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Wednesday, April 23, 2014

Health Care Reform Articles - April 23, 2014


Acceleration Is Forecast for Spending on Health

WASHINGTON — Standing before a roomful of economists, policy makers and health care experts earlier this month, Amitabh Chandra, director of Health Policy Research at Harvard’s Kennedy School of Government, closed a presentation about the slowdown in health care spending over the last decade by citing an article in The New York Times.
“Changes in the way doctors and hospitals are paid — how much and by whom — have begun to curb the steady rise of health care costs in the New York region,” the article declared. “Costs are still going up faster than overall inflation, but the annual rate of increase is the lowest in 21 years.”
Then came the punch line. The article,written by my now-retired colleague Milt Freudenheim, was published in December 1993, when the so-called managed care revolution promised for a few hopeful years to change the way doctors practiced medicine and curb the breakneck rise in health care costs for good.
It is a sobering reminder that the recent improvements could wither away just as they did two decades ago.
http://www.nytimes.com/2014/04/23/business/economy/forecasting-the-scale-of-health-spendings-climb.html?_r=1

Biotech’s Hard Bargain

by APRIL 28, 2014

Few people have done better in the recent stock boom than biotech investors. Biotech was the best-performing market sector last year, and in the past two years its stocks rose a hundred and twenty per cent. But suddenly, in late March, the stocks tanked, some falling more than twenty per cent in a few weeks. The selloff can be explained to some extent as a market correction and part of a wider flight from risk. But the real story concerns a revolutionary new hepatitis-C drug developed by the biotech giant Gilead.
Hepatitis C affects 3.2 million Americans; untreated, it leads to scarring of the liver and to liver cancer. Until now, the best treatments cured only about half of patients and often had debilitating side effects. But in December the F.D.A. approved the first in a new wave of hep-C drugs, Gilead’s Sovaldi. This is huge news—not just in medicine but on Wall Street. Vamil Divan, a drug-industry analyst at Credit Suisse, told me, “Sovaldi and the other new hep-C drugs are great drugs for a tough disease.” Sovaldi can cure ninety per cent of patients in three to six months, with only minor side effects. There’s just one catch: a single dose of the drug costs a thousand dollars, which means that a full, twelve-week course of treatment comes to more than eighty grand.
For Gilead this is great. Take an expensive treatment, multiply by a huge number of hepatitis-C patients, and you get a very lucrative business proposition. It’s also good news for patients. But it’s a big problem for insurers and taxpayers, who—given that hepatitis-C patients have an average annual income of just twenty-three thousand dollars—are going to end up footing much of the bill. There has been an uproar of criticism. Private insurers blasted Gilead’s pricing strategy; the pharmacy-benefit manager Express Scripts said that it wanted its clients to stop using Sovaldi once an alternative appears. Then, on March 20th, three Democratic members of Congress sent Gilead a letter asking it to explain why Sovaldi costs so much. The letter had no force of law, but it spooked investors by raising the spectre of what they most fear—price regulation.
Investors love drug companies in part because they often have tremendous pricing power. Drugs designed to fight rare diseases routinely cost two or three hundred thousand dollars; cancer drugs often cost a hundred grand. And, whereas product prices in most industries drop over time, pharmaceuticals actually get more expensive. The price of the anti-leukemia drug Gleevec, for instance, has tripled since 2001. And, across the board, drug prices rise much faster than inflation. The reason for this is that prices for brand-name, patented drugs aren’t really set in a free market. The people taking the drugs aren’t paying most of the cost, which makes them less price-sensitive, and the bargaining power of those who do foot the bill is limited. Insurers have to cover drugs that work well; the economists Darius Lakdawalla and Wesley Yin recently found that even big insurers had “virtually zero” ability to drive a hard bargain when it comes to drugs with no real equivalents. And the biggest buyer in the drug market—the federal government—is prohibited from bargaining for lower prices for Medicare, and from refusing to pay for drugs on the basis of cost. In short, if you invent a drug that doctors think is necessary, you have enormous leeway to charge what you will.

http://www.newyorker.com/talk/financial/2014/04/28/140428ta_talk_surowiecki?printable=true&currentPage=all

With protections set to lapse on advanced drugs, U.S. presses strict rules overseas

By , Published: March 14

Stung by overseas patent rulings that could undercut U.S. companies, the Obama administration is trying to expand protection for the makers of the world’s most advanced medicines through trade rules that critics argue could lead to higher global drug prices.
The effort has sparked an intense debate between pharmaceutical firms, which are looking to protect costly research investments and fund the next generation of drug development, and patient advocates and others who worry that a strict application of U.S. rules around the world could keep prices out of reach, particularly for patients in developing countries.
The issue has injected a moral dimension into negotiations over the Trans-Pacific Partnership, the 12-nation pact that would apply similar rules to developing nations, such as Vietnam, which are struggling worldwide to provide access to advanced medicines, and sophisticated industrial countries such as Japan. For the United States, the economic stakes are direct, and they show how U.S. officials hope to use the TPP to shape the landscape for industries considered central to the U.S.’s economic future. Along with pharmaceuticals, U.S. negotiators are pressing hard to set standards that would give logistics and consulting firms, cloud computing and telecommunications businesses, and other leading-edge companies more freedom in the 11 other TPP nations — and globally if those standards take root.
In the case of biotechnology, regulations are not clearly settled even in the United States. It was only under the Affordable Care Act, for example, that the U.S. government agreed to allow generic alternatives for the sophisticated and costly-to-develop drugs that are considered among the most promising ways to attack cancer and other chronic diseases.
The Food and Drug Administration continues to work out the details, and the first generics probably are years away.
Given the uncertainty — and the expense of treatments that routinely run into the tens of thousands of dollars per patient — some critics argue that the United States should not push a regulatory scheme onto other countries that has not been tested at home.
“What is optimal for the U.S. is not necessarily optimal for other countries,” said Patricia M. Danzon, a professor of health-care management at the Wharton School of the University of Pennsylvania. The broad trade-off accepted in wealthy countries — years of patent protection that keeps prices high, in order to encourage innovation, before generic competition is allowed — becomes more of a problem in poorer nations, where insurance coverage may be sparse, national health systems screen out the more expensive treatments, and patients simply do without.

Hawaii provides model for health reform

Thanks to a tradition of health care, the state has better coverage, treatment than other states. And it’s healthier.

By Noam N. Levey 
Tribune Washington Bureau
HONOLULU — When the giant kapok and nawa trees that tower over the Queen’s Medical Center in downtown Honolulu were planted more than a century ago, Hawaii faced a health crisis.
Many on the islands, including the queen who founded the hospital in 1859, feared that native Hawaiians, devastated by smallpox, measles and other illnesses brought by foreigners, were in danger of dying off completely.
Today, the people who walk under these trees are some of the healthiest in America.
Hawaiians live longer than their counterparts on the mainland. They die less frequently from common diseases, such as breast and colon cancers, even though these cancers occur more often here than in most other states. They also pay less for their care; the state’s health care costs are among the lowest in the country.
Hawaii’s success owes much to the state’s trailblazing health system and its long history of near-universal health insurance.
A LONG HISTORY OF HEALTH BENEFITS
Forty years ago, the state became the first to require employers to provide health benefits, codifying a tradition that grew out of Hawaii’s agrarian past, when sugar and pineapple plantations employed doctors to care for their workers.
That system has led to some of the highest rates of coverage and best access to medical care in the country.
“There has always been a mentality here that if you are sick, you go to the doctor. It’s just part of the culture,” said Myra Williams, 64, who has lived in Hawaii for 35 years and was recently treated successfully for early-stage breast cancer.
Nearly 99 percent of the patients at the cancer center at Queen’s have health coverage, a level unheard of at most urban medical centers on the mainland.
Health care in America is a tale of two countries.

Looking at Costs and Risks, Many Skip Health Insurance

By 
LOUISVILLE, Ky. — Steve Huber, an affable salesman who is still paying off an unexpected medical bill, was not among the millions of Americans who signed up for health insurance under the Affordable Care Act during the enrollment period that ended March 31.
After seeing television ads for Kentucky’s new online insurance marketplace, Mr. Huber, 57, made several attempts to explore the website but found it too complicated. Moreover, his income has dropped in recent years, he said, and he felt certain that he could not afford coverage. So he never priced plans or researched whether he qualified for financial assistance.
“I realize that I’m gambling,” he said, stopping at a coffee shop before a sales call. “But I don’t have a lot of patience, and I’m on a pretty tight budget anyway.”
After a surge of last-minute sign-ups, eight million people bought private coverage through the federal and state marketplaces during the initial six-month enrollment period, exceeding the Obama administration’s target. Mr. Huber represents the next challenge for the administration as it struggles to reduce the ranks of the uninsured and broaden support for the president’s signature health care law.
For every individual who did sign up, there were others who resembled Mr. Huber: people who have decided to stay uninsured for now, despite the law’s requirement that most Americans get coverage this year or pay an income tax penalty of $95 or more.
A common thread running through stories of the unenrolled is cost. Many people either do not qualify for federal subsidies or believe that the assistance is not enough to make insurance affordable, interviews with consumers and experts suggested. According to enrollment counselors in several states, people who have gone without health insurance or major illness for years can be especially resistant to investing in coverage.
To be sure, some of those who chose not to sign up were motivated by ideological opposition to Mr. Obama, to the law’s mandate that they buy insurance, or to both. And for many others, confusion and lack of understanding, including about whether they could get financial help buying coverage, were the overriding reasons.
But a New York Times/CBS News poll of uninsured people in December found that of those who did not plan to get coverage, half said that cost was the main reason. Nearly three in 10 said they objected to the government’s requiring it, while about one in 10 said they felt they did not need it.
http://www.nytimes.com/2014/04/22/us/looking-at-costs-and-risks-many-skip-health-insurance.html?hp&_r=0




New Hampshire Hospital Lifts Veil on Prices
04/22/2014  

Transparency is a term often applied to calls for more open government. But it's also a concept that's being embraced by some New England hospitals. Among them, Elliot Hospital in New Hamsphire, which is being up front about how much it charges for various procedures. New Hampshire Public Radio's Todd Bookman reports.
Related Media
New Hampshire Hospital Lifts Veil on PricesListen
 Duration:
3:28

You don't drop everything to go get a colonoscopy. But after a decade of waiting, 63-year old Richard Coll (left) of Manchester knew he couldn't keep putting it off. 

"It's something you got to do, you're supposed to do," says Coll. "There's a little bit of history in my family, so I was encouraged to do it."http://www.mpbn.net/Home/tabid/36/ctl/ViewItem/mid/5347/ItemId/33367/Default.aspx

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