PNHP

Discretionary Deeming: How One Town Got Improved Medicare

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.”

http://www.healthycal.org/archives/14454

Why drug prices are out of control, or money well spent by Big Pharma

By A.W. Gaffney, M.D.
Truthout, Jan. 24, 2014

Nowadays, it’s not only radicals who are recognizing the rising problem of inequality. Between Bill de Blasio’s mayoral inauguration, Obama’s pointed speech early last month, and Pope Francis’ critique of trickle down economics in November, the rhetoric of Occupy Wall Street seems to be going mainstream. Newly emerging statistics — for instance, that the top 0.01 percent of earners now seem to take home a bigger percentage of the national income than in any other year for which we have the numbers — seemingly rubs more and more Americans the wrong way. 

To be fair, however, perhaps this increasingly skewed distribution of income and wealth should be interpreted as nothing more than the fair return on a prudent investment strategy. With enough money devoted to government lobbying, one could argue, any of us could be the beneficiary of upward wealth redistribution. But while some contributing factors to inequality — say the failure of the minimum wage to keep up with inflation (much less with productivity growth) — can be concisely displayed in numbers and graphs, acts of direct upward wealth redistribution require demonstration by way of a specific case study. Here, I consider the illustrative (and evolving) case of the transfer from taxpayers to pharmaceutical companies through Medicare Part D. 

When Medicare was crafted in 1965, a drug benefit had strong Democratic Congressional support; at the same time, it wasn’t a political priority for either party, and so given concerns about costs, it was dropped from the final bill. Growing pressure from seniors over subsequent decades, however, ultimately made a drug benefit an important political issue. Prescription drug coverage for seniors could have been created over these years with relative ease: A benefit could have been affixed to traditional Medicare, which would then have administered the program, and could have negotiated with pharmaceutical companies over prices (as other capitalist democracies, and even our own Veteran’s Administration, already do). 

However, the drug benefit that ultimately emerged – “Medicare Part D” – with President George W. Bush’s 2003 Medicare Modernization Act (MMA) was the result of a much stronger power than common sense: corporate lobbying. Indeed, as argued in the 60 Minutes exposé, “Under the Influence,” the pharmaceutical industry all but wrote the law. Former congressmen and senators who had registered as lobbyists for the industry then endeavored to get it passed. Thomas Scully, a former hospital industry lobbyist who was appointed by Bush to run Medicare, was the primary negotiator with Congress over the MMA. He managed to obtain a waiver of federal ethics rules that allowed him to negotiate for lobbying jobs while still running Medicare, and in the lead up to the law’s passage, actually threatened to fire his chief actuary if he revealed a higher cost estimate for the program. Meanwhile, the main proponent of the bill in the House — Congressman Billy Tauzin, who had received significant campaign funding from the pharmaceutical industry — was actually already looking for lobbying jobs while the legislation was under consideration. Within weeks of its passage, he was in negotiations with the Pharmaceutical Research and Manufacturers of America (PhRMA), the chief lobbying group for the industry, for a position.

The profound generosity of the 2003 Act — not in terms of benefits for seniors, but with respect to profits — should therefore come as little surprise. First, the bill created an entirely privatized, administratively wasteful, and unnecessarily complex system of Pharmaceutical Dispensary Programs (PDPs) to administer the benefit. Under this system, seniors must choose from dozens of plans with various costs and differing formularies: Given the complexity of aggregating prices, premiums, and deductibles together with a universal human incapacity for predicting future illnesses, seniors succeed in choosing the cost-optimal plan (according to a 2012 report by the National Bureau of Economic Research) less than 10 percent of the time. 

But the real prize of the law lay elsewhere: By explicitly outlawing Medicare from involving itself in “negotiations between drug manufacturers and pharmacies and PDP sponsors,” the bill ensured that Medicare would pay richly for the drugs it purchased. Notably, when it comes to all other healthcare — including physician services, hospitalizations, lab tests, and so forth — Medicare essentially has a “take-it-or-leave-it” approach to pricing. When it comes to prescription drugs, however, Medicare isn’t even allowed to use its purchasing power to try to get a better deal for U.S. taxpayers, which is particularly problematic because many prescription drugs are patent-protected, giving the seller monopoly-power in determining prices.

Perhaps the industry, however, is simply getting what it pays for: In 2013, for instance, it led all other industries with $171 million spent on government lobbying. Similarly, the various other actors crucial to the bill’s passage have also earned strong dividends on their legislative investment, allowing some to quickly catapult into the highest echelons of the rich. Billy Tauzin, for instance, accepted a $2 million a year offer to head PhRMA. Scully similarly soon joined the ranks of the drug lobbyists. In fact, according to 60 Minutes, at least 15 congressional staffers, officials, and congressman who worked on the bill subsequently took positions with the industry.

Nor has the situation changed in more recent years. PhRMA predicated its support of President Barack Obama’s Affordable Care Act on, among other things, maintaining the prohibition on Medicare drug price negotiation. Tauzin, still president of PhRMA, visited the White House some half dozen times after the 2008 election, and the industry ultimately got what it wanted: no price negotiations or drug imports. In that same year, Tauzin took home a bonus of $2.3 million in addition to his $2.1 million salary, and the following year he cashed out of the organization for a cool $11.6 million. Who knew public service could be so rewarding?

But such payouts are miniscule in comparison with the predictable, and predicted, upward transfer of wealth effected by these lobbying efforts. When comparing the prices of the top 20 drugs prescribed to seniors, the organization Families USA found nearly a 60 percent markup in median drug prices (by comparing the lowest Part D prices with the lowest VA prices). The aggregate size of the wealth transfer that results from such differences was estimated in a January 2013 report by the Center for Economic and Policy Research, which argued that if Medicare spent as much as other industrialized nations on prescription drugs, it would save the federal government between $229.7 and $541.3 billion over the coming decade. The report also estimated that such a move would save state governments between $30.8 and $72.7 billion and beneficiaries directly between $47.7 and $112.4 billion over this same period. What’s a cool half trillion between friends? Clearly, Big Pharma’s annual lobbying expenditures are a downright pittance in the context of such rewards.

The massive annual salaries of the CEOs of the pharmaceuticals companies — $25 million in 2012 for the head of Pfizer alone, for instance, and about $200 million for the big 11 that year collectively — cannot, in other words, be construed as simply the natural result of anarchical market forces. On the contrary, much of the wealth accumulation at the apex of the economic pyramid over the last few decades has had little to do with some miraculous, collective upsurge in the work ethic, intelligence, prudence, inspiration, perspiration, thrift, or math-and-science skills of a tiny class of mega-rich: instead, it has more to do with the rest of us being out-maneuvered in the political arena. The absurd fact that financiers pay much less in taxes on money made on the stock market than what many others pay on money earned through actual work is yet another example of crude upward wealth redistribution via political action.

Conservatives frequently argue that inequality is a fact of life, or the price of doing business in a market economy; liberals often argue that we could do a better job of ameliorating the consequences of inequality through a stronger safety net. No doubt we need a stronger social welfare system, real universal health care, a more progressive tax code, a world-class system of education, and much more. But if we are to understand the reasons why ours is an increasingly unequal society, we can’t neglect to trace the green strings of power back to the corporate puppeteers.

A.W. Gaffney is a board-certified internist, a fellow in pulmonary and critical care medicine and a member of Physicians for a National Health Program whose writing deals with issues of health care and health policy from a progressive perspective. He is involved in progressive health activism and is researching a book on the idea of health care as a human right in history. 

http://www.truth-out.org/opinion/item/21294-why-drug-prices-are-out-of-control-or-money-well-spent-by-big-pharma

Oncologists Make the Case for Single Payer System

By Tony Berberabe, MPH
OncLive, Jan. 22, 2014

When a patient receives the diagnosis of cancer, regardless of stage or severity of the disease, one of the many questions asked is how to pay for the treatment. And while the diagnosis is arguably the single most catastrophic health care event in an individual’s life, the burden of cost on the patient and their family only adds to the stress of the situation.

Oncologists are in the unenviable position of advising a treatment scheme that the patient can afford, paving the way to consider a single-payer system, writes Ray E. Drasga, MD, and Lawrence H. Einhorn, MD, in the latest issue of the Journal of Oncology Practice. Drasga is a community oncologist who founded a free clinic in Crown Point, IN, and Einhorn is a professor of Medicine at Indiana University Hospital in Indianapolis.

Single-payer systems are systems in which a single public or quasi-public agency handles all health care financing. Delivery of care may remain in public or private hands, depending on the particular system.

Drasga and Einhorn make the case for a regional single-payer system similar to Medicare that would provide universal, comprehensive coverage with free choice of providers. “All medical care would be covered, including provider visits, hospital care, prescription drugs, and rehabilitation. Copayments, deductibles, insurance premiums, and out-of-pocket expenses would be eliminated,” they write.

With the Affordable Care Act (ACA) now firmly established and private insurers firmly at its center, the authors foresee the trend of more high-deductible health plans, underinsurance, and greater cost shifting to patients. In addition, Drasga and Einhorn point out that the ACA does not include any cost-control measures, but rather relies on accountable care organizations, a revised version of the health maintenance organization. The authors write, “There’s no evidence ACOs will be any more effective than HMOs were in containing costs.”

Faced with the crisis of uncontrolled costs and inequitable access to care, Drasga and Einhorn call for a “streamlined, efficient, nonprofit system based on human needs to provide high-quality care to every person,” and ask that their fellow oncologists and their society, ASCO, endorse a single-payer system of national health care insurance.

http://www.onclive.com/news/Oncologists-Make-the-Case-for-Single-Payer-System

High deductibles perpetuate system’s issues

By Jonathan D. Walker, M.D.
The Journal Gazette (Fort Wayne, Ind.), Jan. 14, 2014

“Doc, I need to get this done before my new deductible kicks in.” Physicians hear this a lot; it reflects the increasing use of so-called consumer-directed health plans, where people are responsible for the first several thousand dollars of care before their insurance company has to pay. If you don’t already have one, you probably will soon.

And, believe it or not, this trend has nothing to do with Obamacare. The adoption of high-deductible plans is a symptom of a deeper problem: the fact that everything costs way more in America than anywhere else. For decades, there has been so much money sloshing around the system that there has been an “arms race” over who can charge the most. And for-profit insurance companies have never had the leverage to actually bring those prices down – the system is too fragmented.

There are some good things that come from those prices; part of that money goes to developing new treatments and technology. But a lot of that money ends up being wasted. For instance, a huge amount is thrown away on needless bureaucracy. A 2003 paper in the New England Journal of Medicine estimated that up to 30 percent of our health care costs come from administrative waste.

And it gets even worse. Researchers have shown that some of the care provided may not be as necessary or effective as doctors think. For instance, there is a whole website created by the American Board of Internal Medicine to help doctors and patients decide which tests and treatments actually are useful (choosingwisely.org).

So we have a system that is insanely expensive, that wastes money on needless paperwork and may not always provide the right type of care. But no one can fix it because it is too disjointed and unwieldy. So what do you do if you are a for-profit insurance company? You figure out a way to make someone else pay.

And that is why we have high-deductible plans. The insurance company is off the hook for the first several thousand dollars. Plus, the thinking is that if you have to pay that first big amount, you will somehow be able to control costs and “solve” the system’s problems. Now, there is a bit of truth to that. Studies show that people respond to high deductibles by cutting down on doctor visits for simple things. More importantly, it gets people to be more involved in their care, and that is definitely a good thing.

Unfortunately, it doesn’t solve the fundamental problem of high costs. Once people get really sick, they blast through the deductible and the system ends up right back where it started, with lots of expensive care and no way to control it. And a lot of studies show that when people are worried about their deductibles, they put off being evaluated, ending up much sicker and with more expensive problems. Children can often be the innocent victims of this, as parents struggling with finances try to decide which symptoms need a doctor and which don’t. Finally, women tend to have higher health costs overall, and high-deductible plans amount to more than a $1,000 loss in pay for women compared to men.

But the winners are always the insurance companies. They have managed to shift their costs onto you, yet they can still charge huge premiums and deceptively blame Obamacare (rather than admit that they are perpetuating a broken business model). It would have been so much simpler, and cheaper, if Congress had just raised everyone’s Medicare tax – less than what we pay for private insurance – then we could all have some degree of basic coverage through Medicare. But that concept is kept so far off the table that most Americans don’t realize it is an option.

But even if research suggests that high-deductible plans can’t work, it doesn’t make any difference. They are happening. So in coming years, as you pay thousands of dollars to fulfill your deductible, remember that you are spending all that extra money to help your insurance company survive. Hopefully you will, too.

Dr. Jonathan D. Walker is an assistant clinical professor at Indiana University School of Medicine in Fort Wayne and a member of Hoosiers for a Commonsense Health Plan. He wrote this for The Journal Gazette.

http://www.journalgazette.net/article/20140114/EDIT05/301149990/1144