Editor's Note:
Don McCanne's comment on the Jonathan Chait article (Pretending Single Payer Health Care Is Easy to Pass Doesn’t Make It Easy) posted in my August 17, 2018 blog is instructive to those of us advocating health care reform, and who are occasionally (or not so occasionally) frustrated by the seemingly slow pace of change. I hope you agree.
-SPC
Comment by Don McCanne
Jonathan Chait is correct. The benefits of a well designed, single payer, improved Medicare for all are not in dispute. It is not the policies that are a problem, but rather it is the political obstacles that have prevented us from enacting and implementing such a system.
We are moving again into a debate on the left - the progressives supporting a bona fide single payer Medicare for all system, and the centrists expropriating the Medicare for all rhetoric to support a public option with a Medicare label. The ideologues on the right don't have to do anything. The left will self-destruct thereby confirming that Chait's point is correct - the political obstacles are great.
An important point here is that the policy message must remain intact. You do not discard essential policy positions as you sit down to negotiate a compromise, such as supporting the incremental step of enacting a public option with a Medicare label. We did that before.
Although the single payer purists were ejected from the process, the center-left supported a public option, but then in negotiations allowed it to be transformed from a strong public model, as described by Jacob Hacker, into a very weak model even stripped of some of the beneficial features of private commercial insurance just to be sure that it would not be a competitive threat in the private market. Even that was too much, and so the emasculated public option was abandoned. That's what happens when you compromise on policy.
Incremental steps merely tweak our dysfunctional, inequitable, unaffordable, administratively overburdened system - perpetuating most of the defects that cry out for reform. We basically have the single payer policy right. We do not want to negotiate that away as the center-left did last time.
Although the barriers are political, it is a mistake to make them partisan. That's obvious when you look at the obstructionism of the Republicans who for years demanded that we replace the Affordable Care Act with their own model that it turns out never really existed. It definitely would be a mistake, as mentioned above, for the Democrats to move forward now with this intra-party divide on single payer Medicare for all versus a Medicare public option for some.
The right understands the well designed single payer model. The recent Mercatus report is an example, even if the single payer concept was modified to try to discredit the concept. They still showed that everyone would be covered with a $2 trillion savings over a decade (though the results would be much more impressive had they accurately analyzed a model such as PNHP's). Also, in a recent Quote of the Day, two libertarians in separate reports indicated that they too understand the benefits of the single payer model. So we don't want to change policy, and, on the politics, we want to end partisanship and start communicating better.
But to the really important point in Chait's article, he says that we are not persuasive in our suggestions on how to get around the political obstacles in the way of single payer. He has a point since we currently do not have a single payer system in spite of a quarter of a century of trying. But what we don't want to do is to walk away because the political barriers are too great, thereby making that a self-fulfilling prophecy (Chait and Krugman, take note). So how do we get around those barriers?
First, as Chait indicates, is eduction. We must be unrelenting in getting out the word on just what an improved Medicare is all about. As the understanding of the concept increases, coalition and grassroots organizing must be utilized to help spread the word. Polling indicates that these efforts have been effective, but the process is very slow and laborious.
Chait, Krugman and others have acknowledged the clear benefits of the single payer model while they have become somewhat dismissive because of the political challenges. Rather than an expression of pessimism on their part, it seems to me that they are expressing realism with their understanding of how difficult the process is. We certainly understand that as well, as we have lived with this all these years.
Education. Coalitions. Activism. Grassroots organizing. These activities in all of their permutations. Be there and do it. Maybe Chait doesn't think this is persuasive, but it is what we have, and it can work as those in the civil rights movement have shown us (and Social Security, and Medicare, and the end of the Vietnam war, and so on). We must keep on. As FDR said, "make me do it."
Reclaiming Patriotism for the Left
by Jefferson Cowle - NYT - August 21, 2018
The resurgence of blood-and-soil nationalism around the world seems to prove that appeals to nationhood are too racist, too tribal and too dangerous to be of value. Yet surrendering patriotism to champions of the ethno-state abdicates the fight for the soul and meaning of the American project.
The American left, from the center of the Democratic Party to its insurgent challengers, needs a dose of national vision. One of the core lessons of Trumpian politics is that Americans are starved for a meaningful politics of what it means to be American. Getting rid of the vainglorious Trump administration is only a partial solution. The causes of his rise remain.
Call what is needed a reinvigoration of “civic nationalism” or “civic republicanism” (a reference to the ancient political ideal, not the party). This is a revival of the “bond of common faith,” the “bond of common goal,” as Robert Kennedy once put it, which needs constructive outlets if what is left of American democracy is to survive.
In recent decades, progressive forces in the United States have split between two positions, both of which surrender a robust and hopeful sense of national citizenship. On one track can be found a cosmopolitan economic elite that embrace a multicultural world order shaped largely by the politics of corporate globalization. On the other track are radical critics of the racism and imperialism of the American state who often support local community and transnational solidarity but maintain a deep cynicism, even despair, about the American project. Both groups have abdicated the national story to their shared political enemies. What remains is a fervent hybrid of nationalism and anti-statism, an echo of the rebel yell.
The American past, according to the historian Gary Gerstle in his book “American Crucible,” can be understood as a struggle between “two powerful and contradictory ideals” — a civic and racialized national vision. Yet the dissolution of a progressive civic dimension has left us with an unchallenged ethno-racial nationalism.
Globalization has further complicated the problem. In a dizzying world of oppressive economic and political inequality, global trade, immigration and technological disruption, voters seek grounding not in technocratic detail but in place, in time, in tradition and, above all, in the shared fate, history and meaning of the nation.
The unhealed wounds of the 2008 financial crisis may have laid the way for Donald Trump, but the full mosaic of the American working class has long been looking desperately for routes to make America great again. As globalization expanded, it pounded foreign cars with sledge hammers, sponsored protective tariffs, promoted “Buy American” campaigns, tried to defeat Nafta, tried to organize unions and fought against undocumented migrant labor. But the plants closed anyway, domestic and foreign capital moved around, mass migrations happened, attacks on worker protections proceeded at a relentless pace, and the increasingly complicated world of national politics seemed more focused on Davos than Peoria.
Before the 1960s, dissenting and progressive movements regularly invoked nationalist and patriotic themes. The 19th-century Knights of Labor — one of the more inclusive labor organizations in American history — couldn’t get enough of the Fourth of July and the Declaration of Independence. Teddy Roosevelt advocated his “New Nationalism” as a counterbalance to the seemingly unchecked power of the robber barons. The socialist leader Eugene V. Debs drew on American traditions to frame his radical critiques of corporate power. The labor upheavals of the 1930s openly expressed faith in a “working-class Americanism.” Even the American Communist Party cloaked itself in “Americanism” and the words and visage of Abraham Lincoln. In Franklin Roosevelt’s efforts to reconfigure class power, he did not attempt to speak for workers or the poor but simply said that tax on the rich was “the American thing to do.”
In the midst of the Cold War, when Paul Robeson was questioned by House Committee on Un-American Activities about his association with the African-American radical Ben Davis, he replied, “I say that he is as patriotic an American as there can be, and you gentlemen belong with the Alien and Sedition Acts, and you are the nonpatriots, and you are the un-Americans, and you ought to be ashamed of yourselves.”
Reviving this older stream of dissenting rests on the active interests and lost authority of its citizens and its fading democratic values. This would replace “my country right or wrong” with the centuries-long struggle, as the Rev. Dr. Martin Luther King Jr. put it, “to be true to what you said on paper.” This is the position from which voting rights, civil rights, immigrant rights and economic rights can be fought: with a vision of what is acceptably American and what is not. Decent people will rise to the challenge.
The nation is the only “imagined community,” as Benedict Anderson put, where everything from mass transit to health care to wealth distribution to a green economy can find traction. A rejuvenated national vision would transcend the backward-looking — and often reactionary — search for an America in arrested decay that has too often informed politics since Ronald Reagan first promised to make America great again.
Civic patriotism must also be an aspirational story of struggle and inclusion. The narcissistic and racist politics of right-wing nationalism must be challenged with an expansive and inclusive civic vision about hope and potential. It’s what Barack Obama spoke of at the 50th anniversary of the Selma march. Standing before the Edmund Pettus Bridge, he asked, “What greater form of patriotism is there than the belief that America is not yet finished, that we are strong enough to be self-critical, that each successive generation can look upon our imperfections and decide that it is in our power to remake this nation to more closely align with our highest ideals?”
To be sure, the rhetoric of nationalism can be dangerous in a place with a history of settler colonialism, slavery, anti-immigrant hysteria and territorial expansion. Any civic framing risks fomenting exclusion by drawing lines between those who are in and those who are out — an especially profound problem in an era of mass migration. Yet when the American left abandons any vision of social patriotism because of the racist ugliness it has come to symbolize, it concedes the American story to the voices of exclusion and avarice.
The pragmatist philosopher Richard Rorty made many of these arguments 20 years ago in a book, “Achieving Our Country.” That book became famous after the 2016 election for having predicted the rise of a “strongman” to fill the void in national politics. He feared that indulging in cultural politics rather than emphasizing the material interests of American working people, and surrendering the struggle to shape the national vision where that can happen, would lead to such a catastrophe. While his nightmare of the nationalist demagogue has come to pass, few people are talking about the foundation of his predictions.
Patriotism may well be the last refuge of the scoundrel, but as a pragmatist like Mr. Rorty would tell you, it is too powerful and too important to leave to the scoundrels. Voters are in search of a place of vision for average Americans, a place of idealism in an age of cynicism, a place of unity in a time of fracture and a place where policy can be embedded in something greater than technocracy.
While commentators are getting worked up over the revival of “socialism,” an increasing number of insurgent blue-collar Democrats across the country are looking to recapture a sense of nation. The dark-horse candidate from Kansas, the Army veteran James Thompson, for instance, promises to “Fight for America.”
As we approach midterm elections, we urgently need to hear these messages in good faith and rise to their challenge.
Fact checkers have a Medicare-for-all problem
by Ryan Cooper - The Week - August 21, 2018
Medicare-for-all: Would it save American society money? That question has been tying fact checkers in knots over the past several weeks.
One recent working paper put out by the libertarian Mercatus Center unwittingly answered in the affirmative, to the tune of over $2 trillion over a 10-year period. But so far The Washington Post, The Associated Press, FactCheck.org, PolitiFact, and CNN have absolutely beclowned themselves trying to dispute the study's clear finding.
Here's the background. Bernie Sanders has a Medicare-for-all bill that he put out last year. It would fold all Americans into an upgraded Medicare system over four years, which would now cover dental, vision, and hearing with no cost-sharing. Prescription drugs would be covered with small cost-sharing, capped at $250 per year. It would be paid for with new taxes, but offset by zeroing out insurance premiums and almost all cost-sharing.
When it comes to overall spending, this would have three effects pulling in different directions. First, there would be higher utilization and thus more spending, as people who were prevented from seeking treatment due to cost could now go to the doctor. But second, medical providers would be paid somewhat less, because Medicare reimbursement rates are 40 percent lower than those of private insurance — though they are higher than Medicaid (the largest insurer in the country) and much higher than that of uninsured people who simply can't pay for the emergency treatment that hospitals are legally required to provide.
Third, because they would now only have to deal with one billing system, providers would be able to dramatically streamline their administrative apparatus. A Health Affairs study of eight rich countries, for instance, found U.S. hospitals spent by far the highest faction of their budgets on administration, at 25.3 percent — while those of the Netherlands spent 19.8 percent, the U.K. spent 15.5 percent, and Canada spent 12.4 percent.
Therefore, figuring out what Sanders' Medicare-for-all bill might cost overall depends on two estimates and one fact: 1. how much utilization will increase, 2. how much can be saved on administration, and 3. what the provider reimbursement rates are. The first two are necessarily uncertain, but the third is simply whatever is stipulated in the Medicare-for-all legislation.
Charles Blahous of the Mercatus Center did an elementary study of Sanders' Medicare bill whose main purpose was pretty obviously to find a really big number for new public spending, and then get that headline figure blasted out in the media.
But buried in the tables there was also an estimate of total national health expenditures (that is, all public and private spending) of the status quo compared to the Sanders plan. Here is the table — look at "Currently projected national health expenditures (NHE)" versus "NHE under M4A," which I have underlined:
Mysteriously, Blahous chose not to display the summed total figures for those rows, but if you do the arithmetic, you find he estimates status quo NHE at $59.7 trillion over 10 years, while he estimates NHE under the Sanders plan at $57.6 trillion over the same time frame — for a savings of $2.1 trillion.
Perhaps not satisfied with this result, Blahous then put forward an alternative plan of his own in which provider payments would not be cut as much, with total NHE spending somewhat higher. Importantly, this plan has nothing at all to do with the Sanders bill. It's just something he made up.
He also heavily emphasized that Medicare reimbursement rates are 40 percent lower than private insurance, but did not outline how much the Sanders plan specifically would cut. However, if you go into his tables and reverse-engineer the figures, it must be something like 11 percent.
That brings me to the epic fact checker faceplant. Sanders trumpeted the Mercatus finding, because it was hilarious and a good demonstration of how America could be getting universal Medicare while spending less overall — even given no doubt slanted libertarian assumptions. Glenn Kessler of The Washington Post was first on the attack, giving Sanders 3 out for 4 "Pinocchios" for a supposedly "cherry-picked" $2 trillion figure. He asserted that Blahous' alternative Medicare plan was more realistic, as did Robert Farley of FactCheck.org and AP's Ricardo Alonso-Zalvidar. PolitiFact rated Sanders' claim as "half true" because he didn't mention the Blahous plan. CNN's Jake Tapper put out a video chiding him and Alexandria Ocasio-Cortez for relying on the $2 trillion figure. "A reminder to all you politicians out there, you're perfectly entitled to your own opinions, but not your own facts," tut-tutted Tapper.
This point is wildly misleading, and indeed has nothing to do with facts as such at all. The fact checker brigade is saying that provider payments will be hard to cut, and therefore Sanders might end up passing something different than his Medicare bill. Therefore he is a liar. But Blahous's study absolutely, positively does say that the Sanders plan as written will save the American people $2 trillion. Sanders didn't mention the more expensive Mercatus plan because it is not his plan. Vague speculation about future political negotiations has nothing whatsoever to do with the facts of the Sanders proposal, nor the empirical contents of the Mercatus study.
But that's not even the worst part.
As part of its PR rollout of the paper, Mercatus bought buying ads for Facebook in D.C. promoting a Wall Street Journal op-ed in which Blahous baldly misrepresents his own paper, writing that the Sanders bill would "immediately and dramatically cut provider payment rates by roughly 40 percent."
(Screenshot via Facebook political ad tracker)
As noted above, this is absolutely false, because only about half of people are on private insurance. Medicare payments would stay the same, while Medicaid and uninsured payments would go up. But Kessler, after talking to Blahous, initially swallowed this characterization, writing in his first article that providers "would face an immediate cut of 40 percent in their payments."
He was forced to correct that article (for that and several other factual errors) — though a video which is still up on The Washington Post at the time of writing contains the same false claim, asserting the plan "generously assumes providers would be paid roughly 40 percent less than they are now." Unbelievably, even after correcting his first article, Kessler wrote another article making the false claimagain, writing "the Sanders plan would slash payments to providers by 40 percent." That one is still uncorrected at the time of writing.
This 40 percent talking point is not just wrong, it is preposterous. One way of seeing why is by looking at how much Blahous estimates Sanders will save with provider cuts in the table above. On the right-hand column, we find the sum total of "Applying Medicare payment rates" from 2022-31 is $5.3 trillion in spending cuts. If that is a 40 percent cut, then that implies that the total volume of provider payments in the Sanders plan must be only about $8.0 trillion ((5.3/0.4)*0.6 = 7.96) — over a period in which national health expenditures are $57.6 trillion. Less than a seventh of medical spending going to providers in a Medicare system doesn't pass the laugh test — in 2015 existing Medicare provider payments accounted for at least 77 percent of spending, with another 14 percent going to prescription drugs — and again, the true cut to providers in the paper itself must be about 11 percent.
Finally, this study should be seen as the absolute worst-case scenario for universal Medicare, not a fair estimate of what it might cost. The fact that even the Mercatus Center couldn't make it look that bad is a very good sign. Fact checkers need to get a grip.
Medicare for All's Time Has Come
by Bernie Sanders - Common Dreams - August 16, 2018
Let's be clear. The American people are increasingly tired of a healthcare system that works for Wall Street investors, insurance companies and the pharmaceutical industry—but ignores their needs. They want real change, and poll after poll shows that they want to move toward a Medicare-for-all, single-payer system. And for good reason.
Today, the United States has the most expensive, inefficient, and bureaucratic healthcare system in the world. Despite the fact that we are the only major country on earth not to guarantee healthcare for all—and have 30 million uninsured and even more who are underinsured—we now spend more than twice as much per capita on healthcare as the average developed country.
According to a recent Organisation for Economic Co-operation and Development analysis, we spend more than $10,300 per capita on healthcare. Meanwhile, Canada spends just $4,826, France spends $4,902, Germany spends $5,728, and the United Kingdom spends $4,264.
Further, despite this huge expenditure, which now constitutes almost 18% of our GDP, our healthcare outcomes are worse than most of these other countries. For example, our life expectancy is 2.5 years lower than Germany's and our mortality rate for children under the age of 19 is at the top of the list compared to other developed countries.
The ongoing failure of our healthcare system is directly attributable to the fact that—unique among major nations—it is primarily designed not to provide quality care to all in a cost-effective way. Instead, the system makes maximum profits for health insurance companies, the pharmaceutical industry and medical equipment suppliers.
The Medicare-for-all legislation that I wrote, which now has 16 co-sponsors in the Senate, would provide comprehensive healthcare to every man, woman and child in our country—without out-of-pocket expenses. No more insurance premiums, deductibles or co-payments. Further, it would expand Medicare coverage to include dental and vision care. In other words, this plan would do exactly what should be done in a civilized and democratic society. It would allow all Americans, regardless of their income, to get the healthcare they need when they need it.
Under the current system, while thousands of Americans die each year because they lack access to the healthcare they desperately need, the top five health insurance companies last year made $21 billion in profits, led by the UnitedHealth Group, which made $10.56 billion.
As tens of thousands of American families face bankruptcy and financial ruinbecause of the outrageously high cost of healthcare, the CEOs of major insurance companies receive disgustingly high levels of compensation. According to Axios, in 2017, the CEO of UnitedHealth Group, Dave Wichmann, received $83.2 million; the CEO of Aetna, Mark Bertolini, received $58.7 million, and the CEO of Cigna, David Cordani, received $43.9 million.
Today, as an indication of how dysfunctional our current system is, about one out of every five Americans cannot afford to fill the prescriptions given to them by their doctors because we pay, by far, the highest price in the world for prescription drugs. A 2013 study showed that in 2010, the United States paid, on average, about double what was paid in the United Kingdom, Australia, and Switzerland for prescription drugs. Since 2014, the cost of 60 drugs commonly taken has more than doubled, and 20 of them have at least quadrupled in price.
While millions of Americans are unable to afford the medicine they desperately need, or are forced to cut their pills in half in order to save money, five top drug companies made over $50 billion in profits last year and, in 2015, 10 prescription drug CEOs made a combined $327 million in total compensation.
Would a Medicare-for-all healthcare system be expensive? Yes. But, while providing comprehensive healthcare for all, it would be significantly less costly than our current dysfunctional system because it would eliminate an enormous amount of the bureaucracy, administrative costs and misplaced priorities inherent in our current for-profit system.
Instead of doctors and nurses spending a significant part of their day filling out forms and arguing with insurance companies, they could be using their time to provide care to their patients. We'd be able to save up to $500 billion annually in billing and administrative costs. That money could be used to greatly expand primary care in this country and make certain that all Americans got the healthcare they needed when they needed it—saving billions on expensive emergency room care and hospital visits. Instead of paying the highest prices in the world for prescription drugs, we could save hundreds of billions over a 10 year period through tough negotiations with the drug companies.
The benefits of a Medicare-for-all, single-payer system are so obvious that even a recent study done by the right-wing Mercatus Center estimated that it would save Americans more than $2 trillion over a decade, reducing the projected cost of healthcare between 2022 and 2031 from $59.7 trillion to $57.6 trillion. Needless to say, that wasn't the point the study attempted to emphasize. Rather, the author of the study was hoping the headline—"Medicare for All costs the federal government $32.6 trillion" —would frighten the American people and get them to oppose it.
While opponents of Medicare for all focus their criticism on the increased taxes the American people will have to pay, they conveniently ignore the fact that ordinary people and businesses will no longer have to pay sky-high premiums, co-payments and deductibles for private health insurance.
At a time when healthcare in 2018 for a typical family of four with an employer-sponsored PPO plan now costs more than $28,000, according to the Milliman Medical Index, the reality is that a Medicare-for-all system would save the average family significant sums of money.
A recent study by RAND found that moving to a Medicare-for-all system in New York would save a family with an income of $185,000 or less about $3,000 a year, on average. Even the projections from the Mercatus Center suggest that the average American could save about $6,000 under Medicare for all over a 10-year period.
A Medicare-for-all system not only benefits individuals and families, it would benefitthe business community. Small- and medium-sized businesses would be free to focus on their core business goals instead of wasting precious energy and resources navigating an incredibly complex system to provide health insurance to their employees.
Needless to say, there is huge opposition to this legislation from the powerful special interests that profit from the current wasteful system. The insurance companies, the drug companies, Wall Street and the Koch brothers will undoubtedly spend billions on lobbying, campaign contributions and television ads to defeat Medicare for all. But they are on the wrong side of history.
Here is the bottom line: If every major country on earth can guarantee healthcare to all and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States of America cannot do the same.
https://www.commondreams.org/views/2018/08/16/medicare-alls-time-has-come?
Nearly Three Days Later, Jake Tapper Admits CNN "Fact Check" on Medicare for All Was, Uh, Not Factual
by Jake Johnson - Common Dreams - August 20, 2014
After nearly three days of constant pressure, clear explanations of basic facts, and bit of healthy shaming, CNN's Jake Tapper on Sunday finally relented to the sheer force of the evidence and admitted that his Medicare for All "fact check"—which aimed to discredit Sen. Bernie Sanders' (I-Vt.) claim that a Koch brothers-funded studyshowed single-payer would save Americans $2 trillion—was horribly misleading and is in need of a substantial "redo."
The central falsehood of Tapper's video segment, which he has now promised to correct, was his conflation of the American people and the U.S. government.
Sanders, New York congressional candidate Alexandria Ocasio-Cortez, and several policy analysts have pointed out that—according to the Koch-funded Mercatus Center study, authored by Chuck Blahous—the American public would save $2 trillion on healthcare under Sanders' Medicare for All plan.
Apparently confused by the difference, Tapper declared in his segment: "Is that true? Did a study funded by the Koch brothers indicate that Medicare for All would actually save the U.S. government [emphasis added] trillions of dollars? No."
Numerous commentators proceeded to point out the error:
Jake, you cannot claim that Bernie said "the government" would save $2 trillion. He did not say that, instead he said americans would over all save $2 trillion. Look at the video clip of Bernie again. This is undeniably a false representation of Bernie's claim. Straight up.— Matt Bruenig (@MattBruenig) August 17, 2018
While Tapper's concession on Sunday that these criticisms of his segment are "totally valid" was welcomed, several observers noted that his fundamentally incorrect video has already reached a large audience and argued that Tapper must issue a full correction and broadcast an entirely new segment.
In an article on Monday, People's Policy Project founder Matt Bruenig—who was the first to point out that the Koch-funded study projected $2 trillion in healthcare savings—argued that Tapper's misleading video is indicative of the broader problem of fact checkers not actually understanding the issue they're analyzing, making them vulnerable to the manipulative claims of corporate-funded right-wing institutions like the Mercatus Center.
"To determine whether the study says what Sanders says, you need to read it and independently judge that. If you are not capable of doing that, which most journalists aren't due to the complexity of the matter, then you need to talk to a lot of people from different sides who have read the report and have the skills necessary to describe it to you," Bruenig writes. "Instead, journalists like Tapper have decided to only ask [the Mercatus Center's] Blahous, who has an incentive to deceive people, what the report says rather than asking neutral experts or experts from different political persuasions to describe the report."
As an egregious example of this phenomenon, Bruenig cites yet another falsehood-riddled Medicare for All fact-check by the Washington Post's Glenn Kessler, who—according to Sanders policy director Warren Gunnels—didn't even contact Sanders' office prior to publishing his analysis, choosing to rely solely on Blahous.
"This is the kind of nonsense we are dealing with here. Tribal affiliations are getting in the way of basic presentations of facts and figures," Bruenig concludes. "The centrist and liberal media brand themselves as truth-tellers, but that's all it is: a brand. When the truth goes agains their tribe or ideological priors, they become just as bad as Fox News."
States Rush to Rein In Prescription Costs, and Drug Companies Fight Back
by Robert Pear - NYT - August 18, 2018
WASHINGTON — States around the country are clamping down on pharmaceutical companies, forcing them to disclose and justify price increases, but the drug manufacturers are fighting back, challenging the state laws as a violation of their constitutional rights.
Even more states are, for the first time, trying to regulate middlemen who play a crucial role by managing drug benefits for employers and insurers, while taking payments from drug companies in return for giving preferential treatment to their drugs.
The bipartisan efforts by states come as President Trump and his administration put pressure on drug companies to freeze prices and reduce out-of-pocket costs for consumers struggling to pay for drugs that often cost thousands of dollars a month.
Twenty-four states have passed 37 bills this year to curb rising prescription drug costs, according to Trish Riley, the executive director of the National Academy for State Health Policy, a nonpartisan forum of policymakers, and several state legislatures are still in session.
The burst of state activity on drug costs recalls the way states acted on their own to pass laws to expand health insurance coverage in the years before Congress passed the Affordable Care Act in 2010.
“In the absence of federal action, states are taking the lead in combating high drug prices,” said State Representative Sean Scanlon of Connecticut, a Democrat.
A bill passed unanimously this year by the Connecticut General Assembly illustrates a popular tactic: States are shining a spotlight on drug price increases as a first step toward controlling costs.
Under the Connecticut law, drug companies must justify price increases for certain drugs if the price rises by at least 20 percent in one year or 50 percent over three years. Insurers must identify their 25 highest-cost drugs and the 25 with the greatest cost increases when they file their annual rate requests with the state Insurance Department.
In addition, the middlemen, known as pharmacy benefit managers, must disclose the amount of rebates and other price concessions they receive from drug companies.
Republicans have their own reasons for concern.
“As state legislators, we are responsible for the wise stewardship of taxpayers’ money,” said State Representative Norm Thurston of Utah, a Republican. “The state spends a lot of taxpayers’ money on prescription drugs, through Medicaid, corrections and jails, state employees, higher education employees and their dependents. We should be sure we’re getting the best deal.”
In response to a bill introduced by Mr. Thurston, the Utah Health Department is studying possible ways to import prescription drugs from Canada, and he is working with a Republican state senator on a bill to require the reporting of price information by drug companies.
California has adopted a law requiring drug companies to provide advance notice of price increases, together with a detailed statement of the reasons for the increases. In addition, insurers must file annual reports showing the percentage of premiums attributable to drug costs.
“Californians have a right to know why their medication costs are out of control, especially when pharmaceutical profits are soaring,” Gov. Jerry Brown said.
Drug companies have filed suit to block the California law, which they describe as “unprecedented and unconstitutional.”
The law “exports California’s policy choices” to the rest of the country and violates the First Amendment by compelling drug manufacturers to explain their price increases, said the lawsuit, filed by the Pharmaceutical Research and Manufacturers of America.
PhRMA, along with the Biotechnology Innovation Organization, also went to court to challenge a law signed by Gov. Brian Sandoval of Nevada, a Republican.
The Nevada law requires manufacturers of diabetes medicines, such as insulin, to report detailed information, including the production costs for each drug, the amount spent to market it, the profits earned on its sales and the amount of rebates paid to pharmacy benefit managers for sales of the drug in Nevada.
Drug companies dropped the lawsuit in June after Nevada agreed that certain information in the drug price reports could be kept confidential.
Reining in drug costs is a top priority for state officials who run Medicaid, the health program that serves more than 70 million low-income people.
Oklahoma will soon start paying for some prescription drugs based on how well they work. If a drug does not perform as promised, the manufacturer will refund the cost of the drug or another negotiated amount.
“If a drug claims to keep people out of the hospital and doesn’t, the manufacturer may be liable for the cost of the hospitalization,” said Nancy Nesser, the pharmacy director of the Oklahoma Medicaid program.
New York has imposed an annual cap on drug spending in its Medicaid program. If spending is projected to exceed the cap in any year, state officials must identify drugs responsible for the excess costs and try to negotiate additional rebates with drug manufacturers to keep spending under the cap. If a drug company balks, the state can restrict access to its drugs or impose controls on their use, based on advice from an independent panel that reviews the drugs’ costs and clinical benefits.
In the first year of the program, which ended in March, spending was on track to exceed the target, but state officials say they extracted $60 million in additional savings for the state through negotiations with companies that produce 30 particularly high-cost drugs.
In Ohio, Medicaid officials announced this past week that they had a new way to pay for prescription drugs. Pharmacy benefit managers will no longer be allowed to keep any of the payments they receive from drug manufacturers. The money must be passed on to Medicaid health plans and used for the benefit of Medicaid recipients, starting Jan. 1.
Ohio officials said they wanted to know whether the benefit managers had been overcharging the state, but were frustrated in trying to obtain drug pricing information.
“It’s shrouded in secrecy,” said Tom Betti, a spokesman for the Ohio Medicaid agency. “We intend to open up the black box.”
Maine adopted a law last month doing something that Congress has been trying, without success, to do for several years. The law requires manufacturers of brand-name drugs to make samples available to generic drug companies trying to develop inexpensive copies of those products. Generic drug developers need the samples to show that a low-cost generic copy is equivalent to the brand-name original.
The stated goal of the Maine law is to promote competition, so consumers do not have to pay “monopoly drug prices.”
A growing number of states have passed laws to ensure that pharmacists can inform customers of less expensive options. These laws ban “gag clauses,” which prevent pharmacists from telling consumers when they could save money on prescriptions by paying cash rather than using their health insurance.
Maryland tried a particularly bold approach.
After reports of huge increases in the prices of certain generic drugs, Maryland banned “price gouging,” defined as an unconscionable increase in the price of any “essential off-patent or generic drug.” A drug company that flouts the law could be fined $10,000 and be required to pay refunds to consumers.
The lobby for generic drug companies, the Association for Accessible Medicines, filed suit to block the law, and the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., struck down the law, saying it interfered with interstate commerce in violation of the Constitution.
Under the law, it said, Maryland would regulate prices in transactions that occur wholly outside its borders — prices charged by drug makers to wholesalers — regardless of whether any pills were ever shipped to Maryland.
In a lengthy dissent, Judge James A. Wynn Jr. said that Maryland should be able to protect the health and welfare of its citizens. The court, he said, was accepting the drug companies’ view that they were “constitutionally entitled to impose conscience-shocking price increases” on consumers.
This Drug Is Safe and Effective. Wait. Compared With What?
by Aaron Carroll - NYT - August 20, 2018
We spend many billions of dollars each year on the discovery and development of new drugs, but almost none of it addresses two crucial questions: How do these new therapies compare with already known ones? What are the relative benefits and harms in a particular situation, for a person like you?
Such questions can best be answered by comparative effectiveness research.
To get approval from the Food and Drug Administration, drugs must be proved both effective and safe. The costs of doing this are significant, and they are most often borne by the pharmaceutical industry.
But the F.D.A.’s bar, while meaningful, often isn’t very useful for what physicians and patients really care about every day: how effective and safe drugs are compared with one another.
Real-World Questions
Consider antibiotics. In my work as a pediatrician, questions about their use come up a lot. Which drug is the best first-line therapy for which common illnesses? We don’t know. How long should we treat for different infections? We don’t know. What are the relative trade-offs between benefits and side effects in different patients in different circumstances? We don’t know.
The questions we need answered are legion. All the guidelines and practices we have are best guesses.
Comparative effectiveness research can take on many forms and involve more than drugs.
- Because of a trial published in The American Journal of Preventive Medicine, we know that an intensive lifestyle intervention works better than metformin to promote weight loss.
- A study published in JAMA Pediatrics last year showed that adding individual health coaching to enhanced primary care reduced pediatric obesity, but no more than enhanced primary care alone.
- A comparison of different levels of insurance published in The New England Journal of Medicine showed that enhanced drug insurance coverage led to increased medication adherence, lower patient spending and lower rates for a first major vascular event (like a heart attack or stroke), with no increased overall health care spending.
A Blood Pressure Study
We know that high blood pressure is both terribly prevalent and a significant risk factor for cardiovascular disease. We also know that there are a lot of drugs out there, all F.D.A.-approved, that can help reduce this risk by better controlling blood pressure. But which is best?
This question isn’t new. In 2002, the results of the Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial — a comparative effectiveness trial — were published in JAMA.
Participants had to be at least 55, have hypertension and have at least one other risk factor for coronary heart disease. They were randomly assigned to take one of four drugs, each with an entirely different mechanism, representing a different class of drugs.
Chlorthalidone is a diuretic, or a drug that increases urine output. Amlodipine, a calcium channel blocker, causes blood vessels to relax and widen, and lowers the heart rate. Doxazosin does the same by blocking the effects of adrenaline on muscles throughout the body. Lisinopril blocks the enzyme angiotensin, which tightens blood vessels, leading to lower blood pressure. All the patients were tracked for four to eight years.
All of these drugs had been proved safe and effective; we just didn’t know what worked best as a first-line therapy for the many people with high blood pressure.
The main outcomes of interest were death from coronary heart disease, or a heart attack that didn’t lead to death. By those measures, there was no difference between any of the four drugs in that period. But chlorthalidone outperformed two of the others in lowering systolic blood pressure. That drug also performed better in preventing heart failure (a gradual weakening of the heart) and stroke, and lowering rates of cardiovascular disease.
The take-home message was that the diuretic was better in preventing at least one of the major types of cardiovascular disease. It was also the least expensive.
As you can imagine, this is immensely valuable information. It tells us what drug is best to start if you have someone over 55 with high blood pressure and at least one risk factor for coronary heart disease. That’s exactly the kind of question that only a comparative effectiveness trial can answer.
This study was enormous; it took place in 623 centers in Canada and the United States between 1994 and 1998, and included over 33,000 participants. It also cost more than $100 million, and that was two decades ago.
So was the debate over? Far from it. A stunning number of papers have been written critiquing this study.
There are methodological concerns, in that the primary endpoint (death and heart attacks) was somewhat ignored in favor of secondary outcomes like strokes and blood pressure. Most of the patients had probably been on other therapies before starting the trial, so it’s not clear if prior therapy could have changed results. Many patients received more than one drug, and the stepwise addition (adding drugs one at a time) might have favored the diuretic. Significantly more people on the diuretic developed diabetes than those on other drugs. And in the many years since the trial, these drugs have all become cheaper and generic, and more drugs have appeared, making the answers somewhat murky once again.
Recent work in The Journal of the American Heart Association even improved on the huge 2002 study by showing that using a combination of drugs to treat hypertension initially is better than starting patients on one drug and then progressing to more.
I’m a Doctor and Even I Can’t Afford My Student Loans
by Farzon Nahvi - NYT - August 20, 2018
Last week, the New York University School of Medicine became the first medical school in the nation to become fully tuition-free. Dr. Robert Grossman, dean of the medical school, cited young physicians’ “crushing debt” as an impetus for the move. One may think that doctors, with their gigantic salaries, are immune to student debt worries, but Dr. Grossman’s announcement made official what many medical school students have long known: The crisis of paying for education has finally caught up with the one percent.
My personal experiences highlight the magnitude of the problem. Upon graduation from medical school in 2013, I owed approximately $180,000 in student debt — what might seem an outrageously high number that is actually about $10,000 less than the average for today’s medical school graduates. I scrounged and saved during residency, living in a tiny Chinatown apartment, riding my bicycle to work every day, and sneaking expired patient sandwiches for lunch so that I could make my monthly $700 debt payment. Yet upon completing residency, the amount I owed had, to my disbelief, increased to $188,000 — all my efforts had not been enough to cover even the interest accumulating on my loans.
Growing up, I expected a career in medicine partly to be a ticket out of the working-class circumstances I grew up in. My parents, immigrants from rural Iran, struggled to provide opportunity for their children. A career in medicine promised a better future ahead. But five years after graduating from medical school, that future still seems on a distant horizon. I cannot afford to buy a house, still ride my bicycle to work and continue to skimp on meals in order to cover more than $3,000 in monthly loan payments.
I am far from alone. A mentor in residency, several years my senior and making over $200,000 per year, once revealed that she had moved back in with her mother just to get a handle on her student loans. Another colleague had a marriage proposal rejected because of his mortgage-size debt.
There is a bigger issue here for society. Young physicians are avoiding careers in lower-paying specialties, from pediatrics to psychiatry, even though our country needs more of them. Instead, they are flocking to high-paying specialties like cardiology that already have a relative surplus. It is also affecting where they choose to practice. Ultimately, as specialists remain in urban centers where jobs are more plentiful, rural areas and smaller cities suffer. The National Rural Health Association estimates a shortage of 45,000 doctors by 2020, and already more than 70 rural hospitals have closed since 2010.
If student debt is a problem for doctors, imagine what it is like for nurses, teachers and other graduates whose incomes are far lower. Indeed, an entire generation is being squeezed by the high cost of tuition at the graduate and undergraduate level. Without expendable income to buy homes, millennials are living with their parents in record numbers, stunting the housing market. Unable to save, my generation is neither contributing to nor benefiting from the stock market. Most doctors will someday earn enough to pay off their school loans. But many thousands in less lucrative professions will carry their loans into middle age and beyond. The burden that is bowing medical students has truly been crushing lower- and middle-income graduates.
The alarm seems to have jolted some into action. Alexandria Ocasio-Cortez, 28, won her stunning Democratic primary election upset over Representative Joseph Crowley, a longtime incumbent, partly by running on a platform of free higher education. Importantly, her message was a winning one not just among the working-class parts of her congressional district, but in the areas populated by highly educated young professionals as well. Other progressive congressional candidates around the country have also taken up the call for attacking the high cost of college.
I’d like to think that the weight of student loans is giving doctors and others greater insight into the crisis of income inequality. There is reason to hope. Some doctors’ groups have found common ground with lower-wage workers in calling for government programs to help ease debt burdens. The American Medical Association, historically a right-leaning organization, came out strongly for the Affordable Care Act in 2008. More generally, polls indicate that college-educated voters now support an increased minimum wage, higher taxes on the rich and guaranteed health care to the same degree that voters without a college education do.
Perhaps all of this is simply self-interested economics. But if that is the case, so be it. The mere fact that student debt is causing the highest earners to struggle should awaken us to the severity of the situation. It also is a reminder that being in the top 1 percent of earners no longer means being in the top 1 percent of actual wealth.
The country should follow N.Y.U.’s lead in recognizing the damage wrought by crushing student debt. Making higher education free for all should not just be a pipe dream.
A Small Budget and a Large Task
In the United States, comparative effectiveness trials are supported almost exclusively by the National Institutes of Health and the Patient Centered Outcomes Research Institute. The latter’s executive director, Joe Selby, wrote to me: “It’s essential that we learn to ask and answer practical questions about the comparative clinical effectiveness of therapy options in the course of everyday care.”
He said the research institute was the only organization dedicated primarily to supporting and expanding this kind of research in the United States “with a rigor and scale that match the importance of this relatively new approach to building knowledge and information.”
The research institute’s budget constitutes a small percentage of overall public research funding.
Basic science research is necessary to make breakthroughs in how treatments might be created. Randomized controlled trials are necessary to determine if they have efficacy. Pragmatic trials can tell us if and how they’re effective in real world settings. Health services research can improve the ways in which we deliver them. But without comparative effectiveness research, too many important questions that concern patients will remain unanswered.
Why a patient paid a $285 copay for a $40 drug
by Megan Thompson - PBS Newshour - August 19, 2018
Two years ago Gretchen Liu, 78, had a transient ischemic attack — which experts sometimes call a “mini stroke” — while on a trip to China. After she recovered and returned home to San Francisco, her doctor prescribed a generic medication called telmisartan to help manage her blood pressure.
Liu and her husband Z. Ming Ma, a retired physicist, are insured through an Anthem Medicare plan. Ma ordered the telmisartan through Express Scripts, the company that manages pharmacy benefits for Anthem and also provides a mail-order service.
The copay for a 90-day supply was $285, which seemed high to Ma.
“I couldn’t understand it — it’s a generic,” said Ma. “But it was a serious situation, so I just got it.”
A month later, Ma and his wife were about to leave on another trip, and Ma needed to stock up on her medication. Because 90 days hadn’t yet passed, Anthem wouldn’t cover it. So during a trip to his local Costco, Ma asked the pharmacist how much it would cost if he got the prescription there and paid out of pocket.
The pharmacist told him it would cost about $40.
“I was very shocked,” said Ma. “I had no idea if I asked to pay cash, they’d give me a different price.”
Ma’s experience of finding a copay higher than the cost of the drug wasn’t that unusual. Insurance copays are higher than the cost of the drug about 25 percent of the time, according to a study published in March by the University of Southern California’s Schaeffer Center for Health Policy and Economics.
USC researchers analyzed 9.5 million prescriptions filled during the first half of 2013. They compared the copay amount to what the pharmacy was reimbursed for the medication and found in the cases where the copay was higher, the overpayments averaged $7.69, totaling $135 million that year.
USC economist Karen Van Nuys, a lead author of the study, had her own story of overpayment. She discovered she could buy a one-year supply of her generic heart medication for $35 out of pocket instead of $120 using her health insurance.
Van Nuys said her experience, and media reports she had read about the practice, spurred her and her colleagues to conduct the study. She had also heard industry lobbyists refer to the practice as “outlier.”
“I wouldn’t call one in four an ‘outlier practice,’” Van Nuys said.
“You have insurance because your belief is, you’re paying premiums, so when you need care, a large fraction of that cost is going to be borne by your insurance company,” said Geoffrey Joyce, a USC economist who co-authored the study with Van Nuys. “The whole notion that you are paying more for the drug with insurance is just mind boggling, to think that they’re doing this and getting away with it.”
Joyce told PBS NewsHour Weekend the inflated copays could be explained by the role in the pharmaceutical supply chain played by pharmacy benefit managers, or PBMs. He explained that insurers outsource the management of prescription drug benefits to pharmacy benefit managers, which determine what drugs will be covered by a health insurance plan, and what the copay will be. “PBMs run the show,” said Joyce.
In the case of Express Scripts, the company manages pharmacy benefits for insurers and also provides a prescription mail-delivery service.
Express Scripts spokesperson Brian Henry confirmed to PBS NewsHour Weekend the $285 copay that Ma paid in 2016 for his wife’s telmisartan was correct, but didn’t provide an explanation as to why it was so much higher than the $40 Costco price. Henry said that big retailers like Costco sometimes offer deep discounts on drugs through low-cost generics programs.
USC’s Geoffrey Joyce said it is possible that Costco negotiated a better deal on telmisartan from the drug’s maker than Express Scripts did, and thus could sell it for cheaper. But, he said, the price difference, $285 versus $40, was too large for this to be the likely explanation.
Joyce said it is possible another set of behind-the-scenes negotiations between the pharmacy benefit managers and drug makers played a role. He explained that drug manufacturers will make payments to pharmacy benefit managers called “rebates.”
Rebates help determine where a drug will be placed on a health plan’s formulary. Formularies often have “tiers” that determine what the copay will be, with a “tier one” drug often being the cheapest, and the higher tiers more expensive.
Pharmacy benefit managers usually take a cut of the rebate and then pass them on to the insurer. Insurers say they use use the money to lower costs for patients.
Joy said a big rebate to a pharmacy benefit manager can mean placement on a low tier with a low copayment, which helps drives more patients to take that drug.
In the case of Ma’s telmisartan, Express Scripts confirmed to PBS NewsHour Weekend that the generic drug was designated a “nonpreferred brand,” which put it on the plan’s highest tier with the highest copay.
Joyce said sometimes pharmacy benefit managers try to push customers to take another medication for which it had negotiated a bigger rebate. “It’s financially in their benefit that you take the other drug,” said Joyce. “But that’s of little consolation to the person who just goes to the pharmacy with a prescription that their physician gave them.”
But Joyce said the pharmacy benefit managers also profit when collecting copays that are higher than the cost of the drug.
In recent years, the industry has taken a lot of heat from the media and elected officials over a controversial practice called “clawbacks.” This happens when a pharmacist collects a copay at the cash register that’s higher than the cost of the drug, and the pharmacy benefit manager takes most of the difference.
The three largest pharmacy benefit managers – Express Scripts, CVS Caremark, and OptumRx – all told PBS NewsHour Weekend they do not engage in clawbacks.
But Howard Jacobson, a pharmacist at Rockville Centre Pharmacy in Long Island, NY, showed PBS NewsHour Weekend several recent examples of clawbacks. In one instance, Howardson acquired a dose of the generic diabetes Metformin for $1.61. He said if a patient paid out-of-pocket, he likely would sell if for $4. But in a recent transaction, the pharmacy benefit manager told Jacobson to collect a $10.84 copay from the patient, and it took back $8.91.
In the case of Z. Ming Ma and his wife Gretchen Liu, there was no pharmacist involved, because they purchased the medication directly from Express Scripts.
Express Scripts’ Brian Henry reiterated to PBS NewsHour Weekend that the company does not engage in clawbacks and opposes the practice. And he also blamed the health insurer, Anthem, for Ma’s high copay. “Anthem has its own Pharmacy and Therapeutics committee that evaluates placement of drugs on the formulary based on their own clinical and cost review – thus setting their own formulary and pricing,” Henry said in an email.
But Lori McLaughlin, a spokesperson for Anthem, pointed the finger back at Express Scripts. “Anthem currently contracts with Express Scripts for pharmacy benefit manager services and under that agreement Express Scripts provides the drug pricing,” she said in a statement. “Anthem is committed to ensuring consumers have expanded access to high-quality, affordable health care which includes access to prescription drugs at a reasonable price.”
McLaughlin also pointed to a lawsuit filed in March 2016 by Anthem against Express Scripts, for, she said, “breach of its obligation to provide competitive pharmacy pricing.”
As for Express Scripts’ contention that it doesn’t engage in clawbacks, USC’s Karen Van Nuys said it’s a matter of semantics. “Whenever the copay is higher than the cash price, and the difference isn’t reimbursed to the patient, someone else must be pocketing the difference,” Van Nuys said. “Maybe it isn’t technically called a clawback, but the principle is the same.”
So what’s a patient to do? Websites like GoodRx and WellRx can help consumers find the best prices at local pharmacies. They provide coupons and savings cards for certain drugs as well as out-of-pocket price information, which could be less than a copay.
It’s not always better to pay out-of-pocket, even if it’s cheaper. Patients need to look at the terms of their insurance plans and do the math.If a patient has a high deductible, it might make more sense in the long-run to pay the higher price and use up the deductible so insurance kicks in sooner.
Z. Ming Ma said he does find the Express Scripts home delivery service convenient. But he wasn’t happy about the price of his wife’s medication, and is glad he found another way to buy it.
“You have no choice, you can’t bargain,” he said. “I knew I wasn’t going to win.”
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