The following article should put the final nail on claims that "more price transparency will allow consumers to drive down healthcare prices. It just ain't so, and even perfect and consistent information about healthcare prices won't do the job. Attempts to force disclosure of prices as a way to control costs are a fantasy and are nothing more than yet another distraction, intended to kick the can down the road.
-SPC
Hospitals Must Now Post Prices. But It May Take a Brain Surgeon to Decipher Them.
WASHINGTON
— Vanderbilt University Medical Center, responding to a new Trump
administration order to begin posting all hospital prices, listed a
charge of $42,569 for a cardiology procedure described as “HC PTC CLOS
PAT DUCT ART.”
Baptist Health in Miami helpfully told consumers
that an “Embolza Protect 5.5” would cost them $9,818 while a “Visceral
selective angio rad” runs a mere $5,538.
On Jan. 1, hospitals
began complying with a Trump administration order to post list prices
for all their services, theoretically offering consumers transparency
and choice and forcing health care providers into price competition.
It’s turning into a fiasco.
“This
policy is a tiny step forward, but falls far short of what’s needed,”
said Jeanne Pinder, the founder and chief executive of Clear Health
Costs, a consumer health research organization. “The posted prices are
fanciful, inflated, difficult to decode and inconsistent, so it’s hard
to see how an average person would find them useful.”
The
data, posted online in spreadsheets for thousands of procedures, is
incomprehensible and unusable by patients — a hodgepodge of numbers and
technical medical terms, displayed in formats that vary from hospital to
hospital. It is nearly impossible for consumers to compare prices for
the same service at different hospitals because no two hospitals seem to
describe services in the same way. Nor can consumers divine how much
they will have to pay out of pocket.
“To 99 percent of the
consuming public, these data will be of limited utility — meaningless,”
said Kenneth E. Raske, the president of the Greater New York Hospital
Association.
The list price for a hospital service is like the
sticker price for a car. But as it is playing out, it is as if the car
dealers were disclosing the price for each auto part, without revealing
the charge for the vehicle as a whole.
The result has baffled consumers.
“This
is gibberish, totally meaningless, a foreign language to me,” said Sara
Stovall, 41, of Charlottesville, Va., after looking at price lists for
hospitals in her area.
She reviewed the price lists for Sentara
Martha Jefferson Hospital and for University Hospital, each of which has
more than 16,000 items.
“I can’t imagine
how I would go about making this useful,” Ms. Stovall said on Sunday. “I
wouldn’t know how to find my procedure. I wouldn’t know what services
might be rolled up with my procedure. And I would not know the price to
me after health insurance.”
By most accounts, the Trump administration is pursuing a worthy goal, but the execution of its plans leaves much to be desired.
After
the administration proposed the price-disclosure requirement in April
2018, many hospitals warned of the shortcomings that are now evident.
But
federal health officials, accustomed to debating issues inside the
Washington policy bubble, have still been surprised at the reaction
around the country as consumers and local news media try to decipher the
data. The administration says it is open to suggestions for 2020 and
beyond.
The price-disclosure requirement, issued by the Department
of Health and Human Services, grows out of one sentence in the
Affordable Care Act, which says, “Each hospital operating within the
United States shall for each year establish (and update) and make public
(in accordance with guidelines developed by the secretary) a list of
the hospital’s standard charges for items and services provided by the
hospital.”
The idea languished for eight years. Under prior
guidance from the government, hospitals could meet their obligations by
providing charges to patients on request. But the Trump administration
wanted to go further.
“We’ve updated our guidelines to
specifically require hospitals to post price information on the internet
in a machine-readable format,” Seema Verma, the administrator of the
Centers for Medicare and Medicaid Services, said last week. “This is a
historic change from what’s been required in the past.”
“This is about empowering patients,” Ms. Verma said.
It
has not worked out that way, at least so far. Martin Gaynor, a
professor of economics and health policy at Carnegie Mellon University
in Pittsburgh, described list prices as “somewhat fictitious.”
“If
this is an initial step leading to real transparency with actionable,
usable information, that would be fantastic,” Mr. Gaynor said.
But
in its current form, he added, the price information is “not very
useful and could even be misleading” because a hospital with high list
prices could be the cheaper alternative for some consumers, depending on
their insurance.
“For patients to know up front how much their
care will cost, that’s incredibly valuable,” said Brenda L. Reetz, the
chief executive of Greene County General Hospital in rural southwest
Indiana. “We’ve posted our prices, as required. But I really don’t think
the information is what the consumer is actually wanting to see.”
Spending
on hospital care last year totaled $1.1 trillion, or nearly one-third
of all health spending, according to the Department of Health and Human
Services. So even small improvements in the market could yield big
savings.
The Trump administration adopted the new requirement as
part of its agenda to promote “transparency” in health care, in the
belief that health markets would work better if consumers had more
information. In another example, federal officials want to require
pharmaceutical companies to disclose the list price of prescription
drugs in television advertisements.
“Providers and insurers have
to become more transparent about their pricing,” Alex M. Azar II, the
secretary of health and human services, said last year. “There is no
more powerful force than an informed consumer.”
The
Trump administration told hospitals that they had to post their
standard charges for all services and items, including drugs, by Jan. 1,
but did not define “standard charges.” In later guidance, it said the
format was “the hospital’s choice.”
“Without a standard
definition, patients cannot make accurate comparisons between
hospitals,” said Herb B. Kuhn, the president of the Missouri Hospital
Association.
No hospitals operating in the United States are
exempt from the new requirement, but the Trump administration has not
said how it plans to enforce it. Federal officials have asked the public
to suggest “enforcement mechanisms.”
Each hospital has a list —
known as a “chargemaster” — of prices for thousands of goods and
services, including medical procedures, laboratory tests, supplies and
medications. But the price information is often difficult and sometimes
impossible to find on hospital websites.
List prices may be
relevant for some consumers. People with high-deductible plans may have
to pay some or all of the list price until they meet the deductible, and
people with insurance who go outside their health plan’s network may
also have to pay a substantial share of the list price.
But to
others, the prices listed on the “chargemaster” may have no bearing on
the cost of their care. Health plans and insurance companies usually
negotiate much lower prices, and uninsured patients often qualify for
substantial discounts.
“Many hospitals still see the chargemaster
price as an important way to enhance revenue,” said Ge Bai, an expert on
health care finance and accounting at Johns Hopkins University. “Having
a high list price means they have more leverage in negotiating prices
for people covered by private insurance.”
Even while complying with the new requirement, many hospitals have posted disclaimers warning consumers not to rely on the data.
The
University of Texas MD Anderson Cancer Center, for example, says that
it “does not warrant the accuracy, completeness or usefulness” of the
charges listed on its website.
If hospitals have complaints about
the new requirements, Ms. Verma said, they should voluntarily provide
patients with more useful information.
“Hospitals don’t have to wait for us to go further in helping their patients understand what care will cost,” she said. https://www.nytimes.com/2019/01/13/us/politics/hospital-prices-online.html
A 2003 article titled “It’s the Prices, Stupid,” and coauthored by the
three of us and the recently deceased Uwe Reinhardt found that the
sizable differences in health spending between the US and other
countries were explained mainly by health care prices. As a tribute to
him, we used Organization for Economic Cooperation and Development
(OECD) Health Statistics to update these analyses and review critiques
of the original article. The conclusion that prices are the primary
reason why the US spends more on health care than any other country
remains valid, despite health policy reforms and health systems
restructuring that have occurred in the US and other industrialized
countries since the 2003 article’s publication. On key measures of
health care resources per capita (hospital beds, physicians, and
nurses), the US still provides significantly fewer resources compared to
the OECD median country. Since the US is not consuming greater
resources than other countries, the most logical factor is the higher
prices paid in the US. Because the differential between what the public
and private sectors pay for medical services has grown significantly in
the past fifteen years, US policy makers should focus on prices in the
private sector.
Additional Excerpts
From the Introduction
Much has happened in the US and other OECD countries in health policy and health care delivery in the intervening fifteen years. Since 2003 there has been much greater attention given to the cost of treating people with chronic conditions, a greater emphasis on value-based care, more people entering managed care programs, the passage of the Affordable Care Act, the introduction of electronic medical records, consolidation of hospitals and insurers, and many other changes designed to lower the level of spending in the US. As a result, it is important to assess whether the general conclusion that prices are responsible for most of the difference in health spending remains valid and what, if anything, has changed.
Health Spending
US per capita health spending was $9,892 in 2016. The US spending level was 25 percent higher than that of Switzerland ($7,919), the country with the next-highest expenditure per capita; 108 percent higher than that of neighboring Canada ($4,753) and 145 percent higher than the OECD median of $4,033. The US spent 17.2 percent of its GDP on health care in 2016, and the OECD median was 8.9 percent.
Public versus private spending
The US financed 50.9 percent of its health care from private sources in 2016, compared to the OECD median of 25.0 percent. It is noteworthy that the differential between the prices paid by public and private insurers in the US has increased drastically since the 2003 article was written. In 2000 the price differential between what public and private insurers paid was approximately 10 percent. The Medicare Payment Advisory Commission recently estimated that private insurers pay prices that are 50 percent higher than what Medicare pays. Increased attention needs to be paid to the prices paid in the private sector.
Spending on pharmaceuticals
In 2015 per capita spending on pharmaceuticals varied from $171 in Poland to $1,011 in the US, with most of the OECD countries spending $400–$600. Recent studies found that prices for brand-name pharmaceuticals were responsible for most of the difference in pharmaceutical spending, with the US providing a considerable portion of the profits to the pharmaceutical industry.
Supply of physicians
In 2015 the US had 19 percent fewer practicing physicians per 1,000 population than the median OECD country (2.6 versus 3.2). The median OECD country had 12.1 medical school graduates in 2015 per 100,000 population, while the US had only 7.5. The US also had the lowest percentage of generalist physicians among the twenty-eight countries with data available, according to the OECD definition: 11.9 percent. The OECD median was 27.9 percent.
Supply of nurses
The US nurse-to-population ratio declined from 2000 to 2015, when it was 7.9 per 1,000 population—20 percent below the OECD median (9.9 per 1,000).
Hospitals
The US had 26 percent fewer inpatient acute care hospital beds per 1,000 population (2.5) than the median OECD country (3.4) in 2015.
Medical technology
The US was second (after Japan) in MRI units per million population and third (after Japan and Australia) in CT scanners per million population in 2015.
Explanations for differences
There is a growing literature on administrative costs. A Commonwealth Fund comparison of health insurance administrative costs showed that the US spent $737 per capita on administration, compared to $94 per capita in the median OECD country. The next-highest-spending country after the US (Switzerland) had administrative costs of only $280. In 2017 Steffie Woolhandler and David Himmelstein estimated that the US would save about $617 billion (about 20 percent of its total health spending) if it moved to a single-payer system. A study comparing administrative costs of physicians in Canada and the US found that US physicians spend considerably more on administrative services than Canadian physicians do.
Health spending versus health care provision
The 2003 article discussed how the buy and sell sides of the marketplace operate. The subsequent literature has validated the arguments made in the 2003 article. First, many OECD countries continue to use their monopsony power to control prices, while the US continues to have geographic areas with providers able to obtain “rents” from having monopolies in their community. Second, the current literature continues to show that the US buy side continues to be highly fragmented by international standards.
A series of recent articles has examined the relationship between the market power of providers in a community and health outcomes and found association with higher prices but very little correlation with health outcomes. These studies show that insurance companies are strengthening their market power through consolidation, while hospitals and physicians’ practices merge into giant conglomerates, strengthening their sell-side market power and driving up the prices.
In the US the evidence suggests that consolidation of insurers does not necessarily lead to lower premiums, copayments, or deductibles, but it shifts profits from providers to insurers, thereby transferring revenues from providers to insurers and not to society.
It's still the prices, stupid
In 2000 the US had fewer physicians per 1,000 population, physician visits per capita, and acute care beds per capita, as well as fewer hospital admissions per 1,000 population and acute care days per capita, compared to the median OECD country. The US was still not devoting more real resources to health care than most other OECD countries in 2015 or 2016. At that time, the US had 26 percent fewer hospital beds per capita, 20 percent fewer practicing nurses, and 19 percent fewer practicing physicians per capita, compared to the OECD median country. Because the US is still not devoting more real resources to medical care than the typical OECD country, we believe that the conclusion that “it’s the prices, stupid,” remains valid. What is different between 2003 and 2016 is that the differential between what public and private insurers pay for health care services has become wider. Lowering prices in the US will need to start with private insurers and self-insured corporations.
It was a pretty good year for President Barack Obama’s major
legacy, health care reform, aka Obamacare or the Affordable Care Act.
The pace of new signups has been respectable if not miraculous, and now
Republicans in Congress have decided (correctly) that perhaps total war
against Obamacare is not their wisest strategy.
People seem to like the ACA. They especially like the
provision forbidding insurers to discriminate against those with
preexisting conditions. This formerly obscure technical term of the
insurance business has become the center of the health care discussion.
You can’t call it a debate, because there’s no basic disagreement.
Everyone’s for covering preexisting conditions. The question is, Who got
there first?
Health care is now like Social Security, the famous “third
rail of American politics” — that is, the one that will kill you if you
touch it, like the third rail of the New York subway. (What? The subway
has no fourth rail? Relax. It’s only a metaphor.) So Republicans are
claiming, preposterously, that their many attempts to kill Obamacare —
both before and after its enactment — were actually attempts to improve
it.
Imagine walking into an insurance company office, or maybe
you go online to log in to one of those “exchange” thingummies that
Obamacare encourages the states to start. You have a rare tropical
disease that can only be held at bay by an equally rare drug costing
$200,000 a year. (The number and situation are made up, but not
unrealistic.) Before Obamacare, insurance companies and plans could have
said no to you. They could cherry-pick their customers, taking only the
ones they wanted. The more you needed medical insurance, the less
likely you were to be able to get it.
Democrats — quite unfairly — have used the preexisting
conditions question to make insurance companies look like bad guys. But
they aren’t.
The insurance companies are not behaving like heartless
monsters. They are behaving like insurance companies. As long as
preferring healthy, inexpensive customers to cheap and sick ones was
legal, they’d have been crazy — and possibly violating their fiduciary
duty to stockholders — if they didn’t discriminate against people with
preexisting conditions.
Democrats believe they solved the preexisting conditions
problem by simply forbidding discrimination against people with
preexisting conditions. This sounds easier than actually doing it will
be.
There are all sorts of ways, subtle or otherwise, that a
salesperson can discourage a sale without overt discrimination. She
could frown, or dress like a slob or merely smell bad, but the effect
would be the same as discrimination. Likewise an insurance company. To
use a well-known example, suppose the insurance company just happens to
put all of its sales offices on the second floors of buildings without
an elevator. No one in a wheelchair need apply. Or suppose it keeps the
doctors with the highest ratings out of its network.
Even if a company plays it straight and doesn’t try to game
the system, a so-called insurance death spiral can develop. If enough
young healthy types buy cheap plans (with less coverage), less money
goes into the pot to cover those who need care. And the whole edifice
swivels into a dark hole.
Obamacare assumes that money-in from healthy people will be
more than enough to balance the money-out for the high cost of people
with health problems — preexisting conditions. But there is no guarantee
of this. In fact, it was always pretty unlikely that Obamacare would
actually generate a profit.
But go ahead, boys and girls of Congress. Have your fun. And when you decide to get serious, maybe we can have single-payer.
‘Extremists’ like Elizabeth Warren and
Alexandria Ocasio-Cortez are actually closer to what most Americans want
- The Boston Globe
By Margery Eagan - Boston Globe -
January 10, 2019
‘Far left.” “Too liberal.” “Out of the mainstream.” Google US Senator Elizabeth Warren. You’ll see descriptions like these.
“Socialist.” “Radical.” “Extreme.” Google US Representative
Alexandria Ocasio-Cortez, the whirling, twirling, dancing phenom out of
the Bronx. You’ll see words like those.
But are even Ocasio-Cortez’s positions all that “fringe” in 2019?
I don’t think so.
On “60 Minutes” Sunday, Ocasio-Cortez talked about a 70 percent tax
rate for Americans earning more than $10 million a year. She said this
would fund a Green New Deal: big money for renewable energy and
technologies to avert climate catastrophe.
That’s soak-the-rich, prosperity-killing insanity, conservatives claimed.
But
many economists, including Nobel Prize winners Paul Krugman and MIT’s
Peter Diamond, agree with Ocasio-Cortez. Diamond argued years ago for a
top rate of 73 percent. Krugman recently wrote that the “right’s denunciation of AOC’s ‘insane’ policy ideas serves as a very good reminder of who is actually insane.”
And of who’s pulling a fast one: the billionaire campaign donors
arguing for debunked trickle-down economics. Why? To keep more of their
billions.
But many forget that the top tax rate was more than 90 percent during the 1950s, and 70 percent for all income above $216,000,
right up until Ronald Reagan became president, in 1981. He then
declared government the enemy and slashed taxes for the rich. Thus ended
the most successful period of middle-class economic growth in America’s
history.
Some of us actually remember those halcyon days. Dad’s
salary alone was enough to support a middle-class family of four or
five, to buy a modest home, get the kids most of the way through
college, and still swing a vacation on the Cape in July.
Hard to
imagine now. But when the rich paid more, the government built highways
and bridges. The MBTA parking garage wasn’t collapsing at Alewife
station. The Red Line tracks weren’t catching on fire.
No
one talked about the 1 percent vs. the 99 percent, because income
inequality was far less severe and it was hard to conceive of a single
human amassing a net worth of, say, $88 billion (Warren Buffett, CEO of Berkshire Hathaway) or even $53 million (Robert Iger, CEO of Walt Disney).
Right before Congress passed the Trump millionaire tax giveaway, Pew Research found that 43 percent of voters wanted taxes raised on Americans earning $250,000, nowhere close to $10 million. Sixty percent of Americans already suspected those millionaires weren’t paying their fair share.
So why, asks New York magazine’s Eric Levitz,
do we in the media call Republican Susan Collins of Maine, who voted
for Trump’s tax scheme, a “moderate” instead of an pro-oligarch
extremist? And why is Ocasio-Cortez, with her evidence-based tax
proposal, derided as a know-nothing socialist kook?
Meanwhile
Warren says she’s a capitalist who wants capitalism reasonably regulated
again. She wants to regulate Wall Street’s big banks. She wants to keep
the Consumer Financial Protection Bureau, her brainchild, as a
regulatory check against cheating mortgage lenders, credit companies,
and student loan servicers. But the Trump administration, despite ever
higher consumer complaints, has gutted its enforcement power.
Aren’t we all supposed to oppose corporate cheats?
She also wants Medicare for all and free public college tuition.
So
do 70 percent of Americans (85 percent of Democrats and 52 percent of
Republicans). And 79 percent of Democrats and 41 percent of Republicans
support free public college tuition.
Most Americans also want coverage for preexisting conditions (75 percent), including majorities of Democrats, independents, and Republicans.
Massachusetts’ “Price Transparency”
Resolution To Surprise Facility Fees, Consumer Protection Laws Yield To
Health Care Complexity
by Jackson Williams - Health Affairs - January 10, 2019
It is often said that “health care is different” from other
commodities— that it is essential, that traditional markets don’t work,
that information asymmetry is all but impossible to overcome. This
shibboleth may have guided Massachusetts’ attorney general in settling
some complaints about prices at hospital-owned “urgent care” clinics.
This was a dispute amenable to disposition under ordinary consumer
protection laws and doctrines. However, the attorney general’s resolution of this matter
in September 2018 exemplifies how the perception of health care’s
complexity can intimidate and perplex regulators, complicating efforts
to contain costs.
The facts of the case are laid out in a Boston Globe article:
“Patients sought treatment in an ordinary physician office or urgent
care center. But to their shock, they were billed for an expensive
outpatient hospital visit instead.”
“Patients complained about bills from the [Brigham and Women’s
Hospital] urgent care center in Foxborough, Newton-Wellesley Hospital’s
urgent care center in Waltham, and a North Shore Medical
Center-affiliated urgent care center in Danvers.”
“One woman received a $400 bill for treatment for an eye injury at
North Shore Urgent Care in Danvers—far more than the $75 listed on her
insurance card—because it was billed as an ‘outpatient clinic’ visit,
according to a complaint.”
“‘This is 100% false advertising,’ her husband complained. ‘On both
the website and the gigantic sign in the parking lot, URGENT CARE can be
seen in big letters.’”
An experienced consumer advocate would analyze this scenario under
the Federal Trade Commission’s (FTC’s) definition of deceptive
practices. The 100-plus-year-old FTC Act is the foundation of consumer
protection law, and each state has a “little FTC Act,” usually called
the Unfair and Deceptive Acts and Practices or UDAP, the Massachusetts iteration of which
the state attorney general was applying in this situation.
Massachusetts, like a majority of states, incorporates the FTC’s
decisions into its UDAP jurisprudence. FTC policy
is to evaluate an “entire advertisement, transaction, or course of
dealing in determining how reasonable consumers are likely to respond”
to, say, a sign in a clinic’s parking lot saying “URGENT CARE.” Most
consumers understand urgent care to be the analog of margarine to a
hospital’s butter—a somewhat inferior and definitely cheaper product. No
reasonable consumer would expect to pick up margarine in the
supermarket and pay the price for butter. The Danvers, Massachusetts,
patient made a conscious decision, based on the seriousness of her
medical issue, to forego the extensive resources available in a hospital
in favor of the cheaper option, which is what some insurers have been nudging consumers to do.
Instead of insisting that these facilities either lower their charges
or remove the “urgent care” name, the attorney general’s settlement
simply requires a disclosure of the higher hospital billing on “the
Internet homepage of the facility” and “clearly and conspicuously
displaying signage with the disclosure at the urgent care registration
desk.” It is here that the attorney general significantly departs from
FTC policy, which “looks to the impression made by advertisements as a
whole” and holds that “pro forma statements or disclaimers may not cure
otherwise deceptive messages or practices.” To see why that might be,
look for the mandated disclosure on this hospital’s urgent care home page; even after clicking the link to the disclosure, no price in dollars is stated.
In short, Massachusetts is giving wide berth to the hospital “facility fee.”
Facility fees are a kind of junk fee like those commonly added to
bills in the mortgage lending, telecom, and travel businesses. There are
no hard and fast rules on the legality of junk fees, but businesses
strive to make the fees small enough that consumers won’t complain or
walk away, and to make them sound plausibly related to the transaction
while still set slightly apart from it, for4 example, a hotel “resort
fee” that supposedly covers wifi service. The twin goals are to be able
to charge more than the advertised or expected price while avoiding a
definitive court ruling on the practice’s legality (usually by settling
class action lawsuits challenging the most piggy examples).
Health care consumers generally are protected from junk fees since
the contracts providers sign when they join an insurer network will
prohibit them. Whether because of these hospitals’ market power or
because insurers perceived urgent care as a destination for healthier
enrollees unlikely to exceed their deductibles, the companies insuring
the Massachusetts complainants did not try to protect them from these
fees. That makes it especially disappointing that the attorney general
did not step in as a second line of defense.
This example raises two overarching questions. First, why did the
hospitals violate the “unwritten rule” of junk fees and make them so
large and so noticeable, thereby drawing complaints? The immediate
answer, of course, is that they thought they could away with it—which
they did.
Second, why did the attorney general decline to shut down the billing?
One answer, I think, is intimidation. The head of the hospital,
usually the largest or most prominent employer in town, says that facility fees
are necessary to offer “24/7 access to care for all types of patients,
to serve as a safety net provider for vulnerable populations, and to
have the resources needed to respond to disasters.” An assistant
attorney general may wonder, should the hospital be held to account
under the same standards governing door-to-door encyclopedia salesmen?
It requires some confidence to ask, if the hospital cannot provide
urgent care services at urgent care prices, why does it not leave that
market to smaller players who can, just as large airlines code-share
with smaller carriers to arrange regional jet service? Only something
akin to learned helplessness can explain a “price transparency” settlement that does not extend to disclosing the actual price.
Another answer is to recognize the march of price transparency from
buzzword to all-purpose solution for all health care cost problems such
as lack of competition. Transparency—or the lack thereof—is not the
problem here, and not just because, as the FTC has stated, “Written
disclosures and fine print may be insufficient to correct a misleading
impression.” The problem is that the prices are unreasonably,
unjustifiably, and unsustainably high—and we need help in lowering them
from our state attorneys general. https://www.healthaffairs.org/do/10.1377/hblog20190108.78905/full/?utm_source=Newsletter&utm_medium=email&utm_content=Consumer+Protection+Laws%3B+What+My+Pain+Treatment+Got+Wrong&utm_campaign=HAT&
Memorial Sloan Kettering Curbs Executives’ Ties to Industry After Conflict-of-Interest Scandals
by Katie Thomas and Charles Ornstein - NYT - January 11, 2019
This article was reported and written in collaboration with ProPublica, the nonprofit journalism organization.
Memorial
Sloan Kettering Cancer Center, one of the world’s leading research
institutions, announced on Friday that it would bar its top executives
from serving on corporate boards of drug and health care companies that,
in some cases, had paid them hundreds of thousands of dollars a year.
Hospital
officials also told the center’s staff that the executive board had
made permanent a series of reforms designed to limit the ways in which
its top executives and leading researchers could profit from work
developed at Memorial Sloan Kettering, a nonprofit with a broad social
mission that admits about 23,500 cancer patients each year.
The
conflicts at Memorial Sloan Kettering, unearthed by The New York Times
and ProPublica, have had a rippling effect on other leading cancer
institutions across the country. Dana-Farber Cancer Institute in Boston
and Fred Hutchinson Cancer Research Center in Seattle, both of whose
executives sit on corporate boards, are among the institutions
reconsidering their policies on financial ties.
In
the wake of reports about board memberships held by Memorial Sloan
Kettering officials last fall, Dr. Craig B. Thompson, the hospital’s
chief executive, resigned in October from the board of Merck. The
company, which makes the blockbuster cancer drug Keytruda, had paid him
about $300,000 in 2017 for his service.
The
announcement on Friday was one of several steps the cancer center said
it was considering as part of an institutionwide overhaul of its
corporate relationships and conflict-of-interest policies. The cancer
center has hired Deloitte as well as two law firms, Ropes & Gray and
Debevoise & Plimpton, to help conduct its reviews.
Debra
Berns, the center’s chief risk officer, also said in an email to
employees that the hospital’s Board of Overseers and Managers formalized
a policy enacted last fall that prohibits board members from investing
in start-up companies that Memorial Sloan Kettering helped to found. In
addition, it also prevents hospital employees who represent Memorial
Sloan Kettering on corporate boards from accepting personal
compensation, like equity stakes or stock options, from the companies.
Memorial Sloan Kettering Cancer Center memo by Debra Berns, chief risk officer
Changes in conflict-of-interest policies. Jan. 11, 2019
Memorial
Sloan Kettering Cancer Center, one of the world’s leading research
institutions, announced on Friday that it would bar its top executives
from serving on corporate boards of drug and health care companies that,
in some cases, had paid them hundreds of thousands of dollars a year.
Hospital
officials also told the center’s staff that the executive board had
made permanent a series of reforms designed to limit the ways in which
its top executives and leading researchers could profit from work
developed at Memorial Sloan Kettering, a nonprofit with a broad social
mission that admits about 23,500 cancer patients each year.
The
conflicts at Memorial Sloan Kettering, unearthed by The New York Times
and ProPublica, have had a rippling effect on other leading cancer
institutions across the country. Dana-Farber Cancer Institute in Boston
and Fred Hutchinson Cancer Research Center in Seattle, both of whose
executives sit on corporate boards, are among the institutions
reconsidering their policies on financial ties.
In
the wake of reports about board memberships held by Memorial Sloan
Kettering officials last fall, Dr. Craig B. Thompson, the hospital’s
chief executive, resigned in October from the board of Merck. The
company, which makes the blockbuster cancer drug Keytruda, had paid him
about $300,000 in 2017 for his service.
The
announcement on Friday was one of several steps the cancer center said
it was considering as part of an institutionwide overhaul of its
corporate relationships and conflict-of-interest policies. The cancer
center has hired Deloitte as well as two law firms, Ropes & Gray and
Debevoise & Plimpton, to help conduct its reviews.
Debra
Berns, the center’s chief risk officer, also said in an email to
employees that the hospital’s Board of Overseers and Managers formalized
a policy enacted last fall that prohibits board members from investing
in start-up companies that Memorial Sloan Kettering helped to found. In
addition, it also prevents hospital employees who represent Memorial
Sloan Kettering on corporate boards from accepting personal
compensation, like equity stakes or stock options, from the companies.
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Dr.
Walid Gellad, director of the Center for Pharmaceutical Policy and
Prescribing at the University of Pittsburgh, called the policy changes a
“watershed moment.”
“This is highly
significant, especially at such a high-profile academic center,” Dr.
Gellad said in an email. “Leadership matters, and the institution has
decided that their leaders should not also be concurrently leading
for-profit health companies.”
When
doctors enter into financial relationships with companies, the concern
is that these ties can shape the way studies are designed and
medications are prescribed to patients, potentially allowing bias to
influence medical practice. A 2014 study in JAMA
found that about 40 percent of the largest publicly traded drug
companies had a leader of an academic medical center on their boards.
Ms.
Berns said the Memorial Sloan Kettering board’s policy decision was
intended to emphasize the hospital’s focus on education, research and
treatment of patients. Dr. Nadeem R. Abu-Rustum, who is president of
Memorial Sloan Kettering’s medical staff, said the policy changes were
“well-received” by employees.
Dr. Baselga resigned days later,
and he also stepped down from the boards of the drugmaker Bristol-Myers
Squibb and Varian Medical Systems, a radiation equipment manufacturer.
Earlier this month, AstraZeneca announced that it had hired Dr. Baselga
to run its new oncology unit.
Additional reports detailed how other top officials had cultivated lucrative relationships with for-profit companies, including an artificial intelligence start-up, Paige.AI,
that was founded by a member of Memorial Sloan Kettering’s executive
board, the chair of the pathology department and the head of a research
lab. The hospital struck an exclusive deal with the company to license
images of 25 million patient tissue slides that had been collected over
decades.
When news of Dr. Baselga’s disclosure lapses first became public, 12
doctors and researchers at the hospital served on the boards of publicly
traded companies. The number has now dropped to nine.
On
October 1, some doctors at the hospital called for a no-confidence vote
in Dr. Thompson’s leadership and questioned whether the industry
relationships were jeopardizing the hospital’s mission.
The
hospital task force is expected to release draft recommendations in
February and will solicit feedback from employees, Ms. Berns said in the
memo released Friday. The review is also expected to examine faculty
membership on corporate boards, participation on companies’ scientific
advisory boards, and doctors’ and researchers’ consulting relationships
with drug and health care companies.
Memorial
Sloan Kettering will also host a symposium in February on disclosing
conflicts of interest in medical journals, in what Ms. Berns described
as “a first step toward developing a common framework that harmonizes
financial disclosures in research publications.”
Ms. Berns delivered details of the review at a medical staff meeting Friday morning that was also attended by Dr. Lisa DeAngelis,
the hospital’s acting physician-in-chief. During the meeting, Dr.
DeAngelis sought to reassure employees that hospital leaders were taking
their concerns seriously while also defending the hospital’s reputation
as a world-renowned cancer center, according to accounts of the
meeting.
At one point, according to
the accounts, Dr. DeAngelis celebrated recent good news for the
institution, including the Food and Drug Administration’s approval of a
new cancer drug, Vitravki, developed at the hospital.
Justice
Ginsburg is recovering from cancer surgery on her left lung that was
performed at the center. The Supreme Court announced on Friday that she
was still recovering and would not be on the bench next week, but that
there was no evidence of any more cancer.
Democrats Don't Just Support Medicare for All, 84% in New Poll Want Party Leaders to Make It 'Extremely Important Priority'
by John Queally - Common Dreams - January 8, 2019
'Are you listening?'
That was the question posed by healthcare justice advocates to Senate
Minority Leader Chuck Schumer and Speaker of the House Nancy Pelosi—and
potential Democratic presidential candidates as well—after another new
poll showed overwhelming support for Medicare for All by Democratic
Party voters. "They may have the money. But we have the people." —Sen. Bernie Sanders (I-Vt.)According to the Politico/Harvard poll
(pdf), released Monday, a full 84 percent of Democrats says "providing
health insurance coverage for everyone through a taxpayer-funded
national plan like MedicareForAll" should "be an extremely important
priority" for the party. Politicoreports:
While support for a national, taxpayer-funded plan is
concentrated on the Democratic side, 60 percent of Republican
respondents backed allowing Americans under 65 to buy into Medicare (71
percent of respondents overall supported the idea, and 83 percent of
Democrats).
The poll involved a series of questions that made distinctions
between a Medicare for All system that covered everyone, a possible
"buy-in" option for people under 65, and a more vague "public option"
that could be purchased. "The poll showed most people weren't aware of a
Medicare buy-in or public option," Politico noted, "but were broadly supportive of the ideas when informed about them."
While numerous polls over the last two years
have shown increasingly high levels for a single-payer approach or
Medicare For All solution to the nation's healthcare crisis, many
Democratic Party leaders have clung to their reluctance of the idea.
Last week, Democrat Terry McAuliffe, the former governor of Virginia who says he is contemplating a run for president, warned the party
away from bold solutions like Medicare for All, saying voters are not
ready for policies that he characterized, without evidence, of being
"unrealistic."
But those pushing for Medicare for All say the political winds are at
their back as the polling continues to suggest the American people are
ready to join the rest of the world's developed nations by creating a
healthcare system that includes everybody and leaves nobody out.
While leaders like Pelosi and Schumer have yet to embrace Medicare
for All fully, there has been movement. As the Democrats took control of
the House last week, and the Speaker's gavel was returned to Pelosi, it
was announced
that major committees would hold hearings on Medicare For All this
year, a development advocates called a "giant step." Meanwhile, progressive organizing continues to swell with National Nurses United, the nation's largest nurses union, holding "barnstorming" events nationwide next month to demand Medicare for All and the Democratic Socialists of America continuing their door-to-door and grassroots campaigning.
As Sen. Bernie Sanders (I-Vt) said on Tuesday morning: "The fight for
Medicare for all will be opposed by all of the special interests—drug
companies, insurance companies, Wall Street—who make billions from our
dysfunctional health care system. They may have the money. But we have
the people."
The fight for Medicare for all will be opposed by
all of the special interests—drug companies, insurance companies, Wall
Street—who make billions from our dysfunctional health care system.
V.A. Seeks to Redirect Billions of Dollars Into Private Care
by Jennifer Steinhauer and Dave Phillips - NYT - January 12, 2019
WASHINGTON — The Department of Veterans Affairs is
preparing to shift billions of dollars from government-run veterans’
hospitals to private health care providers, setting the stage for the
biggest transformation of the veterans’ medical system in a generation.
Under
proposed guidelines, it would be easier for veterans to receive care in
privately run hospitals and have the government pay for it. Veterans
would also be allowed access to a system of proposed walk-in clinics,
which would serve as a bridge between V.A. emergency rooms and private
providers, and would require co-pays for treatment.
Veterans’
hospitals, which treat seven million patients annually, have struggled
to see patients on time in recent years, hit by a double crush of
returning Iraq and Afghanistan veterans and aging Vietnam veterans. A
scandal over hidden waiting lists in 2014 sent Congress searching for
fixes, and in the years since, Republicans have pushed to send veterans
to the private sector, while Democrats have favored increasing the
number of doctors in the V.A.
If put into effect, the proposed
rules — many of whose details remain unclear as they are negotiated
within the Trump administration — would be a win for the once-obscure
Concerned Veterans for America, an advocacy group funded by the network
founded by the billionaire industrialists Charles G. and David H. Koch, which has long championed increasing the use of private sector health care for veterans.
For
individual veterans, private care could mean shorter waits, more
choices and fewer requirements for co-pays — and could prove popular.
But some health care experts and veterans’ groups say the change, which
has no separate source of funding, would redirect money that the current
veterans’ health care system — the largest in the nation — uses to
provide specialty care.
Critics have also warned that switching
vast numbers of veterans to private hospitals would strain care in the
private sector and that costs for taxpayers could skyrocket. In
addition, they say it could threaten the future of traditional veterans’
hospitals, some of which are already under review for consolidation or
closing.
President Trump, who made reforming veterans’ health care
a major point of his campaign, may reveal details of the plan in his
State of the Union address later this month, according to several people
in the administration and others outside it who have been briefed on
the plan.
The proposed changes have grown out of health care
legislation, known as the Mission Act, passed by the last Congress.
Supporters, who have been influential in administration policy, argue
that the new rules would streamline care available to veterans, whose
health problems are many but whose numbers are shrinking, and also prod
the veterans’ hospital system to compete for patients, making it more
efficient.
“Most veterans chose to serve their
country, so they should have the choice to access care in the community
with their V.A. benefits — especially if the V.A. can’t serve them in a
timely and convenient manner,” said Dan Caldwell, executive director of
Concerned Veterans for America.
One of the group’s former senior advisers, Darin Selnick,
played a key role in drafting the Mission Act as a veterans’ affairs
adviser at the White House’s Domestic Policy Council, and is now a
senior adviser to the secretary of Veterans Affairs in charge of
drafting the new rules. Mr. Selnick clashed with David J. Shulkin, who
was the head of the V.A. for a year under Mr. Trump, and is widely
viewed as being instrumental in ending Mr. Shulkin’s tenure.
Mr. Selnick declined to comment.
Critics,
which include nearly all of the major veterans’ organizations, say that
paying for care in the private sector would starve the 153-year-old
veterans’ health care system, causing many hospitals to close.
“We
don’t like it,” said Rick Weidman, executive director of Vietnam
Veterans of America. “This thing was initially sold as to supplement the
V.A., and some people want to try and use it to supplant.”
Members
of Congress from both parties have been critical of the
administration’s inconsistency and lack of details in briefings. At a
hearing last month, Senator John Boozman, Republican of Arkansas, told
Robert L. Wilkie, the current secretary of Veterans Affairs, that his
staff had sometimes come to Capitol Hill “without their act together.”
Although
the Trump administration has kept details quiet, officials inside and
outside the department say the plan closely resembles the military’s
insurance plan, Tricare Prime, which sets a lower bar than the Department of Veterans Affairs when it comes to getting private care.
Tricare
automatically allows patients to see a private doctor if they have to
travel more than 30 minutes for an appointment with a military doctor,
or if they have to wait more than seven days for a routine visit or 24
hours for urgent care. Under current law, veterans qualify for private
care only if they have waited 30 days, and sometimes they have to travel
hundreds of miles. The administration may propose for veterans a time
frame somewhere between the seven- and 30-day periods.
Mr. Wilkie
has repeatedly said his goal is not to privatize veterans’ health care,
but would not provide details of his proposal when asked at a hearing
before Congress in December.
In remarks at a joint hearing
with members of the House and Senate veterans’ committees in December,
Mr. Wilkie said veterans largely liked using the department’s hospitals.
“My
experience is veterans are happy with the service they get at the
Department of Veterans Affairs,” he said. Veterans are not “chomping at
the bit” to get services elsewhere, he said, adding, “They want to go
places where people speak the language and understand the culture.”
Health
care experts say that, whatever the larger effects, allowing more
access to private care will prove costly. A 2016 report ordered by
Congress, from a panel called the Commission on Care, analyzed the cost
of sending more veterans into the community for treatment and warned
that unfettered access could cost well over $100 billion each year.
A
fight over the future of the veterans’ health care system played a role
in the ousting of the department’s previous secretary, David J.
Shulkin.CreditDoug Mills/The New York Times
Tricare costs have climbed steadily, and the Tricare
population is younger and healthier than the general population, while
Veterans Affairs patients are generally older and sicker.
Though
the rules would place some restrictions on veterans, early estimates by
the Office of Management and Budget found that a Tricare-style system
would cost about $60 billion each year, according to a former Veterans
Affairs official who worked on the project. Congress is unlikely to
approve more funding, so the costs are likely to be carved out of
existing funds for veterans’ hospitals.
At the same time, Tricare
has been popular among recipients — so popular that the percentage of
military families using it has nearly doubled since 2001, as private
insurance became more expensive, according to the Harvard lecturer Linda
Bilmes.
“People will naturally gravitate toward the better deal,
that’s economics,” she said. “It has meant a tremendous increase in
costs for the government.”
A spokesman for the Department of Veterans Affairs, Curt Cashour, declined to comment on the specifics of the new rules.
“The
Mission Act, which sailed through Congress with overwhelming bipartisan
support and the strong backing of veterans service organizations, gives
the V.A. secretary the authority to set access standards that provide
veterans the best and most timely care possible, whether at V.A. or with
community providers, and the department is committed to doing just
that,” he said in an email.
Veterans’ services organizations have
largely opposed large-scale changes to the health program, concerned
that the growing costs of outside doctors’ bills would cannibalize the
veterans’ hospital system.
Dr. Shulkin, the former secretary,
shared that concern. Though he said he supported increasing the use of
private health care, he favored a system that would let department
doctors decide when patients were sent outside for private care.
The
cost of the new rules, he said, could be higher than expected, because
most veterans use a mix of private insurance, Medicare and veterans’
benefits, choosing to use the benefits that offer the best deal. Many
may choose to forgo Medicare, which requires a substantial co-pay, if
Veterans Affairs offers private care at no charge. And if enough
veterans leave the veterans’ system, he said, it could collapse.
“The
belief is as costs grow, resources are going to shift from V.A. to the
private sector,” he said. “If that happens on a large scale, it will be
extremely difficult to maintain a V.A. system.” https://www.nytimes.com/2019/01/12/us/politics/veterans-administration-health-care-privatization.html
Trump Officials Say Drug Prices Are Inflated. So Are Some of Their Claims on a Solution.
by Robert Pear - NYT - December 16, 2019
WASHINGTON
— In his zeal to fulfill a campaign promise, President Trump has
correctly identified high drug prices as a major problem for many
Americans. But in defending his proposed solutions, he has sometimes
stretched the facts.
Mr. Trump has proposed that Medicare pay for
certain prescription drugs based on the prices paid in other developed
countries. He called this “a revolutionary change” and said it would
save money for the government and for Medicare beneficiaries without
hurting their ability to get the medicines they need.
As part of a
demonstration project covering half the country, Medicare would
establish an “international pricing index” and use it to calculate a
“target price” for each drug covered by Part B of Medicare. The proposal
is expected to produce “a 30 percent reduction in Medicare spending”
for drugs included in the test, the Department of Health and Human
Services said.
The new pricing model, unveiled less than two
months ago, has encountered a torrent of criticism from drug companies,
which benefit from high prices under the current system, and from
conservative groups, which accuse Mr. Trump of trying to import price
controls from foreign countries.
Part B of
Medicare spends roughly $30 billion a year for drugs that patients
receive in doctor’s offices and outpatient hospital clinics — often by
infusion or injection — for cancer, rheumatoid arthritis, macular
degeneration and other conditions. Some of the drugs cost more than
$100,000 a year. Many are biologic drugs made from living cells.
What was said
— The Trump administration, in statements this fall.
This is misleading.
Mr.
Trump is right that brand-name drugs often cost much more in this
country than in Europe. But it is a stretch to say that drug companies
voluntarily provide discounts abroad. They generally charge lower prices
to ensure that their products will be covered by national health
systems in other countries.
Medicare does not use its leverage in
that way. As a candidate, Mr. Trump said Medicare should directly
negotiate prices with drug makers, a proposal long favored by Democrats.
But since taking office, he has dropped the idea.
Most of the 36
countries in the Organization for Economic Cooperation and Development
“regulate pharmaceutical prices directly or indirectly through coverage
determinations,” the group said in a report last month.
Daniel
Hartung, an associate professor at the Oregon State University College
of Pharmacy, explained: “Many O.E.C.D. countries have single-payer
systems in which the government is essentially setting prices and
telling companies what it will pay for coverage. That’s how they can
extract substantial reductions relative to prices paid in the United
States.”
Mr. Trump is proposing to use
prices in 14 other countries as a benchmark or guide in deciding what
Medicare would pay. The administration acknowledged that some of these
countries, like the Czech Republic and Greece, “have far lower per
capita incomes than the United States.”
Several of the 14
countries have a budget for spending on prescription drugs. Many peg
their payments to drug prices in other countries, a practice known as
reference pricing or international benchmarking. Some of the countries
assess the “cost-effectiveness” of drugs and limit how much they will
pay for expected gains in the length and quality of life, with some
exceptions allowed.
Just seven months ago, the Trump
administration criticized the use of reference pricing by other
countries, but it has now proposed something similar for Medicare.
What was said
“The
president is also going to bring smart negotiation to billions of
dollars’ worth of drugs in a part of Medicare where there is currently
no negotiation at all.”
— Alex M. Azar II, the secretary of health and human services, in May
What was said
“In
Medicare Part B today, the government gets the bill, and we just
blindly pay it — oh, plus a 6 percent markup for the provider who
administers it. There is no negotiation.”
It
is true that the government does not negotiate with drug manufacturers
to determine the prices paid for drugs in Part B of Medicare. But the
prices paid for many of those drugs do reflect the results of
competition and negotiations in the private sector.
Under the
Medicare Modernization Act of 2003, the government’s payment for a Part B
drug is based on the drug’s “average sales price.” This price, as
defined in the law, accounts for commercial discounts, rebates and other
price concessions that drug manufacturers negotiate with health
insurance plans, pharmacy benefit managers and other private purchasers.
These price concessions, generally treated as trade secrets, may knock 15 to 35 percent off the list price of a drug.
The
problem for Medicare and for consumers is that, for some drugs,
manufacturers do not give substantial discounts. This may be the case,
for example, if a drug has no direct competitors, so doctors cannot
prescribe an alternative, or if the market for a drug outside Medicare
is small.
“For at least 30 percent of Part B
spending, Medicare prices are at least half of the market, meaning
there is effectively no competition within that substantial federal
spending among competing products,” said John O’Brien, the senior
adviser on drug pricing at the Department of Health and Human Services.
What was said
“This
model will expand patient access, through lower prices. This is a
pro-patient-access model. We are going to lower drug prices
substantially, for our most costly drugs, without restrictions on
patient access.”
Under
Mr. Trump’s proposal, Medicare payment for physician-administered drugs
would be based, in part, on prices in other countries, including some
that restrict access to drugs by limiting coverage.
The
administration assumes that Medicare can pay lower prices without
limiting access. This assumption is based on a belief that drug
manufacturers could not walk away from the Medicare market because it is
so large, with 55 million people in Part B.
Moreover, Medicare
officials say they would monitor the use of prescription drugs to ensure
that beneficiaries’ access to medicines is not compromised. Even with
the pricing index, they say, Medicare would still be paying more than
the average of other countries.
But some advocates for patients are apprehensive.
“We
share the administration’s goal of reducing prescription drug costs,”
said Christopher W. Hansen, the president of the advocacy arm of the
American Cancer Society, but the proposal “raises numerous questions
about beneficiary access.”
“For instance,” Mr. Hansen said, “how
would patients access necessary care if there are no vendors willing to
bring drugs to physicians in their area? What if the drug maker decides
not to sell a particular drug at the price required under the proposal,
and patients are unable to get the Medicare-covered drugs they need to
treat their disease?”
Dr. Debra Patt, a breast cancer specialist
at Texas Oncology, a group of more than 400 doctors, asked: “What
leverage would a vendor have to bring manufacturers to the table?
Suppose a manufacturer is selling drug X for $1,000, and the vendor
wants to pay only $750. What if the manufacturer says no? What then
happens to Medicare beneficiaries?”
Robert
Pear has been a domestic correspondent in the Washington bureau since
joining The Times in 1979. He currently covers domestic policy, the
budget, health care and Social Security.
Court Rejects Trump’s Cuts in Payments for Prescription Drugs
by Robert Pear - NYT - January 7, 2019
WASHINGTON
— A federal court has rejected President Trump’s first major effort to
cut payments for prescription drugs, saying the administration went far
beyond its legal authority.
The Trump
administration made a “drastic departure from the statutorily mandated
rates” when it reduced payments to hospitals for drugs given to Medicare
beneficiaries in outpatient clinics, Judge Rudolph Contreras of the
Federal District Court here said in the decision, issued late last
month.
Alex M. Azar II, the secretary of health and human services, “may not end-run Congress’s clear mandate,” the judge said.
The
court is still considering how to compensate hospitals for the money
lost, estimated at $1.6 billion for last year. The cuts are still in
effect, but the court has asked the government and hospitals to propose a
remedy.
At
issue is a federal program that allows hospitals serving large numbers
of low-income people to get discounts from drug manufacturers on certain
prescription drugs, including many used to treat cancer and
H.I.V./AIDS.
Medicare pays for the
drugs when Medicare beneficiaries receive them as outpatients at more
than 1,000 hospitals that participate in the program. The Trump
administration concluded that Medicare was paying hospitals much more
than they spent to acquire the drugs.
So federal officials cut the reimbursement rate last year — to 77.5 percent of a drug’s average sales price, from 106 percent.
Hospital executives told the judge that as a result of the reductions, they would have to cut back or eliminate some services.
Under
the Medicare law, Judge Contreras said, federal officials have the
power to “adjust” reimbursement rates. But, he said, they abused that
power and “fundamentally altered the statutory scheme established by
Congress for determining” reimbursement rates.
Mr.
Azar “may either collect the data necessary to set payment rates based
on acquisition costs, or he may raise his disagreement with Congress,”
but he may not circumvent the mandate of Congress, said Judge Contreras,
who was appointed by President Barack Obama. The government had
acknowledged that it did not know the precise amount of the difference
between what hospitals were paying for the drugs and what Medicare was
reimbursing them.
The program, created under Section 340B of the Public Health Service Act, is commonly known as the 340B program.
Caitlin
Oakley, a spokeswoman for Mr. Azar, said Monday: “We are disappointed
with the court’s ruling and are evaluating next steps. As the court
correctly recognized, its judgment has the potential to wreak havoc on
the system.”
Ms. Oakley said the
decision could increase costs for Medicare patients, who are generally
responsible for 20 percent of the Medicare-approved amount for
outpatient drugs covered by the program. Most people on Medicare have
supplementary insurance, like a Medigap policy or retiree health
benefits, to help pay their share of the bill.
The
lawsuit challenging the Medicare cuts was filed by the American
Hospital Association; by two trade groups representing teaching and
public hospitals; and by three providers: Henry Ford Health System,
based in Detroit; Park Ridge Hospital, in Hendersonville, N.C.; and
Eastern Maine Healthcare Systems, now known as Northern Light Health.
Dr.
Robert A. Chapman, a medical oncologist at Henry Ford Health System,
described the administration’s action as an example of “reverse Robin
Hood.” Under the policy, he said, the government took money from
hospitals serving large numbers of low-income people and redistributed
most of it to hospitals that did not qualify for the program.
When
Medicare cuts its payments to hospitals, Dr. Chapman said, it tends to
offset the discounts that hospitals receive from drug manufacturers.
Melinda
R. Hatton, a senior vice president and the general counsel of the
American Hospital Association, said the court was “holding the
administration’s feet to the fire to comply with the law.” Hospitals use
savings from the program to pay for myriad services in low-income
communities, she said.
In a speech in May in the Rose Garden, Mr. Trump announced
what he called “the most sweeping action in history to lower the price
of prescription drugs for the American people.” He persuaded some
pharmaceutical executives to roll back or postpone price increases over
the summer.
And at a campaign rally
in October in Wisconsin, Mr. Trump said: “You will see, very soon, drug
prices will go plunging downward. You wait, you watch.”
But drug makers have increased prices on hundreds of products this month, provoking an angry reaction from the president.
In a Twitter post
over the weekend, Mr. Trump said: “Drug makers and companies are not
living up to their commitments on pricing. Not being fair to the
consumer, or to our Country!”
Many of those commitments were carefully hedged and temporary. Pfizer, for example, said in July that it was rolling back price increases to give Mr. Trump time to work on his “blueprint to lower drug prices.”
Pfizer
said then that its prices would remain at the lower level until the
president’s blueprint took effect or until the end of 2018, “whichever
is sooner.”
Members of Congress from
both parties, including Speaker Nancy Pelosi and Senator Charles E.
Grassley, Republican of Iowa, said they were hoping to work with Mr.
Trump to rein in drug prices. But so far, Trump appointees have
generally expressed more interest in unilateral administrative actions
than in legislative solutions.
AUGUSTA, Maine - A Democrat's bill would create a new health care system for Maine residents. The Legislature referred Sen. Geoff Gratwick's bill Wednesday to its Health Coverage, Insurance and Financial Services committee.
Gratwick served on a task force last year tasked with creating plans to provide health coverage for all Maine residents. The committee released a report urging improved oversight over pharmacy benefit managers and prescription drug costs.
Gratwick's bill would rely on funding sources from payroll taxes, transaction taxes and other available federal funding. All Mainers could enroll on a voluntary basis for a benefit plan covering essential health benefits. Medicaid recipients would be automatically enrolled.
But more details about the bill, which is in concept form, are likely to be hashed out in legislative committee if the legislation moves forward.
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