PNHP

Trump’s plan won’t lower prescription drug prices. Ours would.

Trump’s plan won’t lower prescription drug prices. Ours would.

The White House is pushing half-measures. We need more.

By Adam Gaffney, M.D.
Washington Post, May 23, 2018

The drug price reforms that President Trump recently proposed are as potent as a placebo, but not as harmless.

Trump once blustered that drug firms were “getting away with murder,” but his real-life plan caused pharmaceutical stocks to surge as investors foresaw even higher prices and profits ahead. The president stepped away from his earlier promises to allow Medicare to negotiate prices, while vowing to fight for higher drug prices abroad — a gold mine for the industry that would do nothing to reduce drug prices at home.

With Fortune 500 drug firms raking in $67.7 billion in profits in 2016, more revenue is the last thing the industry deserves. But a failure to contain drug costs isn’t the only shortcoming of Trump’s proposal. The whole pharmaceutical system — from the way medicines are developed to how they are tested, regulated, promoted, priced and provided — is broken, bent to the interests of the pharmaceutical industry. It cries out for reform.

Enter the comprehensive reform proposal drafted by a group of U.S. and Canadian physicians and drug policy experts (led by me and Joel Lexchin of Toronto), published May 17 in the British Medical Journal. Our proposal outlines a pharmaceutical vision that, unlike Trump’s, would both reduce costs and improve health.

Bringing down the price of brand-name drugs isn’t brain surgery: High-income nations throughout the globe get prices roughly half of ours by relying on a central payer to use its leverage in negotiations with drug firms — an approach we estimate could save about $154 billion annually if implemented in the United States. Negotiations by Medicare, once supported by Trump, might produce a chunk of those savings.

But the problem is bigger than prices. A recent analyst’s report from Goldman Sachs illustrates the pitfalls of letting the profit motive determine research priorities. As reported by CNBC, the report asked a disturbing question: “Is curing patients a sustainable business model”? As the report noted, curing many patients of an infectious disease like hepatitis could stop transmission and eliminate new cases, causing profits to plummet. That firms would even ponder such factors may seem nefarious, but it’s the inevitable consequence of a profit-obsessed R&D agenda. One noxious side effect of that agenda is the proliferation of drugs that offer no advance over existing agents: The majority of new agents are “me-too” drugs — trivial modifications of older medications — whose sales are pumped up by aggressive advertising campaigns but do nothing to improve health.

The public — mostly through the National Institutes of Health — ­already contributes richly to the research that underlies basically all modern drugs. But once a breakthrough looks imminent, the research is often turned over to pharmaceutical firms to carry out the last stages of developing a drug and profiting from it. Why not go all the way, and set up a public program parallel to compete with the private firms in developing and testing new drugs, and keep those publicly developed drugs outside the patent system, as the economist Dean Baker and others have described? These new drugs could immediately be manufactured cheaply as generics. Research could be directed toward the drugs that are most needed, not the most profitable, while testing would be performed by scientists without conflicts of interest.

That kind of reform would save money (and give us better drugs) in the long run, but relief is needed now. While drug price negotiations — as Trump once recognized — can help, they may not always suffice. For instance, if only one drug is available to treat a particular disease, the firm that owns the patent holds all the cards in negotiations, and it can walk from the bargaining table. In those situations, we need additional tools to lower prices while ensuring that patients have access to all necessary medications.

So our working group endorsed “compulsory licensing,” or allowing government to greenlight the generic production of expensive branded medicines in cases of medical necessity. Public drug manufacturing (which already happens in Sweden) should also be an option, as a last resort to combat price gouging — and to deal with shortages that have left hospitals scrounging for basic essentials like IV fluids and post-op pain medications as commercial manufacturers have faltered.

But regardless of who funds drug development, we also need to raise the standards for evaluating and approving drugs, which neither this administration nor its predecessors have shown an interest in doing. In recent years, expedited drug development pathways and downgraded standards of evidence have left us in the dark about how well many new drugs work — or even if they really work at all. Rushing new drugs to market based on shoddy research serves the industry, not patients. A study of recently approved cancer drugs in JAMA Internal Medicine found a majority of these drugs won approval on the basis of “surrogate endpoints,” like imaging findings, that frequently don’t translate into better health. Disturbingly, on follow-up, more than half of the drugs were never shown to improve survival.

That problem won’t get better unless we upgrade the FDA’s standards for approving new drugs. Drugmakers should be required to prove that new medicines improve the length or quality of life over and above existing treatments. Industry funding of the FDA — which began in 1993 and appears to have led to an increase in the approval of unsafe drugs — should end, and the agency should be fully publicly funded.

Even if reforms like these bring us lower prices and higher quality drugs, it won’t mean much for patients who can’t access them. For the more than 28 million uninsured Americans, medicines are often entirely out of reach — a problem that would be exacerbated by Trump’s Obamacare repeal efforts. And even for those who are insured, drug co-pays and deductibles force difficult — and unnecessary — choices between filling prescriptions and paying for other necessities.

Fortunately, there’s a simple solution: universal single-payer coverage without drug co-pays or deductibles. It’s how things work in Wales, Scotland and Northern Ireland (where it has proved entirely financially feasible), and it’s the only way to ensure nobody has to make a decision between their money and their life.

Our proposals for reform are ambitious. But the deep-seated problems in our pharmaceutical system demand a vigorous response, not the paltry half-measures Trump has proposed. Lives are at stake.

Dr. Adam Gaffney is an instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at the Cambridge Health Alliance and serves on the board of directors of Physicians for a National Health Program.

https://www.washingtonpost.com…

Dr. Paul Song: The Great Debate

PNHP-CA president Dr. Paul Song participated in a single-payer debate at the Commonwealth Club of California on May 23, 2018. He was joined by Micah Weinberg (Bay Area Council Economic Institute) and Mark Zitter (Zetema Project) to discuss SB 562 and the virtues of single-payer vs. multi-payer systems.

California’s success still leaves over 1 million eligible uninsured

Older Californians Struggle to Afford Lowest-Cost Plans on Covered California

California Health Care Foundation, May 14, 2018

Under the Affordable Care Act (ACA) California has now covered 93% of our adult population — a record high. Federal ACA subsidies through Covered California have made coverage more affordable for hundreds of thousands of Californians. The ACA further protected consumers’ finances by requiring insurers to pay a minimum level of medical expenses and by outlawing annual and lifetime caps on what insurers pay for care. However, 1.2 million Californians are eligible to purchase coverage on Covered California but remain uninsured, mainly because of cost.

Older Californians who aren’t covered by an employer or by Medi-Cal or Medicare, and who earn just above the maximum income to qualify for federal ACA subsidies (400% of the federal poverty level [FPL] — approximately $48,000 for an individual, $65,000 for a couple), may find it especially challenging to find affordable plans. For example, to purchase the lowest-cost bronze plan on Covered California:

* A 55-year-old single consumer earning $48,361 (401% FPL) would spend between 10% and 15% of her income on premiums, depending on where she lived.

* A 55-year-old married couple earning $65, 122 (401% FPL for a family of two) would pay between 15% and 22% of their income on premiums.

As consumers age, premiums increase:

* A 64-year-old earning $48,361 would pay between 13% and 20% of his income on premiums.

* A 64-year-old married couple earning $65,122 would pay between 20% and 30% of their income on premiums.

In addition, bronze plans come with a $6,300 deductible for individual policies and a $12,600 deductible for family policies.

https://www.chcf.org…

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Comment:

By Don McCanne, M.D.

California has done a phenomenal job in implementing the Affordable Care Act and has gone beyond the federal requirements in an effort to further expand coverage. Yet 1.2 million Californians who are eligible to purchase coverage on Covered California remain uninsured, mainly because of cost.

Look at the numbers above. Not only are the premiums unaffordable for many of those who earn too much to qualify for subsidies – requiring up to 30 percent of income – but those premiums purchase only low actuarial bronze plans (60% AV) which require additional payments of an average of 40 percent of the costs of care received.

It is not California’s fault nor the fault of any other state that is trying to make the system work. It is the fault of Congress and the administration for refusing to enact a health financing infrastructure that would work well for everyone, not just in California but in the entire nation. But sadly, not only is there inertia on reform that would work, the President and many members of Congress would actually pare back further the inadequate coverage we do have, leaving even more uninsured or underinsured.

We could provide everyone with all essential health care services with no cost sharing barriers without increasing our national health expenditures above their current level merely by enacting a well designed, single payer improved Medicare for all. We are already paying for it; we should have it. But to get there we will have to replace Congress and the administration with competent, caring public stewards.

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Providers representing patients as proxy consumers – What?

Beyond Utilization: Reimagining Providers As Consumers To Promote Hospital Price Competition

By Dhruv Khullar, Amitabh Chandra, Rahul Rajkumar
Health Affairs Blog, May 18, 2018

Spending on hospital care accounts for one-third of US health care expenditures, or $1.1 trillion—a sum that exceeds total medical spending for all health care goods and services in some other high-income countries.

While total spending on health care services is a product of how many services we use and how much we pay for each, most efforts to limit cost growth have focused primarily on reducing the delivery of unnecessary or low-value care; there has been relatively little attention given to reducing the level of prices. But higher prices—not necessarily higher rates of utilization—drive excess spending in the United States.

Accountable care organizations (ACOs) have been a major focus of delivery system reform, proposed as a way to promote high-value care and reduce costs. ACOs may encourage integration of care, shift spending toward important non-clinical services (for example, care management), and discourage delivery of unnecessary services. But they have yet to produce substantial cost savings and are unlikely to directly confront the fundamental problem of high prices.

One reason ACOs have thus far generated limited savings may be that they attempt to organize and provide all care within their network of providers. This may allow for better care integration and coordination, but it prevents them from taking advantage of providers outside the ACO who may be able to deliver lower-price, high-quality care because of their greater specialization. We can address this problem if we reimagine ACOs—along with other delivery system innovations such as medical homes—as consumers, with more sophistication, incentive, and bargaining power than patients. Conceptualized this way, ACOs can encourage competition among bundlers of hospital care and help lower prices.

Barriers To Hospital Price Competition And The Limits Of Patient Consumerism

In most industries, consumers apply competitive pressure on vendors to reduce the price and improve the quality of available products. But in health care, the ability of patients to shop effectively and create meaningful competition among providers is limited. This is particularly true for hospital care, for which prices vary widely across the country with little relation to outcomes. Can consumerism work when it comes to hospital care? And can ACOs be part of the solution?

Two principal factors prevent patients from functioning as traditional consumers. First, hospital care is not organized into well-defined, easily understood, clinically meaningful units. Instead, each service is billed for separately, and a complex menu of “charges” for thousands of individual billing codes—entirely divorced from outcomes—makes it difficult to shop for episodes such as childbirth, joint replacement, or treatment of coronary artery disease.

Second, health insurance largely insulates patients from costs, so they are not well-positioned to apply competitive pressure on hospitals for expensive care. Because most hospital spending occurs above out-of-pocket maximums, high-deductible plans are unlikely to help. Even below the deductible, it is not clear that patients shop effectively for health care services.

These two forces—opaque pricing and poorly incented patients—constrain the ability of markets to take on a growing challenge: Prices for hospital services are often not the result of competition among providers. Public payers generally use regulated prices, which offer similar prices to high- and low-quality hospitals. For private payers, prices are largely determined by hospitals’ bargaining leverage, which is problematic in rural areas, in markets where hospitals have considerable brand identity and clout, and in regions with substantial hospital consolidation.

Bundled Payments As A Path To Greater Pricing Competition

What Is The Product Being Delivered?

Bundles include care for the full cycle of a well-defined medical condition and offer several advantages over traditional ways of organizing care: They capture the receipt of care for the duration of a medical episode; they put delivery of effective care largely within the control of providers; and they mimic how consumers generally purchase goods and services in other industries.

How Are Prices Determined?

Bundling services allows for more competitive pricing than ACOs and similar approaches through two channels. First, more providers can compete on a given bundle than can compete to assume responsibility for a large population. Smaller hospitals and ambulatory surgical centers, for example, can offer bundles to compete with larger, incumbent hospitals on specific services but are unlikely to have the capital and scale to compete on all services.

Second, if bundles are standardized by private or public payers—and price and outcomes data are publicly reported—insurers, ACOs, and patients can more effectively compare service delivery cost and quality across providers.

Who Is The Consumer?

Bundled payments allow ACOs and medical homes to function as consumers. ACO providers, usually primary care physicians, often engage other providers to deliver specialized care and must evaluate the price and quality of the services they offer patients. ACOs are in a better position to identify high-value services than are individual patients and could facilitate price competition among contracting providers.

Current iterations of bundled payments take steps toward achieving these goals, but there is more to be done. Medicare bundles are mostly administered retrospectively, so physicians still report fee-for-service claims, which does little to disrupt existing practice patterns.

Future iterations of bundled payments may allow for greater use of complementary pricing initiatives, such as reference pricing, by which payers agree to pay a set price for a bundle and additional costs are borne by consumers.

Bundled services could also allow for expanding Medicare’s competitive bidding program, which currently only includes certain medical equipment and supplies, to include Medicare Part B services offered by providers competing on bundles.

Combining bundles with ACOs and medical homes also allows for progress on some traditional challenges with bundles. For example, it is not clear how bundles should be structured for preventive and primary care services, or for comorbid chronic disease management. Moreover, while bundles encourage care efficiency within the bundle, they do not limit the total number of bundles. However, a payment structure that funds difficult-to-bundle care through capitated payments to physician-led ACOs and medical homes—and gives them the option to shop for and purchase hospital care using bundles—may mitigate these problems and lower the cost of care.

Bundles still need refinement. As with other payment models, risk adjustment and outcomes measurement are challenges. Dividing a single bundled payment among several providers can be difficult, and bundling hospital and postacute care, physician and nursing care, and drugs and devices will require large organizational changes within hospitals and investments in cost accounting. Nevertheless, expanded use of bundled payments is a potential path toward greater price competition for hospital services. Bundles have often been thought of as a mechanism to integrate care, but their greatest impact may be increasing the number of providers in the health care markets, and redefining and strengthening the role of the consumer.

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Published Comment:

By Stephen Kemble, M.D.

Two problems with this proposal:

1. Bundles incentivize delivering more bundles of care for low risk patients, which can mean more unnecessary care.

2. The majority of health care is not in the form of discrete episodes of care for acute conditions or specific procedures. It is for care of chronic conditions for which there are no clear end-points for starting and ending a bundle.

I believe the whole idea of trying to control prices via competition is not likely to work. For one thing, in many markets, including rural and poverty areas with a high percentage of Medicaid and uninsured patients, hospitals are already losing money and can’t afford to reduce prices. We should be focusing on reducing administrative cost and burdens combined with price controls, instead of competition, if we want to reduce prices without destroying care for large segments of the population, including those who are poor, chronically ill, or elderly, and who need care the most.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

The policy community remains obsessed with the concept of using competition to harness the power of the consumer in order to bring under control our high health care prices in the United States. The record to date demonstrates the utter failure of this approach, but that does not keep them from trying, no matter how lame their various proposed innovations.

Today’s proposal acknowledges that patients do not function well as consumers in the health care environment, But to save the concept of consumerism, they suggest that the health care providers consolidate, bundle together what can be bundled, while clumping together difficult-to-bundle care as ACOs or medical homes, and then delegating themselves as consumers of their own bundled services, serving as proxies for their patient-consumers. Egad!

Our colleague, Stephen Kemble, in his posted comment, sees through this policy smokescreen. In spite of all the talk about bundling care, most care does not package into neat bundles. Second, the providers that do have bundles to sell want to sell more of them when it is not only prices but also quantity that determines the total health care spending.

Kemble’s most important point is that, instead of relying on competition, “we should be focusing on reducing administrative cost and burdens combined with price controls.” Administrative waste and high prices have been proven to be the two greatest sources of recoverable waste in our runaway health care spending. Competition has not controlled them; in fact, the markets have only made them worse.

It is astonishing that these market ideologues do not acknowledge the beneficial health financing policies that are just outside their box – automatic lifetime coverage for everyone prepaid through equitable, public financing, in a system that is publicly administered far more efficiently than with our fragmented, multi-payer system. Maybe someone should attach a door knocker onto their box so we can get their attention.

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Richard Painter on single payer Medicare for all

'I've been a pain in the rear for the Republican Party': A conversation with Richard Painter

By David M. Perry
Pacific Standard, May 17, 2018

Excerpts

A few weeks ago, Richard Painter shocked the Minnesota political establishment by declaring that he would run for the United States Senate as a Democrat. Painter was the White House ethics lawyer under President George W. Bush and has become widely known as a centrist Republican commentator, in his own writing and on media outlets such as MSNBC. He’s now a professor of corporate law at the University of Minnesota. It was no surprise when he announced an exploratory committee to compete for the Senate seat vacated by Al Franken earlier this year, but no one seems to have guessed that he’d switch parties.

Right now, in addition to his long-running criticisms of President Donald Trump, Painter is challenging Minnesota Senator Tina Smith from the left on health care, the environment, and corporate partnerships, especially over the new NFL stadium in Minneapolis. Smith was lieutenant governor of Minnesota before Governor Mark Dayton appointed her to replace Al Franken after the latter’s resignation last December.

I recently sat down with Painter in a suburban coffee shop in Eagan, Minnesota.

David Perry: I’d like to start by asking you to tell me the story of how you decided to run as a Democrat.

Richard Painter: I have a paper trail that goes back to at least 1994. I’ve been writing, and that’s what professors do. I challenge people to find an issue that I’ve really made a substantial change on. I recognize new evidence, for example, of even worse behavior in the banking sector than what I talked about in 1994. But because I worked for President Bush as the ethics lawyer, people assume that somehow everything else that was going on [then] was things that I would agree with.

DP: So you haven’t always been in lockstep with everything in the Republican Party platform?

RP: There are quite a lot of differences. I have tended to speak out on the issues that are in the purview of my professional expertise—business ethics, corporate ethics, and government ethics. Until recently, I didn’t get into what I think is the best health-care system, weighing in on abortion or something. In the past year or two, I started to weigh in on a lot of issues. People assume that, because the Republican president that I worked for had a different position on those issues, that back then I had a different position. That’s just not the case. The whole paper trail is there.

DP: I’d love to hear more about your recent decision to run as a Democrat for the Senate, especially when everyone else was assuming you’d run as a Never-Trump Republican. Can you take me into that decision?

RP: When I actually go to take public positions on issues, and you go down the issues, the Republican Party has moved dramatically from where they were in earlier times. On environmental issues, on women’s reproductive health, on a military spending, we can go through issue after issue after issue where the Republican Party—and it’s a trend that started in 1980 with [President Ronald] Reagan, but it’s accelerated even it it weren’t for Trump—I’m running on a platform that’s very different.

DP: Let’s talk a little about those issues. You’ve come out for single-payer health care, and even used the issue as a way to attack Senator Smith from her left. What does single payer mean to you? If you had the power to create a health-care system, what would you do?

RP: I think it’s in the interest of the consumer and also the small business owner to ask the question: How do we get the highest-quality health care for the best price? And also [how to] not have health-care issues interfere with the ability to start businesses? Right now, when you connect the employment relationship with health care, that means the big business has an enormous advantage over the small business. It makes no sense to connect those two. Why should health care be linked to your job?

DP: So what’s the better solution?

RP: The advantage of having a single-payer system is that there’s negotiating power vis-à-vis providers, drug companies, medical device companies. So I’m looking at it from an efficiency vantage point. I want best quality for best price.

DP: Debates around the best kind of single-payer usually identify one of three models. There’s Medicare for All. There’s the public option model. And there’s the Obamacare exchanges plus subsidies model.

RP: I like Medicare for All. The advantage of Medicare for All, and we might not be able to do it right away, [but in] the ideal system, your employer would have nothing to do with your health care, just like your employer has nothing to do with your kids’ education. Your employer doesn’t send your kids to school. Your kids’ health care shouldn’t depend on your employer. So we separate that relationship.

And of course that may relieve the employer of a lot of expense, so we may have to raise taxes to do it, OK! You gotta find the money somewhere, but employers then would not have to pay this extra amount of money [on health care]. We would separate out the employment relationship from health care and use tax revenue, but does it matter whether I pay higher taxes or I have to pay an insurance company?

That’s issue No. 1. Two is negotiating power to cut costs. You remove all those insurance company execs who are making a lot of money. Granted, this single-payer [system] is gonna have to pay people, but I don’t think you’d pay them as much as the big insurance companies.

DP: It’s not a stock option-based system.

RP: You don’t have the stock and the stock options and the advertising and the legal costs and everything. A lot of the costs that are in the current system are the insurance companies competing against the other. The time it takes for consumers to compare all these different options—you say competition is good, but it’s time comparing insurance options. What you should be doing is comparing doctors.

Now let’s talk about the drug companies and medical device companies.

DP: You’ve been critical of Senator Smith on her support for repealing the Obamacare medical device tax and her support from the chief executive officer of the medical device company Medtronic.

RP: We’ve made enormous advances, but at a certain point, Americans are paying for most of it. The rest of the world gets the medical devices and the drugs for maybe a third of the prices we do. A lot of the money is going to stock options and the investors and the executives, not going to research and development.

DP: So what’s the solution?

RP: I think the single payer negotiates with the drug companies. It’s negotiating power, it’s the ability to get those prices down. To say, for this medical device, this is the price that’s being paid; for this drug, this is the price we’re gonna pay. Which is exactly what Canada is doing and every other country is doing, all the industrialized countries. In the United States, we’re paying two or three times as much.

DP: Let’s talk about connections between health care and other issues of workers and work. What are your thoughts around these more fundamental issues of labor, economic well-being, the Supplemental Nutrition Assistance Program, and food security? Where do you fall on these positions?

RP: First of all you take health care out of the equation [by instituting single payer], so people don’t have to worry about that. That’s going to help a lot. Then we talk about what’s left. Certainly childhood nutrition, that’s the kind of thing the government ought to be spending on. I am very much focused on government doing what government should do and do it well. So: Nutrition for children [is] absolutely critical. We ought to be doing a lot more than we currently do with SNAP, like school lunches and breakfasts and other meals for children. That’s a useful role for government.

DP: So philosophically, it sounds like you’re pretty aggressive in terms of using the power of government to set tax policy, to set minimum wages, to create subsidies, and otherwise to intervene pretty strongly to bring everyone up to a basic level.

RP: I would tend to have more spending on education and health care and food assistance—critical functions of government. I’m going to be exercising a lot of scrutiny over both defense spending and large-scale infrastructure projects. I wanna see roads repaired. I wanna see bridges repaired. I wanna see more mass transportation, particularly electric busses. I’m gonna be looking very carefully at very large-scale rail projects.

DP: Last question: You’re running now as a Democrat. You’re running to get a nomination of a party that you haven’t been a part of. You’re running against a lieutenant governor who by all accounts has done a good job helping Governor Dayton shepherd Minnesota to a much better place than where it was eight years ago. What happens if you lose, or if you don’t get the nomination? Are you going to continue to be a Democrat? To vote for Democrats and support Democrats?

RP: I don’t see Republicans on the ballot for federal office, this year, in any state, who should get support. They have all fallen in line behind President Trump. I think it’s critical to our democracy. This isn’t about being a Democrat; I’m an American before party. I’ve been a pain in the rear for the Republican Party, and if I were to continue to be involved in the Democratic Party, I will continue to be a pain in the rear on campaign finance, health care, the environment. I’m not interested in party loyalty issues. I’m interested in policy, in issues, and the right thing to do.

https://psmag.com…

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Comment:

By Don McCanne, M.D.

Richard Painter’s lesson for us? It’s not about party. It’s about policy and ethics. It’s about the right thing to do.

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Healing an ailing pharmaceutical system: prescription for reform for U.S. and Canada

Our pharmaceutical systems are broken, and only fundamental reform can ensure universal access to safer, more innovative, and more affordable drugs

By Adam Gaffney, instructor in medicine, Harvard; Joel Lexchin, professor emeritus, York; US, Canadian Pharmaceutical Policy Reform Working Group
BMJ, May 17, 2018

Key messages

The US and Canadian pharmaceutical systems are dysfunctional

Costs are exorbitant, commercial goals distort drug development, misleading promotion fosters misuse, and medications are too often unaffordable for patients

We propose reforms that would provide universal drug coverage without fees at the point of use while reducing prices through negotiations with drug firms and, when needed, compulsory generic manufacture

Innovation would be enhanced through patent reform and by establishing new public agencies to fund drug development and clinical trials

Drug safety, efficacy, and prescribing quality would be improved by raising standards for approval and safety monitoring

While the proposals face formidable political obstacles, a popular mandate exists for pharmaceutical reform in both nations

Drugs are among medicine’s most powerful tools. Yet the pharmaceutical systems of the United States and Canada are mired in dysfunction. The industry’s pricing practices—charging whatever the market will bear, especially in the US—strain budgets and put vital medicines out of reach for many patients. Despite some notable advances, the industry’s overall rate of real innovation remains incommensurate with our vast drug spending; many new drugs are marketed each year but few represent substantial clinical improvements. And commercial imperatives distort drug trials, research priorities, and drug regulation.

While many recognize the need for change, proposed remedies vary and would fall short of achieving the fundamental reform that these deficiencies call for. The advocacy organization Physicians for a National Health Program therefore encouraged a working group of US and Canadian doctors, scholars, and advocates (the US/Canadian Pharmaceutical Policy Reform Working Group) to come together to craft a wide ranging reform proposal for both nations.

Although some of our recommendations could be implemented within the existing US healthcare financing framework, full implementation would require a universal single payer system. Canada already has a single payer system but it would still require reforms because the system fully covers hospital and doctors’ services but not drugs out of hospital.

Our proposal rests on six principles

• Medical needs, not financial means, should determine access to medications

• Drugs must be affordable to society

• Drug development should be geared toward real innovation that maximizes population health

• The human right to health must take precedence over intellectual property rights (patents)

• The safety and effectiveness of medications must be independently and rigorously evaluated

• Comprehensive and unbiased information on drugs should be available to prescribers and patients.

Achieving change

Jonas Salk, inventor of the polio vaccine, eschewed patenting, declaring: “Could you patent the sun?” Today, in contrast, profiteering too often reigns, to the detriment of population health.

Our proposal calls for a fundamental reorientation of drug policy: it would make drugs more affordable for patients and society, promote innovation, strengthen efforts to assure the safety and effectiveness of medications, and upgrade the evidence available to prescribers and the public. Because drugs developed through the proposed new public pathways would remain in the public domain, they could be produced generically throughout the world, benefiting many nations.

The reforms we advocate face formidable political opposition, especially from drug firms, which made total profits of $67.7bn in 2016. However, most Americans—both Democrats and Republicans—now favor government action to lower drug prices, and 91% of Canadians support a universal pharmaceutical benefit. These are unmistakable popular mandates for change. The trail from sentiment to policy will doubtless be arduous. Yet history is replete with examples of sweeping reforms—often enabled by unpredictable shifts in political circumstances—that overcame entrenched interests. We aim with this proposal to provide a blueprint for reform that anticipates—and may kindle—transformative changes in our nations’ pharmaceutical systems.

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For the full proposal as published in BMJ:
PNHP: https://pnhp.org/pharma
or BMJ: https://www.bmj.com…

For PNHP’s press release (identifies the seven critical areas for reform):
https://pnhp.org…

For an economic analysis and supplemental materials:
https://pnhp.org/pharmatables

For a 2 minute video introduction and media coverage of the proposal:
https://pnhp.org/pharmamedia

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Comment:

By Don McCanne, M.D.

Physicians for a National Health Program (PNHP) and Canadian Doctors for Medicare have produced a comprehensive reform proposal for pharmaceuticals which would make essential drugs accessible and affordable for everyone.

This proposal could not be more timely. Last week President Trump delivered his long-awaited speech on his proposal to supposedly control price gouging of drugs. Pharmaceutical stock prices immediately spiked – a response confirming that Trump supports Big Pharma while neglecting patients desperately in need of therapeutic drugs.

Let’s let the people of the United States and Canada know that there is a way that we can fix this problem. Share this great news with others.

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

Doctors in U.S. and Canada launch sweeping pharmaceutical reform proposal

Plan published today in the British Medical Journal outlines seven steps to slash costs, improve access, and increase safety of prescription medications in both nations

FOR IMMEDIATE RELEASE, May 17, 2018

Contact: Clare Fauke, Physicians for a National Health Program, clare@pnhp.org or 312-782-6006

WASHINGTON, D.C. — The skyrocketing cost of prescription medications is one of the biggest concerns for American voters. However, in his proposal last Friday, President Donald Trump failed to offer any new policies that would expand access, reduce costs, or increase the safety and efficacy of prescriptions.

Today, a group of 21 prominent experts published a comprehensive proposal to ensure universal access to safe, innovative, and affordable medications. “Healing an ailing pharmaceutical system: prescription for reform for the U.S. and Canada,” identifies seven critical areas for reform, along with both short- and long-term solutions to improve the development, approval process, affordability, and marketing of medications:

1. Access: Even insured patients face high out-of-pocket costs, leaving them unable to fill prescriptions. To achieve universal access, the proposal calls on the U.S. and Canada to establish national formularies of the safest, most effective, and least expensive medications, and provide all residents with full coverage of formulary drugs without copays or deductibles.

2. Affordability: The industry’s pricing strategy is to charge whatever the market will bear, regardless of the actual cost of development. As a result, the U.S. spends about twice as much per-capita on prescriptions than any other nation. Under this proposal, public agencies would negotiate with manufacturers to make branded medications more affordable, and if negotiations fail, issue a “compulsory license” to allow generic manufacturing. The U.S. and Canadian governments also would create a publicly owned manufacturing capacity to produce needed products, along with an increase in public funding for the development of non-patented medications.

3. Preclinical development and patent protection: The current patent system encourages the development of “me-too” products that offer only trivial modifications and higher costs. Under this proposal, patents would be limited to medications that provide real innovation. While current law allows publicly funded researchers to patent and sell their discoveries to private firms, this proposal would keep publicly funded research in the public domain. The plan also calls for health agencies to fund a new public research program to develop and test new treatments outside of the patent system, prioritizing medications with high clinical value, and for conditions deemed unprofitable and ignored by the industry. Such treatments could be sold cheaply as generics as soon as they are brought to market.

4. Clinical testing: Most clinical trials are conducted by private firms, often using unsound methods and selective reporting, calling into question the objectivity of research and the usefulness and safety of new therapies. Corporate ownership of trial data can hide safety problems and obstruct further research. The proposal calls on approval agencies to increase standards for clinical trials and increase transparency by making all trial data publicly available. Experts believe that most clinical trials should be funded and supervised by public health agencies to maintain safety standards and to facilitate innovation for needed treatments.

5. Approval reform: Regulatory agencies are funded primarily by industry fees, creating conflicts of interest. Too many unsafe products are approved, and the increased use of “expedited reviews” and weaker standards of evidence threatens to bring more unsafe or ineffective products to market. This proposal would strengthen regulators’ independence by funding them exclusively with public funds. Approval agencies would strictly limit expedited reviews and the use of surrogate endpoints only to treatments likely to offer genuine clinical advances.

6. Postmarketing surveillance: Due to weakening of the approval process, postmarket studies are critical to confirm the efficacy and safety of medications already in use. However, regulators fail to penalize firms that don’t complete them. The proposal would require that companies promptly perform and submit safety studies after their products are on the market, increase regulators’ funding for postmarketing surveillance, and give regulators the power to order safety warnings and remove unsafe therapies from the market.

7. Promotion: Pharmaceutical corporations spend more on marketing than on research and development, and promotional materials often include inaccurate or misleading claims. This proposal would improve monitoring and stiffen sanctions for misleading or off-label promotions. Companies would be prohibited from funding continuing medical education programs for providers.

“Our pharmaceutical system prioritizes industry profits over public health, but it doesn’t have to be this way,” said Dr. Adam Gaffney, a critical care physician and faculty member at Harvard Medical School, and co-chair of the Pharmaceutical Reform Working Group. “Through a series of commonsense reforms, we can increase the affordability, safety, and effectiveness of medicine for our patients.”

Dr. Gaffney warned that combating the power of major pharmaceutical firms won’t be easy, noting that the industry spent a combined $171 million on lobbying last year. “Every year we wait for reform means another spike in medication prices,” he said.

“The pharmaceutical industry directly funds the regulating arm of the FDA, and paid more than $800 million in user fees in 2017,” said Dr. Sidney Wolfe, founder of Public Citizen’s Health Research Group. “The FDA’s independence is too important to expose to the influence and money of the industry.”

Dr. Wolfe added that increasing affordability of lifesaving therapies should be a national priority. “Lack of access to medicines results in preventable deaths and serious illness to hundreds of thousands of patients a year,” he said.

Rep. Keith Ellison (D-Minn.) encouraged his colleagues in Congress to take action. ”The outrageous cost of prescription drugs in this country is a crisis that the American people feel every day,” he said. “There are real solutions we can implement that we know will lower drug prices and save lives, but what we lack right now, and what we need, is the political will from those in Congress and other elected officials to do the right thing and stand up to the greed of Big Pharma.”

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“Healing an ailing pharmaceutical system: prescription for reform for U.S. and Canada,” by Adam Gaffney, M.D., and Joel Lexchin, M.S., M.D., British Medical Journal, went online today (May 17, 2018). The writing committee includes Marcia Angell, M.D., Michael Carome, M.D., Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., Gordon Schiff, M.D., and Sidney Wolfe, M.D.

The full proposal and supplemental materials can be found at www.pnhp.org/pharma.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance.

Medicare’s own actuary confirms the deleterious consequences of short-term health plans

Trump’s Plan for Cheaper Health Insurance Could Have Hidden Costs

By Robert Pear
The New York Times, May 15, 2018

President Trump’s plan to expand access to skimpy short-term health insurance policies, as an alternative to the Affordable Care Act, would affect more people and cost the government more money than the administration estimated, an independent federal study says.

The study, by Medicare’s chief actuary, suggests that the new policies would appeal mainly to healthy people, including many who have had comprehensive coverage under the Affordable Care Act.

The administration estimated in February that a few hundred thousand people might sign up for the “short-term, limited-duration policies,” which would not have to provide the standard health benefits like preventive services, maternity care or prescription drug coverage.

But the chief actuary, Paul Spitalnic, estimates that 1.4 million people could sign up for the short-term policies in the first year, with enrollment reaching 1.9 million by 2022.

The new policies would probably attract people who do not need the full suite of benefits guaranteed by the Affordable Care Act, Mr. Spitalnic wrote in a recent memorandum.

Those remaining in Affordable Care Act marketplaces “would be relatively less healthy,” Mr. Spitalnic said, and as a result, the average premiums for those insurance policies would increase.

The Trump administration estimated the extra cost to the federal government at $96 million to $168 million a year.

But the chief actuary, whose independence is protected by federal law, estimates that the rule proposed by the administration could increase federal spending by $1.2 billion next year and by a total of $38.7 billion over 10 years.

Short-term insurance policies were originally intended for people who were between jobs or needed temporary coverage for other reasons. Under the proposed rule, they could play a larger role.

“There is nothing in the proposed rule that would prevent companies from underwriting and issuing new policies to individuals at the end of the one-year coverage term,” Mr. Spitalnic said.

Under the Affordable Care Act, the most popular type of marketplace plans, so-called silver plans, cover 70 percent of health care costs for a typical population. By contrast, Mr. Spitalnic said, the new short-term plans would cover 50 percent of costs, on average.

Short-term plans can exclude coverage for pre-existing conditions and can omit some benefits deemed essential in the Affordable Care Act.

Thus, for example, some short-term plans offered by UnitedHealth Group do not provide prescription drug coverage and do not pay expenses related to a normal pregnancy or the treatment of mental disorders, according to a brochure from the company.

https://www.nytimes.com…

American Academy of Actuaries; Re: CMS–9924–P—Short-Term, Limited-Duration Insurance:
http://www.actuary.org…

Addendum: the link to the report from Medicare’s chief actuary:
https://www.cms.gov…

***

Comment:

By Don McCanne, M.D.

There have been extensive reports on the Trump administration’s proposed rule that would greatly expand the use of skimpy, bare-bones, short-term health insurance policies. These reports have shown that this rule would greatly expand the prevalence of underinsurance – policies that fail to provide adequate financial protection in the event of medical need. It would result in adverse selection within the standard plans – driving insurance premiums up, thus making them less affordable. This would cause many to forgo insurance altogether – increasing the numbers of uninsured.

The reason today’s report is significant is that it comes from Medicare’s own chief actuary, Paul Spitalnic. He confirms the adverse consequences of expanding the use of short-term policies, yet the rhetoric coming out of HHS/CMS and the White House continues to tout the affordability of these plans while remaining silent on the severe adverse consequences.

I did an extensive search to try to access the chief actuary’s report. If it is available, they did a good job of hiding it (which would be understandable since it is contrary to the administration’s con job that is being being foisted off on the American public). Lacking his report, I have included a link to a highly credible report on this proposed rule submitted to HHS/CMS by the American Academy of Actuaries, which, once again, confirms the deleterious consequences of this proposal. (Edit: the chief actuary’s report has been added as an addendum, above.)

The administration has the true facts at hand, yet they have shown no inclination to act on those facts. We need to hold President Donald Trump, HHS Secretary Alex Azar, and CMS administrator Seema Verma personally responsible for the physical suffering and financial hardship that they are about to inflict on too many of us.

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

For Single-Payer Plan, Winds May Be Shifting

Amid the deconstruction of "Obamacare," public opinion and physician leaders seem to be moving toward a national health plan. But if it ever does materialize, it will be a long time in coming, experts say.

By Heather Boerner
Physician Leadership Journal, May 16, 2018

Some cases simply haunt Ed Weisbart, MD, CPE. That includes the 63-year-old woman who, caring for her grandchildren, had to choose between paying rent to stave off eviction and buying her blood pressure medicine. She chose the rent but hadn’t forgotten about her blood pressure, which was now measuring off the charts.

“How long can I live,” he remembers the patient asking, “without taking my blood pressure pills?”

It’s the kind of question medical school hadn’t prepared him to handle. And as the years passed, the Missouri physician has had to field such questions repeatedly. Whether it was because of insufficient coverage, high deductibles, inscrutable formularies or just a tight month, Weisbart said he found himself juggling increasing hours of billing and coding for a growing number of health insurance plans on one hand and the financial limits on his patients’ health on the other.

And he started to wonder: How do you do no harm in a health care system that doesn’t guarantee patients can afford their treatment?

“I can tell you hundreds of stories,” he said. “People are desperately sick. They need something and they know they need something. I want to give them the treatment and they want to get it. And they simply can’t afford to pay for it. And then they die. This is not the way it should be.”

The solution to this problem is far from settled. The Affordable Care Act tried a hybrid public-private model. Now, many in Congress are pushing less-expensive plans and high deductibles, trusting the free market to solve the problem. But after more than 30 years in practice, Weisbart has come to a different conclusion: It’s got to be coverage for all — something like Medicaid or Medicare expanded to everyone.

And he’s not alone. As Congress works to dismantle what the Obama administration established and moves to deregulate health care, there’s a growing appetite for the direct opposite — a public solution. But if it ever does materialize, it will be a long time in coming, experts say.

From Truman to Trump

The government has been trying to get it right on health care since the early 1900s, when Congress formed the Committee on the Costs of Medical Care. In 1945, President Harry S. Truman proposed that part of America’s “economic bill of rights” was “a right to adequate medical care and the opportunity to achieve and enjoy good health.” The other? The “right to adequate protection from the economic fears of…sickness.”

Months after that proposal, Truman fleshed it out, and the bill was, indeed, meaty. Not only did the bill provide for government-funded construction of hospitals in health care deserts, as well as funds for physicians and other health care providers to work in areas with none, but it also included a government health insurance program, available to all Americans, but not compulsory.

“The time has arrived for action to help them attain that opportunity and that protection,” Truman told Congress.

But, in fact, the moment hadn’t. Though the bill was introduced repeatedly, it never reached his desk.

That was followed by a proposal by Truman’s successor in the Oval Office, Dwight D. Eisenhower, to create a fund to help private insurance companies cover more people. Federal workers got public health insurance in 1960, followed by the enactment of Medicaid and Medicare under the Lyndon B. Johnson administration.

There have been several proposals since then: Richard M. Nixon’s Comprehensive Health Insurance Plan, Jimmy Carter’s Children’s Health Assessment Program, and Bill Clinton’s managed competition plan. But none passed until the ACA in 2010.

And with the ACA still targeted by President Donald J. Trump, people are asking what’s next.

The Trump Vision of Health Care

So far, what’s next is a return to many pre-ACA policies. Trump publicly has supported market-driven solutions, such as high-deductible plans and associated health savings accounts. He is also calling for a move back to buying insurance across state lines and health plans that don’t cover all of the ACA’s so-called essential health benefits, which include pregnancy. And recent announcements from the Centers for Medicare & Medicaid Services that the agency will allow waiver requests from states seeking to impose work requirements on enrollees could mean a drop in Medicaid rolls.

Harvard Business Review called 2017’s tax overhaul bill “the most important health care legislation enacted since the Affordable Care Act,” and here’s why: It repealed the ACA’s mandate that all Americans must have health insurance or pay a tax penalty. Without the penalty, the Congressional Budget Office estimates that 13 million people will lose their insurance or choose to abandon it by 2027.

And as people exit the exchanges, those with chronic conditions are expected to make up a larger proportion of the risk pool — meaning that premiums are expected to rise. A report from the Commonwealth Fund says, for instance, premiums for older adults could rise by $1,469 in Arizona and $1,817 in Nebraska.

Swing of the Pendulum

But Truman’s idea of a national health insurance plan never really went away. In June 2017, the California Senate passed a government health insurance program bill that would cover all state residents. Around the same time, New York state legislators reintroduced the long-standing New York Health Act — a universal coverage bill that has passed in the state Assembly several times.

Meanwhile, legislators in Colorado, Nevada and Vermont, among others, have been proposing universal coverage plans for years. The only states with anything approaching universal coverage are Hawaii, which in 1989 added a state health insurance plan to cover people who are not insured by Medicaid or Medicare but cannot afford private insurance, and Massachusetts, which has something resembling a universal plan.

It’s not just happening on the state level. Last year, Congress members introduced two bills proposing different ways to expand government health insurance from the elderly, the disabled, the indigent and veterans to encompass all Americans. So far, all the bills have stalled either in committee or in one house of state legislatures.

A Change in Momentum

None of the federal bills, of course, has a chance in the current political climate, says Jim Morone, professor of public policy at Brown University, who has written about the history of health care reform. But that doesn’t mean they are meaningless.

Indeed, he says, every president has had to address health care — and future presidents will, too. By following the politics of health care reform over the decades, he says he has learned a few things:

A president’s leadership is essential to get a health care bill passed.

There’s never a good time for reform — it’s always politically difficult, he said, and it’s never the right time economically.

And, if reform is going to happen, it’s going to happen in the first year of a president’s term.

“The electoral glow wears off quickly,” he says. “That’s why Clinton lost on health care. He didn’t submit it for a year after his election, and by then all anyone could think about was, ‘Will Republicans take Congress?’”

In this sense, he says, both Obama and Trump got it right, addressing health care at the very start of their terms.

The other thing he learned in his research — particularly on Truman’s health reform efforts — was that keeping up a drumbeat of moral outrage about the rightness of health care reform can work, even long after a bill is thought dead in the water.

“When Clinton lost health reform, what people said was that maybe it wasn’t the right proposal. Truman didn’t do that,” Morone says. “He said directly, ‘We lost because of politics, and this is still the right thing to do.’”

The result is that when Johnson signed the bill creating Medicare and Medicaid — an adoption of Truman’s plan — Johnson did it with the former president at his side. “In this way,” Morone says, “Bernie [Sanders] is doing it right.”

Physicians in the Lead

To a certain degree, that’s where physician leaders come in, Morone says.

And there are signs physicians may be ready to play that role. While physicians have typically come out against public insurance options — the American Medical Association has been among the most vocal opponents of such plans since the Truman administration — recent surveys suggest physicians are changing their minds.

In a recent survey by the market research group Merritt Hawkins, 35 percent of physicians strongly opposed single-payer health care. But the majority — 56 percent — supported it.

Those statistics conform to results of a June 2017 Pew Research Center poll, which found that not only did 60 percent of Americans say the government is responsible for ensuring all Americans have access to health care, but more than half of those people say they support a single-payer system, such as Medicare or Medicaid expanded to all Americans. That’s a 12 percent increase from 2014.

Weisbart is one of those leaders. He is spending his retirement doing something he never thought he’d do: After 20 years as a primary care physician in Chicago, and then another several years as chief medical officer of a mail-order pharmacy, he finds himself running the Missouri chapter of the Physicians for a National Health Program. The first year he worked with them, he gave 35 presentations around the state, mostly trying to explain what a national health program means. In 2017, he did 100 presentations.

“At first it was us pushing” to get in the door, he says. “That’s not the case anymore. Now most of the presentations I give, they come to me. They say, ‘We want a speaker on Medicare for all.’”

https://news.physicianleaders.org…

Urban Institute’s ‘Healthy America Program’

The Healthy America Program: Building on the Best of Medicare and the Affordable Care Act

By Linda J. Blumberg, John Holahan, Stephen Zuckerman
Urban Institute, May 14, 2018

Abstract

Since efforts to “repeal and replace” the Affordable Care Act (ACA) have failed, and bipartisan attempts to improve the law have stalled, some policymakers are now looking beyond incremental fixes. In this paper, Urban Institute researchers present a set of policy ideas that would provide universal access to comprehensive coverage but would also allow people to keep their employer-sponsored coverage, would offer a range of insurer options and ensure broad pooling of health care risk, would not have an employer mandate, would provide income-related federal assistance, and would create a more flexible individual incentive to remain insured than that under the ACA.

The proposal builds on components of the Medicare program and the ACA Marketplaces. However, it simplifies the current health insurance system by integrating Medicaid acute care for nonelderly people and the Children’s Health Insurance Program (CHIP)—while preserving access to their benefits—with coverage for people enrolled in private nongroup insurance and people currently uninsured. This large new Medicare-style marketplace, featuring a public plan and private insurer options, would contain costs by fostering competition among many insurers, capping provider payment rates, and addressing prescription drug pricing. This proposal is less ambitious than a single-payer system (i.e., Medicare for All), but it would get close to universal coverage with much lower increases in federal spending and less disruption for people currently enrolled in employer coverage or Medicare.

They estimate that the plan would result in 15.9 million fewer uninsured people and reduce total health care spending by $28.9 billion in its first full year of implementation.

Healthy America Compared with Other Proposals 

See Table 4 in the full article for other proposals – only Healthy America (HA) and Medicare for All by Sanders (MfA) are included here.

Who is eligible for the new program?

HA – All lawfully present people younger than 65

MfA – All US residents

What’s in the program?

HA – New public plan option, restructured private nongroup insurance market, enhanced premium and cost- sharing subsidies, new incentive to remain insured

MfA – Single-payer system enrolling all US residents in a single plan

Does the separate Medicaid program continue?

HA – Medicaid acute care program ends, with enrollees folded into other programs; long- term services and supports program continues as under current law

MfA – No

Are states required to make maintenance-of- effort contributions?

HA – Yes, but only for spending on acute care for the nonelderly

MfA – No

Does the separate Medicare program continue?

HA – Yes

MfA – No

Does the private insurance market remain?

HA – Yes, for group and nongroup private insurers; no firewall between employer coverage and new program

MfA – No

What benefits are offered?

HA – ACA essential health benefits

MfA – All medically necessary acute care and dental, vision, and hearing care; long-term services and supports stay the same as under current Medicaid program

How much are household premiums?

HA – Premiums range from 0 to 8.5% of income; premium subsidies are tied to 80% actuarial value plan

MfA – None

What are the cost-sharing requirements?

HA – Cost-sharing subsidies increase actuarial value above 80% for people with incomes up to 300% of FPL; cost- sharing options with actuarial value below 80% also available

MfA – None

Are people automatically enrolled?

HA – Only SNAP and TANF enrollees, who face no premiums, are autoenrolled; others without premiums can enroll in public plan at any time

MfA – Yes

Do individuals face a penalty for remaining uninsured?

HA – Yes, structured as loss of a tax benefit, which can be partially refunded if people enroll in coverage later

MfA – No, all are enrolled in a single plan

Are there limits on provider payment rates?

HA – Yes, for nongroup insurance markets

MfA – Yes

Do employers face a penalty for not insuring workers?

HA – No

MfA – No

Are there minimum standards for employer coverage?

HA – No

MfA – Not applicable; employer insurance eliminated

Does the program provide universal coverage?

HA – Close to universal for legal residents (not for undocumented people)

MfA – Yes

From the Discussion

Several proposals are being put forward to fix the ACA or to fundamentally reshape the US health insurance system. Proposals of significant restructuring are necessarily more complex than those focused on making the ACA work better. In Healthy America, we try to strike a balance by retaining Medicare and employer-sponsored insurance while significantly changing Medicaid and nongroup health insurance. Our goals are to keep what people like, change what is not working, and limit the increase in new federal costs.

https://www.urban.org…

Full Report (24 pages):
https://www.urban.org…

***

Comment:

By Don McCanne, M.D.

Those looking for solutions other than a single payer improved Medicare for all may find Urban Institute’s Healthy America Program to be an attractive incremental approach since it leaves Medicare and employer-sponsored plans intact while making adjustments to Medicaid and the nongroup health insurance market. For single payer advocates, merely reading the comparisons between the two proposals is enough to show that the Urban proposal falls intolerably short of the reform goals of single payer.

A detailed critique of the full proposal could be prepared, but if you merely skim though the full report, it’s obvious that it is not worth the effort since they leave in place most of our highly flawed health care financing infrastructure.

Read the full report if you want to, but if you are primarily interested in refreshing in your mind what actually will work, spend your time reading once again the Physicians’ Proposal for Single-Payer Health Care Reform: pnhp.org/nhi.

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Framing health financing as wealth transfer ignores the moral imperative of social insurance

Health policy reform or wealth transfer?

By Gary Galles
The Orange County Register, May 9, 2018

Americans have been fighting over health insurance reform for years. Single-payer proposals, as most recently proposed in California’s legislature, are just the latest example. However, while rhetoric has focused on how many would supposedly gain or lose insurance, wealth transfers have been the real issue. As economist Henry Aaron estimated a quarter-century ago, implementing comprehensive national health insurance would redistribute more income than any single public policy then in existence.

We know insurance is not the real issue because claimed “reforms” violate so many principles of insurance.

The price controls reform proposals incorporate are also about transferring wealth, not health insurance. My age makes my actuarial risk six times that of my students. If, as Obamacare required, I could not be charged more than three times what they were, that really forces the young to subsidize the old, explaining why Obamacare imposed penalties to force acceptance of a bad deal.

Mandating coverage of pre-existing conditions also shows “reforms” are seldom really about insurance. It doesn’t reduce people’s risk exposure, it forces others to cover costs already known to be higher and deflects the blame to insurance companies who must charge others more. Such after-the-fact possibilities are not offered in fire, automobile or life insurance. Similarly, casinos don’t let you bet once the roulette ball or dice have stopped.

In addition, if health policy was truly aimed to benefit all Americans, rather than benefiting some by pick-pocketing others, it would not have been pushed with so many lies, damned lies and statistics.

Our health insurance debate has become so contentious largely because it has allowed massive wealth transfers to be mis-represented as improving health insurance. It helped dishonestly sell Obamacare, and now portrays reducing massive theft from those government targeted to hold the bag as imposing heartless harm on others. Such mis-representation cannot generate policies that advance either Americans’ or Californians’ well-being.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research fellow of the Independent Institute, a member of the Foundation for Economic Education faculty network, and a member of the Board of Policy Advisors at the Heartland Institute.

***

Published comment:

By Don McCanne, M.D.

Wealth transfers have been the real issue? Isn’t the real issue rather ensuring that everyone has affordable access to essential health care services, as all other wealthy nations do?

We take for granted public services such as primary and secondary education, fire and police protection, public parks, highways and streets, national defense, Medicare, Social Security, the services of the National Institutes of Health, to mention a few. Most of the taxes used to fund these services are progressive to some degree – those with higher incomes pay more than those with lower incomes. Yet we do not refer to wealth transfer as being the primary policy that drives the existence of these services; it its the services themselves that are the primary public policies.

Health care stands out partly because of its very high costs. The cost of health care for the typical family of four receiving employer-sponsored PPO coverage is now $27,000 (Milliman). Median household income is now about $59,000. Although those are not identical family units, these numbers do make the general point that average-income families cannot possibly pay their proportionate share of global health care costs if they were evenly distributed amongst all of us (risk pooling).

Rather than framing this primarily as wealth transfer it should be framed as social insurance covering the health care needs of the people. If the funding were not equitable (progressive), too many would have to do without health care. The most efficient and effective methods of financing happen to be either a single payer system – an improved Medicare that covers everyone – or a national health service – socialized medicine. Most Americans would prefer Medicare for all, and would consider it their earned right, just as we consider Medicare in retirement to be our earned right rather than being primarily a government wealth transfer program.

https://www.ocregister.com…

***

Comment:

By Don McCanne, M.D.

Although it is usually not wise to repeat the deceptive rhetoric of the opponents of health care justice, it can be helpful to understand it and be able to respond when it is in your face. Professor Galles uses wealth transfer – a concept he apparently considers to be evil – to reject the concept of pooling risk for health care.

It’s really simple. Because health care needs are unequally distributed, we need to pool risk by transferring from the healthy to the infirm. Because average health care costs are beyond the means of those with average incomes we need to fund the risk pool equitably based on ability to pay.

This is a concept that is accepted throughout society. Tax-financed public services are largely funded progressively through tax policy. That is not evil, but good. It makes it possible to provide those services for everyone. We don’t suggest that individuals with lower incomes should be denied fire or police protection merely because it would results a transfer of wealth.

Galles condemns what he calls wealth transfer when it makes health care services available to those who otherwise could not afford them. Yet he remains silent on the massive wealth transfer that necessitates these public policies – the transfer of wealth from the workers whose productivity has grown the economy, to those already wealthy rentiers who provide little personal contribution other than their excess capital gained by market abuses. That’s the shameful wealth transfer that our public policies should be addressing.

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The Time for Single-Payer Is Now

Countering Corporate Lies, Doctors Run Ad Providing the Facts About Medicare for All

By Jake Johnson
Common Dreams, May 12, 2018

As momentum in the fight for Medicare for All continues to grow nationwide thanks to persistent grassroots organizing by nurses, democratic socialists, and progressive activists, a group of California doctors placed an unprecedented eight-page ad in a major Sacramento newspaper on Thursday in an effort to combat corporate lies about single-payer and provide “patients and physicians with the tools they need to be effective advocates for a system that provides high quality care, but doesn’t bankrupt the sick or the U.S. economy.”

What If

“We don’t have the deep pockets of the insurance industry or the pharmaceutical industry, which Californians may recall spent $109 million two years ago to defeat a ballot measure to reduce drug prices, but we are determined to get the facts about single-payer out in Sacramento and across the country,” Dr. Paul Song, a radiation oncologist and president of the California chapter of Physicians for a National Health Program (PNHP), said in a statement.

The full eight-page publication—which features articles from doctors explaining how a single-payer system would be more cost-effective and provide far better care than the for-profit status quo—can be read here.

Funded by local PNHP members, the ad campaign ran in 100,000 copies of the Sacramento News and Review, and copies of the insert were given to every member of the California state legislature before the publication ran this week.

“There’s a lack of informative, accurate coverage of single payer in the mainstream media,” Dr. Bill Bronston, chair of the Sacramento Chapter of PNHP, said in a statement.

In addition to pressuring lawmakers in California and nationwide to get behind Medicare for All—which has been surging in popularity over the past year and now has the support of the majority of the American public—the ad insert is also aimed at urging “patients to talk to their doctors about how single payer could dramatically reduce drug costs and allow patients to choose their physicians without co-pays, deductibles, and outrageous out-of-network bills,” Dr. Song said.

https://www.commondreams.org…