By Marty Schladen and Cathy Candisky
The Columbus Dispatch, January 20, 2019

CVS used its role as a pharmacy middleman for the Ohio Medicaid program to pay some of its biggest retail competitors far less than it pays its own stores, according to a section in a state report that CVS is fighting in court to keep secret.

Critics say the state report is strong evidence that CVS was, in essence, using taxpayer money to give its own retail stores an unfair advantage in the marketplace.

At the same time this issue is being scrutinized in Ohio, CVS is attempting to convince a federal judge that its $70 billion proposed merger with insurance giant Aetna doesn’t pose a threat to competition in the pharmacy marketplace.

“This is startling information, the degree of difference” between what CVS was paying some large competitors and what it paid itself, said Thomas Greaney, former assistant chief of the U.S. Justice Department’s Antitrust Division.

Greaney, now a professor at the University of California Hastings College of Law, helped plan the American Medical Association’s opposition to the CVS-Aetna merger, which is now being reviewed by U.S. District Court Judge Richard Leon in Washington, D.C.

“I think this will certainly get his attention, that there is conduct consistent with the theory the Justice Department chose not to pursue,” Greaney said, referring to the fact that the Justice Department didn’t raise objections to the possibility that a merged company could use its clout as both an insurer and pharmacy middleman to stifle competition among retailers.

Indeed, Medicaid’s own report casts doubt on the notion that CVS reimbursements were sustainable for pharmacies that were its retail competitors.

And though CVS pharmacies were among those the report referred to, the same analysis found that CVS’ middleman arm charged taxpayers $197 million more for drugs than it paid pharmacies.

Walmart raised concerns about CVS’ practices by announcing last week that it was suspending most of its business with the pharmacy benefit manager, CVS Caremark.

The state then obtained all data from the $2.5 billion spent on drugs by Medicaid managed-care plans, and its analysis determined that CVS Caremark — which represents four of the five plans — and the other, OptumRx, were billing taxpayers 8.8 percent more for drugs than they were paying the pharmacists who dispensed them. That amounted to a $224 million differential. The state report said that the PBMs were charging Ohio taxpayers three to six times the standard industry rate.

As Ciaccia of the pharmacists’ association put it, “Caremark knows what they contracted to pay Kroger. Caremark knows what they contracted to pay Walmart. They have to know that when they slide an offer across the table to CVS, it’s a lot more.”

http://gatehousenews.com…

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The FDA’s Drug Pricing Strategy: What’s New?

By Henry Waxman, Bill Corr, Kristi Martin, Jeremy Sharp, and Sophia Duong
The Commonwealth Fund, January 27, 2019

Since the release of President Trump’s blueprint for lowering high prescription drug prices, U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb, M.D., has continued to implement the administration’s agenda for increasing market competition and transparency.

(The word “competition” or a derivative appears 26 times in this article and its accompanying timeline.)

https://www.commonwealthfund.org…

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Comment:

By Don McCanne, M.D.

I received a personal communication from a friend this week in which he informed me that the life-saving medication his teenage son is on costs $15,000 per week, and he may be on it forever. We can be thankful that the medication has been effective in returning him to a state of homeostasis with a normal lifestyle, but at that price?

It is no secret that the costs of pharmaceuticals and biologics are outrageous today. Polls confirm that the public is very concerned and wants something done about it.

The Columbus Dispatch article about CVS and its own pharmacy benefit manager middleman – Caremark – is only one example of how our reliance on competition in the marketplace to control drug prices has been a miserable failure. Yet as part of President Trump’s blueprint for lowering prescription drug prices, FDA Commissioner Scott Gottlieb wants to increase market competition – a concept supported in the article by former Democratic Congressman Henry Waxman and his colleagues (“competition” or a derivative appears 26 times in their article and illustration, 27 times if you count the references).

Competition is what we have now, and yet that exposes us to abuses like the CVS/Caremark conspiracy, and, worse, to $15,000 a week drug prices. When the private sector is failing us, that is when we need to turn to our own government for solutions. A great start would be to enact and implement a Single Payer Medicare for All program, with bulk purchasing and negotiated drug prices. If that still doesn’t work, maybe the industry needs to be threatened with nationalization.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

NORC, University of Chicago, Poll conducted December 13-16, 2018

How much have people heard about Medicare-for-All?

46% – Not at all
40% – Some
13% – A lot
1% – Other

Who would be eligible?

51% – All Americans
23% – Age 50+
23% – No other insurance option

Would participation be mandatory or optional?

41% – Mandatory
55% – Optional

Who would be eligible to participate in Medicare-for-All?

23% – Only Americans without access to insurance
23% – Only Americans 50+
51% – All Americans

Expected impact of Medicare-for-All on various health care issues

Patient out-of-pocket costs

26% – Increase
49% – Reduce

Coverage for health care services

29% – Limit
44% – Expand

Number of people with health insurance coverage

8% – Decrease
69% – Increase

Amount U.S. spends on health care

47% – Increase
29% – Reduce

Quality of care

30% – Reduce
28% – Increase

Access to doctors and hospitals

24% – Reduce
42% – Increase

http://www.norc.org…

NORC press release:
http://www.norc.org…

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Comment:

By Don McCanne, M.D.

We cannot assume that the obvious advantages of a single payer Medicare for All program will automatically sell itself. Why? In spite of considerable public discussion about Medicare for All, close to half say they haven’t heard of the concept, and many who have are confused on the specifics of the proposal.

The confusion may partly be due to the fact that several politicians have used “Medicare for All” as a label for their own proposals that are mostly merely expansions of the Affordable Care Act and are not single payer proposals. Also conservative opponents, in their attacks on single payer, frequently assign policy features that are not part of the model (e.g., the government takes away your choice of doctors and hospitals).

But that one number: 46% say they haven’t heard at all about Medicare for All. We’ve got to turn up the volume.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Dan Witters
GALLUP, January 23, 2019

The U.S. adult uninsured rate stood at 13.7% in the fourth quarter of 2018, according to Americans’ reports of their own health insurance coverage, its highest level since the first quarter of 2014. While still below the 18% high point recorded before implementation of the Affordable Care Act’s individual health insurance mandate in 2014, today’s level is the highest in more than four years, and well above the low point of 10.9% reached in 2016. The 2.8-percentage-point increase since that low represents a net increase of about seven million adults without health insurance.

https://news.gallup.com…

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Comment:

By Don McCanne, M.D.

According to this GALLUP survey, the uninsured rate declined from 18 percent just before implementation of the Affordable Care Act down to 10.9 percent in 2016. It has since increased to the current level of 13.7 percent, a net increase of about seven million adults now without health insurance since its 2016 low.

This is the program that was enacted after an intensive political effort that began with rejection of the single payer model that would have reduced the uninsured rate to zero percent.

A majority of the nation now understands that we need to enact and implement Single Payer Medicare for All – a program in which everyone is automatically enrolled for life. Yet where are our politicians headed? The Republicans support only guaranteeing access to coverage for individuals with preexisting disorders, yet they offer no practical plan for making that happen. The Democrats campaigned on Medicare for All, yet they want to take us back down the same ACA pathway, leaving tens of millions uninsured and many millions more underinsured.

The original goal supposedly was to make health care affordable and accessible for everyone. The Affordable Care Act, even with the various proposed tweaks, cannot possibly ever get us there because of its unrectifiable design defects. In contrast, the Single Payer Medicare for All model is specifically designed to accomplish that goal, and it would actually work.

So the numbers of uninsured have recently again increased by seven million, and the politicians want more of that system? Shall we ask those seven million uninsured people what they think of it? Or do we even care? (How could anyone ask that last question? But…)

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Ashley Kirzinger, Cailey Muñana, and Mollyann Brodie
Kaiser Family Foundation, January 23, 2019

This month’s KFF Health Tracking Poll continues to find majority support (driven by Democrats and independents) for the federal government doing more to help provide health insurance for more Americans. One way for lawmakers to expand coverage is by broadening the role of public programs. Nearly six in ten (56 percent) favor a national Medicare-for-all plan, but overall net favorability towards such a plan ranges as high as +45 and as low as -44 after people hear common arguments about this proposal.

Larger majorities of the public favor more incremental changes to the health care system such as a Medicare buy-in plan for adults between the ages of 50 and 64 (77 percent), a Medicaid buy-in plan for individuals who don’t receive health coverage through their employer (75 percent), and an optional program similar to Medicare for those who want it (74 percent). Both the Medicare buy-in plan and Medicaid buy-in plan also garner majority support from Republicans (69 percent and 64 percent­).

Moving forward, half of Democrats would rather see the new Democratic majority in the U.S. House of Representatives focus their efforts on improving and protecting the ACA (51 percent), while about four in ten want them to focus on passing a national Medicare-for-all plan (38 percent).

Malleability in attitudes towards national health plan and lingering confusion about possible impacts

This month’s KFF Health Tracking Poll finds the net favorability of attitudes towards a national Medicare-for-all plan can swing significantly, depending on what arguments the public hears.

Net favorability towards a national Medicare-for-all plan (measured as the share in favor minus the share opposed) starts at +14 percentage points and ranges as high as +45 percentage points when people hear the argument that this type of plan would guarantee health insurance as a right for all Americans. Net favorability is also high (+37 percentage points) when people hear that this type of plan would eliminate all premiums and reduce out-of-pocket costs. Yet, on the other side of the debate, net favorability drops as low as -44 percentage points when people hear the argument that this would lead to delays in some people getting some medical tests and treatments. Net favorability is also negative if people hear it would threaten the current Medicare program (-28 percentage points), require most Americans to pay more in taxes (-23 percentage points), or eliminate private health insurance companies (-21 percentage points).

While most Americans (77 percent) are aware they would have to pay more in taxes to cover the cost of health insurance if a national Medicare-for-all plan was put into place, there is some confusion about whether people would be able to keep their current health insurance. Most people under the age of 65 and who currently have employer-sponsored insurance say that if a national health plan was put into place, they would be able to keep their current coverage (55 percent) while about four in ten (37 percent) are aware they would not be able to keep their current coverage.

And while majorities say low-income people and people who currently don’t have health insurance would be “better off” if a national Medicare-for-all plan was put into place, there is less certainty among the public about how much it would impact them, personally. Across demographic groups, about four in ten say that if a national Medicare-for-all plan was put into place it “would not have much impact” on them.

Medicare-for-All and seniors

Overall, a larger share of the public say a Medicare-for-all plan will “not have much impact” on seniors (39 percent) or say that they would be “better off” (33 percent) than say seniors would be “worse off” (21 percent).

Democrats want Democratic lawmakers to focus on ACA rather than Medicare-for-All

Despite the recent attention on proposals to expand Medicare or Medicaid, when asked to choose Democrats would rather the new Democratic majority in the U.S. House of Representatives focus their efforts on “improving and protecting the ACA” rather than “passing a national Medicare-for-all plan.” Half (51 percent) of Democrats say House Democrats should focus on the ACA while four in ten (38 percent) say they should focus on passing a national Medicare-for-all plan. The share of Democrats who want Congress to focus on passing a national Medicare-for-all plan is down 10 percentage points from March 2018.

Partisans have different health priorities for Congress

When forced to choose the top Congressional health care priorities, the public chooses continuing the ACA’s pre-existing condition protections (21 percent) and lowering prescription drug cost (20 percent) as the most important priorities for Congress to work on. Smaller shares choose implementing a national Medicare-for-all plan (11 percent), repealing and replacing the ACA (11 percent), or protecting people from surprise medical bills (9 percent) as a top priority. One-fourth said none of these health care issues was their top priority for Congress to work on.

Continuing the ACA’s pre-existing condition protections is the top priority for Democrats (31 percent) and ranks among the top priorities for independents (24 percent) along with lowering prescription drug costs, but ranks lower among Republicans (11 percent). Similar to previous KFF Tracking Polls, repealing and replacing the ACA remains one of the top priority for Republicans (27 percent) along with prescription drug costs (20 percent).

The Role of independents in the Democratic health care debate

One of the major narratives coming out of the 2018 midterm elections was the role that health care was playing in giving Democratic candidates the advantage in close Congressional races. Consistently throughout the election cycle, KFF polling found health care as the top campaign issue for both Democratic and independent voters. While a majority of Democrats want the new Democratic majority in the U.S. House of Representatives to focus on improving and protecting the ACA, Democratic-leaning independents have more divided opinions of the future of 2010 health care law. These individuals – who tend to be younger and male – would rather Democrats in Congress focus efforts on passing a national Medicare-for-all plan (54 percent) than improving the ACA (39 percent) – which is counter to what Democrats overall report. In addition, when asked whether House Democrats owe it to their voters to begin debating proposals aimed at passing a national health plan or work on health care legislation that can be passed with a divided Congress and a Republican President, Democrats are divided (49 percent v. 44 percent) while Democratic-leaning independents prioritize House Democrats working on bipartisan health care legislation (53 percent) over debating national health plan proposals (39 percent).

https://www.kff.org…

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Comment:

By Don McCanne, M.D.

Medicare for All now has more public support than ever before, but this highly credible poll reminds us that some are still confused on the policy issues, and many are swayed by rhetoric and framing of those who are supporting alternative visions of reform, especially from the neoliberal and conservative ranks.

When poll results like this are released, there is a tendency to criticize the pollsters for failing to ask the right questions and then to dismiss the results. On the contrary, we should use the perceptions of those polled to refine our own messages. The lesson is that we still have a long way to go on educating the public at large on health policies that would benefit us all – those of the Single Payer Medicare for All model.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Health and Human Services Department, Proposed Rule, January 17, 2019

Summary

This proposed rule sets forth payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs; cost-sharing parameters; and user fees for Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FPs). It proposes changes that would allow greater flexibility related to the duties and training requirements for the Navigator program and proposes changes that would provide greater flexibility for direct enrollment entities, while strengthening program integrity oversight over those entities. It proposes policies that are intended to reduce the costs of prescription drugs. It includes proposed changes to Exchange standards related to eligibility and enrollment; exemptions; and other related topics.

https://www.federalregister.gov…

Unpublished rule – 331 pages:
https://www.federalregister.gov…

This document is scheduled to be published in the Federal Register on 01/24/2019 and available online at:
https://federalregister.gov…

Fact Sheet – 4 pages:
https://www.cms.gov…

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By Katie Keith
Health Affairs Blog

The 2020 Proposed Payment Notice, Part 1: Insurer And Exchange Provisions:
https://www.healthaffairs.org…

The 2020 Proposed Payment Notice, Part 2: Risk Adjustment:
https://www.healthaffairs.org…

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Trump Proposals Could Increase Health Costs for Consumers

By Robert Pear
The New York Times, January 21, 2019

Consumers who use expensive brand-name prescription drugs when cheaper alternatives are available could face higher costs under a new policy being proposed by the Trump administration.

The proposal, to be published this week in the Federal Register, would apply to health insurance plans sold under the Affordable Care Act.

The administration is proposing several other changes that could increase costs for consumers.

Under the proposal, fewer people would qualify for federal subsidies, and those who qualify could be required to spend a larger share of their income on insurance premiums.

The Trump administration estimated that the changes would save the government $900 million annually in subsidies in 2020 and 2021 and $1 billion a year in 2022 and 2023. In addition, it predicted that 100,000 fewer people would have coverage through the insurance exchanges created under the Affordable Care Act.

The administration said that some of the 100,000 people might buy short-term insurance policies, which do not have to cover pre-existing conditions or provide all the benefits required by the health law. But, it said, most are “likely to become uninsured.”

Either way, the administration said, “these individuals will be bearing a larger share of the costs of their own health care consumption.”

Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee, described the new proposed rule as “Trump’s latest attempt to sabotage health care.”

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

The federal process of making arcane rules is somewhat elaborate, requiring publication of the proposed rule in the Federal Register to provide an opportunity for public comment. Since none of us read the rules, the process favors the vested interests that do provide input. More importantly, it is used by the administration to change the rules so that they are more com[pliant with their ideological preferences.

Although the title of this particular rule indicates that it is about benefit and payment parameters under ACA, you really should quickly skim-read the four-page fact sheet if you want to get an idea of the extent of the rule changes. If you want to better understand some of the rule changes, the two articles in the Health Affairs Blog by Katie Keith can be helpful, though they are heavy on academic rhetoric. We’ll mention only two topics here.

One of the major defects of the Affordable Care Act is that it relies heavily on private health insurance plans. Thus the risk pool is split amongst the various insurers. The insurance industry is notorious for adopting policies that manipulate the risk pool to improve their bottom lines. Thus risk adjustment has become essential to transfer funds from insurers that had healthier patients and thus paid out less in health benefits to insurers that had to pay out more because of greater “losses” because their clients had greater needs. Decades of experience have shown that the program administrators cannot get risk adjustment right. The proposed rule on “recalibrating the risk adjustment models using a blended average from 2017 MarketScan® data and 2016 and 2017 enrollee-level EDGE data” and on “Risk Adjustment Data Validation (RADV) Audits” may convince you that they will never get it right.

The obvious solution is that we need to get rid of the fragmented system of private insurers and establish one single risk pool that covers everyone. This, of course, is what a Single Payer Medicare for All program would do.

The other topic to be mentioned regards the prescription drug benefit. Without discussing here any of the specific proposals in the rule, Robert Pear, in his New York Times article writes, “fewer people would qualify for federal subsidies, and those who qualify could be required to spend a larger share of their income on insurance premiums.” Also, most of the 100,000 who would lose their ACA coverage are “likely to become uninsured.” Pear also reports that Senator Ron Wyden described the new proposed rule as “Trump’s latest attempt to sabotage health care,” and it does.

There would certainly be rule-making under Single Payer Medicare for All, but the rules would be designed to benefit patients rather than designed to satisfy the whims of the right-wing, anti-government ideologues who are also rewarding their friends in the health care corporate world with our tax funds.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Dr. Martin Luther King Jr.
City Temple, London, England, December 7, 1964

Now I would like to mention one or two ideas that circulate in our society—and they probably circulate in your society and all over the world—that keep us from developing the kind of action programs necessary to get rid of discrimination and segregation. One is what I refer to as the myth of time. There are those individuals who argue that only time can solve the problem of racial injustice in the United States, in South Africa or anywhere else; you’ve got to wait on time. And I know they’ve said to us so often in the States and to our allies in the white community, “Just be nice and be patient and continue to pray, and in 100 or 200 years the problem will work itself out.” We have heard and we have lived with the myth of time. The only answer that I can give to that myth is that time is neutral. It can be used either constructively or destructively. And I must honestly say to you that I’m convinced that the forces of ill will have often used time much more effectively than the forces of goodwill. And we may have to repent in this generation, not merely for the vitriolic words and the violent actions of the bad people, but for the appalling silence and indifference of the good people who sit around saying, “Wait on time.”

And somewhere along the way it is necessary to see that human progress never rolls in on the wheels of inevitability. It comes through the tireless efforts and the persistent work of dedicated individuals who are willing to be co-workers with God. And without this hard work, time itself becomes an ally of the primitive forces of social stagnation. And so we must help time, and we must realize that the time is always ripe to do right. This is so vital, and this is so necessary.

Democracy Now! MLK Day Special: Rediscovered 1965 King Speech on Civil Rights, Segregation & Apartheid South Africa:
https://www.democracynow.org…

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Comment:

By Don McCanne, M.D.

And they are telling us, “We don’t have time for Medicare for All. We’ll be too busy trying to fine tune the Affordable Care Act.”

We don’t have time to enact and implement a health care financing system that is truly universal, affordable, efficient, effective and equitable because we have to use that time refining a system that has none of these features? We have time to expand the health care business model in order to enhance the returns of the medical-industrial complex, the private insurers and the pharmaceutical industry, but we can’t use that same time to ensure health care justice for all?

Maybe we should read once again Martin Luther King’s words on the myth of time.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Christopher Ody, Lucy Msall, Leemore S. Dafny, David C. Grabowski, and David M. Cutler
Health Affairs, January 2019

Abstract

Medicare’s Hospital Readmissions Reduction Program (HRRP) has been credited with lowering risk-adjusted readmission rates for targeted conditions at general acute care hospitals. However, these reductions appear to be illusory or overstated. This is because a concurrent change in electronic transaction standards allowed hospitals to document a larger number of diagnoses per claim, which had the effect of reducing risk-adjusted patient readmission rates. Prior studies of the HRRP relied upon control groups’ having lower baseline readmission rates, which could falsely create the appearance that readmission rates are changing more in the treatment than in the control group. Accounting for the revised standards reduced the decline in risk-adjusted readmission rates for targeted conditions by 48 percent. After further adjusting for differences in pre-HRRP readmission rates across samples, we found that declines for targeted conditions at general acute care hospitals were statistically indistinguishable from declines in two control samples. Either the HRRP had no effect on readmissions, or it led to a systemwide reduction in readmissions that was roughly half as large as prior estimates have suggested.

From the Discussion

The Hospital Readmissions Reduction Program has been cited as one of the successes of value-based payment, which fosters the view that targeted financial incentives can lead to large changes in behavior. However, altering two seemingly small details related to data and methodology meaningfully weakens the evidence that the HRRP lowered risk-adjusted readmission rates for targeted conditions and targeted hospitals. By coincidence, the HRRP was implemented just before a change in electronic transaction standards that increased diagnostic coding and therefore created the illusion that risk-adjusted readmission rates had decreased. Furthermore, given the higher rate of readmissions for targeted conditions at targeted hospitals than at nontargeted hospitals and nontargeted conditions, the decreases in readmission rates for targeted conditions and targeted hospitals were not atypically large.

This set of findings can be interpreted in two ways. One is that the HRRP had no effect on readmissions. The second is that the HRRP may have led to a systemwide reduction in readmissions (that is, a reduction not limited to targeted conditions and targeted hospitals) that was roughly half as large as prior estimates have suggested. Distinguishing between these conclusions remains an important topic for research.

We note in closing that if the HRRP has not lowered readmission rates, then the rationale for the program’s existence becomes substantially weaker. To see why, note that pay-for-performance programs have at least two potential downsides. First, participants may engage in undesirable efforts to game the system. In the case of the HRRP, many observers have raised concerns that hospitals may have been less willing to readmit patients after implementation of the program, which could have increased the use of care that was not counted as a readmission (such as emergency department visits or observation stays) or prevented patients from receiving needed care, possibly harming care quality. Second, pay-for-performance schemes expose participants to the risk of unstable funding, in ways that may seem unfair or contrary to other social goals. In the case of the HRRP, the program was found to have initially penalized hospitals that cared predominantly for patients of low socioeconomic status—hospitals that are more likely to be safety-net providers already operating on tight budgets.

In a successful pay-for-performance program, these two potential downsides must be more than made up for by robust improvements in performance. Our study suggests that any salutary effects of the HRRP are smaller than earlier estimates have suggested.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

Medicare’s Hospital Readmissions Reduction Program (HRRP) has been used extensively as an example of how changing incentives (P4P – paying more, or at least not penalizing, based on performance) can lower costs. Yet this study shows that, at a minimum, the benefits of penalizing hospitals for readmitting patients have been tremendously overstated.

An additional concern is that patients are often held on observation status rather than being readmitted, sometimes to avoid the readmission penalties. This can significantly increase out-of-pocket costs for the patient since they are billed as outpatients (Part B), with greater cost-sharing, rather than as inpatients (Part A). More importantly, there is also the risk that the patient may receive less care as an outpatient when the patient’s condition warrants full inpatient services. Thus the readmission reduction program may be causing significant patient harm, both physically and fiscally.

The government bureaucrats and the policy community are fixated on these various programs that they just thought up out of the blue that supposedly would control spending, even though their track record overall is dismal. Yet they keep avoiding a proven solution that would reduce our uniquely outrageous administrative waste that costs hundreds of billions of dollars. That solution is a single payer national health program, an improved Medicare that would cover everyone. We should at least enact that and then we could examine other innovations as long as they are designed to truly benefit patients.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.