Canadian Doctors for Medicare hosted a celebration of Medicare in Canada. The speakers included Roy Romanow, former Saskatchewan Premiere and Commissioner on Health Care in Canada. They tell Americans that Canadian universal health care works and encourage Americans to implement a single payer universal health care systems.
Universal Health Care Message to Americans from Canadian Doctors & Health Care Experts
Canadian Doctors for Medicare hosted a celebration of Medicare in Canada. The speakers included Roy Romanow, former Saskatchewan Premiere and Commissioner on Health Care in Canada. They tell Americans that Canadian universal health care works and encourage Americans to implement a single payer universal health care systems.
Europe leads in pharmaceutical research
Global Drug Discovery: Europe Is Ahead
By Donald W. Light
Health Affairs
August 25, 2009
It is widely believed that the United States has eclipsed Europe in pharmaceutical research productivity. Some leading analysts claim that although fewer drugs have been discovered worldwide over the past decade, most are therapeutically important. Yet a comprehensive data set of all new chemical entities approved between 1982 and 2003 shows that the United States never overtook Europe in research productivity, and that Europe in fact is pulling ahead of U.S. productivity. Other large studies show that most new drugs add few if any clinical benefits over previously discovered drugs.
Policy Reflections
Congressional leaders and others concerned about high prices of new patented drugs will be heartened by this analysis, because lower European prices seem to be no deterrent to strong research productivity. A previous analysis using industry-based data showed that pharmaceutical companies recover all costs and make a good profit at European prices. Europeans are not “free riders” on American patients–another myth promoted by industry that assumes that countries are separate R&D/market silos that should each pay for themselves.
The real innovation crisis for patients and society is not the recent decline in new molecular entities but the small percentage over many years of new molecular entities that provide clinical advantages to patients over existing medications. This longer pattern stems from defining “effective” as better than placebo and using soft surrogate endpoints, or substitute criteria, instead of hard clinical endpoints. As a result, the vast majority of new drugs that constitute 80 percent of U.S. pharmaceutical costs offer few therapeutic advantages and greater risks than good drugs discovered in prior years. High prices for these new drugs enable companies to spend two and a half times more on marketing than on R&D, to persuade physicians to prescribe them and patients to want them. Thus, current incentives reward better marketing more than better value.
If we want new drugs to be clinically superior to existing ones, we need to reward companies for developing them and not for developing drugs that are merely superior to placebo. Arjun Jayadev and Joseph Stiglitz propose a key strategy: pay in terms of clinical value added, as some large purchasers already do and as Consumer Reports Best Buy Drugs does by comparing value with price. Jayadev and Stiglitz also recommend having clinical trials independently run and paid for by a public body such as the National Institutes of Health so that they can be designed to measure comparative advantages and risks over existing treatments. Publicly funded trials would also reduce cost and risk for pharmaceutical companies and increase competition from smaller firms by lowering the high cost barrier that company-funded trials pose. These are some ways in which incentives can be restructured to foster greater competition for clinically superior drugs and to lower overall spending.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w969v1
Arjun Jayadev and Joseph Stiglitz, “Two Ideas To Increase Innovation And Reduce Pharmaceutical Costs And Prices,” Health Affairs, 28, no. 1 (2009): w165-w168
http://content.healthaffairs.org/cgi/content/abstract/28/1/w165
Our uniquely American health care system is noted for its high prices for relative mediocrity. Some contend that our pharmaceutical industry provides an exception. It doesn’t. We are paying high prices for new chemical entities that over 85 percent of the time are providing us with no real benefit over existing products.
Many contend nevertheless that innovations provided by U.S. pharmaceutical firms are well worth our very high prices. Yet productivity of European pharmaceutical firms remains even higher, and they are able to provide new products at much lower prices.
When reform advocates look at the excessive costs of U.S. health care, two favorite targets are the private insurance industry and the pharmaceutical firms. Policies that would reduce these burdens are no secret. Physicians for a National Health Program has described policies that would eliminate the private insurance burden. Arjun Jayadev and Nobel Laureate Joseph Stiglitz, in the article cited above, provide examples of policies that would increase value in our purchasing of pharmaceuticals.
So what is Congress’s response? They intend to expand the dysfunctional private insurance markets, and use more of our tax money for subsidies. For the biotech industry they are expanding data exclusivity thereby keeping generics off the market for longer periods. Reform is going to bring us more overpriced, inadequate private insurance plans and more overpriced pharmaceuticals/biologics.
Tell Congress that reform is not about enhancing the business models of the insurance and pharmaceutical firms. It’s about making health care affordable and accessible for everyone. Go back and get it right.
Europe leads in pharmaceutical research
Global Drug Discovery: Europe Is Ahead
By Donald W. Light
Health Affairs
August 25, 2009
It is widely believed that the United States has eclipsed Europe in pharmaceutical research productivity. Some leading analysts claim that although fewer drugs have been discovered worldwide over the past decade, most are therapeutically important. Yet a comprehensive data set of all new chemical entities approved between 1982 and 2003 shows that the United States never overtook Europe in research productivity, and that Europe in fact is pulling ahead of U.S. productivity. Other large studies show that most new drugs add few if any clinical benefits over previously discovered drugs.
Policy Reflections
Congressional leaders and others concerned about high prices of new patented drugs will be heartened by this analysis, because lower European prices seem to be no deterrent to strong research productivity. A previous analysis using industry-based data showed that pharmaceutical companies recover all costs and make a good profit at European prices. Europeans are not “free riders” on American patients–another myth promoted by industry that assumes that countries are separate R&D/market silos that should each pay for themselves.
The real innovation crisis for patients and society is not the recent decline in new molecular entities but the small percentage over many years of new molecular entities that provide clinical advantages to patients over existing medications. This longer pattern stems from defining “effective” as better than placebo and using soft surrogate endpoints, or substitute criteria, instead of hard clinical endpoints. As a result, the vast majority of new drugs that constitute 80 percent of U.S. pharmaceutical costs offer few therapeutic advantages and greater risks than good drugs discovered in prior years. High prices for these new drugs enable companies to spend two and a half times more on marketing than on R&D, to persuade physicians to prescribe them and patients to want them. Thus, current incentives reward better marketing more than better value.
If we want new drugs to be clinically superior to existing ones, we need to reward companies for developing them and not for developing drugs that are merely superior to placebo. Arjun Jayadev and Joseph Stiglitz propose a key strategy: pay in terms of clinical value added, as some large purchasers already do and as Consumer Reports Best Buy Drugs does by comparing value with price. Jayadev and Stiglitz also recommend having clinical trials independently run and paid for by a public body such as the National Institutes of Health so that they can be designed to measure comparative advantages and risks over existing treatments. Publicly funded trials would also reduce cost and risk for pharmaceutical companies and increase competition from smaller firms by lowering the high cost barrier that company-funded trials pose. These are some ways in which incentives can be restructured to foster greater competition for clinically superior drugs and to lower overall spending.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w969v1
Arjun Jayadev and Joseph Stiglitz, “Two Ideas To Increase Innovation And Reduce Pharmaceutical Costs And Prices,” Health Affairs, 28, no. 1 (2009): w165-w168
http://content.healthaffairs.org/cgi/content/abstract/28/1/w165
Comment:
By Don McCanne, MD
Our uniquely American health care system is noted for its high prices for relative mediocrity. Some contend that our pharmaceutical industry provides an exception. It doesn’t. We are paying high prices for new chemical entities that over 85 percent of the time are providing us with no real benefit over existing products.
Many contend nevertheless that innovations provided by U.S. pharmaceutical firms are well worth our very high prices. Yet productivity of European pharmaceutical firms remains even higher, and they are able to provide new products at much lower prices.
When reform advocates look at the excessive costs of U.S. health care, two favorite targets are the private insurance industry and the pharmaceutical firms. Policies that would reduce these burdens are no secret. Physicians for a National Health Program has described policies that would eliminate the private insurance burden. Arjun Jayadev and Nobel Laureate Joseph Stiglitz, in the article cited above, provide examples of policies that would increase value in our purchasing of pharmaceuticals.
So what is Congress’s response? They intend to expand the dysfunctional private insurance markets, and use more of our tax money for subsidies. For the biotech industry they are expanding data exclusivity thereby keeping generics off the market for longer periods. Reform is going to bring us more overpriced, inadequate private insurance plans and more overpriced pharmaceuticals/biologics.
Tell Congress that reform is not about enhancing the business models of the insurance and pharmaceutical firms. It’s about making health care affordable and accessible for everyone. Go back and get it right.
Hold the line on healthcare, Mr President
Only in the US is medicine solely run for profit
Rose Ann DeMoro
The Times (of London)
August 21, 2009
The bizarre US healthcare debate, replete with wild distortions of the NHS, must seem incomprehensible to many in the UK. News reports have emphasised images of enraged conservatives fearing fabricated “death panels” or traumatised elderly people urging “hands off my Medicare”.
They face mostly Democratic legislators and some liberal advocacy groups who are circling their wagons around an embattled President Obama to defend their proposed minor revisions to the status quo after already surrendering more comprehensive reform.
To other industrialised countries, this fear of government having a role in protecting the health and safety of its citizens must seem especially hard to fathom. Among leading nations, only in the US is healthcare not a fundamental right, but bartered for profit by a maze of corporations.
The result is about 45 million Americans with no health coverage and tens of millions more denied medical care because their insurer won’t pay for it.
President Obama has had no trouble describing the problem. “We are held hostage at any given moment by health insurance companies that deny coverage or drop coverage or charge fees that people can’t afford,” he said in Montana in mid-August. But from the outset Mr Obama dismissed the call for a systemic transformation, deciding instead to seek support from conservative legislators and negotiate with the largest healthcare corporations in the hope of neutralising their opposition.
What’s left is a plan that will force the uninsured to buy private insurance, with subsidies for those on low incomes and limited constraints on high pricing and the denials of treatment that characterise the present faltering insurance-based system. In sum, it looks like another huge corporate bailout, after the one for the banks, for an equally unpopular insurance industry.
As a result, mobilising activists has proved a challenge, as the White House and Congress have found out in recent weeks as they struggle to counter those denouncing them from the right. Even the grassroots network built by Mr Obama that set new standards for campaigning last year has failed to produce much enthusiasm for his health plan.
America’s nurses and many doctors continue to press for wider reform, to a national or single-payer system that would look familiar to the rest of the industrial world. It is still possible. But time is running out.
Rose Ann DeMoro is executive director of the California Nurses Association/ National Nurses Organising Committee, the largest US union of nurses
The way is clear: Health insurance must end
BY JOHN HAMMOND
The News & Observer
Aug 16, 2009
PITTSBORO – In the first half of the 20th century, most health insurance was provided to those who could afford it by state-based, nonprofit Blue Cross/Blue Shield plans, which based premiums on a community rating system. The agency took the costs of its enrollees, added a reasonable overhead contribution and divided that by the number of enrollees to calculate the premium. Under this system, the young, healthy enrollees subsidized the cost of the older, more chronically ill enrollees.
At first, the for-profit insurance companies considered health insurance too risky. But by 1955, these companies figured out how to manage the risks and entered the health insurance market. To deal with adverse risk, they developed the concept of pre-existing conditions to exclude the sick from insurance coverage and applied liability-style risk rating to health insurance premiums, which reduced the premiums for the young while making insurance unaffordable for the older population. Thus, risk rating of premiums effectively ended the subsidy of older people by younger people.
The risk-based premium approach is appropriate for auto liability insurance, because people are responsible for their own driving records. But risk rating is totally inappropriate for human beings who cannot control their genetic inheritance, which plays a large role in their overall health. However, risk rating and pre-existing condition exclusions did protect the for-profit health insurance companies from the adverse risk of health insurance by denying access to insurance to those who need it most.
The introduction of risk-based premiums immediately caused major problems for the nonprofit BCBS plans. If they continued the community rating system, they would end up with all the sick (adverse selected population), and all the young healthy enrollees would flock to the cheaper rates of the for-profit risk-based premium system. This forced the nonprofit BCBSs to go to risk-based premiums and act like the for-profits. Today, for example, there is little difference between BCBS of North Carolina and CIGNA.
Another major problem is the total number of health insurance plans offered by the health insurance industry and the lack of any real regulation to ensure that they adequately cover the needs of the enrollees. The huge numbers of plans challenge doctors and hospitals to figure out what services are covered by what plans. Such choice drives the administrative costs for both the insurers and the providers higher than any other health insurance system in the world. It is profitable for the manufacturers of large mainframe computers and billing software vendors, but it adds billions to the administrative costs of the health-care system, and still hospitals cannot get our bills straight.
Further, the U.S. health-care system has the greatest number of administrative personnel of any country in the world. It is no wonder that our per-capita costs are 1.6 times other countries, even though millions have no health insurance. If these administrative costs could be reduced to the European or Canadian level, substantial money would become available to cover a part of the insurance costs of the 52 million to 55 million uninsured Americans for whom health care is difficult or impossible to get.
It is time to acknowledge that there are absolutely no market solutions for the chronically and mentally ill in a for-profit health insurance system. Boards of directors and executives of for-profit health insurance corporations aim to maximize the income of the corporations for investors. If for-profit and not-for-profit insurance companies with their plethora of plans are kept alive, it will be impossible to control costs, free the billions of dollars that today go to administrative costs and make these funds available for patient care.
All the existing health insurance companies must be eliminated. We need a single-payer system that covers every person in the country for medical, mental and dental health care. Its cost should be funded by income taxes paid by each adult/family in the country. It should provide universal access to care no matter where you are in the country, with equal quality and quantity and without regard to your wealth. It is time to face the reality that affordability and cost control are possible only with a single-payer system.
The current insurance system is both morally and financially bankrupt and cannot be sustained. It may not be possible to achieve all the necessary reforms quickly, but the direction we need to take is clear.
John Hammond, Ph.D., is professor emeritus at the School of Medicine, UNC-Chapel Hill.
A bailout for the U.S. health-care industry
By Rose Ann DeMoro
Ottawa Citizen
August 25, 2009
The fractured U.S. healthcare debate, replete with wild distortions of Canada’s medicare, must seem incomprehensible to many north of our border.
News images of fabricated “death panels” or traumatized seniors on U.S. Medicare — a government-funded program — urging legislators to keep the government’s hands “off my Medicare” must seem especially hard to fathom.
Equally puzzling, no doubt, has been the reaction of the administration and many of its allies in Congress whose response to the attacks is to move further away from comprehensive reform.
Entering the year with a Democratic president and strong majorities in both houses of Congress, and a clear public mandate to end our long health-care nightmare, President Barack Obama and Congressional leaders decided to compromise from the outset, and not pursue the most effective reform, Medicare for all.
Gambling they could bring along conservative opponents, the administration and Congressional leaders instead advanced a more limited plan that preserves the role of the insurance industry. Prospects of broader reform were further undermined by some liberal and progressive groups and labour unions, who chose to merely endorse the proposals of the administration and top Congressional Democrats, rather than fighting for a national system like single-payer, which many of them have long endorsed.
Overnight, the left flank was effectively gutted from the beginning of the fight. Most of the pressure has thus come from the right and those who embrace the status quo — leading to further compromises by both Obama and the leading Democrats.
This retreat was clearly articulated by the former president, Bill Clinton, who chastised a conference of worried netroots activists Aug. 13, saying “I want us to be mindful we may need to take less than a full loaf.”
But mobilizing activists for a half loaf has proven to be a challenge, as the White House and Congress have learned to their dismay in recent weeks as they struggle to counter those denouncing them from the right.
Even the grassroots network built by candidate Obama that set new standards for campaign activism last year has, the New York Times noted Aug. 15, failed to produce much enthusiasm for the current health plan, and most liberal constituency groups have not fared much better.
What’s left is a proposal that will force the uninsured to buy private insurance with subsidies for low-income earners and only limited constraints on industry price gouging and care denials that characterize the collapsing insurance-based system.
In sum, it looks like another massive corporate bailout, following the earlier version for the banks, this time for an equally unpopular insurance industry, which will fuel even more public cynicism of the reform process and political system.
To residents of all other industrialized countries, terrors over a government role in promoting and protecting the health and safety of its citizenry, and the reluctance of political leaders to effectively respond to these attacks must be especially confounding. Among major nations, only in the U.S. is health care not a fundamental right, but bartered for profit by a maze of health-care corporations. The result is that the U.S. continues to fall far behind other industrial nations in a variety of measurements, from access to care to equality in treatment, and even in the much discussed issue of waiting times for medical care.
While the U.S. spends twice as much as every other nation on per capita health care, there remain more than 45 million Americans with no health coverage and tens of millions more with insurance who are routinely denied medical care because their insurer doesn’t want to pay for it.
Medical bills account for 62 per cent of personal bankruptcies. Half of all Americans skip doctor visits or immunizations for their children because of high out-of-pocket costs, troubling news indeed with the U.S. already leading the globe in swine flu infections and deaths.
The nation’s registered nurses and many doctors continue to press for real change, a national or single-payer system that would look familiar to Canadians and the rest of the industrial world. It is still possible to achieve stronger reform, but time is running out.
Rose Ann DeMoro is executive director of the 86,000-member California Nurses Association/National Nurses Organizing Committee, the largest U.S. union of nurses.
Copyright (c) The Ottawa Citizen
5 Myths About Health Care Around the World
Editor’s note: The key fact in this article is that “the United States is the only developed country that lets insurance companies profit from basic health coverage.”
By T.R. Reid
Washington Post
Sunday, August 23, 2009
As Americans search for the cure to what ails our health-care system, we’ve overlooked an invaluable source of ideas and solutions: the rest of the world. All the other industrialized democracies have faced problems like ours, yet they’ve found ways to cover everybody — and still spend far less than we do.
I’ve traveled the world from Oslo to Osaka to see how other developed democracies provide health care. Instead of dismissing these models as “socialist,” we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:
1. It’s all socialized medicine out there.
Not so. Some countries, such as Britain, New Zealand and Cuba, do provide health care in government hospitals, with the government paying the bills. Others — for instance, Canada and Taiwan — rely on private-sector providers, paid for by government-run insurance. But many wealthy countries — including Germany, the Netherlands, Japan and Switzerland — provide universal coverage using private doctors, private hospitals and private insurance plans.
In some ways, health care is less “socialized” overseas than in the United States. Almost all Americans sign up for government insurance (Medicare) at age 65. In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life. Meanwhile, the U.S. Department of Veterans Affairs is one of the planet’s purest examples of government-run health care.
2. Overseas, care is rationed through limited choices or long lines.
Generally, no. Germans can sign up for any of the nation’s 200 private health insurance plans — a broader choice than any American has. If a German doesn’t like her insurance company, she can switch to another, with no increase in premium. The Swiss, too, can choose any insurance plan in the country.
In France and Japan, you don’t get a choice of insurance provider; you have to use the one designated for your company or your industry. But patients can go to any doctor, any hospital, any traditional healer. There are no U.S.-style limits such as “in-network” lists of doctors or “pre-authorization” for surgery. You pick any doctor, you get treatment — and insurance has to pay.
Canadians have their choice of providers. In Austria and Germany, if a doctor diagnoses a person as “stressed,” medical insurance pays for weekends at a health spa.
As for those notorious waiting lists, some countries are indeed plagued by them. Canada makes patients wait weeks or months for nonemergency care, as a way to keep costs down. But studies by the Commonwealth Fund and others report that many nations — Germany, Britain, Austria — outperform the United States on measures such as waiting times for appointments and for elective surgeries.
In Japan, waiting times are so short that most patients don’t bother to make an appointment. One Thursday morning in Tokyo, I called the prestigious orthopedic clinic at Keio University Hospital to schedule a consultation about my aching shoulder. “Why don’t you just drop by?” the receptionist said. That same afternoon, I was in the surgeon’s office. Dr. Nakamichi recommended an operation. “When could we do it?” I asked. The doctor checked his computer and said, “Tomorrow would be pretty difficult. Perhaps some day next week?”
3. Foreign health-care systems are inefficient, bloated bureaucracies.
Much less so than here. It may seem to Americans that U.S.-style free enterprise — private-sector, for-profit health insurance — is naturally the most cost-effective way to pay for health care. But in fact, all the other payment systems are more efficient than ours.
U.S. health insurance companies have the highest administrative costs in the world; they spend roughly 20 cents of every dollar for nonmedical costs, such as paperwork, reviewing claims and marketing. France’s health insurance industry, in contrast, covers everybody and spends about 4 percent on administration. Canada’s universal insurance system, run by government bureaucrats, spends 6 percent on administration. In Taiwan, a leaner version of the Canadian model has administrative costs of 1.5 percent; one year, this figure ballooned to 2 percent, and the opposition parties savaged the government for wasting money.
The world champion at controlling medical costs is Japan, even though its aging population is a profligate consumer of medical care. On average, the Japanese go to the doctor 15 times a year, three times the U.S. rate. They have twice as many MRI scans and X-rays. Quality is high; life expectancy and recovery rates for major diseases are better than in the United States. And yet Japan spends about $3,400 per person annually on health care; the United States spends more than $7,000.
4. Cost controls stifle innovation.
False. The United States is home to groundbreaking medical research, but so are other countries with much lower cost structures. Any American who’s had a hip or knee replacement is standing on French innovation. Deep-brain stimulation to treat depression is a Canadian breakthrough. Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs.
Overseas, strict cost controls actually drive innovation. In the United States, an MRI scan of the neck region costs about $1,500. In Japan, the identical scan costs $98. Under the pressure of cost controls, Japanese researchers found ways to perform the same diagnostic technique for one-fifteenth the American price. (And Japanese labs still make a profit.)
5. Health insurance has to be cruel.
Not really. American health insurance companies routinely reject applicants with a “preexisting condition” — precisely the people most likely to need the insurers’ service. They employ armies of adjusters to deny claims. If a customer is hit by a truck and faces big medical bills, the insurer’s “rescission department” digs through the records looking for grounds to cancel the policy, often while the victim is still in the hospital. The companies say they have to do this stuff to survive in a tough business.
Foreign health insurance companies, in contrast, must accept all applicants, and they can’t cancel as long as you pay your premiums. The plans are required to pay any claim submitted by a doctor or hospital (or health spa), usually within tight time limits. The big Swiss insurer Groupe Mutuel promises to pay all claims within five days. “Our customers love it,” the group’s chief executive told me. The corollary is that everyone is mandated to buy insurance, to give the plans an adequate pool of rate-payers.
The key difference is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit. The United States is the only developed country that lets insurance companies profit from basic health coverage.
In many ways, foreign health-care models are not really “foreign” to America, because our crazy-quilt health-care system uses elements of all of them. For Native Americans or veterans, we’re Britain: The government provides health care, funding it through general taxes, and patients get no bills. For people who get insurance through their jobs, we’re Germany: Premiums are split between workers and employers, and private insurance plans pay private doctors and hospitals. For people over 65, we’re Canada: Everyone pays premiums for an insurance plan run by the government, and the public plan pays private doctors and hospitals according to a set fee schedule. And for the tens of millions without insurance coverage, we’re Burundi or Burma: In the world’s poor nations, sick people pay out of pocket for medical care; those who can’t pay stay sick or die.
This fragmentation is another reason that we spend more than anybody else and still leave millions without coverage. All the other developed countries have settled on one model for health-care delivery and finance; we’ve blended them all into a costly, confusing bureaucratic mess.
Which, in turn, punctures the most persistent myth of all: that America has “the finest health care” in the world. We don’t. In terms of results, almost all advanced countries have better national health statistics than the United States does. In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.
Given our remarkable medical assets — the best-educated doctors and nurses, the most advanced hospitals, world-class research — the United States could be, and should be, the best in the world. To get there, though, we have to be willing to learn some lessons about health-care administration from the other industrialized democracies.
T.R. Reid, a former Washington Post reporter, is the author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” to be published Monday.
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082101778.html
The art of the drug deal
Helen Redmond explains how the drug industry got a seat at the head of the health care reform table.
By Helen Redmond
August 13, 2009
BILLY TAUZIN, a former Republican member of Congress from Louisiana and the current president of the Pharmaceutical Research and Manufacturers of America (PhRMA), is all about the art of the deal. He’s the Donald Trump of brand-name prescription drugs, but unlike “The Donald,” “The Billy” goes to the White House and closes deals in private with the president of the United States.
In a secret, behind-the-scenes mother of all deals, the Obama administration agreed to two central PhRMA demands: no government negotiation of drug prices for Medicare beneficiaries and no re-importation of cheaper drugs from Canada or other countries. In exchange, the industry “pledged” $80 billion in cost savings over 10 years. The details of how the cost savings will be achieved and accounted for haven’t been disclosed.
To ensure it was a done deal, Tauzin, with audacity to spare, demanded in interviews with the national media that the White House publicly acknowledge “the deal.” He was reacting to health care legislation in the House of Representatives that would allow the government to negotiate drug prices and to statements by House Speaker Nancy Pelosi.
“We know we can squeeze more from the system,” Pelosi told the New York Times. “The minute the drug companies settled for $80 billion, we knew it was $160 billion.” Then, in classic doublespeak, she added, “The president made the agreements he made. And maybe we’ll be limited by them. But maybe not!”
Succumbing to the pressure of drug industry lobbyists, White House Press Secretary Robert Gibbs announced at a press conference, “We feel comfortable with the amount of money that has been talked about at this point.”
Tauzin said of the deal earlier on, “We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal.'” Later, reported the New York Times, Tauzin threw down the threat: “80 billion is the max,” he said, “no more or less, adding other stuff changes the deal. Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”
– – – – – – – – – – – – – – – –
THE PRESCRIPTION-buying public, of course, got a raw deal. In accepting PhRMA’s demand for no price controls, the government is forgoing what could be as much as $220 billion in savings over the same period. That’s according to a report by the Institute for America’s Future that matched drug price savings the government negotiated for the Veteran’s Administration.
Americans spend a staggering $200 billion a year on prescription drugs. We pay more money for medication than people in any other advanced industrial country. The Congressional Budget Office found that drug prices in other countries are 35 to 55 percent below the prices in the U.S. Go to any online pharmacy in Canada, and the price of a month’s worth of medication is almost always lower there than it is here. But don’t purchase any medication; buying drugs from Canada is illegal.
During Obama’s campaign for president, he promised that, if he were elected, he would “allow for the safe re-importation of drugs” and that it was a “profound mistake” that Congress exempted Medicare from negotiating drug prices. He explained:
We will break the stranglehold that a few big drug and insurance companies have on the health care market…It’s become clear that some of these companies are dramatically overcharging Americans for what they offer…We’re not going to get the change unless we can overcome the resistance of the drug companies, the insurance companies, the HMOs, those who are making a major profit from the system currently. Now, I think all these industries have a roll to play…We want to listen to what they have to say. They should have a seat at the table, but they can’t buy every chair.
The pharmaceutical industry doesn’t have to buy every chair at the health care reform table, just a few. The $100 million a year that they spend lobbying members of Congress is far more important. Sen. Max Baucus (D-Mont.), Obama’s point person for health care reform, is one of the top recipients of drug company and insurance campaign contributions.
Obama’s latest flip flop will no doubt anger millions of people who despise the profit-gouging drug industry and are desperate for relief from the high cost of prescription medication.
For millions of Americans, a trip to the pharmacy to fill a prescription induces nothing short of a panic attack. Picking up a prescription is a trade-off against paying the mortgage, buying food, putting gas in the car or paying utility bills. Millions routinely skip doses of medication to make it last longer, to the detriment of their health.
A study by the Center for Health System Change (HSC), a nonpartisan health policy research organization, found that the proportion of Americans under 65 years old who reported problems affording medications increased from 10.3 percent in 2003 to 13.9 percent in 2007. Uninsured, working-age people who were unable to afford prescription drugs saw the biggest jump–from 26 percent in 2003 to nearly 35 percent in 2007.
As report authors Laurie Felland and James Reschovsky, senior health researchers at HSC, wrote:
The outlook for non-elderly Americans’ access to prescription drugs is not positive. The ability of many people to afford prescription drugs is likely to deteriorate as the economy continues to decline. The economic downturn will swell the ranks of the uninsured and place greater fiscal strains on state Medicaid budgets, likely leading to tightening of drug benefits and eligibility.
The outlook for the salaries of the CEOs of the biggest drug companies is positive, even during an economic depression. Last year, Johnson & Johnson CEO William Weldon was paid $29,127,432; Abbott Labs CEO Miles White made $28,253,387 and Merck’s Richard Clark took in $25,073,555.
The only way to bring down the cost of medicine is for the government to negotiate with the pharmaceutical industry as almost every other country does. In those countries, access to both medicine and health care is viewed as a human right. Until that happens–and the Obama administration will have to be forced to do it–Americans will continue to suffer the devastating health consequences of going without medicine and pay the highest prices in the world.
T.R. Reid's "The Healing of America"
The Healing of America
A Global Quest for Better, Cheaper, and Fairer Health Care
By T.R. Reid
My global quest demonstrated that America’s approach to health care is unique in the world for a good reason: No other country would dream of doing things the way we do. So it’s clear that we can’t fix the basic problems by tinkering at the margins of our existing system. Any proposal for “reform” that continues to rely on our fragmented structure of overlapping and often conflicting payment systems for different subsets of the population will not reduce the cost or complexity of American health care. Any proposal that sticks with our current dependence on for-profit private insurers – corporations that pick and choose the people they want to cover and the claims they want to pay – will not be sustainable.
To put it simply, the United States does well when it comes to providing medical care, but has a rotten system for financing that care. We need a health care system that permits the strong facets of American medicine to flourish, makes their benefits accessible to everybody, and does it in a cost-efficient way. As we’ve seen, this is not impossible. All other rich countries have found financing mechanisms that cover everybody and they still spend much less than we do. We’ve ignored those foreign models, partly because of “American exceptionalism” – the notion that the United States has nothing to learn from the rest of the world. In health care, at least, that old mindset is clearly losing its sway. Americans are coming to realize that the other rich countries are getting more and better medicine, for less money, than we do.
Another reason Americans tend to ignore the valuable lessons we could take from the rest of the world is that we have been in thrall to conventional wisdom about health care overseas. Thus we conclude that the foreign approaches would never work here. In fact, as I found on my global quest, much of this conventional wisdom is wrong. A lot of what we “know” about other nations’ approach to health care is simply myth.
The Healing of America:
http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781594202346,00.html?The_Healing_of_America_T.R._Reid
And…
5 Myths About Health Care Around the World
By T.R. Reid
The Washington Post
August 23, 2009
1. It’s all socialized medicine out there. (Not so.)
2. Overseas, care is rationed through limited choices or long lines. (Generally, no.)
3. Foreign health-care systems are inefficient, bloated bureaucracies. (Much less so than here.)
4. Cost controls stifle innovation. (False.)
5. Health insurance has to be cruel. (Not really. The key difference is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit.)
All the other developed countries have settled on one model for health-care delivery and finance; we’ve blended them all into a costly, confusing bureaucratic mess.
(T.R. Reid, a former Washington Post reporter, is the author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” to be published August 24.)
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082101778.html
In “The Healing of America” and in last year’s PBS Frontline presentation, “Sick Around the World,” T.R. Reid has demonstrated how other nations have higher performance health care systems that take care of everyone and at a much lower cost than in the United States.
Other nations have adopted one of a few rational models of health care financing, though with variations. The basic models are Bismarck (Germany, France, Belgium, Switzerland, Japan), Beveridge (Great Britain, Italy, Spain, most of Scandinavia), and national health insurance (Canada, Taiwan, South Korea).
The United States has combined these models into our patched-together system of financing health care. Our components are Bismarck (employer-sponsored plans), Beveridge (VA, Indian Health Service), and national health insurance (Medicare). But we’ve added one more model that Reid discusses: out-of-pocket for the uninsured (Cambodia, Burkina Faso, rural India, rural China). Reid makes a strong case that this dysfunctional, fragmented financing system is in a large part responsible for our very expensive mediocrity.
Which model for the United States?
The out-of-pocket model is certainly not suitable, and the Beveridge model would have very little support only because Americans are uncomfortable with the concept of government ownership of the health care delivery system.
National health insurance, based on an improved model of Medicare, would be very popular once established, and would enable us to reach our goal of affordable, high-quality care for everyone. It is the least expensive, most equitable, most efficient, and most effective model of reform.
T.R. Reid and others such as Uwe Reinhardt believe that Americans are more likely to support the Bismarck model based on private health plans. But they emphasize that our U.S. plans with a business mission would have to be transformed into European-style plans with a service mission. The superficial similarities between the U.S. and European private insurers belie the stark differences in their missions. Just imagine the probability of the highly-compensated U.S. insurance executives and the institutional investors that own their companies stepping up to lead this essential transformation. Fat chance. It is difficult to share the faith that T.R. Reid and Uwe Reinhardt have in the insurers doing the right thing.
But the biggest problem is not with the private insurers; it’s with Congress. They have decided to move forward with our patched-together system, primarily by expanding the use of U.S.-style, business-model private plans. We will be forced to use inadequate subsidies to purchase private plans that are too expensive and that provide inadequate protection in the face of medical need. This is a program that will expand expensive mediocrity – hardly the solution we seek.
An improved Medicare for all is what America would really want, if only the people were better versed in policy science. It’s our job to see that they become so.
(T.R. Reid will be a featured speaker at the PNHP Annual Meeting in Cambridge, MA on Saturday, October 24. Meeting information is available on the PNHP website at www.pnhp.org).
T.R. Reid's "The Healing of America"
The Healing of America
A Global Quest for Better, Cheaper, and Fairer Health Care
By T.R. Reid
My global quest demonstrated that America’s approach to health care is unique in the world for a good reason: No other country would dream of doing things the way we do. So it’s clear that we can’t fix the basic problems by tinkering at the margins of our existing system. Any proposal for “reform” that continues to rely on our fragmented structure of overlapping and often conflicting payment systems for different subsets of the population will not reduce the cost or complexity of American health care. Any proposal that sticks with our current dependence on for-profit private insurers – corporations that pick and choose the people they want to cover and the claims they want to pay – will not be sustainable.
To put it simply, the United States does well when it comes to providing medical care, but has a rotten system for financing that care. We need a health care system that permits the strong facets of American medicine to flourish, makes their benefits accessible to everybody, and does it in a cost-efficient way. As we’ve seen, this is not impossible. All other rich countries have found financing mechanisms that cover everybody and they still spend much less than we do. We’ve ignored those foreign models, partly because of “American exceptionalism” – the notion that the United States has nothing to learn from the rest of the world. In health care, at least, that old mindset is clearly losing its sway. Americans are coming to realize that the other rich countries are getting more and better medicine, for less money, than we do.
Another reason Americans tend to ignore the valuable lessons we could take from the rest of the world is that we have been in thrall to conventional wisdom about health care overseas. Thus we conclude that the foreign approaches would never work here. In fact, as I found on my global quest, much of this conventional wisdom is wrong. A lot of what we “know” about other nations’ approach to health care is simply myth.
The Healing of America:
http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781594202346,00.html?The_Healing_of_America_T.R._Reid
And…
5 Myths About Health Care Around the World
By T.R. Reid
The Washington Post
August 23, 2009
1. It’s all socialized medicine out there. (Not so.)
2. Overseas, care is rationed through limited choices or long lines. (Generally, no.)
3. Foreign health-care systems are inefficient, bloated bureaucracies. (Much less so than here.)
4. Cost controls stifle innovation. (False.)
5. Health insurance has to be cruel. (Not really. The key difference is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit.)
All the other developed countries have settled on one model for health-care delivery and finance; we’ve blended them all into a costly, confusing bureaucratic mess.
(T.R. Reid, a former Washington Post reporter, is the author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” to be published August 24.)
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082101778.html
Comment:
By Don McCanne, MD
In “The Healing of America” and in last year’s PBS Frontline presentation, “Sick Around the World,” T.R. Reid has demonstrated how other nations have higher performance health care systems that take care of everyone and at a much lower cost than in the United States.
Other nations have adopted one of a few rational models of health care financing, though with variations. The basic models are Bismarck (Germany, France, Belgium, Switzerland, Japan), Beveridge (Great Britain, Italy, Spain, most of Scandinavia), and national health insurance (Canada, Taiwan, South Korea).
The United States has combined these models into our patched-together system of financing health care. Our components are Bismarck (employer-sponsored plans), Beveridge (VA, Indian Health Service), and national health insurance (Medicare). But we’ve added one more model that Reid discusses: out-of-pocket for the uninsured (Cambodia, Burkina Faso, rural India, rural China). Reid makes a strong case that this dysfunctional, fragmented financing system is in a large part responsible for our very expensive mediocrity.
Which model for the United States?
The out-of-pocket model is certainly not suitable, and the Beveridge model would have very little support only because Americans are uncomfortable with the concept of government ownership of the health care delivery system.
National health insurance, based on an improved model of Medicare, would be very popular once established, and would enable us to reach our goal of affordable, high-quality care for everyone. It is the least expensive, most equitable, most efficient, and most effective model of reform.
T.R. Reid and others such as Uwe Reinhardt believe that Americans are more likely to support the Bismarck model based on private health plans. But they emphasize that our U.S. plans with a business mission would have to be transformed into European-style plans with a service mission. The superficial similarities between the U.S. and European private insurers belie the stark differences in their missions. Just imagine the probability of the highly-compensated U.S. insurance executives and the institutional investors that own their companies stepping up to lead this essential transformation. Fat chance. It is difficult to share the faith that T.R. Reid and Uwe Reinhardt have in the insurers doing the right thing.
But the biggest problem is not with the private insurers; it’s with Congress. They have decided to move forward with our patched-together system, primarily by expanding the use of U.S.-style, business-model private plans. We will be forced to use inadequate subsidies to purchase private plans that are too expensive and that provide inadequate protection in the face of medical need. This is a program that will expand expensive mediocrity – hardly the solution we seek.
An improved Medicare for all is what America would really want, if only the people were better versed in policy science. It’s our job to see that they become so.
(T.R. Reid will be a featured speaker at the PNHP Annual Meeting in Cambridge, MA on Saturday, October 24. Meeting information is available on the PNHP website at www.pnhp.org).
Where's the Wizard of Oz When We Need Him?
By Carol Miller
Taos Daily News
August 15, 2009
The people are crying-out for access to health care. The economy is in freefall with no sign yet of the bottom. It is time for bold action. Poll after poll finds that two out of every three Americans supports converting to a universal health care system similar to Medicare.
I find myself wishing there was someone like the Wizard of Oz to give courage to politicians, the courage to stand up for us–the people, the taxpayers, the voters.
So, what’s the problem?
One problem is that most elected leaders, from the president on down, are cowards when it comes to standing up to the corporations. A few recent examples: bailouts for banks while homeowners still face foreclosure and homelessness; the AIG mega-insurance corporate bailout; and the current and most cruel bailout–protecting large sickness insurance corporations rather than giving us guaranteed access to health care. This is not reform.
A truly reformed system would focus on improving health by expanding public health, prevention, wellness programs, and easy access to health care without causing fear as to how individuals will pay for it.
It is becoming obvious that there is more interest in raising current and future campaign funds than giving us access to the higher quality, lower-cost health care that the rest of the industrialized world enjoys.
How much money has corporate health care invested in politicians to protect their profits? In the past 10 years, a cool $3.4 billion. 2008 was a big investment year for health corporations: $167 million to Congressional candidates (60% to Democrats), $18.7 million to the Obama Campaign, and $7.3 million to McCain. While that sounds like a lot to us, it is pocket change for these corporations–they make billions in profit every year.
A Billion Dollars a Day
I know there are a lot of numbers in this commentary, but if you want to memorize only one, here it is: health insurance administrative costs alone waste one billion dollars a day, $365 billion dollars a year, and a trillion dollars every two and a half years. This is a trillion dollars that are sucked out of the health care system every couple of years for wasteful paperwork and corporate profit. Not one penny of this provides any health care. This is why the corporations are fighting to have the 49 million uninsured handed over to them.
Elected Politicians are Helping Government Haters Kill Health Reform
When our elected officials refuse to strongly defend the popular, lifesaving and well-run government health programs, they open the door and airways to endless government bashing. We see now how out of control these government haters have become. Some of these are even the people we have elected to represent us!
Why won’t the president stand up and defend government health programs? He has had so many opportunities, but instead he plays into the hands of the sickness insurance corporations, feeding the myth that people like their insurance companies.
U.S. Socialized Medicine Is Popular
Americans are so trained to think that socialized anything is bad that they get frightened when they hear lies in the media that the government is going to impose socialized medicine. The definition of socialized medicine is when the government owns the hospitals and clinics and all of the staff are government employees.
This system actually sounds very familiar to 20 million Americans, and almost one out of every four New Mexicans. You know why? The United States already has a very large socialized medical system that includes military health, veteran’s health, and the Indian Health Service.
Why doesn’t President Obama ever mention this? He could let people know that the VA is a great system, recently honored as having the highest patient satisfaction of all health plans for the sixth year in a row. The military has always had a socialized health system, and service members consider it the most important benefit of service.
America Already Has a Single Payer System
It is amazing that the thought of government-run health care frightens so many people, including those who already have it. The United States today has the largest single payer health care system in the world, with 103 million beneficiaries–more than one out of every three Americans.
In New Mexico, 800,000 people have single payer health care, through Medicare and Medicaid. Add in the more than 400,000 in the socialized system, and two out of every three New Mexicans is already in government run health care. The truth is, most of them like it and are more satisfied with their coverage and care than people in corporate sickness insurance.
Here is why Medicare is popular–it keeps the private delivery system intact and leaves it to the government to pay the bills. If people want “choice,” they will find more choice of doctors and hospitals in Medicare than any other insurance plan.
The president has said time and again that if we were starting the system from scratch, he would favor a single payer system. He is clear that he knows it is the best. But he always follows this up with the comment that a lot of people like what they have, so we will build on the current system. But 123 million people already have government health care, 41% of the country. Why not get to universal health care by building on these systems?
At a recent AARP Forum on Health Reform, President Obama was unable to convince a Medicare beneficiary that Medicare is actually a government-run program. The person refused to believe that the government could operate such a great program.
Rather than standing up for the government, the president missed the perfect opportunity to educate and move the country. He could have explained that reform will not be about taking away anything from the 45 million seniors in Medicare, but instead would welcome their children and grandchildren to join them in the most popular government program.
Compare that to the current system which has grandma in Medicare, mom and dad either uninsured or in another plan, and often the children in yet another, each with annual enrollment, changing rules, and benefits unknown until you are sick and an insurance company bureaucrat tells your doctor what care you can get. Imagine the whole family in one health system, with the same rules, benefits, and enrollment for life–this is an idea worth fighting for!
People Like Their Insurance?
Really? Who are these people? This is a huge lie. The president says it over and over. Our members of Congress say it over and over, but repeating this lie will never make it true.
For the most part, people like their doctors and the hospitals and clinics where they get care, but in my many years of working in health care, I have never met anyone who told me they love their insurance company.
Insurance companies collect money every month, supposedly to pay for health care, but their profits are based on denying and rationing as much care as possible. The rationing starts before someone even signs up for an insurance plan, because sales agents are trained to discourage or deny coverage to sick people or people who they think might become sick.
With corporate for-profit insurance, you never know in advance what will be paid for and how much they will leave for you to pay. Too many people have learned the absolute heartlessness of ruthless insurance companies. More than 500,000 people in the United States go bankrupt every year as a result of medical bills or illness. Most who declare medical bankruptcy are “insured,” or so they thought. They paid their premiums every month, but when they or a family member became sick, they learned that they were not protected from financial ruin.
Who benefits from this system? Insurance executives and CEOs with sky-high compensation packages reaching to the tens and hundreds of millions of dollars. The former CEO of United Health Care holds the record, receiving over one billion dollars in a single year in salary and stock options. This is the same corporation that just “won” the contract to run the behavioral health system in the State of New Mexico.
Continuing the for-profit sickness insurance industry and using tax dollars to expand it further is yet another unaffordable corporate bailout. This is a nonessential industry that makes profits from rationing health care to people who need it and, even worse, it rations the care to people who have already paid for it!
My challenge to the New Mexico Congressional delegation and the president is this: even if you don’t have the courage to support a transformation of the health care system that would let everyone into a restored Medicare program, why not at least let the 49 million uninsured enroll in this most popular government program? This is the easiest and least costly way to cover the uninsured.
There are two bills in Congress to create a Medicare-for-All program, House Bill 676 and Senate Bill 703. On July 30th, U.S. House of Representatives Speaker and California Congresswoman Nancy Pelosi committed to a vote on HB676 when Congress comes back from vacation in September.
The outcome of that vote depends on us making sure that all of our representatives know we oppose the looming corporate bailout and want health care, not health insurance.
What we want is simple: one system, everyone in, nobody out.