The Fate of Obamacare
by Ross Dothan - NYT
FOR the first six years of the Obama era, many Republicans made an apocalyptic case against the president’s health care law. It was unconstitutional, immoral, borderline tyrannical. It wouldn’t just fail: It would fail disastrously, in a death spiral that would take down most of American health care as we know it.
Then the apocalypse failed to arrive. The law survived two Supreme Court challenges; it survived the website fiasco during its rollout; it survived the wave of cancellations and premium increases; it successfully enrolled millions of the uninsured.
At which point Republicans, never particularly eager to grapple with the actual details of health care policy, began talking about the issue less and less. Since the government shutdown in 2013 failed to stop the law from taking effect, the word “Obamacare” has lost pride of place in G.O.P. talking points. On the 2016 campaign trail, terrorism and immigration are the hot-button topics, tax cuts once again the big domestic policy promise, and it’s clear that any real health care talk will wait until the general election (if it shows up then). The party’s base just isn’t that excited by the issue anymore.
Yet the interesting thing is that as Republicans have fallen silent, the law’s struggles have actually increased. For a little while after the website righted itself and enrollment picked up, liberal pundits had fun mocking the G.O.P.’s predictions of disaster, and began talking as though Obama’s legacy was established, the law’s success foreordained. But you hear a lot less of that talk nowadays.
First, after the initial surge, Obamacare’s enrollment numbers have mostly disappointed. Not in a catastrophic way — the law has knocked down the U.S. uninsured rate to about 11-12 percent, compared to a pre-Great Recession level of 14-15 percent. But depending on how you cut the numbers, it looks like the Obamacare exchanges will fall at least four million enrollees short of the target for 2016.
Long-Term Care Insurance Can Baffle, With Complex Policies and Costs
By JOHN F. WASIK DEC. 18, 2015
INSURING for long-term care is a lot like trying to cover the future financial impact of climate change. It’s a universal problem that looms large, is hard to predict and will be costly to mitigate.
Few have prepared for this gathering storm. Private long-term care insurance is available, of course, to help pay for expensive services if you are mentally or physically incapacitated late in life.
But it is a notoriously confusing and not always reliable product. That’s why few people turn to such insurance. Some 70 percent of those over age 65 will require some form of long-term care before they die, but only about 20 percent own a policy.
Instead, millions of those who end up needing long-term care pay for it out of pocket or, after impoverishing themselves, turn to the government for support.
The median annual expense for a semiprivate nursing home room is more than $80,000, according to a national survey by Genworth, an insurance company. That’s 4 percent more than last year, which means that the cost is growing at more than double the rate of overall inflation. A private room can cost more than $90,000 annually.
Stand-alone long-term care insurance is an imperfect financial hedge to a complex situation. And for many people it doesn’t make sense to pay for a policy that may never deliver its promised benefits.
While insurance premiums are lowest when you’re younger, you may not need it for decades, if at all. In the interim, most policy owners face premium increases, which is why many people let the policy lapse, leaving them with no coverage and no compensation for money spent on premiums.
Premiums on such policies have more than doubled from 2007 to 2014, according to the American Association for Long-Term Care Insurance, a trade association. A 55-year-old couple typically paid a combined $1,982 annually seven years ago for a policy offering $100 a day in benefits and 5 percent annual inflation protection with a 90-day deductible. Last year, that same policy would have cost around $5,000.
It’s hard to compare policies side by side because of multiple layers of coverage, exclusions and prices based on age and health, said Howard G. Gleckman, a senior fellow at the Urban Institute and author of “Caring for Our Parents” (St. Martins, 2009). And the business has proved difficult for insurers to figure out: Only 14 companies currently sell the policies, compared with nearly 100 a decade ago.
U.S. and Cuba at Odds Over Exodus of the Island’s Doctors
By VICTORIA BURNETT and FRANCES ROBLES
“It was also a way out of Cuba,” said Dr. Sánchez, 29, who moved to the United States in September, four years after he graduated as a general practitioner.
Dr. Sánchez’s escape route was set up by the United States government, under a 2006 program that offers American residency to Cuban medical workers posted overseas. It is a door through which thousands of Cuban health workers have emigrated — and one that President Raúl Castro is determined to close.
One year after Cuba and the United States announced their thaw, policies like this, which hail from a more hostile era, show that diplomacy after five decades of tensions will not be as easy as the raising of embassy flags. The number of Cuban medical professionals who defected for residency in the United States reached a record this year, putting a crimp in the newly restored relations between the two countries and forcing Cuba to scramble to stop the exodus.
The Department of Homeland Security fast-tracks residency for Cuban medical professionals who defect, but it has been slowed by the swell of applications, accusations of fraud and delays that left hundreds of people like Dr. Sánchez stranded in Colombia for months this year.
In April, 18 months into his two-year medical posting in Venezuela, Dr. Sánchez traveled to Bogotá, Colombia. There, he applied for the Cuban Medical Professional Parole Program at the United States Embassy. But the process, which normally takes four to six weeks, stretched to five months. “I always planned to leave — somehow,” said Dr. Sánchez, now a medical assistant in Paterson, N.J.
Cuba denounced the program in recent weeks as the two nations met to discuss American immigration rules that give Cubans special opportunities to enter the United States and become residents.
In Developing World, Cancer Is a Very Different Disease
by George Johnson
In the United States the median age at which colon cancer strikes is 69 for men and 73 for women. In Chad the average life expectancy at birth is about 50. Children who survive childbirth — and then malnutrition and diarrhea — are likely to die of pneumonia, tuberculosis, influenza, malaria, AIDS or even traffic accidents long before their cells accumulate the mutations that cause colon cancer.
In fact, cancers of any kind don’t make the top 15 causes of death in Chad — or in Somalia, the Central African Republic and other places where the average life span peaks in the low to mid-50s. Many people do die from cancer, and their numbers are multiplied by rapidly growing populations and a lack of medical care. But first come all those other threats.
How different this is from the United States, where oncologists are working to rid a 91-year-old former president of metastatic melanoma, one of the deadliest cancers. One of Jimmy Carter’s drugs, a new immunotherapy agent called Keytruda, has been priced at $12,500 a month, in addition to the cost of his surgery and treatment with computer-guided radiation beams.
Mr. Carter, a religious man, says he is prepared to meet his maker. But he is among the fortunate who first have the luxury of exhausting the most expensive remedies medicine has to offer.
So far the approach appears to be working, shrinking his brain tumors to invisibility. Should there be a setback, his doctors may have the option of combining Keytruda with other recently approved immune system therapies, the next line of defense. Last summer at the annual meeting of the American Society of Clinical Oncology, Dr. Leonard Saltz, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center, estimated that medical bills for these cocktails could run $300,000 a year.
That is for just one person. For those with the will and the resources, the war on cancer has come to mean pushing incrementally toward some imagined immortality, the ultimate right to life. There appears to be no limit to what we — society in the abstract — will agree to pay for extending long and well-lived lives.
Vice President Joseph R. Biden Jr. was envisioning more of these death-defying acts when, borrowing a metaphor, he recently called for a “moon shot” to end cancer — infusions of additional dollars that, judging from the past, would go largely toward research that helps older people become older.http://www.nytimes.com/2015/12/22/science/in-developing-world-cancer-is-a-very-different-disease.html?&hpw&rref=science&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
No Justification for High Drug Prices
There is ample evidence that drug prices have been pushed to astronomical heights for no reason other than the desire of drug makers to maximize profits. Prices in many cases far exceed what’s needed to cover the costs of research and clinical trials, and some companies have found ways to rake in profits even without shouldering the cost of drug development.
The two worst offenders are bottom feeders that simply buy companies they believe have underpriced their drugs and then quickly raise prices to astronomical levels.
In August, Turing Pharmaceuticals acquired the American marketing rights to a 62-year-old drug to treat a devastating parasitic infection and raised the cost of one pill to $750 from $13.50. That brought the cost of a course of treatment for some patients to hundreds of thousands of dollars. (Turing’s founder, Martin Shkreli, was indicted on Thursday on charges of securities fraud involving a hedge fund and another biotechnology firm he started.)
Valeant Pharmaceuticals greatly increased the prices of several drugs it acquired, including two used by hospitals to treat heart conditions. It also protected its high-priced dermatology drugs by urging doctors to send prescriptions to a mail-order pharmacy that would make sure no cheaper alternative was substituted.
The Pharmaceutical Research and Manufacturers of America, a trade group, described Turing and Valeant as essentially investment vehicles “masquerading as pharmaceutical companies.”
Yet even some mainstream companies have set high prices that seem hard to justify. Eli Lilly said its new lung cancer drug, Portrazza, would cost about $11,430 a month in the United States, six times the $1,870 price that leading oncologists said in a recent journal article would be a fair reflection of the benefit the drug offers compared with older therapies.
Similarly, Pfizer set the list price for Ibrance, a drug to treat a form of advanced breast cancer, at $9,850 a month, a price that remains high even after the 20 percent discount demanded by insurers. The price was not based on manufacturing costs or research costs, according to an analysis by The Wall Street Journal. Rather, Pfizer set the price as high as it could without causing doctors and insurers to favor an alternative drug.
Employers Battle Drug Costs
by Peter Loftus
The Wall Street Journal
Business
At the University of Minnesota, strategies include paying for the priciest pills just a few at a time
MINNEAPOLIS—At the University of Minnesota, employees with cancer face a new rule under the health plan. If they are starting on certain expensive drugs, they get just a two-week supply, half the usual amount.
Before they can get two more weeks’ worth, a nurse at the university’s pharmacy partner has to confirm they are doing well enough.
The policy, called “split fill,” is designed to avoid paying for drug prescriptions that go half-unused if patients develop side effects and must stop them. It is part of a growing effort to rein in a drug bill the university says rose 8.9% last year, roughly double the rate for other health expenses.
“I don’t want to penalize the patients, but what the drug companies have to realize is they put us in that box” by charging such high prices, said Stephen Schondelmeyer , a pharmacy professor who advises the administration on its benefits for nearly 39,000 employees, retirees and family members. Some of the cancer drugs cost as much as $13,500 a month.
Rising drug costs are forcing tough decisions on those who foot the bill for much of American health care: employers. The pinch is most acute for the many large employers that, like the University of Minnesota, are self-insured—hiring an insurance company to administer benefits but paying the bill themselves.
Employers have for years been shifting more health costs to workers, through higher premiums and deductibles. With drugs, they face a growing challenge. Specialty medications for ills such as cancer and multiple sclerosis are so pricey that despite making up only about 1% of prescription volume at the University of Minnesota, they account for 28% of its drug costs, said Kenneth Horstman , director of benefits and compensation. Pharmacy costs are about 17% of its health plan’s spending, up from less than 14% in 2013.
Nationally, employers’ pharmacy costs are rising about 9.5% this year and will go up 10% in 2016, according to Aon Hewitt, a benefits consultant. The firm expects employers’ other medical costs to rise far less, 4.5% this year and 5% in 2016.
“This is a tsunami,” said John Bennett , president and chief executive of Capital District Physicians’ Health Plan in Albany, N.Y., a nonprofit insurer with corporate clients. Pharmacy costs are “the single biggest driver of our medical inflation in the last few years.”
In tackling them, employers are becoming more aggressive. Many have expanded requirements that doctors obtain advance approval from health-plan administrators for certain costly drugs, a practice called prior authorization. For instance, about 89% of employer health plans now mandate prior authorization for certain anti-inflammatory drugs for diseases like rheumatoid arthritis, up from 61% in 2007, according to survey by drugmaker EMD Serono Inc.
Another increasingly common strategy is “step therapy,” which requires that patients be treated with lower-cost drugs before the health plan will pay for a more expensive option. This year, about 69% of employers had step-therapy rules, compared with 56% in 2011, according to the Pharmacy Benefit Management Institute, a research organization.
A newer tactic is pursuing supply contracts that cap annual price increases for drugs at a set percentage, says Jim DuCharme, CEO of Prime Therapeutics, a pharmacy-benefits manager that negotiates such deals.
The University of Minnesota’s health plan is among the more ambitious in attacking drug costs. Its efforts include resisting drug-company programs that help patients with their copays, which encourage use of expensive brand-name drugs over cheaper options.
University officials hold monthly brainstorming sessions in a Minneapolis hotel with people from about 15 other large employers to discuss cost-saving drug strategies. The university has “been able to test a number of strategies that go a lot further than other employers,” said Carolyn Pare , president and CEO of the Minnesota Health Action Group, which organizes the sessions.
As employers push back, employees sometimes feel their access to drugs is being restricted, and costs increasingly foisted upon them. The university last year increased its highest patient copay to $75 from $60, applying it to branded drugs such as Flovent asthma inhaler and the antibiotic Zyvox.
Amy Boemer , a library manager who has diabetes, said her doctor switched her to a new insulin product this year because the university made it a “preferred” drug, and her cost would have risen if she wanted to stick with her old one. She says the new insulin isn’t controlling her blood sugar as well.
“What’s frustrating to me is I was on a drug, had been on it for two years,” said Ms. Boemer. “It worked for me. It’s frustrating they’re making me change it.”
The university chose a new preferred insulin “based on price, delivery and drug effectiveness,” said Mr. Horstman, the benefits director. He said plan members can ask their doctor to file an application for coverage of a different insulin if it is medically necessary, and if the university’s pharmacy benefit manager agrees, the drug will be covered with just a $10 copay. Or the patient can take a nonpreferred insulin anyway, but for a $75 copay.
Officials don’t exclude drugs on cost alone, said Kathryn Brown , vice president for human resources. She said they make coverage decisions “in a way that allows them to provide the benefit to employees who need them, but also allows our self-insured plan to continue to be viable.”
The university’s plan has monthly premiums for family coverage of about $300. The national average is $413, according to the Kaiser Family Foundation. The university doesn’t make employees pay a percentage of the price of the most expensive drugs—a practice called coinsurance that is increasingly common elsewhere.
So far, the university has declined to pay for two new drugs—each priced at over $14,000 a year—for people who need greater cholesterol reduction than they can get from statins. It is awaiting more information on efficacy and potential discounts before deciding on coverage, Mr. Horstman said.
The university became self-insured in 2002, switching from a plan for state government employees and adopting one of its own called the “UPlan,” in a bid to get better control of costs.
At the vanguard of the cost-control effort is Dr. Schondelmeyer, who holds two pharmacy doctorates and has had 40 years’ experience studying pharmaceutical economics. Outside the classroom, the university’s health plan serves as his laboratory, where Dr. Schondelmeyer, 65 years old, tests cost-saving ideas as an adviser to the benefits and compensation department.
Employees sometimes stop him in the hall and ask, “What are you doing about the high prices that drug companies are charging us? How can we put pressure on them?” he says.
“It’s tougher personally and corporately” to make decisions about drugs that affect colleagues, he says. “I make every decision with the thought of, ‘How does this impact individuals at the institution and their loved ones?’ ” Covered by the plan himself, he declines to say what drugs, if any, he uses.
Decades ago, Dr. Schondelmeyer became an advocate of generic drugs for cost control. Research he did at the University of Kentucky on generics’ safety and effectiveness convinced him that wider use of them could hold down costs while preserving health outcomes.
The university is already close to maximizing that strategy. Its usage of generic drugs has risen to 84% of prescription volume from about 50% a decade ago, encouraged by lower copays.
A way pharmaceutical companies try to thwart the shift to generics is with coupons that can reduce patients’ copays for brands to the same level as for generic drugs, or even to zero. University officials say that while the coupons cut costs for patients, they raise them for the payer, because of how they encourage use of more-expensive branded drugs.
Dr. Schondelmeyer says some companies leave coupons with doctors and their staffs to be handed out to patients. A doctor who gives them out—telling patients the coupons are a way to save on a branded-drug prescription—may not think about the cost impact to a health plan.
“On the surface it sounds like a good deal for the employee, but a zero-dollar copay may mean the patient is using a $500-a-month drug when a $50 drug is better,” Dr. Schondelmeyer said.
The university, with his support, began plotting a response last year. It has a benefits advisory committee made up of employees, which meets monthly. At a meeting a year ago, Karen Chapin , a university manager of health programs, told members that drugmakers were using coupons to counter generics and keep patients on branded drugs. At another meeting two months later, she outlined a plan to eliminate coverage for some “heavily couponed” brands.
In the summer, the UPlan stopped covering about 90 branded drugs for which manufacturers were distributing copay coupons, including the Nasonex allergy treatment and Belsomra insomnia drug, both from Merck & Co. Patients can still get coverage if their doctors can show the drugs are medically necessary.
In an interview, Merck CEO Kenneth Frazier said, “There’s a legitimate role to be played for assisting patients with copays for medically necessary products, when there is an economic barrier to their using the products they need.” He said Merck sets prices for drugs based on their benefit to patients and the health-care system, and whether they address an unmet medical need.
Newer, high-price specialty drugs pose a particular challenge to the university because there typically aren’t lower-cost alternatives. That is where the split-fill strategy comes in.
Last year, Dr. Schondelmeyer and university officials began considering it for initial prescriptions of certain costly cancer drugs, among them Sutent, made by Pfizer Inc. Some can have side effects, such as rashes, that may cause patients to stop taking them and leave part of a one-month prescription unused.
Asked about the policy, a Pfizer spokeswoman said that “cost control interventions must consider individual patient care in order to minimize complications and burdens for patients including disruptions in treatment at critical moments in the management of their disease.”
University officials began briefing the benefits committee on a split-fill plan in the fall of 2014 and adopted it in February, for nearly 20 drugs.
A new patient gets an initial two-week supply, and then seven to 10 days later, a nurse at a specialty pharmacy the university uses to dispense such drugs calls to ask how the patient feels.
If he or she reports a serious side effect, the nurse tells the patient to stop taking the drug, then contacts the patient’s physician to discuss a dosing adjustment or alternative drug. If the patient is tolerating the medicine, the nurse authorizes the next two-week supply.
During the split-fill period, the patient faces no copay. After three months, the patient begins receiving the pills in monthly supplies, but also with a $10 copay.
Amy Monahan , a law professor on the benefits advisory committee, said some members worried the system could be burdensome because a patient has to keep going back to the pharmacy, “and this is someone obviously dealing with a very serious illness and you want to make sure you’re not imposing this horrible burden on someone.” Patients can pick drugs up at a pharmacy or have them delivered to their homes.
Samith Kochuparambil, a Minneapolis oncologist, said he agreed with the concept in principle but had practical concerns, such as that outside pharmacy nurses wouldn’t know a patient’s health history well and might mistake a patient’s pre-existing health condition for a drug side effect.
Since the program began in February, a small number of patients have had prescriptions filled this way, with no complaints so far, said Mr. Horstman, the benefits director. It is too soon to know if it is saving money, but it has done so elsewhere. Diplomat Specialty Pharmacy in Flint, Mich., installed a split-fill program for employer and insurer clients in 2010 and found they could save about 19% on the targeted drugs, said Atheer Kaddis, a senior vice president.
Given the trend in drug prices, said Dr. Schondelmeyer, “At some point, we can’t keep writing blank checks.”
Write to Peter Loftus at peter.loftus@wsj.com
There is ample evidence that drug prices have been pushed to astronomical heights for no reason other than the desire of drug makers to maximize profits. Prices in many cases far exceed what’s needed to cover the costs of research and clinical trials, and some companies have found ways to rake in profits even without shouldering the cost of drug development.
The two worst offenders are bottom feeders that simply buy companies they believe have underpriced their drugs and then quickly raise prices to astronomical levels.
In August, Turing Pharmaceuticals acquired the American marketing rights to a 62-year-old drug to treat a devastating parasitic infection and raised the cost of one pill to $750 from $13.50. That brought the cost of a course of treatment for some patients to hundreds of thousands of dollars. (Turing’s founder, Martin Shkreli, was indicted on Thursday on charges of securities fraud involving a hedge fund and another biotechnology firm he started.)
Valeant Pharmaceuticals greatly increased the prices of several drugs it acquired, including two used by hospitals to treat heart conditions. It also protected its high-priced dermatology drugs by urging doctors to send prescriptions to a mail-order pharmacy that would make sure no cheaper alternative was substituted.
The Pharmaceutical Research and Manufacturers of America, a trade group, described Turing and Valeant as essentially investment vehicles “masquerading as pharmaceutical companies.”
Yet even some mainstream companies have set high prices that seem hard to justify. Eli Lilly said its new lung cancer drug, Portrazza, would cost about $11,430 a month in the United States, six times the $1,870 price that leading oncologists said in a recent journal article would be a fair reflection of the benefit the drug offers compared with older therapies.
Similarly, Pfizer set the list price for Ibrance, a drug to treat a form of advanced breast cancer, at $9,850 a month, a price that remains high even after the 20 percent discount demanded by insurers. The price was not based on manufacturing costs or research costs, according to an analysis by The Wall Street Journal. Rather, Pfizer set the price as high as it could without causing doctors and insurers to favor an alternative drug.
Employers Battle Drug Costs
by Peter Loftus
The Wall Street Journal
The Wall Street Journal
Business
At the University of Minnesota, strategies include paying for the priciest pills just a few at a time
MINNEAPOLIS—At the University of Minnesota, employees with cancer face a new rule under the health plan. If they are starting on certain expensive drugs, they get just a two-week supply, half the usual amount.
Before they can get two more weeks’ worth, a nurse at the university’s pharmacy partner has to confirm they are doing well enough.
The policy, called “split fill,” is designed to avoid paying for drug prescriptions that go half-unused if patients develop side effects and must stop them. It is part of a growing effort to rein in a drug bill the university says rose 8.9% last year, roughly double the rate for other health expenses.
“I don’t want to penalize the patients, but what the drug companies have to realize is they put us in that box” by charging such high prices, said Stephen Schondelmeyer , a pharmacy professor who advises the administration on its benefits for nearly 39,000 employees, retirees and family members. Some of the cancer drugs cost as much as $13,500 a month.
Rising drug costs are forcing tough decisions on those who foot the bill for much of American health care: employers. The pinch is most acute for the many large employers that, like the University of Minnesota, are self-insured—hiring an insurance company to administer benefits but paying the bill themselves.
Employers have for years been shifting more health costs to workers, through higher premiums and deductibles. With drugs, they face a growing challenge. Specialty medications for ills such as cancer and multiple sclerosis are so pricey that despite making up only about 1% of prescription volume at the University of Minnesota, they account for 28% of its drug costs, said Kenneth Horstman , director of benefits and compensation. Pharmacy costs are about 17% of its health plan’s spending, up from less than 14% in 2013.
Nationally, employers’ pharmacy costs are rising about 9.5% this year and will go up 10% in 2016, according to Aon Hewitt, a benefits consultant. The firm expects employers’ other medical costs to rise far less, 4.5% this year and 5% in 2016.
“This is a tsunami,” said John Bennett , president and chief executive of Capital District Physicians’ Health Plan in Albany, N.Y., a nonprofit insurer with corporate clients. Pharmacy costs are “the single biggest driver of our medical inflation in the last few years.”
In tackling them, employers are becoming more aggressive. Many have expanded requirements that doctors obtain advance approval from health-plan administrators for certain costly drugs, a practice called prior authorization. For instance, about 89% of employer health plans now mandate prior authorization for certain anti-inflammatory drugs for diseases like rheumatoid arthritis, up from 61% in 2007, according to survey by drugmaker EMD Serono Inc.
Another increasingly common strategy is “step therapy,” which requires that patients be treated with lower-cost drugs before the health plan will pay for a more expensive option. This year, about 69% of employers had step-therapy rules, compared with 56% in 2011, according to the Pharmacy Benefit Management Institute, a research organization.
A newer tactic is pursuing supply contracts that cap annual price increases for drugs at a set percentage, says Jim DuCharme, CEO of Prime Therapeutics, a pharmacy-benefits manager that negotiates such deals.
The University of Minnesota’s health plan is among the more ambitious in attacking drug costs. Its efforts include resisting drug-company programs that help patients with their copays, which encourage use of expensive brand-name drugs over cheaper options.
University officials hold monthly brainstorming sessions in a Minneapolis hotel with people from about 15 other large employers to discuss cost-saving drug strategies. The university has “been able to test a number of strategies that go a lot further than other employers,” said Carolyn Pare , president and CEO of the Minnesota Health Action Group, which organizes the sessions.
As employers push back, employees sometimes feel their access to drugs is being restricted, and costs increasingly foisted upon them. The university last year increased its highest patient copay to $75 from $60, applying it to branded drugs such as Flovent asthma inhaler and the antibiotic Zyvox.
Amy Boemer , a library manager who has diabetes, said her doctor switched her to a new insulin product this year because the university made it a “preferred” drug, and her cost would have risen if she wanted to stick with her old one. She says the new insulin isn’t controlling her blood sugar as well.
“What’s frustrating to me is I was on a drug, had been on it for two years,” said Ms. Boemer. “It worked for me. It’s frustrating they’re making me change it.”
The university chose a new preferred insulin “based on price, delivery and drug effectiveness,” said Mr. Horstman, the benefits director. He said plan members can ask their doctor to file an application for coverage of a different insulin if it is medically necessary, and if the university’s pharmacy benefit manager agrees, the drug will be covered with just a $10 copay. Or the patient can take a nonpreferred insulin anyway, but for a $75 copay.
Officials don’t exclude drugs on cost alone, said Kathryn Brown , vice president for human resources. She said they make coverage decisions “in a way that allows them to provide the benefit to employees who need them, but also allows our self-insured plan to continue to be viable.”
The university’s plan has monthly premiums for family coverage of about $300. The national average is $413, according to the Kaiser Family Foundation. The university doesn’t make employees pay a percentage of the price of the most expensive drugs—a practice called coinsurance that is increasingly common elsewhere.
So far, the university has declined to pay for two new drugs—each priced at over $14,000 a year—for people who need greater cholesterol reduction than they can get from statins. It is awaiting more information on efficacy and potential discounts before deciding on coverage, Mr. Horstman said.
The university became self-insured in 2002, switching from a plan for state government employees and adopting one of its own called the “UPlan,” in a bid to get better control of costs.
At the vanguard of the cost-control effort is Dr. Schondelmeyer, who holds two pharmacy doctorates and has had 40 years’ experience studying pharmaceutical economics. Outside the classroom, the university’s health plan serves as his laboratory, where Dr. Schondelmeyer, 65 years old, tests cost-saving ideas as an adviser to the benefits and compensation department.
Employees sometimes stop him in the hall and ask, “What are you doing about the high prices that drug companies are charging us? How can we put pressure on them?” he says.
“It’s tougher personally and corporately” to make decisions about drugs that affect colleagues, he says. “I make every decision with the thought of, ‘How does this impact individuals at the institution and their loved ones?’ ” Covered by the plan himself, he declines to say what drugs, if any, he uses.
Decades ago, Dr. Schondelmeyer became an advocate of generic drugs for cost control. Research he did at the University of Kentucky on generics’ safety and effectiveness convinced him that wider use of them could hold down costs while preserving health outcomes.
The university is already close to maximizing that strategy. Its usage of generic drugs has risen to 84% of prescription volume from about 50% a decade ago, encouraged by lower copays.
A way pharmaceutical companies try to thwart the shift to generics is with coupons that can reduce patients’ copays for brands to the same level as for generic drugs, or even to zero. University officials say that while the coupons cut costs for patients, they raise them for the payer, because of how they encourage use of more-expensive branded drugs.
Dr. Schondelmeyer says some companies leave coupons with doctors and their staffs to be handed out to patients. A doctor who gives them out—telling patients the coupons are a way to save on a branded-drug prescription—may not think about the cost impact to a health plan.
“On the surface it sounds like a good deal for the employee, but a zero-dollar copay may mean the patient is using a $500-a-month drug when a $50 drug is better,” Dr. Schondelmeyer said.
The university, with his support, began plotting a response last year. It has a benefits advisory committee made up of employees, which meets monthly. At a meeting a year ago, Karen Chapin , a university manager of health programs, told members that drugmakers were using coupons to counter generics and keep patients on branded drugs. At another meeting two months later, she outlined a plan to eliminate coverage for some “heavily couponed” brands.
In the summer, the UPlan stopped covering about 90 branded drugs for which manufacturers were distributing copay coupons, including the Nasonex allergy treatment and Belsomra insomnia drug, both from Merck & Co. Patients can still get coverage if their doctors can show the drugs are medically necessary.
In an interview, Merck CEO Kenneth Frazier said, “There’s a legitimate role to be played for assisting patients with copays for medically necessary products, when there is an economic barrier to their using the products they need.” He said Merck sets prices for drugs based on their benefit to patients and the health-care system, and whether they address an unmet medical need.
Newer, high-price specialty drugs pose a particular challenge to the university because there typically aren’t lower-cost alternatives. That is where the split-fill strategy comes in.
Last year, Dr. Schondelmeyer and university officials began considering it for initial prescriptions of certain costly cancer drugs, among them Sutent, made by Pfizer Inc. Some can have side effects, such as rashes, that may cause patients to stop taking them and leave part of a one-month prescription unused.
Asked about the policy, a Pfizer spokeswoman said that “cost control interventions must consider individual patient care in order to minimize complications and burdens for patients including disruptions in treatment at critical moments in the management of their disease.”
University officials began briefing the benefits committee on a split-fill plan in the fall of 2014 and adopted it in February, for nearly 20 drugs.
A new patient gets an initial two-week supply, and then seven to 10 days later, a nurse at a specialty pharmacy the university uses to dispense such drugs calls to ask how the patient feels.
If he or she reports a serious side effect, the nurse tells the patient to stop taking the drug, then contacts the patient’s physician to discuss a dosing adjustment or alternative drug. If the patient is tolerating the medicine, the nurse authorizes the next two-week supply.
During the split-fill period, the patient faces no copay. After three months, the patient begins receiving the pills in monthly supplies, but also with a $10 copay.
Amy Monahan , a law professor on the benefits advisory committee, said some members worried the system could be burdensome because a patient has to keep going back to the pharmacy, “and this is someone obviously dealing with a very serious illness and you want to make sure you’re not imposing this horrible burden on someone.” Patients can pick drugs up at a pharmacy or have them delivered to their homes.
Samith Kochuparambil, a Minneapolis oncologist, said he agreed with the concept in principle but had practical concerns, such as that outside pharmacy nurses wouldn’t know a patient’s health history well and might mistake a patient’s pre-existing health condition for a drug side effect.
Since the program began in February, a small number of patients have had prescriptions filled this way, with no complaints so far, said Mr. Horstman, the benefits director. It is too soon to know if it is saving money, but it has done so elsewhere. Diplomat Specialty Pharmacy in Flint, Mich., installed a split-fill program for employer and insurer clients in 2010 and found they could save about 19% on the targeted drugs, said Atheer Kaddis, a senior vice president.
Given the trend in drug prices, said Dr. Schondelmeyer, “At some point, we can’t keep writing blank checks.”
Write to Peter Loftus at peter.loftus@wsj.com
Coloradans Will Put Single-Payer Health Care To A Vote
John Daley/Colorado Public Radio
On a brisk morning in Denver recently, an ambulance pulled up in front of a downtown office tower. "I think the patient is going to make it," Dr. Irene Aguilar said as a team rolled out the gurney.
This wasn't a medical emergency, but rather a bit of political theater. The gurney held several big boxes of signed petitions to be delivered to Colorado's Secretary of State's office. The group ColoradoCareYES gathered enough signatures — more than 100,000 — to put a single-payer health system on the ballot next fall.
Under the plan, Coloradans would still pick their own providers of health care, but the new system would pick up all the bills. There would be no deductibles and fewer and smaller copays.
"Our current system gouges us financially," says Ken Connell, a volunteer with ColoradoCareYES. "Too many don't have access until they're too far along the sick path."
Connell says he's been advocating for changes to the U.S. system of health care insurance for more than a decade — ever since his 33-year-old son took his own life. Connell says better access to mental health care could have made a difference for his son.
"We could not get him care," Connell says. "It's a human right. We should be taking care of each other, as long as we can, and we certainly have the resources in this country."
Aguilar, the doctor who accompanied the box-filled gurney, is also a Colorado state senator and a Democrat. She led the rally at Denver's Civic Center the day the signatures were delivered.
"This is not going to be an easy fight," Aguilar says. Obamacare has been a good start, she says. It has sliced Colorado's uninsured rate in half. But many people are still uninsured, and others struggle to pay their premiums and out-of-pocket costs.
The idea behind ColoradoCare, Aguilar says, is "to have everybody paying in but everybody having access to health care that will keep them healthy, keep them working, keep them contributing to our society."
http://www.npr.org/sections/health-shots/2015/12/19/458688605/coloradans-will-put-single-payer-health-care-to-a-vote
John Daley/Colorado Public Radio
On a brisk morning in Denver recently, an ambulance pulled up in front of a downtown office tower. "I think the patient is going to make it," Dr. Irene Aguilar said as a team rolled out the gurney.
This wasn't a medical emergency, but rather a bit of political theater. The gurney held several big boxes of signed petitions to be delivered to Colorado's Secretary of State's office. The group ColoradoCareYES gathered enough signatures — more than 100,000 — to put a single-payer health system on the ballot next fall.
Under the plan, Coloradans would still pick their own providers of health care, but the new system would pick up all the bills. There would be no deductibles and fewer and smaller copays.
"Our current system gouges us financially," says Ken Connell, a volunteer with ColoradoCareYES. "Too many don't have access until they're too far along the sick path."
Connell says he's been advocating for changes to the U.S. system of health care insurance for more than a decade — ever since his 33-year-old son took his own life. Connell says better access to mental health care could have made a difference for his son.
"We could not get him care," Connell says. "It's a human right. We should be taking care of each other, as long as we can, and we certainly have the resources in this country."
Aguilar, the doctor who accompanied the box-filled gurney, is also a Colorado state senator and a Democrat. She led the rally at Denver's Civic Center the day the signatures were delivered.
"This is not going to be an easy fight," Aguilar says. Obamacare has been a good start, she says. It has sliced Colorado's uninsured rate in half. But many people are still uninsured, and others struggle to pay their premiums and out-of-pocket costs.
The idea behind ColoradoCare, Aguilar says, is "to have everybody paying in but everybody having access to health care that will keep them healthy, keep them working, keep them contributing to our society."
When Hospital Paperwork Crowds Out Hospital Care
By THERESA BROWN
A FRIEND was recently hospitalized after a bicycle accident. At one point a nursing student, together with a more senior nurse, rolled a computer on wheels into the room and asked my friend to rate her pain on a scale of 1 to 10.
She mumbled, “4 to 5.” The student put 5 into the computer — and then they left, without further inquiring about, or relieving, my friend’s pain.
This is not an anecdote about nurses not doing their jobs; it’s an illustration of what our jobs have become in the age of electronic health records. Computer documentation in health care is notoriously inefficient and unwieldy, but an even more serious problem is that it has morphed into more than an account of our work; it has replaced the work itself.
Our charting, rather than our care, is increasingly what we are evaluated on. When my hospital switched to bar code scanning for medication administration, not only were the nurses on my floor rated as “red,” “yellow” or “green” based on the percentage of meds we scanned, but those ratings were prominently and openly displayed on printouts left at the nurses’ station.
Or consider “fall assessments,” which a nurse uses to determine a patient’s risk of falling while in the hospital — a problem that accounts for 11,000 deaths annually. The assessments ask about medication, mobility issues and confusion to create a “fall risk score,” which then generates an appropriate menu of interventions.
A nurse could spend 10 minutes documenting a patient’s fall risk, or 10 minutes trying to keep patients from falling. It seems obvious that a computer record of “fall risk” cannot in and of itself prevent falls, but completing those records is considered essential in hospitals. As a result, real fall-prevention efforts — encouraging patients to use the call light, ordering a bedside commode, having an aide do hourly check-ins — get short shrift.
In home hospice, where I now work, the documentation is even more onerous than in the hospital and seems even more disconnected from actual patients. Hospice care is a covered benefit under Medicare, and the Centers for Medicare and Medicaid Services maintain rigid standards for documentation. They regularly withhold reimbursement if documentation is deemed incomplete or flawed.
This paperwork may have a good intent — to prevent fraud — but in practice it gives documentary exactitude an outsize importance. A colleague doing a hospice admission wrote that a dying patient had “liver failure and renal failure,” and in a separate part of her documentation wrote the conditions in the reverse order: “renal failure and liver failure.” From a medical point of view, the order of the two is irrelevant, but her supervisor reprimanded her for the disparity, since it suggested inconsistency. The concern, of course, was that the hospice wouldn’t get paid.
By THERESA BROWN
A FRIEND was recently hospitalized after a bicycle accident. At one point a nursing student, together with a more senior nurse, rolled a computer on wheels into the room and asked my friend to rate her pain on a scale of 1 to 10.
She mumbled, “4 to 5.” The student put 5 into the computer — and then they left, without further inquiring about, or relieving, my friend’s pain.
This is not an anecdote about nurses not doing their jobs; it’s an illustration of what our jobs have become in the age of electronic health records. Computer documentation in health care is notoriously inefficient and unwieldy, but an even more serious problem is that it has morphed into more than an account of our work; it has replaced the work itself.
Our charting, rather than our care, is increasingly what we are evaluated on. When my hospital switched to bar code scanning for medication administration, not only were the nurses on my floor rated as “red,” “yellow” or “green” based on the percentage of meds we scanned, but those ratings were prominently and openly displayed on printouts left at the nurses’ station.
Or consider “fall assessments,” which a nurse uses to determine a patient’s risk of falling while in the hospital — a problem that accounts for 11,000 deaths annually. The assessments ask about medication, mobility issues and confusion to create a “fall risk score,” which then generates an appropriate menu of interventions.
A nurse could spend 10 minutes documenting a patient’s fall risk, or 10 minutes trying to keep patients from falling. It seems obvious that a computer record of “fall risk” cannot in and of itself prevent falls, but completing those records is considered essential in hospitals. As a result, real fall-prevention efforts — encouraging patients to use the call light, ordering a bedside commode, having an aide do hourly check-ins — get short shrift.
In home hospice, where I now work, the documentation is even more onerous than in the hospital and seems even more disconnected from actual patients. Hospice care is a covered benefit under Medicare, and the Centers for Medicare and Medicaid Services maintain rigid standards for documentation. They regularly withhold reimbursement if documentation is deemed incomplete or flawed.
This paperwork may have a good intent — to prevent fraud — but in practice it gives documentary exactitude an outsize importance. A colleague doing a hospice admission wrote that a dying patient had “liver failure and renal failure,” and in a separate part of her documentation wrote the conditions in the reverse order: “renal failure and liver failure.” From a medical point of view, the order of the two is irrelevant, but her supervisor reprimanded her for the disparity, since it suggested inconsistency. The concern, of course, was that the hospice wouldn’t get paid.
How a medical device maker kept U.S. hospitals in the dark about deadly infections
By CHAD TERHUNE AND MELODY PETERSEN
The hunt for a deadly superbug that sickened 22 patients at a Dutch hospital began just before noon on a spring day in 2012.
Inside a lab in the tiny hamlet of Zoeterwoude, a technician carefully peeled back the tip of a state-of-the art medical scope. Watching him intently was a small group of hospital officials and executives from Olympus Corp., the maker of the device.
The Olympus technician found trouble right away. He spotted a brown, grimy film inside parts of the flexible, snake-like scope — parts that were supposed to be sealed. A rubber ring designed to keep bacteria out was cracked and worn. The same bacteria that had sickened the patients were found on the scope.
An investigator hired by Olympus and the hospital concluded that the scope’s design could allow blood and tissue to become trapped, spreading bacteria from one patient to another. In his report, he called on Olympus to conduct a worldwide investigationand recall all its scopes if similar problems turned up.
Over the next three years, 21 people died and at least two dozen more became ill from infections related to scopes in Pittsburgh, Seattle and Los Angeles. An unknown number of other patients have been infected. The Food and Drug Administration has identified 10 outbreaks, seven of which involve Olympus scopes.
Even as patients died and others were put at risk, Olympus continued to sell the device and failed to warn U.S. hospitals that the scopes were tied to dangerous infections, according to interviews with dozens of hospital officials, doctors, regulators and former Olympus employees.
After each outbreak, Olympus contended that its scopes did not cause the infections and blamed the hospitals for not cleaning them properly. The company treated each case as an isolated incident, not telling the U.S. hospitals that they weren’t alone.
By CHAD TERHUNE AND MELODY PETERSEN
The hunt for a deadly superbug that sickened 22 patients at a Dutch hospital began just before noon on a spring day in 2012.
Inside a lab in the tiny hamlet of Zoeterwoude, a technician carefully peeled back the tip of a state-of-the art medical scope. Watching him intently was a small group of hospital officials and executives from Olympus Corp., the maker of the device.
The Olympus technician found trouble right away. He spotted a brown, grimy film inside parts of the flexible, snake-like scope — parts that were supposed to be sealed. A rubber ring designed to keep bacteria out was cracked and worn. The same bacteria that had sickened the patients were found on the scope.
An investigator hired by Olympus and the hospital concluded that the scope’s design could allow blood and tissue to become trapped, spreading bacteria from one patient to another. In his report, he called on Olympus to conduct a worldwide investigationand recall all its scopes if similar problems turned up.
Over the next three years, 21 people died and at least two dozen more became ill from infections related to scopes in Pittsburgh, Seattle and Los Angeles. An unknown number of other patients have been infected. The Food and Drug Administration has identified 10 outbreaks, seven of which involve Olympus scopes.
Even as patients died and others were put at risk, Olympus continued to sell the device and failed to warn U.S. hospitals that the scopes were tied to dangerous infections, according to interviews with dozens of hospital officials, doctors, regulators and former Olympus employees.
After each outbreak, Olympus contended that its scopes did not cause the infections and blamed the hospitals for not cleaning them properly. The company treated each case as an isolated incident, not telling the U.S. hospitals that they weren’t alone.
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