experiences growing up, Mitchell is a staunch supporter of single-payer.

“No system, I think, is perfect, but as far as a system that is the best for taking care of people here in the states, I think it’s the best system,” Mitchell said. “At the end of the day we want everyone to have coverage. We want everyone to have that idea that you deserve health care. If you’re sick you should be able to go to some sort of facility and get the care that you need. I think that’s not a novel concept.”

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