What We Talk About When We Talk About Single Payer
by SIgne Peterson Flinger - Health Affairs Blog - September 19, 2017
There appears to be growing momentum on the left for a move toward single-payer health care. Sen. Elizabeth Warren (D-MA) declared that while President Barack Obama took an important first step, “Now it’s time for the next step. And the next step is single payer.” Sen. Bernie Sanders (I-VT) recently filed his single-payer legislation in the US Senate, with the support of 15 Democratic co-sponsors. A similar proposal has support from some Democrats in the US House of Representatives. In some cases, more progressive members of the party are targeting Democrats who do not openly support single payer. We are also seeing increasing public support for single-payer proposals.
Does that mean that single payer is becoming a main tenet of the Democratic platform? Probably not. Could a single-payer system be enacted in the current political climate? Absolutely not. Could we take some baby steps toward single payer in the not so distant future? Maybe.
The Essence Of Single-Payer Health Care
To break this down a bit, let’s clarify a few points about what single payer actually means and offer a bit of insight into how much these details matter. If you were to look up definitions for single-payer health care, you will get some variations on a theme. In general, these are the most common features:
- Comprehensive universal coverage—in other words, everyone in a given region is covered by the same health plan with the same core set of services.
- Funding for that core set of services comes from a single public fund.
- That single public fund is typically generated through taxation.
- The single payer administers the program by paying providers for health care services from that single public fund.
- The single-payer entity may be the federal government, the state, a province, or even a quasi-governmental agency.
There are some additional features that vary across several single-payer systems:
- The health care delivery system can be private, public, or a mix of both. That means health care providers, such as hospitals and doctors, may be employed by private organizations or by a public agency.
- Private insurance may provide supplemental coverage to the public health plan. However, as the role of private insurance increases, these health care systems tend to look more like multipayer systems.
The Canadian health care system is often the poster child for a single-payer model, with the provinces and territories serving as the administrative entity paying private providers from the public fund. In contrast, England has the National Health Service, which acts as a single payer, but many providers are employed directly by the government—something that is not a required feature of single-payer health care systems.
How About Universal Health Coverage?
Often times, we hear the terms “universal health coverage” and “single payer” used interchangeably. This is misleading. Universal health coverage literally means that everyone is covered. According to the World Health Organization, universal health coverage must meet three criteria: equity in access to health services, quality that improves health, and protection against financial risk. In contrast, single payer presumes universal health coverage but also provides insight into specific financing, administration, and delivery characteristics—specifications that are notably absent from the term universal health coverage.
The Affordable Care Act was striving toward near universal health coverage, with a complex public and private financing scheme. In other words, you could envision a system similar to ours in which everyone has coverage, but that does not make it single payer. In fact, you can look to Switzerland to see how it has achieved universal health coverage through an individual mandate and a highly regulated private health insurance system. While many have compared Switzerland’s system to Obamacare, it has some notable differences in its financing structure. (Importantly, Switzerland also spends relatively more on health care per capita compared to other similar European countries—albeit, still significantly less than the United States.)
What Makes Single Payer Different?
There is a difference between single payer in concept and single payer in reality. There is no health care system in the world that truly has one single fund, with one single payer that covers everything related to health care services. There are flavors of single-payer systems that vary across dimensions of financing, administration, benefits, and delivery.
Financing
At the core of a single-payer health care system is how universal health coverage is financed. In other words, where does the money come from to pay providers to enable you to get access to health care services? In the purest form, there would be a single public fund, generated from tax revenue, which pays health care providers directly, with no out-of-pocket spending by consumers. In most cases, this would be the government as the single payer. In this scenario, you pay your taxes (much like we already do to fund Medicare Part A), and in turn you get to show up at a health care provider and receive services. Meanwhile the single payer (often a government entity) pays the provider on your behalf.
Administration
Along with financing, you have to think about who administers the system. In other words, how does the tax revenue make its way to the providers?
When asked the proverbial question, “if you like your health insurance, can you keep it?” Senator Sanders replied: “No, if you have a Medicare for all, there’ll be one insurance company in America. It’s not a question. Nobody in America likes their insurance company. What people like … is their doctor. They like their hospital. They like their nurses.”
People also tend to like the status quo. While some may quibble with the sentiment, the point here is: What is the role for private insurance in a single-payer system? The question of whether private insurance companies would still exist is important because this determines what exactly is meant by Medicare for all. Put another way, what Sanders is describing is not simply taking the current US Medicare program as we know it and enrolling everyone in it. Why not? While Medicare effectively provides universal health coverage for those ages 65 and older, it is not a single-payer system. Medicare does have significant financing through taxation (from individuals and employers), but the way that money flows to providers is not through a single entity.
Depending on which part of Medicare you are talking about (A, B, C, or D), you may be describing a program administered by the federal government or private insurance companies. Specifically, if you look at traditional Medicare, which includes Parts A and B and covers hospital and physician services, it is administered by the federal government. That means, as a consumer, you are pretty much dealing with Medicare directly. In contrast, you may instead choose to enroll in Medicare Advantage (Part C). In this scenario you are actually choosing a private health insurance plan (for example, Aetna, Humana, Blue Cross, and so forth) that will cover all your Medicare benefits. The federal government pays a private insurance company, and in turn, it must cover all the same services as Parts A and B, and often a little more (for example, dental and vision) in exchange for the additional premium you pay to the plan.
In 2017, one-third of beneficiaries receive Medicare benefits through Medicare Advantage. Similarly, Medicare Part D, which covers outpatient prescription drugs, is also administered by private insurance companies. One of the arguments you often hear in support of single payer is cost savings from eliminating administrative expenses associated with providers that bill multiple insurance companies, as well as the administrative expenses on behalf of those multiple insurance companies. Even if we entirely financed our health care system through taxation and made it universal, but in turn chose to administer it through multiple private insurance companies, many of the health care administration costs would not go away. Some refer to this as a multipayer model since multiple entities are actually reimbursing providers for services. In this way, Medicare Parts A and B are closer to a true single-payer system, and Parts C and D are not.
While the single payer is often a government entity, it can take many forms. In England, the single payer is the National Health Service. In Canada, you actually get your insurance card from one of the 13 provinces or territories.
Benefits
Even in a single-payer government-financed system in which there are no (or low) out-of-pocket expenses, we would also have to decide on a clear list of benefits for the public plan. In Canada, each province must cover a certain core set of benefits, most of them free, and provinces can independently decide if they want to cover more.
Obamacare’s essential health benefits have been hotly debated as part of the recent repeal and replace discussion, and it would be no less controversial in a single-payer system. Single-payer critics often describe this as an example of government rationing of care. But guess what, we already ration care in the United States. We just do it based on price, ability to pay, type of employment, and the color of your skin. In contrast, in countries where the government ensures universal health coverage, that rationing is centralized, both in terms of what is covered and when you can get it. This approach is often achieved with the help of waitlists—a symbol of equitable distribution of resources or government interference in individual decision making, depending on one’s perspective.
Relatedly, we would need to decide whether individuals can purchase private insurance to supplement the public plan and how that private insurance interacts with the public coverage. Countries do this differently, again with different implications for equity. Many Canadians purchase supplemental coverage. However, in Canada, individuals are only able to purchase private insurance for benefits that are not covered by the public plan—this includes benefits such as dental care, prescription drugs, and vision. In contrast, in England individuals can purchase private insurance to supplement all of the benefits offered and often use this private coverage to jump to the front of the line and avoid longer wait times. Again, you see that even with a single-payer system at the core, administrative complexity can re-emerge around private supplemental insurance coverage.
Delivery
Financing takes care of where the money comes from, but delivery accounts for who is providing care. In the United States currently, the majority of health care providers—both individual physicians and nurses as well as institutions such as hospitals and outpatient clinics—are private, meaning they are not employed or owned by a government entity. There are certainly exceptions—the Veterans Administration for example—but by in large, our health care system relies on private providers. Again, looking to our neighbors to the north, they primarily have private providers as well. In contrast, most hospitals in England are run by the National Health Service. Typically, proposals for single-payer systems in the United States suggest adopting a model more similar to Canada, where the majority of providers maintain their independence.
How Does Single Payer Fare on Costs?
Some economists assert that a single-payer approach will definitely lower overall health care costs, largely due to reducing administrative costs and profit, and creating efficiencies associated with centralized administration. Moreover, even with a mostly private health care delivery system, there are significant cost advantages of a single-payer approach. However, going from the current complex and expensive health care system to single payer is not by itself going to solve the cost problem. Specifically, there would need to be a larger role for the government in price controls, including setting prices for reimbursement rates, even implementing annual budgets for hospitals to keep costs under control. This would be a significant political and practical departure from the current status of private payer-provider negotiations that result in significant variation in prices paid.
You may have heard analysts suggest that there is enough money in the system already to cover everyone—you would effectively be moving the money flowing into the system from the current mixed financing schemes (for example, employers, employees, beneficiaries, and government) to taxation. The challenge remains, how do you get from here to there? You cannot flip a switch and implement single payer overnight. So, there will need to be an influx of revenue to start. Initial costs—particularly higher taxes—continue to be a concern for states seeking to pass or implement a single-payer approach, as we have seen most recently in California, Colorado, and Vermont. Similarly, an analysis of the financial feasibility of then-candidate for president Bernie Sander’s proposal for a national single-payer system further highlights this challenge, suggesting that the proposed tax increases would not be enough to fully finance the plan. Importantly, all of these financing estimates depend on the assumptions made about how the redistribution of health care financing will play out as well as concurrent government price controls, reimbursement rates, and utilization trends in the new system—all of which are at best unknowable and at worst highly political.
Where Does This Leave Us?
A single-payer health care system in the United States could eliminate the private health insurance system as we know it, squeeze costs out of the system by reducing administrative expenses and instituting global budgets, and provide universal coverage, while at the same time maintaining the independence of providers. However, it is worth noting, one person’s waste is another person’s job. Not surprisingly, significant political barriers to transitioning to such a system remain—the persuasive rhetoric to generate fear of government-run health care, the power of the health insurance lobby, and opposition by some health care providers groups—further reducing the likelihood of a feasible single-payer proposal any time soon.
In the meantime, more incremental strategies such as adding a public option to state health insurance exchanges, lowering the age of eligibility for the current Medicare program, or enabling people to buy in to Medicare may make for less contentious proposals. However, they will not confer the cost saving advantages of a truly single-payer system.
Author’s Note
Signe Peterson Flieger has a career development professorship funded by Tufts Health Plan.
Column: Here’s what’s wrong with the U.S. health care system
by John Komlos - PBS Newshour - September 22, 2017
In defending his health care plan this week, Sen. Lindsey Graham, R-S.C., called the measure “the only process left available to stop a march toward socialism.” The remark was a boiler-plate Republican critique of the Affordable Care Act. But it was also a nod to the massive political divide over health care policy on display in recent weeks.
While Republicans built support for Graham-Cassidy, which would gut the health care law and shift federal funding to the states, Sen. Bernie Sanders, I-Vt., introduced the “Medicare for All Act” earlier this month. A growing number of Democrats signed onto the bill, which would expand Medicare and create a universal health care system.
Obviously, Sanders’ plan stands no chance of passing right now. (It’s unclear if Republicans can pass Graham-Cassidy, especially after Sen. John McCain, R-Ariz, came out against the plan Friday). Still, it’s worth re-examining some of the fundamental flaws of United States’ current health care system — and why adopting a single-payer model makes the most sense.
To begin with, it’s worth pointing out that the single-payer system is hardly a step towards “socialism,” as Mr. Graham claims. The United Kingdom, Canada and Germany — all countries with different forms of universal health care — are safe bastions of capitalism.
Secondly, the U.S. has the most inefficient medical system in the world, based on health care spending and outcomes. America spends much more on health care per capita than any other nation in the world and gets less health for it.
Source: World Health Organization.
The differences are not trivial at all. The median per capita spending on health care in wealthy countries is $4,700 per year, according to research by the Organisation for Economic Co-operation and Development. (That means that half of the countries spent more than that and half spent less). For instance, Canada‘s spending was just at the level of the median. In contrast, the U.S. spent more than twice as much, at $9,900 for every man, woman and child.If we had Canada’s system we could save no less than $13,600 per average household. That adds up to a walloping $1.7 trillion dollars for the U.S., about as much as last year‘s after-tax profits of all U.S. corporations combined. That’s right: all the profits of J.P.Morgan Chase, Walmart, Apple, Exxon, Facebook and you name it put together. That’s tantamount to highway robbery.
And what do we get for it? More bureaucracy, more price gouging, more uncertainty, and, most importantly, shorter lives. In 2015, average life expectancy in the United States was 79.3 years, data from the World Health Organization shows. In Canada, it was 82.2 years. That means that Canadian babies can expect to live three years longer than their counterparts born south of the 49th parallel. How much would it be worth to you if you could live three years longer? Probably a large amount. Who cares about what you call the system if it delivers a better product?
These are not alternative facts. It’s hard evidence pointing to grave inefficiencies in the health care system. So, what causes all this?
As a country we tend to cling to the misguided belief that all markets are always and everywhere necessarily efficient. This is patently false, however, as the Nobel Prize-winning economist Joseph Stiglitz has pointed out. In the case of the medical system, clinging to an outdated ideology is nothing less than pernicious. Why? Because the medical industry is unique, and we’ve known this for a very long time. As the economist Kenneth Arrow, another Nobel Prize winner, argued as far back as 1963, free markets in health care are inefficient because of the “existence of uncertainty in the incidence of disease and in the efficacy of treatment.”
Source: Organisation for Economic Co-operation and Development
In addition, unlike in most other markets, health care lacks serious price competition (price competition being one of the ways in which markets reach efficiency). For example, hospitals do not list prices as we enter the door. When was the last time you shopped around for the lowest-priced x-ray? As a result, the current health care system runs on what’s called asymmetric information. And markets characterised by asymmetric information — where you get services first and find out the cost later — are generally inefficient.
What’s more, there are perverse incentives built into the current health care system for providers and insurers to increase their prices, and prescribe additional, costly services — like x-rays or MRIs — when they’re not really needed. I’ve experienced that myself.
The health insurance market has also been hampered by the problem of “adverse selection.” People with the most health care needs have a higher probability of insuring themselves than those who are healthy, which drives up the cost for everyone. (The Affordable Care Act tried to address this issue, with mixed results). For all these reasons and many more, it’s no wonder that the U.S. population has less confidence in its health-care system than people in other advanced industrialized countries.
Which brings us back to single-payer. I experienced the difference between a single-payer system and the U.S. system when I worked in Germany. And I can tell you that the German system was much simpler, cheaper, and better. The extra insurance I purchased beyond the one provided by the government cost $500 for my family of four. But it meant that we were covered 100 percent for everything, the coverage was worldwide, and it included doctor’s visits, dental work, and hospitalization. We had no copayments or deductibles, and prescriptions cost just $10 each. I did not experience any frustrating moments in the 18 years I worked there.
Here, in contrast, there is lot of confusion, mistakes, and I usually have to call for an invoice. So the future isn’t Trumpcare — whether it’s the current Graham-Cassidy bill or some future version of it. It’s a single-payer system. The Sanders wing of the Democratic Party is right: it’s time for Americans to repeal Obamacare and adopt a single-payer system like the ones in other developed, capitalist countries like Canada.
Trapped by Their Own Lies
by Paul Krugman - NYT - September 25, 2017
On Saturday pretty much the entire medical sector — groups representing doctors, hospitals, and insurers — released an extraordinary open letter condemning the Graham-Cassidy health bill. The letter was written in the style of Emile Zola’s “J’accuse”: a series of paragraphs, each beginning with the bolded words “We agree,” pointing out the bill’s many awful features, from the harm it would do to people with pre-existing conditions to the chaos it would cause in insurance markets.
It takes a truly terrible proposal to elicit such eloquent unanimity from organizations that are usually cautious to the point of stodginess. So how did Republicans come up with something that bad, and how did that bad thing get so close to becoming law? Indeed, it still has a chance of being enacted despite John McCain’s “no.”
The answer is that Republicans have spent years routinely lying for the sake of political advantage. And now — not just on health care, but across the board — they are trapped by their own lies, forced into trying to enact policies they know won’t work.
Reporting on why the G.O.P. plowed ahead with Graham-Cassidy makes it clear that many Republicans supporting it are well aware that it’s a bad bill, although they may not appreciate just how bad. “You know, I could maybe give you 10 reasons why this bill shouldn’t be considered,” said Senator Chuck Grassley of Iowa. “But,” he continued, “Republicans have campaigned on this,” meaning repeal-and-replace, and had to fulfill their promise.
Carl Hulse of The New York Times adds more detail: one big factor behind the push for Graham-Cassidy was anger among big donors, who wanted to know why Republicans had broken their vows to kill Obamacare.
But repealing the Affordable Care Act wasn’t the only thing Republicans promised; they also promised to replace it with something better and cheaper, doing away with all the things people don’t like about Obamacare without creating any new problems. Remember, it was Bill Cassidy, not Jimmy Kimmel, who came up with the “Jimmy Kimmel test,” the pledge that nobody would be denied health care because of expense.
Yet Republicans never had any idea how to fulfill that promise and meet that test, or indeed how to repeal the A.C.A. without taking insurance away from tens of millions. That is, they were lying about health care all along.
And the base, both the grass roots and the big money, believed the lies. Hence the trap in which Republicans find themselves.
The thing is, health care isn’t the only issue on which lies are coming back to bite the liars. The same story is playing out on other issues — in fact, on almost every substantive policy issue the U.S. faces.
The next big item on the G.O.P. agenda is taxes. Now, cutting taxes on corporations and the wealthy may be an easier political lift than taking health insurance away from 30 million Americans. But Republicans still have a problem, because they’ve spent years posing as the party of fiscal responsibility, and they have no idea how to cut taxes without blowing up the deficit.
As with health care, the party has masked its lack of good ideas with lies, claiming that it would offset lower tax rates and even reduce the deficit by eliminating unnamed loopholes and slashing unnamed wasteful spending. But as with health care, these lies will be revealed once actual legislation is unveiled. It’s telling that Republicans are already invoking voodoo economics to justify their as-yet-unspecified tax plans, insisting that tax cuts will pay for themselves by leading to higher economic growth.
At this point, however, few people believe them. The Bush tax cuts didn’t create a boom; neither did the Kansas tax-cut “experiment.” Conversely, the U.S. economy did fine after the 2013 Obama tax hike, as has the California economy since Jerry Brown raised state taxes. Party apparatchiks will no doubt engage in an orgy of Reaganolatry, but the broader public probably won’t be moved by (false) claims about the wondrous results of tax cuts 36 years ago.
So tax policy, like health care, will be hobbled by a legacy of lies.
Wait, there’s more.
Foreign policy isn’t usually a central concern for voters. Still, past lies have put the Trump administration in a box over things like the Iran nuclear deal: Canceling the deal would create huge problems, yet not canceling it would amount to an admission that the criticisms were dishonest.
And soon the G.O.P. may even start to pay a price for lying about climate change. As hurricanes get ever more severe — just as climate scientists predicted — climate denial is looking increasingly out of touch. Yet donors and the base would react with fury to any admission that the threat is real, after all.
The bottom line is that the bill for cynicism seems to be coming due. For years, flat-out lies about policy served Republicans well, helping them win back control of Congress and, eventually, the White House. But those same lies now leave them unable to govern.
Avoiding a health-care horror
by E.J. Dionne, Jr. - The Washington Post - September 24, 2017
It is difficult to decide which is the worst aspect of the Republicans’ latest try at repealing Obamacare: the irresponsibility, the cruelty or the lies.
And it is impossible to ignore that the climax of this battle will take place under the shadow of President Trump’s shameful, racially charged attacks on prominent African American athletes. Once again, Trump has demonstrated his lack of seriousness about the responsibilities of his office, his autocratic habit of demonizing dissent, and his willingness to play racial politics to divide and distract.
Trump has reason to distract because the repeal effort he has championed was dealt a near-fatal blow when Sen. John McCain (R-Ariz.) announced Friday that he would vote against the catastrophically flawed proposal to scrap the Affordable Care Act from Sens. Lindsey O. Graham (R-S.C.) and Bill Cassidy (R-La.). McCain stuck to the principles he outlined when he voted against July’s repeal bill , even though Graham is his best friend in the Senate and despite the pressure from Trump and GOP congressional leaders.
There is only one reason the Senate even considered a vote this week: The GOP base, and particularly the party’s donor class, wants repeal. So never mind what happens to Americans with modest incomes who have cancer, diabetes or heart trouble. Politics matters more than giving serious thought to a bill that would upend one-sixth of our economy.
That’s why this bill was not subjected to any serious analysis or debate. Republicans scheduled a quickie, last-minute hearing this week for show. Because Trump and his party want “a win,” they’re willing to wreak havoc on the insurance markets, state governments and people’s lives to get it.
Any serious deliberative process would have forced the GOP to grapple with a statement from the bipartisan National Association of Medicaid Directors on Cassidy-Graham’s approach of marrying block grants to severe cuts. The association called the bill “the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history.”
“Any effort of this magnitude,” the Medicaid directors added, “needs thorough discussion, examination and analysis, and should not be rushed through without proper deliberation.” Exactly.
There has always been something deeply wrong about our country’s failure to provide health insurance for all our citizens, which all other wealthy industrialized nations do. It’s not okay for people to face bankruptcy simply because they are doing everything they can to stay alive. Obamacare was a cautious, market-friendly attempt to make the system a bit kinder.
Since the Republicans launched this year’s repeal offensive, many Americans who thought of the Affordable Care Act as a vague sort of failure have heard the compelling stories of those with preexisting conditions and serious illnesses who are far better off today because of the law. A Washington Post-ABC News poll released Friday showed Americans preferred Obamacare to Cassidy-Graham by 56 percent to 33 percent.
Many who believed Trump and other Republicans when they promised to pass something better than Obamacare now know that this pledge was a sham. What the GOP really wants is to spend a lot less government money helping people get health care. But Republicans can’t admit this because it sounds heartless.
So instead, they lie outright about what their bill does. Slate’s Jamelle Bouieprovided one of the best compendiums of falsehoods being offered on behalf of this bill. Jimmy Kimmel called out Cassidy for failing to live up to what the senator himself called the “the Jimmy Kimmel test.” Kimmel described this as a pledge that “no family should be denied medical care, emergency or otherwise, because they can’t afford it.” Cassidy, Kimmel charged last week, “lied right to my face.”
Trump insisted in a tweet: “I would not sign Graham-Cassidy if it did not include coverage of pre-existing conditions. It does!” Actually, it lets states undermine this coverage.
And if Obamacare is so bad, why are Republicans reportedly trying to buy the vote of Sen. Lisa Murkowski (R-Alaska) with a special provision that would, in effect, allow Alaska to keep the Affordable Care Act pretty much as is? Why not give every state this option by killing Cassidy-Graham altogether?
One can hope that McCain’s brave decision and the doubts expressed Sunday by other Republican senators have done exactly that. But the GOP repeal effort never seems to die, so this week remains a testing time.
It’s a test of whether the movement that saved the ACA this summer can rally once more. It’s a test for Republicans who claim to take health-care policy seriously. And it’s a test for a president who prefers ripping the country apart to governing.
Susan Collins, Voicing Doubt on Health Bill, Leaves It Close to Collapse
by Thomas Kaplan - NYT - September 24, 2017
WASHINGTON — Senator Susan Collins of Maine said on Sunday that it was “very difficult” for her to envision voting for the latest plan to repeal and replace the Affordable Care Act, leaving President Trump and Republican leaders on the precipice of failure in their 11th-hour attempt to assemble the votes they need.
“I have a number of serious reservations about it,” Ms. Collins said on CNN’s “State of the Union.”
Her comments came two days after Senator John McCain, Republican of Arizona, announced that he would not support the measure. Another Republican, Senator Rand Paul of Kentucky, had previously said he would oppose it because he believed it did not go far enough in dismantling the Affordable Care Act — a critique he offered again on Sunday.
Republican leaders in the Senate can afford to lose only two of their members in the narrowly divided chamber, and they have only six days to pass the bill in the Senate using procedures that shield it from a Democratic filibuster.
Ms. Collins was one of three Republicans who voted against the Senate’s previous repeal attempt, in July, along with Mr. McCain and Senator Lisa Murkowski of Alaska. Ms. Collins had previously expressed broad reservations about the new proposal, which was put forth by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana.
“I’m concerned about the impact on the Medicaid program, which has been on the books for more than 50 years and provides health care to our most vulnerable citizens, including disabled children and low-income seniors,” Ms. Collins said on Sunday.
She added that she was also concerned about “the impact on cost and coverage,” as well as “the erosion of protections for people with pre-existing conditions like asthma, arthritis, cancer, diabetes and what it would mean to them.”
Still, she stopped short of declaring that she would vote against the measure, saying she wanted to wait for an analysis from the nonpartisan Congressional Budget Office that is expected to be released early this week.
The analysis is unlikely to transform her views. The budget office said last week that it was aiming to provide a preliminary fiscal assessment of the bill by early this week. But the budget office said that it would take at least several weeks to provide an analysis of the bill’s effects on health insurance coverage and premiums.
The Graham-Cassidy bill would repeal the expansion of Medicaid under the Affordable Care Act as well as the tax credits that are provided to help people buy insurance on the individual market. In their place, it would provide block grants to the states to use for health care.
It would also allow states to seek federal waivers that would allow insurers to charge higher premiums to people with pre-existing medical conditions and to omit certain benefits, like maternity care and mental health care, that they are currently required to offer.
On NBC’s “Meet the Press,” Mr. Paul reiterated his view that the bill was “not repeal.” He expressed willingness to support a narrower repeal measure, but made clear that he objected to the central premise of the Graham-Cassidy bill.
“I’m just not for block-granting Obamacare,” Mr. Paul said, “and calling it a day.”
Senators Revise Health Bill in Last-Ditch Effort to Win Votes
by Robert Pear and Thomas Kaplan - NYT - September 24, 2017
WASHINGTON — With time running short, the authors of the latest plan to repeal and replace the Affordable Care Act shifted money in the bill to Alaska and Maine, which are represented by Republican senators who appear reluctant to support it.
The revised version of the bill, written by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, would provide extra money for an unnamed “high-spending low-density state,” a last-minute change seemingly aimed at Alaska and its holdout Republican senator, Lisa Murkowski, who has yet to say how she will vote. It would also send money toward Maine, whose Republican senator, Susan Collins, had said earlier on Sunday that she would almost certainly vote no.
Mr. Cassidy circulated a table on Sunday showing the state-by-state impact of the revised bill from 2020 to 2026. It indicated that Alaska would receive 3 percent more money under the bill than under current law, while Maine would get 43 percent more.
However, the numbers and the calculations could not be independently confirmed. Similar estimates prepared by Mr. Cassidy’s office for the earlier version of the bill differed significantly from estimates by the Kaiser Family Foundation and health policy consulting firms, which said that most states would receive less money than under current law.
Still, the aim seemed clear. Ms. Collins said on Sunday that she was all but certain to oppose the proposal, bringing to three the Republicans who have publicly voiced opposition — enough to end the bill’s chances this week as time runs out on a last-ditch effort to repeal the Affordable Care Act.
In addition, Senator Ted Cruz of Texas said he had not yet been won over and suggested that Senator Mike Lee of Utah had the same stance. Senator Rand Paul of Kentucky, the first Republican to come out against the measure, once again criticized the bill in blunt terms, despite pressure from President Trump to rethink his opposition.
“It’s very difficult for me to envision a scenario where I would end up voting for this bill,” Ms. Collins said on CNN’s “State of the Union.” “I have a number of serious reservations about it.”
The cascade of critical comments left Mr. Trump and Republican leaders on the precipice of failure in their 11th-hour attempt to fulfill the party’s promise to dismantle a cornerstone of President Barack Obama’s legacy.
Already, Mr. Paul and Senator John McCain of Arizona, who announced his position on Friday, had pushed the bill to the edge of failure. Mr. McCain issued a plea for bipartisanship on a matter as consequential as health care.
Republican leaders can afford to lose no others in the narrowly divided chamber, and they have only until the end of this month to pass the bill in the Senate using procedures that shield it from a Democratic filibuster.
Senators will return to the Capitol on Monday in what could be a bruising week for Mr. Trump and the Senate majority leader, Mitch McConnell of Kentucky. In addition to the health care drama that is looming in Washington, voters in Alabama will vote on Tuesday in a closely watched Republican Senate runoff, and a loss by Senator Luther Strange would be a setback for both Mr. Trump and Mr. McConnell.
The health bill’s authors scrambled to get back on track. The revised version of the Graham-Cassidy bill is generally similar to the original version unveiled on Sept. 13.
But it now would allow states to set many of their own health insurance standards without getting waivers from the federal government. States could, for example, allow insurers to omit some of the benefits they are now required to provide, like coverage for maternity care, mental health care and drug addiction treatment.
Under the revised bill, states could set their own limits on out-of-pocket costs that differ from the federal limits. Under the Affordable Care Act, the annual limits are now $7,150 for an individual health plan and $14,300 for a family plan.
The new version of the bill would give decision-making authority to the administrator of the Centers for Medicare and Medicaid Services, now Seema Verma. The initial version gave the authority to the secretary of health and human services, Tom Price.
Under the revised bill, it appears that a state could allow insurers to set higher premiums based on a person’s health status, though not on the basis of sex or genetic information. In applying for federal grants, state officials would have to describe how they would “maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions.”
All of this might be too late. Changes to the bill’s funding formula to win over Ms. Murkowski might cost it support with conservatives. And the hasty revisions could only strengthen concern that Congress would be moving forward on a bill that has not been properly vetted. The Congressional Budget Office is set to release a partial analysis of its impact as soon as Monday, but that report will not include the latest changes.
Speaking to reporters in New Jersey on Sunday, Mr. Trump seemed to be looking ahead to the next big legislative goal for Republicans — overhauling the tax code — even as he talked up the Graham-Cassidy bill and applied pressure to resistant senators.
“Eventually, we will win on that,” he said of repealing the health law. “My primary focus, I must tell you — and has been from the beginning, as you can imagine — is taxes.”
But the architects of the latest repeal plan, Mr. Graham and Mr. Cassidy, were not giving up.
“We’re moving forward, and we’ll see what happens next week,” Mr. Graham said on ABC’s “This Week.” “I’m very excited about it. We finally found an alternative to Obamacare that makes sense.”
Marc Short, the White House director of legislative affairs, said on NBC’s “Meet the Press” that a Senate vote was planned for this week. But a spokesman for Mr. McConnell declined to affirm that timeline on Sunday.
The Graham-Cassidy bill is the latest attempt to develop a repeal proposal that can win the support of 50 of the Senate’s 52 Republicans — a goal that has proved elusive. It would repeal the expansion of Medicaid under the Affordable Care Act, as well as the tax credits that are provided to help people buy insurance on the individual market. In their place, it would provide block grants to the states to use for health care.
The bill would also allow states to seek federal waivers that would allow insurers to charge higher premiums to people with pre-existing conditions and to omit certain benefits, like maternity and mental health care, that they are currently required to provide.
But the proposal has come under heavy criticism, including from governors, patient advocacy groups and health care providers. In a striking display of the widespread concerns, groups representing insurers, hospitals and doctors released a joint statement on Saturday urging the Senate to reject the measure.
Ms. Collins was one of three Republicans who doomed the Senate’s last repeal attempt, in July, along with Mr. McCain and Ms. Murkowski.
Ms. Collins had previously expressed reservations about the Graham-Cassidy bill. She said she had spoken at length with Vice President Mike Pence on Saturday. But on Sunday she continued to voice concerns about the plan.
“I’m concerned about the impact on the Medicaid program, which has been on the books for more than 50 years and provides health care to our most vulnerable citizens, including disabled children and low-income seniors,” Ms. Collins said. She added that she was also concerned about “the impact on costs and coverage,” as well as “the erosion of protections for people with pre-existing conditions like asthma, arthritis, cancer, diabetes.”
Still, she stopped short of declaring that she would vote against the measure, saying she wanted to wait for an analysis from the nonpartisan Congressional Budget Office that is expected to be released this week.
The analysis is unlikely to transform her views. The budget office said last week that it was aiming to provide a preliminary fiscal assessment of the bill by early this week, but would need more time to provide an analysis of the bill’s effects on health insurance coverage and premiums.
In another sign of the difficult task confronting Republican leaders, Mr. Cruz said he and Mr. Lee were seeking changes to the repeal bill in an effort to drive down health insurance premiums.
“Right now, they don’t have my vote, and I don’t think they have Mike Lee’s either,” Mr. Cruz said at The Texas Tribune’s annual festival in Austin, adding that he wanted to end up in support of the legislation.
A spokesman for Mr. Lee, Conn Carroll, said the senator was seeking “technical changes” to the proposal.
Mr. Paul, a relentless critic of the repeal plan in recent days, continued to assail the bill on Sunday, even after Mr. Trump had publicly expressed hope that the senator would change his mind.
“I haven’t given up on him because I think he may come around, O.K.?” Mr. Trump said on Friday night at a rally in Alabama for Mr. Strange.
But on “Meet the Press,” Mr. Paul once again argued that the bill did not go far enough in uprooting the Affordable Care Act. He expressed willingness to support a narrower repeal measure, but made clear that he objected to the fundamental architecture of the Graham-Cassidy bill.
“This is a bad idea,” he said. “It’s not repeal.”
Why the Latest Health Bill Is Teetering: It Might Not Work
by Sheryl Gay Stolberg and Robert Pear - NYT - September 23, 2017
WASHINGTON — Health insurers, who had been strangely quiet for much of the year, came off the sidelines to criticize it. Many state Medicaid directors could not stomach it, either.
For months now, proposals to repeal and replace the Affordable Care Act have risen and fallen in the House and the Senate, almost always uniting health care providers and patient advocacy groups in opposition but winning support among conservatives, including Republican policy makers. But the version drafted by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana — and hastily brought into the spotlight last week — went further.
It brought much of the health care world together to stop it, an effort that appears to have succeeded — not for ideological reasons, but for the simple reason that administrators, caregivers, advocates and insurers believed it could not work.
Senate Republican leaders hoped to bring the measure to the Senate floor for a vote this coming week. But the bill is on life support after Senator John McCain, the unpredictable Arizona Republican whose dramatic “no” vote killed the previous repeal effort, announced on Friday that he could not “in good conscience” vote for the bill. He joined Senator Rand Paul, Republican of Kentucky, in opposition — and Senator Susan Collins, Republican of Maine, is leaning hard toward no.
The three would be enough to doom the bill.
“I think Republicans remain pretty trapped between an abstract promise to repeal the Affordable Care Act and the reality of what that would mean,” said Matthew Fiedler, an economist at the Brookings Institution who advised President Barack Obama on health policy. “That basic tension is going to remain.”
Should the Graham-Cassidy measure die, it would almost surely end the long Republican quest to repeal and replace the Affordable Care Act, Mr. Obama’s signature domestic achievement. If the Senate does not vote by Sept. 30, the drive to kill the Affordable Care Act will lose special protections under Senate rules that allow it to pass with a simple majority, rather than the 60 votes necessary to overcome a filibuster.
The Senate Finance Committee has scheduled a hearing on the measure for Monday, and proponents of the repeal bill say they are not giving up.
“The deadline is still a week away,” said Tommy Binion, who handles government relations for the Heritage Foundation, a conservative policy organization. “It is one of the last trains leaving the station, and it is a political imperative for the Republican Party. I think we are going to go through a couple more loop de loops on this roller coaster before we are all done.”
In a series of tweets early Saturday, President Trump, who has embraced the legislation in recent days, appeared to be nurturing hopes that the legislative effort could be kept alive. He voiced optimism that Mr. Paul would rethink his opposition “for the good of the party.” He also indicated that he thought Senator Lisa Murkowski, Republican of Alaska, who had wavered publicly about the measure, would support it, though her spokeswoman has said only that the senator was studying the bill.
But at the same time, the president vented his frustration with Mr. McCain, saying he had let his state down and been deceived by Democrats into abandoning a promise.
Patient advocacy groups, who also oppose the Graham-Cassidy measure, say they will continue their fight. “We are certainly not relaxing our efforts, because the vote count is not clear,” said Sue Nelson, a vice president of the American Heart Association, which is fighting to preserve the 2010 health law. “We are going full steam ahead with advertising, lobbying and grass-roots efforts to contact members of Congress.”
And in an unusual joint statement on Saturday, groups representing doctors, hospitals and health plans urged the Senate to reject the bill.
“While we sometimes disagree on important issues in health care, we are in total agreement that Americans deserve a stable health care market that provides access to high-quality care and affordable coverage for all,” the groups, which included the American Medical Association and America’s Health Insurance Plans, said. The bill, they added, “does not move us closer to that goal.”
Still, the pressure on Republicans to fulfill their promise has been intense — not only from the voters who helped elect them, but also from conservative donors. Doug Deason, a wealthy Dallas businessman who manages money for his billionaire father, said he had formed a loose-knit coalition of donors who warned senior Republicans — including Senator Mitch McConnell of Kentucky, the majority leader — that contributions would dry up if Congress did not overhaul the tax code and repeal the Affordable Care Act.
“We said we’re not interested in meeting with him until he gets something done,” Mr. Deason said, recounting a telephone conversation he had with Mr. McConnell over the summer. “He needs to lead.”
The drive for repeal of the Affordable Care Act appeared to be dead at the end of July, after Mr. McCain’s “no” vote on a “skinny repeal” measure that was designed purely as a vehicle to permit negotiations with the House, which had passed a much more ambitious bill. That measure also had critics who called it unworkable and potentially disastrous for the insurance market, but Republican leaders could argue that they never intended to actually enact it. They were prepared to discard their handiwork as soon as House-Senate negotiations could start.
The talks never did.
“It is time to move on,” a dejected Mr. McConnell declared at the time.
But behind the scenes, Mr. Graham, whose main expertise is in military affairs, and Mr. Cassidy, a gastroenterologist, had already been working with Rick Santorum, a Republican former senator from Pennsylvania, on a measure that morphed into the Graham-Cassidy bill.
Their collaboration, Mr. Santorum said, grew out of a chance meeting between him and Mr. Graham in the Senate barbershop last spring. Mr. Santorum had already been working with members of the conservative House Freedom Caucus on a bill to take much of the money spent under the Affordable Care Act and send it to states, with vast discretion over how to use it for health care.
“I thought maybe I should bounce this idea off Lindsey and see what he thinks,” Mr. Santorum said, adding that he thought the measure could attract the votes of Senate Republican moderates.
Mr. Santorum argues that giving governors control over how to spend health care dollars will create efficiencies in the system, and disputes as a “false narrative” the idea that states will get less money under the bill.
The bill would require states to organize their own health care systems by 2020 — a time frame that many health care experts say is unworkable — and would also give states a way to roll back protections for people with pre-existing conditions.
If enacted, the measure would constitute “the largest transfer of financial risk from the federal government to the states in our country’s history,” said the National Association of Medicaid Directors, whose members run the program for more than 70 million Americans.
Beyond that fast time frame, the bill faces other hurdles, said Mr. Fiedler of the Brookings Institution. Politically, it almost appears designed to fail, because many more states would lose money under it than would gain. Many of those losing states are represented by Republican senators whose votes are vital: Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado, Mr. McCain and Ms. Collins, to name a few.
And the legislation would set a cap on how much federal support states would receive per person enrolled in the Medicaid program, while health care costs are rising more quickly than the scheduled growth rate for the cap.
“One of the objectives that Republicans have come to this debate with is to reduce federal spending on health care, and it is very difficult to do that, ultimately, without reducing the people covered,” Mr. Fiedler said. “If you’re not making the underlying health care delivery system more efficient, all you’re doing is shifting around the costs.”
The bill would take money spent under the Affordable Care Act and give it to states in the form of block grants. State officials, including some who initially supported the Graham-Cassidy bill, were dismayed when they saw how much money their states could lose.
“We equalize how much each American receives toward her care, irrespective of where she lives,” Mr. Cassidy said. “I don’t see why a lower-income American in Mississippi should receive so much less than a lower-income American in Massachusetts.”
The bill would, in effect, penalize states that have expanded coverage through Medicaid and the public marketplaces created by the Affordable Care Act. An analysis by the consulting firm Avalere Health found the measure would reduce overall federal funding to states by $215 billion through 2026, and by more than $4 trillion over a 20-year period.
Mr. Graham and Mr. Cassidy, unlike some Republicans, have tried to explain and defend their proposal. But they have been overwhelmed by a tidal wave of criticism from doctors, hospitals, insurers, governors and patients — and even the late-night comedian Jimmy Kimmel. Critics object to these provisions:
The bill could weaken consumer protections in the Affordable Care Act. It envisions waivers of federal law that would allow insurers to charge higher premiums to sick people or omit some of the benefits that are now guaranteed, such as maternity care, mental health services or treatment for drug addiction.
It would eliminate the federal tax credits and other subsidies that make health insurance more affordable for people with low and moderate incomes, letting states decide how to use the money.
It would end the expansion of Medicaid, which has provided insurance to low-income people in 31 states of all political hues. The states include Alaska, Arizona, Arkansas, Colorado, Indiana, Louisiana, New York and West Virginia.
“People are scared,” said Senator Sherrod Brown, Democrat of Ohio. “They read in the paper, they see on TV, they see online that their insurance might be taken away. There’s a lot of fear in this society injected by government, and they should be ashamed of themselves.”
Why Are Drug Prices So High? We’re Curious, Too
by Katie Thomas and Charles Ornstein - NYT - September 17, 2017
This much is clear: The public is angry about the skyrocketing cost of prescription drugs. Surveys have shown that high drug prices rank near the top of consumers’ health care concerns, and politicians in both parties — including President Trump — have vowed to do something about it.
What’s not as clear is exactly why prices have been rising, and who is to blame.
For the past four months, The New York Times and ProPublica, the nonprofit investigative journalism organization, have teamed up to answer these questions, and to shed light on the games that are being played to keep prices high, often without consumers’ knowledge or consent. Katie reports from the health desk at The Times, covering prescription drugs, and Charles is a senior reporter at ProPublica, covering health care and the drug industry.
Our reporting journey has turned up some counterintuitive stories, like how insurance companies sometimes require patients to take brand-name drugs — and refuse to cover generic alternatives — even when that means patients have to pay more out of pocket.
Along the way, we’ve asked readers to share their stories about their struggles with high drug costs. We’ve heard from nearly 1,000 people.
In recent weeks, a few stories caught our eye. A woman in Texas, for example, told us that the company that manages her drug benefits, OptumRx, was going to start asking her to pay more out of pocket for Butrans, a painkilling patch that contains the drug buprenorphine. As a “lower cost alternative,” OptumRx, which is owned by UnitedHealth Group, suggested she try painkillers like OxyContin, according to a letter she shared with us, even though they carry a higher risk of abuse and dependence.
“The whole point of pain management is to take the least amount of medication possible to manage your pain, so that you always have somewhere to go when the pain increases or changes,” she wrote to us. “This is irresponsible and scary ‘cost management.’ ” She did not want us to use her name, saying her employer prohibited her from identifying herself, but she allowed us to share OptumRx’s redacted letter.
Her pharmacy benefit manager, she wrote, is “effectively contributing to the ‘opioid crisis’ with its own policies.”
A spokesman for UnitedHealth, Matthew N. Wiggin, said it takes the crisis seriouslyand wants to ensure that people with chronic pain get the appropriate treatment.
We’ve closely followed the opioid crisis and efforts to hold various parties accountable, among them drug manufacturers, pharmacies and emergency room doctors.
But these stories — about patients who believed their insurers were placing roadblocks in the way of less risky painkillers — felt new to us. The resulting article is on Monday’s front page.
We followed up with several of the readers, and searched social media sites like Twitter and Facebook to see if other patients were talking about this (they were).
Then we asked for documents: billing statements from insurers, denial letters, call logs and doctors’ records. In the case of our lead example, a woman named Alisa Erkes, she also agreed to sign a privacy waiver allowing her insurer, UnitedHealthcare, to comment on her case.
Charles enlisted ProPublica’s deputy data editor, Ryann Grochowski Jones, to analyze data from Medicare prescription drug plans. The results showed that insurers were indeed placing more barriers to drugs like Butrans and lidocaine patches than to cheaper generic opioids.
Insurers say that they are doing their part by placing limits on new prescriptions for addictive painkillers, and that they are also doing more to monitor doctors’ prescribing patterns and to catch abuse by patients. Several insurers said they had seen declines in monthly opioid prescriptions, a sign of progress.
But their behavior has infuriated many patients, who say they want to avoid taking opioids if possible. They argue that insurers are too focused on a drug’s cost, since many of the painkillers with a lower risk of addiction are more expensive.
Our project examining high drug costs is not over. We are already digging into other corners of the prescription drug world, hoping to shed light on more of the hidden forces that are keeping drug costs high. Stay tuned, as well, for more stories that were inspired by our readers.
Everyone Wants to Reduce Drug Prices. So Why Can’t We Do It?
by Jay Hancock - NYT - September 23, 2107
Of all the promises President Trump made for the early part of his term, controlling stinging drug prices might have seemed the easiest to achieve.
An angry public overwhelmingly wants change in an easily vilified industry. The pharmaceutical industry’s recent publicity nightmare included 1,000 percent price increases and a smirking chief executive who said, “I liken myself to the robber barons.” Even powerful members of Congress from both parties have said that drug prices are too high.
But any momentum to curtail prescription drug costs — a problem that a large number of Americans now believe government should solve — has been lost amid rancorous debates over replacing Obamacare and stalled amid roadblocks erected via lobbying and industry cash.
“There is a very aggressive lobby that is finding any and all means to thwart any reform to a system that has produced very lucrative profits,” said Ameet Sarpatwari, an epidemiologist and lawyer at Harvard Medical School who follows drug legislation. “Everything that’s coming out is being hit and hit hard — even stuff that’s common-sensical.”
Members of Congress who deal with health policy have spent much of the year advancing proposals to overhaul the Affordable Care Act, none of which was intended to reduce drug prices. The latest Republican proposal, by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, was no different.
Meanwhile, more than two dozen bills aimed at curbing drug costs have been introduced in this or the previous Congress, according to the Drug Pricing Lab, a Memorial Sloan Kettering Cancer Center program that has cataloged ideas for reducing prices. Many have bipartisan support.
Proposals include allowing cheaper imports from other developed countries; allowing the government to negotiate the price of Medicare-covered drugs; speeding approval of cheaper generics; requiring notification by drug companies before they raise prices; and restricting drug ads aimed at consumers.
Other ideas not in bill form include banning patents for pills that simply modify existing medicines without significant clinical benefits and adjusting prices according to a drug’s effectiveness.
“There’s clearly no single solution out there that will solve this rapidly rising spending,” said Dr. Peter Bach, who leads the lab. But, he added, “there’s not a lot of fundamental disagreement about the direction this needs to move.”
Mr. Trump drew new attention to the issue last month by tweeting that Merck’s chief executive, Kenneth Frazier, “will have more time to lower ripoff drug prices!” after Mr. Frazier quit the president’s manufacturing council to protest his remarks about white supremacists in Charlottesville, Va.
Those comments matched Mr. Trump’s characterization in January of drug companies as “getting away with murder.” That same day, a dozen Republican senators, including Ted Cruz of Texas, John McCain of Arizona and Mike Lee of Utah, voted for the old liberal idea of letting Americans buy cheaper drugs from Canada.
The measure was attached to a budget resolution and wouldn’t, by itself, have allowed imports. It failed 52 to 46 after 13 Democrats voted against it, with some citing safety concerns about foreign-sourced medicine — an idea promoted by American drug makers.
Even so, the vote prompted speculation that a price deal might be within reach. “When we’re talking about garden-variety, generic drugs that can be easily imported from another country that has regulatory procedures that make them safe?” Senator Lee said in an interview. “I don’t see why not.”
In response to the new threats, the Pharmaceutical Research and Manufacturers of America, already one of Washington’s biggest-spending trade groups, reportedly increased member dues 50 percent last year as they prepared for battle.
The pharmaceutical and health products industries spent $145 million on lobbying for the first half of 2017, according to the Center for Responsive Politics.
Drug makers gave $4.5 million to congressional campaigns in that period, including six-figure donations to House Speaker Paul Ryan; Representative Greg Walden, a Republican of Oregon who heads the House Energy and Commerce Committee; and Senator Orrin Hatch, Republican of Utah and chairman of the Senate Finance Committee, a Kaiser Health News analysis found.
The drug lobby has spent $28 million so far this year to air six ads depicting heroic researchers about 4,600 times on national TV, according to iSpot.tv, an ad tracker.
The industry hired the former F.B.I. director Louis Freeh to study the impact of importation. He concluded that it would “leave the safety of the U.S. prescription drug supply vulnerable to criminals seeking to harm patients.” Import proponents argue the Food and Drug Administration could easily ensure safety by licensing and inspecting Canadian suppliers.
Drug makers say that high prices reflect heavy investment in innovation and drug development. They reject the notion that the industry wields too much influence in Washington. The top 10 publicly traded United States drug companies made $67.8 billion after taxes last year, regulatory filings show.
“These are important issues with significant ramifications,” said Holly Campbell, a spokeswoman for the drug trade group. “So we will continue to be engaged with the administration to advance solutions that improve the marketplace and make it more responsive to the needs of patients.”
Efforts to restrain prices have also made little progress in the executive branch. The White House has long been expected to issue an executive order on drug costs. But leaked documents show that deliberations have focused on things the industry wants, like extending overseas patents and changing a drug-discount program for hospitals, and not so much on lowering prices.
Gerard Anderson, a health policy professor at Johns Hopkins University, said Mr. Trump’s draft order “did not talk at all about branded drugs or about specialty drugs,” including for rheumatoid arthritis and cancer, that have seen especially steep price increases. “If that represents the administration’s thinking, then my guess is there is not much effort.”
Mr. Trump’s feud with congressional Republicans, especially the Senate majority leader, Mitch McConnell, means “you’re not going to get any strong direction or leadership out of the White House” on drug prices, said Vishnu Lekraj, who follows pharma stocks for Morningstar, an investment research firm.
Another Trump administration official, Scott Gottlieb, the F.D.A. commissioner, has accused the industry of “gaming” the system to delay the appearance of cheap generics after patents expire. He has pledged to speed applications for generics when there is little competition as part of a “drug competition action plan,” but opposes stronger measures like allowing importation.
But this push by Mr. Gottlieb — who has served on the boards of several pharmaceutical companies and earned large consulting fees from the industry — may be less significant than it appears. Professor Anderson noted that directly pressuring companies to reduce brand-drug prices would be much more meaningful.
Yet even small measures might be too large for Congress. “It is sort of remarkable to see just how far the system can bend before meaningful reform is taken,” said Dr. Sarpatwari. “If there ever was a time to strike while it’s hot, it’s now.”
When a Drug Coupon Helps You but Hurts Fellow Citizens
by Austin Frakt - NYT - September 25, 2017
It’s completely rational for you to use coupons to lower the cost of your brand-name drug purchase.
But if the coupon is causing you to switch away from a generic drug with an overall lower cost, you may be playing a role in pushing up drug spending and premiums for others.
Let’s say that I needed the brand drug Effexor XR, used to treat depression and anxiety disorders. It would cost me at least $65 per month on my health insurance plan. It retails for about twice that amount, and the difference would be picked up by my insurer. But the generic version, Venlafaxine, would cost my insurer far less, and my co-payment would be only $10 per month.
My insurer and I would both save money if I purchased the generic. Wyeth, the maker of Effexor XR, would lose a sale.
But Wyeth is fighting back. It offers an Effexor XR coupon card I could use at the pharmacy that would reduce my cost to as low as $4 per month. At that price, I would prefer the brand-name product. Why pay $10 for a generic when for $4 I can get the brand-name drug?
But for the insurer, unless it is getting a discount or a rebate from the manufacturer, the cost is about $130 minus the co-payment.
Wyeth is by no means alone in this tactic. GlaxoSmithKline, Abbott Laboratories, Sanofi, Novartis, Roche, Pfizer and many other drug manufacturers also offer coupon cards online for their brand-name products that compete with generics.
Such coupons are not new. But from 2007 to 2010, brand-name drugs with coupons grew as a share of retail drug spending, to 54 percent from 26 percent. The figure may well be even higher today, according to Leemore Dafny, an economist at Harvard Business School.
Though such coupons assist patients, they do nothing for insurers, for whom generics are still a better deal. And that’s the problem. By encouraging patients to switch from generic to brand drugs, coupons effectively impose higher costs on insurers. That ends up increasing premiums, and not for any particularly good reason. Generic drugs are generally regarded as equivalent to their corresponding brand products and are 80 percent cheaper, on average.
This is precisely why plans impose much higher cost-sharing for brand-name drugs than their generic equivalent. Doing so can help keep premiums down without harming patients. Perhaps in response, Americans are using more generics. In 2006, 90 percent of prescriptions that were filled were for a generic equivalent to a brand-name drug, when such a generic was available. In 2012, that number had increased to 95 percent.
The circumvention of insurance plan designs by these coupons has long been suspected to contribute to drug spending and premium growth. A recent studyexamining data from 2007 through 2010 and published in The American Economic Journal: Economic Policy, puts some numbers to the phenomenon. Co-pay coupons increase use of brand drugs for which generics are available by 60 percent and spending by as much as 4.6 percent.
“Coupons raise spending in two ways,” said Ms. Dafny, an author of the study. “In addition to making more expensive brand drugs more attractive to consumers, it allows manufacturers to raise brand prices.”
For example, the $4 cost with the coupon holds the consumers’ prices fixed at a low level. That allows the manufacturer to raise the overall price without losing sales. This raises spending, too, but for the insurer.
In total, the coupons for drugs with generic competition are responsible for several billion dollars of additional drug spending per year, according to the study, which was also written by Christopher Ody with Northwestern’s Kellogg School of Management and Matthew Schmitt with the U.C.L.A. Anderson School of Management.
The coupons do so, by and large, without expanding the number of people using medications, just by switching which product they purchase — brand or generic. Drug manufacturers also offer coupons for drugs without generic competition, but they were not the focus of the study.
If drug coupons are problematic for insurers and drive up premiums, why don’t insurers reject them?
“They say they can’t ban them because they can’t tell when a coupon is being redeemed at the pharmacy counter,” Ms. Dafny said. But “public payers ban them, after all, and their enrollees pick up prescriptions at the same pharmacies.”
Medicare, for example, bans their use. But enforcement is incomplete, and by one estimate 6 percent of Medicare enrollees use coupons anyway. And Massachusetts has passed laws that ban co-pay coupons for brand drugs with generic equivalents.
The likelier explanation, Ms. Dafny says, is that denying consumers access to coupons would cause a backlash. In the short term, out-of pocket-prices would rise for the few: the consumers relying upon them. But in the long term, encouraging consumers to use generic drugs when available — which is what insurers are trying to do — would reduce drug spending and premiums for everyone.
The Health Care Cul-de-Sac
by Ross Douthat - NYT - September 23, 2017
Before John McCain put yet another Republican health care plan on life support on Friday, I was going to do with the Graham-Cassidy legislation what I’ve done with previous Republican bills, and weigh the plausible ideasthat it contains against its hastily rigged-up architecture and predictable G.O.P. stinginess.
But sometimes, when a party has spent most of a year producing health care bills that excite almost nobody and that even the senators voting for them can’t effectively defend, it’s worth stepping back and thinking about our national priorities.
This goes for both parties: not only the stepping-on-rakes Republicans, but the suddenly single-payer-dreaming Democrats. If Obamacare repeal is really dead for the year 2017, both left and right have a chance to shake their minds free of the health care debate and ask themselves: What are the biggest threats to the American Dream right now, to our unity and prosperity, our happiness and civic health?
I would suggest that there are two big answers, both of which played crucial roles in getting a carnival showman who promised to Make America Great Again elected president. First, an economic stagnation that we are only just now, eight years into an economic recovery, beginning to escape — a stagnation that has left median incomes roughly flat for almost a generation, encouraged populism on the left and right, and made every kind of polarization that much worse.
Second, a social crisis that the opioid epidemic has thrown into horrifying relief, but that was apparent in other indicators for a while — in the decline of marriage, rising suicide rates, an upward lurch in mortality for poorer whites, a historically low birthrate, a large-scale male abandonment of the work force, a dissolving trend in religious and civic life, a crisis of patriotism, belonging, trust.
Now a follow-up question: Is the best way to address either of these crises to spend the next five years constantly uprooting and replanting health insurance systems, and letting health care consume every hour of debate?
That appears to be what some on both sides want to happen. The latest Republican plan would push most of Obamacare’s funding down to the state level, theoretically limiting the issue’s role in national debates. Except that it wouldn’t. Every state-by-state fiasco (and there would be many) would bring calls to recentralize, every federal regulatory decision would be litigated furiously, and the issue would dominate the 2020 campaign at the state and federal levels both.
And if the Democrats, having blown up the insurance system once to implement Obamacare, really rallied around a Bernie Sanders-style proposal to do it all over again but on a bigger scale? Then not only would 2020 be a health care election, but if the Democrat won, the next two years would be consumed by outlandish single-payer expectations.
Where would that leave our two big problems, stagnation and the social crisis? Certainly health care is connected to both of them, because everything is always connected. Conservatives will point out that the way health care costs eat into paychecks is part of the story of stagnation. Liberals will respond that universal health insurance helps stabilize and lift up the working class. Conservatives will object that Medicaid reduces work-force participation and possibly subsidizes opioid addiction and that its value to beneficiaries is overstated. And so on.
But when your main challenges involve men who aren’t working, wages that aren’t rising, families that aren’t forming and communities that are collapsing, constantly overhauling health insurance is at best an indirect response, at worst a non sequitur. Especially since right now health care inflation is relatively low, the deficit has temporarily stabilized and Obamacare is less disruptive than both optimistic and pessimistic accounts suggested.
There are better options for both parties. Republicans could get off the repeal-and-replace merry-go-round and actually try to govern on a version of the Trump agenda: With one hand, cut corporate taxes and slash regulations to spur growth; with the other, spend on infrastructure to boost blue-collar work, cut payroll taxes and increase the child tax credit, and push to reduce low-skilled immigration. Pay for some of it with caps on tax breaks, let paying for the rest wait for another day.
Democrats, meanwhile, could let single-payer dreams wait (or just die) and think instead about spending that supports work and family directly. They could look at proposals for a larger earned-income tax credit, a family allowance, and let the “job guarantee” and “guaranteed basic income” factions fight things out. If they want to go big in 2020, they could run on wage subsidies and public works, not another disruptive health care vision.
Health care reform was the Barack Obama presidency’s main achievement, but it crippled his administration politically once it passed. Obamacare repeal has devoured the first year of the Trump presidency, with nothing to show for it. The country has bigger problems than its insurance system. It’s time for both parties to act like it.
Before John McCain put yet another Republican health care plan on life support on Friday, I was going to do with the Graham-Cassidy legislation what I’ve done with previous Republican bills, and weigh the plausible ideasthat it contains against its hastily rigged-up architecture and predictable G.O.P. stinginess.
But sometimes, when a party has spent most of a year producing health care bills that excite almost nobody and that even the senators voting for them can’t effectively defend, it’s worth stepping back and thinking about our national priorities.
This goes for both parties: not only the stepping-on-rakes Republicans, but the suddenly single-payer-dreaming Democrats. If Obamacare repeal is really dead for the year 2017, both left and right have a chance to shake their minds free of the health care debate and ask themselves: What are the biggest threats to the American Dream right now, to our unity and prosperity, our happiness and civic health?
I would suggest that there are two big answers, both of which played crucial roles in getting a carnival showman who promised to Make America Great Again elected president. First, an economic stagnation that we are only just now, eight years into an economic recovery, beginning to escape — a stagnation that has left median incomes roughly flat for almost a generation, encouraged populism on the left and right, and made every kind of polarization that much worse.
Second, a social crisis that the opioid epidemic has thrown into horrifying relief, but that was apparent in other indicators for a while — in the decline of marriage, rising suicide rates, an upward lurch in mortality for poorer whites, a historically low birthrate, a large-scale male abandonment of the work force, a dissolving trend in religious and civic life, a crisis of patriotism, belonging, trust.
Now a follow-up question: Is the best way to address either of these crises to spend the next five years constantly uprooting and replanting health insurance systems, and letting health care consume every hour of debate?
That appears to be what some on both sides want to happen. The latest Republican plan would push most of Obamacare’s funding down to the state level, theoretically limiting the issue’s role in national debates. Except that it wouldn’t. Every state-by-state fiasco (and there would be many) would bring calls to recentralize, every federal regulatory decision would be litigated furiously, and the issue would dominate the 2020 campaign at the state and federal levels both.
And if the Democrats, having blown up the insurance system once to implement Obamacare, really rallied around a Bernie Sanders-style proposal to do it all over again but on a bigger scale? Then not only would 2020 be a health care election, but if the Democrat won, the next two years would be consumed by outlandish single-payer expectations.
Where would that leave our two big problems, stagnation and the social crisis? Certainly health care is connected to both of them, because everything is always connected. Conservatives will point out that the way health care costs eat into paychecks is part of the story of stagnation. Liberals will respond that universal health insurance helps stabilize and lift up the working class. Conservatives will object that Medicaid reduces work-force participation and possibly subsidizes opioid addiction and that its value to beneficiaries is overstated. And so on.
But when your main challenges involve men who aren’t working, wages that aren’t rising, families that aren’t forming and communities that are collapsing, constantly overhauling health insurance is at best an indirect response, at worst a non sequitur. Especially since right now health care inflation is relatively low, the deficit has temporarily stabilized and Obamacare is less disruptive than both optimistic and pessimistic accounts suggested.
There are better options for both parties. Republicans could get off the repeal-and-replace merry-go-round and actually try to govern on a version of the Trump agenda: With one hand, cut corporate taxes and slash regulations to spur growth; with the other, spend on infrastructure to boost blue-collar work, cut payroll taxes and increase the child tax credit, and push to reduce low-skilled immigration. Pay for some of it with caps on tax breaks, let paying for the rest wait for another day.
Democrats, meanwhile, could let single-payer dreams wait (or just die) and think instead about spending that supports work and family directly. They could look at proposals for a larger earned-income tax credit, a family allowance, and let the “job guarantee” and “guaranteed basic income” factions fight things out. If they want to go big in 2020, they could run on wage subsidies and public works, not another disruptive health care vision.
Health care reform was the Barack Obama presidency’s main achievement, but it crippled his administration politically once it passed. Obamacare repeal has devoured the first year of the Trump presidency, with nothing to show for it. The country has bigger problems than its insurance system. It’s time for both parties to act like it.
Redefining awkward: LePage preaching about health care
by Patricia Callahan - Bangor Daily News - September 24, 2017
I did a double-take when I heard Governor LePage flew to Washington, DC, to meet with Vice President Pence to discuss the latest attempt to repeal and replace the Affordable Care Act. This dynamic duo of extreme conservatism are attempting some sort of power play to pressure Senator Collins to support the Graham-Cassidy Act.
Talk about an awkward.
I mean, LePage was just trash talking Collins over the summer, speculating that her chances in a Republican gubernatorial primary race weren’t great. Pretty cold considering her support for LePage in 2014 — cold enough that the Pence/LePage bequest to Collins should’ve actually started with the phrase:
We know this request is awkward, but …
It gets more awkward when you consider that LePage isn’t backstabbing and pressuring any average fellow Republican and supporter. Collins has been a prize fighter at the center of the battle royal over health care in DC for several weeks now.
I highly doubt peer pressure from our governor is on her radar of factors to consider regarding national health care policy.
Further, it’s hard to imagine why LePage would consider himself an expert on health care.
For starters he’s the governor of a state that’s been seeing an average of one overdose death a day for a year and a half now. The current collective weight of this addiction epidemic and its generational aftermath cannot be underestimated. However, as the epidemic burgeoned, the LePage administration seemed primarily focused on cutting health care access by trimming MaineCare rolls.
And as if previous cuts during an epidemic weren’t enough, our most recent legislative session opened with a LePage administration proposal to cut MaineCare access for working parents to 40 percent of poverty. Apparently in LePage’s world, it would be okay to force parents to choose between treating a deadly condition like addiction or providing for their children.
At 40 percent of poverty, it’d be hard to do both.
I know someone paying $390 a month for methadone treatment without insurance. That’s just the cost of the treatment itself — depending on the distance to the nearest clinic, transportation costs can jack that figure up considerably.
At 40 percent of poverty, a hypothetical single mom of two would’ve had to fork over at least two or three of her paychecks a month to maintain methadone treatment. Thankfully the proposal was ignored by the legislature, but that the LePage administration even put the idea out there speaks volumes.
The LePage administration’s handling of Maine’s overall health care infrastructure hasn’t been overly sound, either. Even though LePage likes to brag about paying back debts to hospitals early in his tenure, their opposition to things like cutting Mainecare access to 40 percent of poverty fall victim to the administration’s selective perception.
LePage’s trip to DC indicates the Maine Hospital Association’s concerns about the Graham-Cassidy health care proposal are meeting the same fate. Never mind that the association is worried about the survival of our rural hospitals.
Never mind that the association’s president said, in reference to Graham-Cassidy:
We’re talking about something that is almost impossible to overstate. We’re talking about, for sure, service closures and probably hospital closures if this would go through. Steven Michaud, President, Maine Hospital Association
Nevermind that the justifications for LePage’s support of Graham-Cassidy are being questioned from a variety of directions. Or that addiction experts fear the legislation would make the addiction epidemic worse.
I trust that Collins has her sights focused on indicators that matter, like the pending Congressional Budget Office scoring of this latest repeal and replace effort. LePage and his awkwardness don’t belong at that battle royal.
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