PNHP

Import Canadian Prices, Not Drugs

Import Canadian Prices, Not Drugs

Los Angeles Times
November 10, 2003
Import Canadian Prices, Not Drugs

Re “Open Door to Drug Imports,” editorial, Nov. 6: We don’t need to import drugs from Canada. Instead, we need to import Canadian drug prices.

Medicare already has in place mechanisms to control the fees and prices of physicians, hospitals, laboratories and other providers of health-care services and products. Although it is not a perfect process, rates are set to cover expenses and provide a fair profit. The system prevents excessive payments to providers.

If a bona fide prescription benefit were to be added to the Medicare program, the same fair rules would be applied to the pharmaceutical firms. Drugs are an essential element of modern health care. It’s time to include them in Medicare under a similar regulatory process that would ensure affordability.

Our system of funding Medicare has not prevented the development of newer medical technology. Likewise, it will not prevent the development of newer pharmaceutical agents. The drug companies will always strive to earn their share of the $1.66 trillion that we are already spending on health care.

Don McCanne MD

San Juan Capistrano

*

The solution is not importing prescriptions but mandating fair-pricing practices. If a manufacturer can sell at reduced prices to Canadian pharmacies, the same prices should be available to pharmacies in the U.S.

Everyone is complaining about rising health-care costs, which stem from high drug costs, yet we turn our heads when the solution is so clear. In order to keep health insurance rates down, we have to keep drug prices down. This means that the manufacturers must be accountable for fair and equitable pricing.

Importation is a simple fix to some, without attempting to solve the problem. We have to lower the cost of medications by making the pricing the same for Canada and the U.S. Only when this happens will the costs of health care be controlled.

Charles S. Franklin

Pharmacist, La Quinta

http://www.latimes.com/news/opinion/letters/la-le-mcanne10.1nov10,1,3511530.story?coll=la-news-comment-letters

Comment: Virtually everyone agrees that access to health care is not complete unless patients have access to affordable prescription drugs. Politicians recognize this and promised us in the last election that prescription coverage would be included as a benefit under Medicare. But we are seeing that participants in the political process can use a popular mandate to advance their own nefarious ends.

If they were sincere on what we thought was their promise, we would already see significant benefits. Most importantly, Medicare beneficiaries would now have affordable access to prescription drugs. Also, the pharmaceutical industry would join the rest of the health care industry in being required to accept the fair pricing that only a regulatory environment can assure.

The free market has served to drive prices up to the maximum tolerated rather than bringing prices down through patient-friendly forces of competition. Furthermore, including prescription coverage would reduce the pressure for Medicare beneficiaries to move into private plans that have provided less value to the taxpayers than has the traditional Medicare program.

But, tragically, the process has moved to behind closed doors with only the ideologues invited in (plus the token presence of Sen. Baucus). Their goals are to protect the free-market pricing of the pharmaceutical firms, but, more importantly, to use this political opportunity to inflict near-fatal blows to Medicare, a program they hate primarily because it is a “government” program.

Through strategic leaks, we know what is happening behind those closed doors. The actual prescription benefit is largely a sham. Very few will benefit from the coverage. The administration of the benefit will be primarily by private middlemen rather than through the publicly-administered, traditional Medicare program. Measures are being included which prohibit the government from providing any regulatory input that might prevent the pharmaceutical firms from charging the maximum that the market will bear. Medicare premiums will be means-tested which will give the affluent a financial incentive to leave the traditional Medicare program. The intent is to then require the traditional program, with a concentration of high-cost, low-income enrollees, to compete with the private plans. This would result in the death spiral of the traditional program.

The political debate now centers around the privatization issue. Sen.Kennedy threatens to prevent its passage if the competition proposal is included. The House ideologues threaten to oppose it if competition is not included. Lost in this is the actual prescription coverage. It is grossly inadequate. But Sen. Kennedy believes that it should be passed because it will open the door to a program that can be repaired later. But he will not do this at the cost of destroying Medicare as a program of social insurance.

The ideologues seem to be willing to take a stand, challenging Sen. Kennedy
and colleagues to block it in the Senate. They can then take the issue to
the voters, claiming that it’s the Democrats who denied Medicare beneficiaries of their prescription benefit.

The issues are complex. But the voters need to understand them. Candidates must be confronted with a public that demands to know whether they support a
bona fide prescription program or if they are using this issue to take as word to the Medicare beast.

Medicare might be a beast, but it’s our beast.(Since this message has great urgency, please consider distributing it to those who do care about our Medicare program.)

Don McCanne

Norwegian international health card

The Norway Post
9 November 2003
New national health card

Next year, 4.5 million Norwegians may be issued a new, international health card which will guarantee immediate help in all countries of the European Economic Area (EEA).

The new card will replace form E-111, which Norwegians are adviced to carry
when travelling in Europe, confirming that you are a member of the Norwegian
Social Security System. Otherwise you may have to pay for your treatment, if
you should get sick.

The EU decided last year to replace form E-111 with a new “plastic card”, and the Norwegian health authorities have decided to introduce the new card from June next year.

To simplify the introduction, and make the system better known, the authorities are now considering issuing the card to all Norwegian citizens, regardless of whether they are planning an immediate trip abroad, or not.

The new card will not make the usual travel insurance obsolete, as the travel insurance also covers lost luggage, or free home travel in case of illness.

http://www.norwaypost.no/content.asp?cluster_id=23777&folder_id=1

Comment: The World Health Organization ranks the United States 72nd on the
performance of our health care system based on our level of health, below
all industrialized nations and below many third world nations.

Just imagine. If we had a universal system of social insurance that improved the allocation of our health care resources, we could also be considering joining with other nations in ensuring that health security is always guaranteed. But lacking a rational system, what country would want to enter an agreement with us?

The uninsured/Minnesota can aim higher

Published November 10, 2003
Minneapolis Star and Tribune

People invited to a conference last week on achieving universal health insurance in Minnesota might have found the timing a bit curious. Minnesota has just faced its worst budget crisis in a generation — as have most states — and the 2003 legislature made cuts, not expansions, in the state’s health-care programs.

Yet for just these reasons, the two-day conference couldn’t have been more timely. Even though it ranks No. 1 or No. 2 nationally in reaching the uninsured, Minnesota is about to get a good, ugly look at what happens when a state reduces health coverage for vulnerable populations. Some 37,000 Minnesotans are expected to lose eligibility for subsidized coverage in the next four years. Data presented at the conference suggest that these patients will lose regular doctor care, contract what should be preventable diseases and wind up in hospital emergency rooms with catastrophic conditions that could have been avoided. It’s the perfect time to think about reversing that trend, and Minnesotans should credit the ambition of the conference organizers — the Children’s Defense Fund, the Minnesota Nurses Association and the Minnesota Council of Health Plans.

The organizers also deserve credit for ingenuity. Months ago they circulated a request for proposals, urging any public expert to submit a plan to expand health coverage. They then had the proposals graded by a panel of experts including former Minnesota Health Commissioners Jan Malcolm and Mary Jo O’Brien and Minnesota Health Economist Scott Leitz.

They received nine proposals covering a broad spectrum. The Minnesota Chamber of Commerce and the Minnesota Business Partnership submitted plans emphasizing cost-containment and consumer accountability, presumably to avoid retrenchment by private employers, who now provide insurance for about 68 percent of Minnesotans. Sen. Sheila Kiscaden, I-Rochester, submitted a plan that would require every Minnesotan to buy health insurance, but then provide means-tested subsidies. The Children’s Defense Fund itself submitted a plan that would have the state guarantee coverage for every child, but then relieve employers from the cost of providing dependent coverage.

Perhaps the most ambitious proposal came from Dr. Edward Ehlinger, director of the Boynton Health Service at the University of Minnesota. His blueprint, developed by The Physicians’ Working Group for Single-Payer National Health Insurance, would move the nation toward national, universal health care. Single-payer proposals have been around for some time, and many observers think they’re outside the political mainstream. But it’s worth remembering that every other developed nation now offers national health insurance, and many studies have shown that these other countries spend less per capita than the United States while achieving better health outcomes. And the closest existing American model, Medicare, actually outperforms most private insurance plans in customer satisfaction and cost containment.

The panel of experts rated Ehlinger’s plan high for coverage and quality, but said it was politically “unrealistic.” That might be true, given that Washington and St. Paul have been moving in the opposite direction this year. But it doesn’t mean that the nation’s current direction is right — or wise.

Our health-care system is broken, but it can be fixed

Our health-care system is broken, but it can be fixed
Salt Lake Tribune

By Lauren O.Florence

On Oct. 26, Salt Lake Tribune business reporter Lesley Mitchell detailed problems created by the rising cost of health care for the employed. Employers are passing on to employees the double-digit inflation they are being charged by insurance companies for health-care coverage.

In the United States, what we pay for health care is increasing faster than in any other nation on earth. But not only is what we pay rising faster, it starts out higher than any other country. We pay about $5,000 per person per year for health care. The Bush administration estimates that we will be paying about $9,000 per person yearly by 2010.

Ms. Mitchell noted that escalating health-care prices stem from increases in costs for hospitals, demand for expensive tests and procedures, use of specialists and drugs. She failed to mention that health insurance companies continue to take higher and higher profits.

These health insurance companies take between 13 percent and 33 percent of the premiums paid to them. They spend this on their top management personnel who make millions each to administer health care that others deliver, on a huge staff devoted to denying care, and on expensive advertising telling us how good they are.

Health insurance companies are excellent investments and pay superb dividends. Any good portfolio has one or more health insurance company stocks. The amount spent on actual health-care delivery is called their “loss ratio.”

It has been estimated that if the insurance companies took only 15 percent more than they pay for actual care, we could save $500 billion per year. That savings would be enough to cover everyone in the United States with good health care.

Health-insurance costs have always been higher for smaller groups than for larger ones. The insurance actuaries say that big companies are less risky. They can charge less for the big companies because the big group has a larger “risk pool.” By that argument, we should put everyone in the country into the same large group and thereby create the largest risk pool that we possibly can. This would lower the premiums for everyone. We could cover everyone instead of just the people who have enough money to pay the 13 percent to 33 percent above the cost of health-care delivery that the insurance companies are extracting from us.
A recent ABC News/Washington Post poll found that more than half of all Americans want everyone to have health coverage. More than half are even all right with the government administering it if everyone is covered. To say that we can’t change our health delivery system because it’s not politically feasible no longer holds. Our citizens want a change. We want everyone covered.

We can afford to change if we take some of the waste out of the system. We can’t afford not to change. We will bankrupt ourselves while the health insurance companies continue to make profits administering health-care delivery.

The sources for the statistics in this essay can be found at https://pnhp.org. PNHP stands for Physicians for a National Health Program. About 9,000 physicians are members of this organization and are willing to take a stand for better health care for everyone in the United States.
   —–
Dr. Lauren O. Florence is a plastic surgeon in solo private practice in Salt Lake City. She is also a founder and secretary of the Utah Health Alliance, a 501(c)(3) organization dedicated to finding a way to assure affordable, comprehensive, and equitable health-care coverage for all Utahns. The Web site is
http://www.utahhealthall iance.org
 

Wal-Mart takes the lead in uninsurance

The Washington Post
November 6, 2003
Stores Follow Wal-Mart’s Lead in Labor
By Greg Schneider and Dina ElBoghdady

Wal-Mart, the world’s biggest retailer and the nation’s biggest private employer, has become so powerful that its practices reverberate throughout the U.S. economy. About as many people work for Wal-Mart — 1.3 million — as are on active duty in the U.S. military. Its most recent annual sales — $245 billion — are greater than the gross domestic product of Switzerland.

Wal-Mart’s vast, non-unionized work force earns a typical wage of about $7
to $8 an hour. Unionized workers at Kroger, by contrast, said they were making between $11 and $13 an hour, with full health benefits. About 62 percent of Wal-Mart workers are eligible for benefits, but less than half of the workforce participates. Critics say the low participation is because Wal-Mart requires steep employee contributions.

Some economists argue that the Wal-Martization of the American workforce is
simply the free-market system functioning as it should. Gary Stibel, founder
and principal of the New England Consulting Group, said Wal-Mart has saved
consumers more than $20 billion through its discount pricing. Figuring in Wal-Mart’s pressure on other retailers to lower prices, savings top $100 billion, he said.

“In this day and age, the United States needs more companies like Wal-Mart
to create jobs, even if not at the highest pay,” Stibel said. “The company
that makes its mark by taking the cost of manufacturing products and services up will lose, and the country that promotes that will lose.”

For retailers, competing with Wal-Mart means not just holding down wages, but curbing health care costs, which are becoming an increasing burden on employers nationwide.

A report by the AFL-CIO, which has tried and failed to organize Wal-Mart workers, said the retailer insures only about 45 percent of its workforce. Wal-Mart workers must pay about one-third of the cost of their health care premiums, while employees at other large companies typically pay 16 to 25 percent, the report said.

The result is that many Wal-Mart workers transfer the health care burden either to their spouse’s employer or to government agencies, the report said.

Some employees at Minneapolis-based Target Corp., a non-union company once
known for its generous employee benefits, say they believe price competition with Wal-Mart caused their employer to cut benefits as well.

In April, Target rolled out a new health care plan for 2004 that offered generous benefits, but only for employees who averaged more than 32 hours of work each week. Some Target employees say the company then hired more workers and reduced existing workers’ schedules so they no longer qualified for the plan.

Blue Cross' RightPlan is terribly wrong

The Sacramento Bee
October 29, 2003
Health plan a sign of future?
Blue Cross offers lower premiums — but higher costs down the line.
By Lisa Rapaport

The day after insurance giants Anthem Inc. and WellPoint Health Networks
Inc. announced a merger deal that could create the biggest health plan in
America, WellPoint’s largest subsidiary unveiled a new product that many say
indicates where this huge insurer may lead the health care market.

Continuing the race to create health plans that lower premiums by charging
patients higher fees for doctors and hospitals, Blue Cross of California
said Tuesday it will sell a new individual health plan called RightPlan. It
has monthly premiums as low as $70 in Sacramento, but it requires patients
to pay $40 for doctor visits and 40 percent of hospital bills.

One aspect of RightPlan that Blue Cross officials said is essential to achieving low premiums is cause for particular concern in the medical community. Blue Cross intends to market the policy to people ages 18 to 34 — the most likely to be uninsured — but the plan does not include maternity coverage.

Known as consumer-driven health plans, policies such as RightPlan have cropped up with greater frequency in recent years as insurers have responded to demands from consumers and employers to curb steep premium increases.

… many health experts believe this latest Blue Cross offering is a good
indicator of what lies ahead.

At Blue Cross, officials would not speculate on whether RightPlan was a sign
of things to come. Spokeswoman Kellie Bernell said the company’s goal in
expanding its selection of consumer-driven plans in recent years has been to
reduce the rolls of the uninsured by offering affordable premiums.

The focus on fees for doctors and hospitals in these plans misses other aspects that may appeal to consumers, Bernell said. RightPlan includes discounts on gym memberships and weight-loss programs, as well as access to acupuncture and other types of alternative medicine.

Anthony Wright, executive director of Health Access, a patient advocacy group based in Sacramento:

“In California, Blue Cross has been a leader in pushing more costs to consumers. They do this and keep diluting the value of insurance. The point of insurance is to not worry about your bank account when you go to the doctor, and insurers seem to increasingly be missing this point.”

http://www.sacbee.com/content/news/medical/story/7688509p-8628347c.html

Comment: The crisis in affordability of health care is of great concern to nearly all Americans. The most visible manifestation of this crisis for the average, relatively healthy individual is the premium paid for health insurance. The insurance industry is acutely aware of this perception and has responded by designing products with affordable premiums. Although these have been targeted to the individual market, employers are now showing interest in these consumer-driven products in order to reduce the costs to them of their health benefit programs.

The United States is unique in its refusal to establish national policies that would contain the exploding health care costs while equitably distributing our finite resources amongst all of us. Without such policies in place, controlling premiums can only result in shifting costs to individual patients. But how many families can afford to pay 40% of the costs of a major hospitalization? The fundamental concept of insurance is being challenged by these consumer-driven programs. Policy studies supporting the importance of health insurance coverage lose their validity when cost sharing becomes unaffordable.

Unfortunately, this movement in health care reform plays into the hands of the ideologues. By shifting costs to individuals, the role of governmental public programs would be reduced. But these ideologues are not only opposed to a greater role of government, they also oppose any collective, societal effort to reduce exposure to the costs of untoward health events.

Pooling risk through nonprofit insurers is a collectivist approach that diminishes the role of individual responsibility in meeting fundamental needs. Although they use the “consumer empowerment” rhetoric, in reality they support the concept that those who “refuse” to achieve success and independence through individual effort should not share in the rewards common to the rest of us.

Let’s not fall into the trap of entering their deceptive rhetorical world which would continue to lead us down the path toward expansion of their highly flawed, inhumane policies. Our simple rhetoric of affordable, comprehensive health care for everyone instead should redirect us down the ethically-sound path toward health security for all.

Cancel Private Hospitals: Prominent Economists Say P3 Hospitals Threaten Medicare

Toronto – Four prominent economists and a former director of audit operations with Canada’s Auditor General released a report today that is sharply critical of controversial “public-private-partnership” (P3) hospital proposals.  The report commends the new provincial government for rejecting the P3 model for public hospitals, including those planned for Brampton and Ottawa.

The reports’ authors are: Lewis Auerbach, Arthur Donner Phd., Douglas D. Peters Phd., Monica Townson and Armine Yalnizyan.

In an open letter to the Ministers of Health and Long-Term Care, and Public Infrastructure Renewal, the authors describe P3 hospitals as posing “ a serious threat to the public health care system.” They urge the government “to carry through with the commitment to cancel the P3 projects proposed for the Royal Ottawa and William Osler Hospitals” and to “ensure that all future investment in public hospitals accords with the principles of public financing, ownership and not-for-profit administration.”

The authors conclude that when properly accounted for, P3 hospitals “are likely to be 10% more costly than hospitals that are publicly financed, owned and operated.”

Their report concludes that there is every reason to expect that if P3 hospitals were established in Ontario, they would result in “a deterioration of hospital services, diminished accountability, an increase in two-tier care, and needless cost.” The authors note that this is turn in likely to “discourage confidence in publicly funded health care, and weaken support for the medicare model.”
————————————————————————

Summary & Backgrounder

FUNDING HOSPITAL INFRASTRUCTURE: WHY P3S DON’T WORK, AND WHAT WILL

Summary

A group of prominent economists and a former director with Canada’s Auditor General have written to the Honourable Ministers of Health and Long Term Care, and Public Infrastructure Renewal commending the government for having rejected the P3 model, and encouraging the government to carry through by cancelling these outstanding projects.

In support of their position, the experts have prepared a report which examines the consequences of adopting a  “public-private partnership” or “P3″ model for providing health care infrastructure and services.  It exposes the fallacies of the rationale offered for adopting this approach, and describes the significant cost premium and accountability problems associated with the P3 model.

The experts describe the consequences of adopting the P3 for public hospitals as including:

· a substantial premium that taxpayers will pay for hospital facilities and services that are likely to be 10% more costly than hospitals that are publicly financed, owned and operated;

· the likelihood that the extent and quality of services will decline in P3 hospitals as efforts are made to sustain profit margins in an environment where efficiency gains are limited;

· the accountability problems inherent to P3 projects where confidentiality is claimed for financial and business records, preventing a proper accounting for public health-care spending, and frustrating efforts to monitor P3 hospitals for compliance with the principles and objectives of the Canada Health Act;
 
· the risk that by introducing the profit motive to public hospitals, P3s will create a platform for two-tiered service because of the co-mingling in one institution of insured health care services with those provided outside the publicly funded system.

The authors also express their support for the traditional approach to funding public infrastructure. They describe the public funding model as perfectly sound so long as accounting for such investments is improved.  To this end they call upon the new Government to adopt an accrual rather than a cash method of accounting for investment in health care infrastructure so that the costs of acquiring an asset like a public hospital can be spread over its useful life. They note that with interest rates at historically low levels, and significant unemployment in the province, the time is ideal to invest in hospitals and infrastructure.

Background

In December 2001, Ontario’s Conservative government announced plans to establish two private hospitals on sites owned by the William Osler Hospital Centre (WOHC) and the Royal Ottawa Health Care Group (ROHCG).

According to a scheme it described as a “public-private partnership” or “P3”, the Government proposed that both hospitals would be privately financed, owned, and operated.  In addition to providing hospital buildings and facilities, these P3 deals would bundle all “non-clinical” services into long-term contracts with for-profit health care companies.  According to the Government, clinical care services would remain under the control of the existing hospital boards.

In making these announcements,  the Government signalled its intention to abandon the non-profit model for providing hospital services in Ontario, where for decades public hospitals have been publicly financed, owned and operated on a non-profit basis. Capital funding for hospital infrastructure was provided by grants from the provincial and federal governments, and private charitable donations.

On the eve of the recent election, both the WOHC and ROH signed “framework agreements” with the same consortium of domestic and foreign investors.  Neither the provincial government nor the hospitals were willing the disclose the details of these arrangements.  However the WOHC has indicated that in its case the P3 contract has a value of $1.28 billion, and a term of twenty-eight years.

However the framework agreements signed by the Hospitals are contingent upon provincial approvals which have not yet been granted.  Moreover, during the election campaign, the Premier indicated that he would not, if elected, carry through with these P3 initiatives.

for a copy of the full report, go to  www.policyalternatives.ca

————————————————————————

Blue Cross’ RightPlan is terribly wrong

The Sacramento Bee
October 29, 2003
Health plan a sign of future?
Blue Cross offers lower premiums — but higher costs down the line.
By Lisa Rapaport

The day after insurance giants Anthem Inc. and WellPoint Health Networks
Inc. announced a merger deal that could create the biggest health plan in
America, WellPoint’s largest subsidiary unveiled a new product that many say
indicates where this huge insurer may lead the health care market.

Continuing the race to create health plans that lower premiums by charging
patients higher fees for doctors and hospitals, Blue Cross of California
said Tuesday it will sell a new individual health plan called RightPlan. It
has monthly premiums as low as $70 in Sacramento, but it requires patients
to pay $40 for doctor visits and 40 percent of hospital bills.

One aspect of RightPlan that Blue Cross officials said is essential to achieving low premiums is cause for particular concern in the medical community. Blue Cross intends to market the policy to people ages 18 to 34 — the most likely to be uninsured — but the plan does not include maternity coverage.

Known as consumer-driven health plans, policies such as RightPlan have cropped up with greater frequency in recent years as insurers have responded to demands from consumers and employers to curb steep premium increases.

… many health experts believe this latest Blue Cross offering is a good
indicator of what lies ahead.

At Blue Cross, officials would not speculate on whether RightPlan was a sign
of things to come. Spokeswoman Kellie Bernell said the company’s goal in
expanding its selection of consumer-driven plans in recent years has been to
reduce the rolls of the uninsured by offering affordable premiums.

The focus on fees for doctors and hospitals in these plans misses other aspects that may appeal to consumers, Bernell said. RightPlan includes discounts on gym memberships and weight-loss programs, as well as access to acupuncture and other types of alternative medicine.

Anthony Wright, executive director of Health Access, a patient advocacy group based in Sacramento:

“In California, Blue Cross has been a leader in pushing more costs to consumers. They do this and keep diluting the value of insurance. The point of insurance is to not worry about your bank account when you go to the doctor, and insurers seem to increasingly be missing this point.”

http://www.sacbee.com/content/news/medical/story/7688509p-8628347c.html

Comment: The crisis in affordability of health care is of great concern to nearly all Americans. The most visible manifestation of this crisis for the average, relatively healthy individual is the premium paid for health insurance. The insurance industry is acutely aware of this perception and has responded by designing products with affordable premiums. Although these have been targeted to the individual market, employers are now showing interest in these consumer-driven products in order to reduce the costs to them of their health benefit programs.

The United States is unique in its refusal to establish national policies that would contain the exploding health care costs while equitably distributing our finite resources amongst all of us. Without such policies in place, controlling premiums can only result in shifting costs to individual patients. But how many families can afford to pay 40% of the costs of a major hospitalization? The fundamental concept of insurance is being challenged by these consumer-driven programs. Policy studies supporting the importance of health insurance coverage lose their validity when cost sharing becomes unaffordable.

Unfortunately, this movement in health care reform plays into the hands of the ideologues. By shifting costs to individuals, the role of governmental public programs would be reduced. But these ideologues are not only opposed to a greater role of government, they also oppose any collective, societal effort to reduce exposure to the costs of untoward health events.

Pooling risk through nonprofit insurers is a collectivist approach that diminishes the role of individual responsibility in meeting fundamental needs. Although they use the “consumer empowerment” rhetoric, in reality they support the concept that those who “refuse” to achieve success and independence through individual effort should not share in the rewards common to the rest of us.

Let’s not fall into the trap of entering their deceptive rhetorical world which would continue to lead us down the path toward expansion of their highly flawed, inhumane policies. Our simple rhetoric of affordable, comprehensive health care for everyone instead should redirect us down the ethically-sound path toward health security for all.

Is starving Medicare the fix we need?

Date: Tue, 4 Nov 2003 11:28:36 -0800
Subject: qotd: Is starving Medicare the fix we need?

The New York Times
November 4, 2003
White House Backs Limits on Spending for Medicare
By Robert Pear

The Bush administration joined House Republicans on Monday in pushing a Proposal that would force Congress to vote on possible cutbacks in Medicare
if the costs of the program, including new drug benefits, grow faster than
expected.

The plan would also set limits on the use of general tax revenue for Medicare.

Senate negotiators have offered a similar proposal, labeled a “bipartisan Senate staff option.” This suggests that some cost-control mechanism is likely to be in any Medicare bill that emerges from Congress, despite objections from many Democrats and advocates for the elderly.

Both proposals would fundamentally change the financing of Medicare. They would also make it more difficult for Congress to enhance drug benefits,
raise payments to doctors or provide coverage for more outpatient services.

Under the latest proposal from House Republican negotiators, Medicare would
be declared “programmatically insolvent” if its trustees found that general tax revenue would account for more than 45 percent of Medicare spending at any point in the next seven years. If the trustees made such a prediction for two consecutive years, the president would have to propose ways to reduce the dependence on general revenue.

That could be done by cutting benefits, increasing beneficiary premiums form raising payroll taxes.

…the General Accounting Office, the investigative arm of Congress, said that Medicare’s growing reliance on general revenue imposed a mortgage on future generations.

Comment: Affordability of health care is a concern of most Americans. We need structural reform to ensure that costs will remain reasonable. A universal, integrated system would eliminate administrative excesses and provide a process to improve resource allocation by reducing inappropriate utilization. A well funded system, with structural integrity, would ensure access to comprehensive, affordable services for everyone.

But the process proposed for Medicare abandons rational cost containment, substituting flawed “starve the beast” economics. Capping the Medicare contribution from general revenues shifts funding to payroll taxes and to premiums and cost sharing paid by beneficiaries. This is both a shift towards more regressive funding of the program, and a shift towards the consumerist movement in health care.

Medicare currently pays only half of the costs of health care for the beneficiaries. Shifting more of the costs to moderate and low income individuals further threatens affordability for the majority of the beneficiaries, especially for those with greater needs. Because of the burden of higher costs, wage earners and beneficiaries would be pressured to accept even greater reductions in Medicare’s benefit package. Slowly starving the Medicare beast is cruel policy.

The fundamental premise that Medicare is no longer affordable is flawed. There are some things in life which we are quite willing to fund. And health security is one of them.

Unfortunately, it appears that the brain trust in Congress that is advancing this agenda is “programmatically insolvent.”

Medicare's blank check for the drug companies

Boston University School of Public Health
Health Reform Program
October 31, 2003
61 Percent of Medicare’s New Prescription Drug Subsidy Is Windfall Profit to Drug Makers
By Alan Sager, Ph.D. and Deborah Socolar, M.P.H.

Congress has declared its commitment to keeping prescription drug prices high under any Medicare drug benefit. This report shows that these unrestrained prices-given the remarkably low real cost of producing the added volumes of pills that Medicare patients need-will bestow enormous windfall profits on prescription drug makers.

An estimated 61.1 percent of the Medicare dollars that will be spent to buy more prescriptions will remain in the hands of drug makers as added profits.

* This windfall means an estimated $139 billion dollars in increased profits over eight years for the world’s most profitable industry.

* At $17 billion annually, this means about a 38 percent rise in drug maker profit.

This is the main reason why the proposed legislation gives patients only a scanty drug benefit, with high continued cost-sharing. The gift to drug makers is also why the plan requires a high taxpayer subsidy-money borrowed from our children and grandchildren.

The legislation would explicitly prohibit Medicare itself from acting to negotiate or contain the drug prices paid under the new program.

… the plan itself is not durable because it is simply too costly.
Congress is simply deferring serious work to shape a sustainable drug industry.

http://www.bumc.bu.edu/www/sph/hs/images/Health_Reform/Medicare_Rx_bill_windfallprofit.pdf

Comment: Physicians, hospitals, laboratories and other providers under the Medicare program have regulated limits on the rates of reimbursement for services and products provided. But look at the language of H.R. 1, the House version of the Medicare prescription drug legislation:

(D) NONINTERFERENCE- In carrying out its duties with respect to the provision of qualified prescription drug coverage to beneficiaries under this title, the [Medicare Benefits] Administrator may not–

(i) require a particular formulary or institute a price structure for the reimbursement of covered outpatient drugs;

(ii) interfere in any way with negotiations between [the various types of private plans] and drug manufacturers, wholesalers, or other suppliers of covered outpatient drugs; and

(iii) otherwise interfere with the competitive nature of providing such coverage through such sponsors and organizations.

The pharmaceutical industry is the most profitable industry in all history, and this bill hands them a blank check to be honored by the taxpayers and beneficiaries. And yet the meager benefit provided will continue to keep prescription drugs out of the reach of millions of Medicare beneficiaries because of the lack of affordability.

What input do we have? Rep. Bill Thomas, who is crafting the final legislation, has excluded most of the Democratic members of the joint conference committee from the process. He is even overriding the input of his Republican co-chair, Sen. Charles Grassley. His attitude is expressed well in this quote (Morgan and Eilperin, Washington Post, Oct. 29):

“I don’t think it serves any purpose to attempt to misrepresent or slant or fabricate… to influence outside the negotiating structure. My goal is to make law, not to make myself look good.”

And from the same article:

… Thomas surprised fellow conferees by outlining a proposed agreement for
the bill. He and his staff had written it without outside consultation. “It was a total unilateral move,” one source said. Grassley reportedly was furious.

http://www.washingtonpost.com/wp-dyn/articles/A38004-2003Oct29.html
It’s time to contemplate those cherished words of Abraham Lincoln: … government of the people, by the people, and for the people…

Let’s not let Lincoln down.

Medicare’s blank check for the drug companies

Boston University School of Public Health
Health Reform Program
October 31, 2003
61 Percent of Medicare’s New Prescription Drug Subsidy Is Windfall Profit to Drug Makers
By Alan Sager, Ph.D. and Deborah Socolar, M.P.H.

Congress has declared its commitment to keeping prescription drug prices high under any Medicare drug benefit. This report shows that these unrestrained prices-given the remarkably low real cost of producing the added volumes of pills that Medicare patients need-will bestow enormous windfall profits on prescription drug makers.

An estimated 61.1 percent of the Medicare dollars that will be spent to buy more prescriptions will remain in the hands of drug makers as added profits.

* This windfall means an estimated $139 billion dollars in increased profits over eight years for the world’s most profitable industry.

* At $17 billion annually, this means about a 38 percent rise in drug maker profit.

This is the main reason why the proposed legislation gives patients only a scanty drug benefit, with high continued cost-sharing. The gift to drug makers is also why the plan requires a high taxpayer subsidy-money borrowed from our children and grandchildren.

The legislation would explicitly prohibit Medicare itself from acting to negotiate or contain the drug prices paid under the new program.

… the plan itself is not durable because it is simply too costly.
Congress is simply deferring serious work to shape a sustainable drug industry.

http://www.bumc.bu.edu/www/sph/hs/images/Health_Reform/Medicare_Rx_bill_windfallprofit.pdf

Comment: Physicians, hospitals, laboratories and other providers under the Medicare program have regulated limits on the rates of reimbursement for services and products provided. But look at the language of H.R. 1, the House version of the Medicare prescription drug legislation:

(D) NONINTERFERENCE- In carrying out its duties with respect to the provision of qualified prescription drug coverage to beneficiaries under this title, the [Medicare Benefits] Administrator may not–

(i) require a particular formulary or institute a price structure for the reimbursement of covered outpatient drugs;

(ii) interfere in any way with negotiations between [the various types of private plans] and drug manufacturers, wholesalers, or other suppliers of covered outpatient drugs; and

(iii) otherwise interfere with the competitive nature of providing such coverage through such sponsors and organizations.

The pharmaceutical industry is the most profitable industry in all history, and this bill hands them a blank check to be honored by the taxpayers and beneficiaries. And yet the meager benefit provided will continue to keep prescription drugs out of the reach of millions of Medicare beneficiaries because of the lack of affordability.

What input do we have? Rep. Bill Thomas, who is crafting the final legislation, has excluded most of the Democratic members of the joint conference committee from the process. He is even overriding the input of his Republican co-chair, Sen. Charles Grassley. His attitude is expressed well in this quote (Morgan and Eilperin, Washington Post, Oct. 29):

“I don’t think it serves any purpose to attempt to misrepresent or slant or fabricate… to influence outside the negotiating structure. My goal is to make law, not to make myself look good.”

And from the same article:

… Thomas surprised fellow conferees by outlining a proposed agreement for
the bill. He and his staff had written it without outside consultation. “It was a total unilateral move,” one source said. Grassley reportedly was furious.

http://www.washingtonpost.com/wp-dyn/articles/A38004-2003Oct29.html
It’s time to contemplate those cherished words of Abraham Lincoln: … government of the people, by the people, and for the people…

Let’s not let Lincoln down.