Editor's Note -

Lots of good clippings in today's blog - but perhaps the most important one is the following essay by my friend and colleague Vikas Saini, President of the Lown Institute. He gets at one of the "underlying pathologies" of our healthcare system - untrammelled greed, also known as capitalism run amok. It's also of note that it originally ran in "Commonheath", published by WBUR, one of Boston's two public broadcasting stations. Would that the rest of the PBS network would cover healthcare with such clarity and integrity.

- SPC

As Drug Prices Rise, Is Boston’s Prosperity Based On A Moral Crime?

by Vikas Saini - Commonhealth - January 31, 2019

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Prescription drug prices have become a high-profile issue, with a growing clamor from politicians, including Massachusetts Gov. Charlie Baker, seeking to take action. There are many laudable elements in Baker’s proposal to negotiate prices directly with drug makers, despite its narrow focus, but such efforts are doomed to become little more than window dressing. We have a much bigger problem to confront.

The week before Thanksgiving, in the freezing rain, a group of patients, nurses, physicians and activists, organized by the Right Care Alliance, marched on the Sanofi drug company in Cambridge, Massachusetts. Sanofi had been marking up its insulin products by as much as 4,500 percent over to the estimated cost of producing a single vial — and people with type 1 diabetes were starting to die. Led by grieving mothers, we carried the ashes of their children to the insulin manufacturer demanding it cut its prices.

I have sympathy for Sanofi employees, and even the company’s management. They are in a difficult, contradictory spot, enticed by well-paying jobs and the promise of doing good in the world – after all, the company’s drugs can sometimes save lives.

But we all need to face up to the real-world consequences of drug pricing practices. That’s not a comfortable thing to do, not for the people who work for drug companies, nor for those of us who are prospering in the “innovation economy.”

There is a story told often here in Massachusetts: The Commonwealth’s economy has boomed, just like Silicon Valley’s, because of a rich ecosystem of startups, intrepid entrepreneurs, savvy venture investors and talented scientists and technologists. Our colleges and universities attract the brightest students from around the world, and their close relationships to industry fuel economic growth.

There is indisputable truth in that story. But there is also an ugly lie at its heart.

The pharma sector, the pride of Massachusetts, is a bubble fed by astronomical, obscene profits. It’s not the innovative ideas, though there are many of those, nor the “best and the brightest” young scientists, though they can be dazzling in their smarts, that are making the biotech sector boom. It’s the recent access to cheap capital and even cheaper hype. And predatory pricing.

The companies that have put down roots here to take advantage of our educated elite – Sanofi, Eli Lilly, Novartis and scores of others – have continued the pattern made famous by Martin Shkreli, the CEO who dramatically hiked the price of several drugs, and is now serving jail time for defrauding investors. Companies today are setting prices to whatever the market will bear, no matter the damage. And we praise their ingenuity for bringing innovation to patients – and dollars to their shareholders.

But what kind of economic miracle routinely depends on the FDA to approve cancer drugs that are unproven when it comes to prolonging life, yet cost more than $100,000 for a course of treatment? What kind of economic miracle leads to people dying because they can’t afford an essential medicine like insulin, which has been around for almost a century?

Antavia Lee Worsham, Alec Raeshawn Smith, Shane Boyle and Jesse Lutgen, four people with type 1 diabetes, died because they couldn't afford insulin.

People with type 1 diabetes need insulin to stay alive, like all of us need water. When insulin was first purified by Canadian scientists Frederick Banting and Charles Best in 1921, they instantly knew it was a life-saving miracle, an essential medication. The phrase “greed is good” from the movie “Wall Street,” which signaled the start of our recent era of hypercapitalism, wasn’t part of their lexicon: they sold their rights for $1 each to make sure everyone could afford it.

Now the price of insulin is out of reach for anyone paying out of pocket, and it is one more thing driving up insurance premiums and deductibles for everyone else.

For those of us who live in Boston, in what the author Thomas Frank has called "the spiritual homeland of America’s professional class,” it’s time for sober reflection. When “innovation” becomes an empty mantra for extortionate pricing, we should all agree that it’s time for a rethink.

I’m not saying it will be simple. From the first social movements like the abolitionists, who found an early home in Massachusetts, to tackling big tobacco or the fossil fuel industry, economic interests almost always cloud moral judgements and make change incredibly slow and difficult.

But what if Massachusetts’ current economic miracle is based on a moral crime?

What else are we to call it when the preferred business model is starting to kill people?

No fair-minded observer would say that we have a functioning market for pharmaceuticals. Instead, we have an organized syndicate of insurance companies, manufacturers and benefits managers, feeding off the vulnerability of the sick and the weak. As a society, we have sacrificed our own — we sacrificed Antavia, Alec, Shane, and Jesse — on the altar of the church of market fundamentalism. To defend this kind of market is a form of idolatry. And it demands that we ask of ourselves: what are we compelled to do for the well-being of all?

The Right Care Alliance felt compelled to take action at Sanofi because no one else seems willing to state this problem in its stark, unvarnished reality. As a society, we need patent laws reformed and serious government intervention to control prices. Yes, we need to bestow reasonable rewards on true innovators who invent effective drugs that bring real health to patients. But we also need a new system to crack down on speculators and profiteers.

From our political leaders we can no longer tolerate half-measures; we need deeds that match the seriousness of the problem, because people are dying. Massachusetts’ prosperity must be reestablished on a sound moral foundation. Otherwise history will not judge us kindly.

Vikas Saini, MD, is a cardiologist, the president of the Lown Institute and co-chair of the Right Care Alliance, a clinician and patient led health care reform movement.

https://www.wbur.org/commonhealth/2019/01/31/drug-prices-insulin-sanofi-boston

Opinion | Editorial: Charlie Baker takes on Big Pharma

Editorial - The Boston Globe - January 30, 2019

Drugs — life-saving drugs — are changing lives, changing the way health care is delivered, and changing the way states, including Massachusetts, are wrestling with the rising public costs of paying for those drugs.

Last week in his proposed 2019-20 state budget, Governor Charlie Baker offered up yet another way to help control those rising prescription drug costs, promising that getting tougher not on MassHealth patients but on pharmaceutical companies could save some $80 million a year. Yes, that’s a big number — but it makes the point that this aspect of Medicaid spending is indeed a big ticket item that needs to be addressed.
That’s not surprising, given that some 1.86 million low-income residents are covered under the program — and that the cost of prescription medications are rising faster than the cost of any other aspect of health care. According to Baker’s budget team, spending on drugs under MassHealth has just about doubled since 2012, to $1.9 billion a year.
The problem, of course is not unique to Massachusetts or even to Medicaid spending. It’s one that private insurers and the federal Medicare bureaucracy are also wrestling with. And no doubt the Baker administration didn’t pick that 2012 date at random. It was in 2013 that the first breakthrough drugs to treat (and cure) hepatitis C came to market — saving lives and untold pain — but at a cost at the time of some $84,000 for a course of treatment. A new and somewhat controversial drug to treat cystic fibrosis — controversial because its efficacy has been called into question — costs $272,000 a year per patient.
Both kinds of drugs would surely be on a short list — and Baker himself assured “we’re talking about a small number of drugs here” — of those MassHealth would be empowered to negotiate directly with drug manufacturers over pricing.
If the manufacturer fails to see the wisdom in offering the state rebates to meet its targeted price, the drug company would be subject to a public rate-setting process. If those negotiations are unsuccessful, then drugs priced at more than $25,000 a year per patient (or $10 million in total costs to the state) would be subject to action by the Health Policy Commission that would include disclosure requirements, public hearings, and a possible referral to the attorney general’s office for action under the state’s consumer protection law.
In short, the measure — which would require legislative approval — would allow the state not only to use its buying power but also its bully pulpit to bring down the cost of the drugs it buys.
And unlike the Baker administration’s proposal last year to exclude certain drugs from its formulary, approving exceptions only on a case-by-case basis, this plan would not require federal approval. (Last year’s was rejected by the feds.)
When it comes to attempts to control drug costs, states have indeed become the laboratories that federalism envisioned. The kind of transparency that the new Baker plan would use as a cudgel if need be to wrest drug discounts from manufacturers is one of the more popular instruments in state toolboxes. Vermont passed its first try at such transparency in 2016 and revised it just last year. It focuses on exposing drugs that have experienced the largest price increases in the course of a year. California passed a similar law in 2017 aimed at the 25 most expensive drugs. Results are still out on the extent of cost savings.
New York has a cap on Medicaid drug spending that if exceeded triggers a negotiating process similar to the one proposed for Massachusetts. That state also has an independent panel that reviews drug costs and clinical benefits — not unlike the role that would be played by the Massachusetts Health Policy Commission.
Connecticut’s law requires drug companies to justify price increases if those increases exceed 20 percent in one year or 50 percent over three years.
Last year Massachusetts lawmakers in their own health care reform effort were looking at promoting drug pricing transparency not simply for MassHealth but for the commercial insurance market as well. Senate President Karen Spilka, in a meeting with the Globe editorial board, indicated that’s a direction she’s still interested in pursuing this year. It would certainly be a logical add-on to the Baker proposal and a hedge against the next EpiPen scandal.
There still needs to be a balancing act, allowing companies to recoup their research costs and turn a reasonable profit. It takes on average some $2.5 billion and often more than seven years to bring a drug to market, according to a study by the Tufts Center for the Study of Drug Development.
The Massachusetts economy, with its burgeoning biotechnology industry, has been a big beneficiary of new medicines. But the drug industry also spends billions of dollars each year to tout its latest advances in direct-to-consumer advertising, offering up lots of warm and fuzzy stories — everything but the drug’s cost. It’s time the state filled that gap. Cutting the state’s financial burden for Medicaid recipients is essential, but so too is real transparency in drug pricing that will make all of us smarter consumers.
https://www.bostonglobe.com/opinion/editorials/2019/01/30/charlie-baker-takes-big-pharma/XjkyttWCTQtPbxugN8f6DI/story.html?et_rid=1744895461&s_campaign=todaysheadlines:newsletter

Opinion | Robert K. Coughlin: Governor Baker’s proposal on drug-pricing will hurt biotech — and consumers

by Robert K. Coughlin - The Boston Globe - January 30, 2019

Governor Baker knows a lot more about health care than your average person. That is why it is so surprising that in his 2019-20 budget proposal he has opted for political gimmickry on drug pricing rather than attempting a more serious approach to improving health care for Massachusetts residents while reining in spending.

Baker proposes to experiment with the state’s Medicaid program, which serves our most vulnerable residents, by attempting to use strong-arm tactics to compel so-called voluntary reductions from drug manufacturers, not unlike what President Trump has touted. This is a dangerous game, with Massachusetts’s neediest residents as the potential big losers. The Legislature should demonstrate its leadership by soundly rejecting this approach and opting instead for a bipartisan effort at real reform.
Medicaid was designed by Congress to ensure that our most vulnerable patients get rapid and equal access to the latest medicines by requiring that drug companies always provide the “best price” to these patients, a guaranteed 23.1 percent discount or the lowest price they offer in the country. This is so important that the federal government subsidizes part of these costs to help the state afford the program. The governor’s strong-arm tactics to squeeze innovative companies for more concessions risks delaying or denying access to new medicines for these patients in ways never intended by Congress.
Second, the governor’s approach won’t work — it won’t meaningfully reduce the Commonwealth’s health care budget. Drug spending is only a small portion of the state’s health care costs. At a national level, retail drug spending represents a small portion of overall health spending (10 percent) and grew at a significantly slower pace, compared to other sectors. In MassHealth, retail drug spending only accounts for 6.3 percent, after rebates, of total health dollars. The governor’s new proposal hopes to squeeze an additional $80 million (a meager 0.5 percent reduction in MassHealth spending) by threatening companies who are already providing the mandatory best price with investigation if they don’t provide additional rebates. Threatening attorney general investigations as a means of extracting additional discounts is inconsistent with American values. Other states have tried this type of approach and have come nowhere near close to those levels of savings. What’s worse, even if successful, this sort of effort will do nothing to actually bend the health care cost curve — only continued investment and support for developing new medical breakthroughs can truly do that.
Finally, while the governor’s proposal will not meaningfully reduce health care spending, it will without a doubt harm the highly productive medical innovation ecosystem, which is the beating heart of the state economy, and will potentially result in job losses.
The number of biotech companies in the state has grown by 28 percent in the last decade — directly employing close to 70,000 people bringing home over $10 billion in Massachusetts-based wages. Why is this unparalleled level of innovation happening here? Because of the educated workforce, academic medical excellence, major investments in innovation, and the interest and availability of capital, forming an unrivaled biomedical ecosystem that has proved its worth 10 times over in discovering new breakthroughs. Massachusetts companies have developed therapies for more than 260 million patients in the United States and close to 2 billion patients around the world.
Instead of following the governor’s political gamesmanship, the Legislature should pull together a group of experts from all corners of health care to work on a series of real reforms that can both improve health outcomes for our residents and cut unneeded spending without risking harm to our most vulnerable patients.
Robert K. Coughlin is president and CEO of MassBio.
https://www.bostonglobe.com/opinion/2019/01/30/governor-baker-proposal-drug-pricing-will-hurt-biotech-and-consumers/fpJIp2WQGZutMUkA8T92DI/story.html?

Drug costs plague seniors, but legislative relief may be elusive - The Boston Globe

by Robert Weisman - Boston Globe - January 28, 2019

Every morning in his Roxbury apartment, 87-year-old retiree Clarence Hogan lifts a plastic inhaler and breathes in a powdery mist to treat his chronic lung disease.
The medicine doesn’t come cheap. In 2017, his out-of-pocket cost for an inhaler loaded with a month’s supply was $27. But when he went to pick up a new one last fall, he was stunned to discover the price had more than quadrupled, to $345 for a three-month supply.
“I’ve been retired since May of 1992, and I don’t have a lot of money,” said Hogan, who worked for decades at Raytheon Co. as an electrical technician. “I stand in line at the drugstore waiting for my prescription, and I see people crying. They say, ‘I can’t afford this.’ ”
Lowering the cost of prescription drugs is a perennial issue in Congress and on Beacon Hill. But in the face of industry opposition and divided government, older Americans like Hogan — covered mainly by private Medicare drug plans — may have to wait until after the next election for relief.

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Drew Altman, president of the Kaiser Family Foundation, said that although members of both parties have cosponsored bills to contain drug prices, “it’s not clear that either side wants to give the other a victory to talk about” in the current toxic political climate.
Proposals introduced on Capitol Hill this month include ideas that allies of the drug industry have blocked in the past, such as allowing patients on fixed incomes to buy cheaper drugs from other countries and permitting Medicare to negotiate prices for its 44 million beneficiaries.
Some price-cutting advocates see a reason to hope this year will be different, citing bold rhetoric from both President Trump and new liberal members of Congress.
At a time of political gridlock, they say, controlling drug prices might emerge as a rare area of bipartisan agreement. Polls by the Kaiser Family Foundation, a nonprofit focusing on health policy research, found bringing down drug prices is a top priority among voters of both parties.
And important advocates are jumping into the battle.
“There’s no question the cost of prescription drugs is our No. 1 issue,” said Mike Festa, director of AARP Massachusetts, which represents about 800,000 state residents age 50 and above. “In a high-cost state like ours, the impact is acute.”
Advocates are closely watching a bipartisan bill proposed earlier this month by Senator Amy Klobuchar, Democrat of Minnesota, and Senator Charles Grassley, an Iowa Republican, who chairs the Senate Finance Committee. The bill would prevent drug companies from paying competitors to delay the introduction of low-priced generic drugs.
Such measures face a steep uphill climb. Potential presidential candidates, including Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont, are also among the sponsors of new legislation, which includes measures to cap out-of-pocket costs and to let the government manufacture generic drugs. But some see these proposals less as serious legislation than as “platform positions” that can be fleshed out in presidential campaigns.
“They’re framing policies and building an agenda for after 2020,” Altman said.
Health policy watchers say the likeliest reforms in the short term may come through administrative channels. Alex Azar, the US health and human services secretary, for example, has proposed rules tying the prices of some Medicare drugs to what other advanced nations pay and requiring companies to list the prices of drugs in television ads.
In recent months, AARP opened a dialogue with the Trump administration on lowering drug costs. And it’s seeking to rally members around the issue on social media.
Closer to home, state Senator Mark C. Montigny, a New Bedford Democrat, plans to file legislation that would require biopharma companies to justify their prices by disclosing how much they spend on research, manufacturing, and marketing. Montigny said the bill also will seek to control state spending on drugs for MassHealth, the state Medicaid program.
A similar Montigny proposal passed the state Senate in late 2017 as part of a broader bill to control medical costs but died in a conference committee last year. Montigny complains many lawmakers on Beacon Hill were “afraid to take on the industry,” an anchor of the Massachusetts economy. But looking ahead, he’s more optimistic.
“Sooner or later,” he said, “the public outrage gets out ahead of the politicians and that’s what may be happening now.”
The drug industry, meanwhile, blames rising costs on cuts in insurance payments by employers, health plans, and middlemen known as pharmacy benefit managers.
Slashing drug prices, they warn, could dry up capital crucial for research into lifesaving therapies.
But such arguments are becoming a “much tougher” sell, conceded Bob Coughlin, president of the Massachusetts Biotechnology Council.
“We’re being portrayed as the greedy boogeymen,” Coughlin said. “But we’re the ones that are going to come up with cures for Alzheimer’s, cures for Parkinson’s, cures for ALS. We need a payer system that can absorb the upfront costs of these drugs and account for the costs avoided” when they render intensive care and hospitalization unnecessary.
The industry is proposing alternative cost-containment measures, including “value-based” drug pricing in which insurers pay drug makers only when medicines are effective in helping patients meet health measures — pricing models that wouldn’t require government involvement.
“We think the status quo is not working for patients,” said Robert Zirkelbach, senior vice president at the trade group PhRMA, which spent a record $27.8 million on lobbying last year. “The question is what changes are we going to get.”
A recent Twitter exchange between Warren and Coughlin both underscored the strong feelings in Massachusetts — a state that’s been in the forefront of health care access and developing breakthrough therapies — and augured the issue’s importance in the 2020 presidential campaign.
Reacting to the announcement that pharmaceutical giant Bristol-Myers Squibb would pay $74 billion to buy Celgene, Warren wrote: “Giant drug companies only care about one thing: raking in profits on the backs of patients. Mergers that mean more money for drug company CEOs while patients pay the price are not a solution to skyrocketing drug costs.”
A day later, Coughlin responded: “Over 70k amazing people go to work everyday at these [biopharma] companies in MA. Their priority is creating therapies and cures for patients.”
Patients like Hogan, the retired Raytheon technician, benefit from cutting-edge medicines but also feel the financial pinch. Hogan, like many his age, takes multiple prescription drugs. His medicine cabinet holds nine medications, ranging from a statin for high cholesterol to a blood thinner for atrial fibrillation to his inhaler for chronic obstructive pulmonary disease. All told, he spent about $2,000 last year on prescriptions, in addition to the premiums he pays for his Medicare drug plan.
“It gets to be a financial burden,” he said. “And it’s only getting worse.”
https://www.bostonglobe.com/business/2019/01/28/drug-costs-plague-seniors-but-legislative-relief-may-elusive/pyBR8G8HicclGPA3KRD8oJ/story.html?

CVS paid itself far more than some
major competitors, report says

by Marty Schladen and Kathy Candisky - The Columbus Dispatch - January 20, 2019

CVS used its role as a pharmacy middleman for the Ohio Medicaid program to pay some of its biggest retail competitors far less than it pays its own stores, according to a section in a state report that CVS is fighting in court to keep secret.
For example, CVS would have to pay Walmart and Sam’s Club almost half again as much — 46 percent more — for generic drugs if CVS were to equal the rates it was paying its own pharmacies, according to a copy of the unredacted report for the Ohio Department of Medicaid that was obtained by The Dispatch.
Also, CVS would have to pay pharmacies in Ohio-based Kroger stores rates 25 percent higher if it were to match what it was paying its own stores during the year ending March 31, 2018, the report said.
"I don't know how this is legal,” said Ryan Bane, pharmacy director for Riesbeck's Food Markets. The grocery chain operates pharmacies in five of its 11 Ohio stores. The analysis showed that CVS’ pharmacy middleman would have to pay Riesbeck's 29 percent higher rates for generic drugs to equal what it was paying its own pharmacies.
“How does this happen?" Bane asked.
Mike DeAngelis, senior director of corporate communications for CVS Health, said late Friday that the reimbursement from the middleman, pharmacy benefit manager CVS Caremark, "is competitive across independent pharmacies and chain pharmacies. A pharmacy’s performance measurements affect the reimbursement it receives, such as its medication adherence and generic dispensing rates. Reimbursement rates also vary between the different types of retailers that operate pharmacies."
Under Ohio's Medicaid system last year, pharmacy benefit managers determined both how much they charged the state for a prescription drug and, in turn, how much they reimbursed each pharmacy for that drug.
Critics say the state report is strong evidence that CVS was, in essence, using taxpayer money to give its own retail stores an unfair advantage in the marketplace.
At the same time this issue is being scrutinized in Ohio, CVS is attempting to convince a federal judge that its $70 billion proposed merger with insurance giant Aetna doesn’t pose a threat to competition in the pharmacy marketplace.
“This is startling information, the degree of difference” between what CVS was paying some large competitors and what it paid itself, said Thomas Greaney, former assistant chief of the U.S. Justice Department’s Antitrust Division.
Greaney, now a professor at the University of California Hastings College of Law, helped plan the American Medical Association’s opposition to the CVS-Aetna merger, which is now being reviewed by U.S. District Court Judge Richard Leon in Washington, D.C.
“I think this will certainly get his attention, that there is conduct consistent with the theory the Justice Department chose not to pursue,” Greaney said, referring to the fact that the Justice Department didn’t raise objections to the possibility that a merged company could use its clout as both an insurer and pharmacy middleman to stifle competition among retailers.
In the merger case, CVS is arguing that it won’t use its access to Aetna’s patient information and market share to give its other businesses an advantage — even though it has a financial incentive to do so, said Neeraj Sood, director of research at the University of Southern California’s Schaeffer Center for Health Policy and Economics. That fact that CVS is reimbursing some retail competitors at a far lower rate than it’s reimbursing its own “shows they’re not doing that.” He added, “I’m sure the judge will notice this.”
The Ohio Medicaid report shows big differences in reimbursement rates for generic drugs, which made up 86 percent of drug transactions, according to a subsequent analysis done by former state auditor and current Attorney General Dave Yost. Reimbursements for brand-name drugs were fairly consistent between CVS and its retail competitors.
The Medicaid report found no evidence of anti-competitive reimbursement practices by CVS, but it looked only at the pharmacy benefit manager’s reimbursements to independent pharmacies in asking that question. CVS has long maintained it pays local pharmacies higher rates than it does CVS stores, and the report confirms that.
DeAngelis said, "The Ohio Department of Medicaid released information that CVS Caremark reimbursed independent pharmacies at a higher rate than CVS Pharmacy in a press release and an executive summary three months before the redacted report was released, as one of its stated objectives was to determine whether or not independent pharmacies were being put at a competitive disadvantage."
CVS allowed the two lines of the report that confirmed its claims about independent pharmacies to be made public. But it wants to keep secret the rest of the information on two pages that show what CVS Caremark paid to other pharmacy groups operating in Ohio; those figures are blacked out on the version of the report released to the public.
DeAngelis didn't respond to several questions, such as why CVS wants to keep so much of the report secret from the public. When the censored version of the report was released in September, he said, "While some questioned the need for redactions, the disclosure of our proprietary rates, formulas and negotiation strategy to lower the drug prices charged by pharmaceutical manufacturers would have significantly impacted our ability to negotiate the lowest rates and fees for our clients in a highly competitive market, which would ultimately cost the state and the taxpayers more."
Though the state Medicaid report shows that some of CVS’ biggest competitors faced the biggest disadvantages as a result of its reimbursement practices, smaller pharmacies also faced challenges. Ritzman Pharmacy, for example, announced this month that it is selling its 20 northeastern Ohio stores to CVS, which says it plans to close 17 of them and reopen at least two as CVS stores.
CVS would have to pay Ritzman rates that are 2 percent higher for generics if it were to match what it was paying its own pharmacies, the report says. That margin helped CVS buy a competitor and close most of its stores, said Antonio Ciaccia, a spokesman for the Ohio Pharmacists Association.
Greaney said economists have names for such behavior: “vertical foreclosure” and “raising rivals’ costs.”
“This is the most straightforward way to do it,” he said.
Low reimbursements on Medicaid prescriptions also were among the reasons Riesbeck's Food Markets closed its store in the Eastern Ohio village of Wintersville last fall.
"We know we're lucky to break even with Medicaid" prescriptions, Bane said, adding that his pharmacies often lose money filling Medicaid prescriptions.
Indeed, Medicaid’s own report casts doubt on the notion that CVS reimbursements were sustainable for pharmacies that were its retail competitors.
“Findings do not indicate that the pharmacies were reimbursed adequately to be profitable,” it said.
And though CVS pharmacies were among those the report referred to, the same analysis found that CVS’ middleman arm charged taxpayers $197 million more for drugs than it paid pharmacies.
Walmart and Kroger officials declined to comment for this story. Walmart raised concerns about CVS’ practices by announcing last week that it was suspending most of its business with the pharmacy benefit manager, CVS Caremark. Walmart said it was “standing up to” CVS and criticized its “unregulated power to direct members on where to fill their scripts, disrupting patients’ health care.”
CVS and Walmart announced Friday that they had come to an agreement, but an industry analyst told Business Insider on Thursday that CVS has a long-term strategy to drive customers out of Walmart pharmacies and into its own.
Sen. Bill Coley, R-Cincinnati, long a critic of CVS, noted that he hasn't seen the unredacted report, but he said that if numbers quoted to him by The Dispatch are accurate, it is "shocking."
"We want to be pro-competition and pro-free enterprise," he said. "They're acting as a monopoly, using the government to give them an unfair advantage over Kroger and Walmart."
The member of the Joint Medicaid Oversight Committee added, "We have to ask whether we want this company participating in the Ohio (Medicaid) program."
Though CVS reimbursed two of its large retail competitors much less than it did itself, the rates it paid another, Walgreens, were 17 percent higher than it paid itself. DeAngelis was asked to explain but did not answer.
The Ohio Department of Medicaid commissioned the analysis last year after The Dispatch did an analysis of its own, using reimbursement data obtained from more than 40 community pharmacists.
The state then obtained all data from the $2.5 billion spent on drugs by Medicaid managed-care plans, and its analysis determined that CVS Caremark — which represents four of the five plans — and the other, OptumRx, were billing taxpayers 8.8 percent more for drugs than they were paying the pharmacists who dispensed them. That amounted to a $224 million differential. The state report said that the PBMs were charging Ohio taxpayers three to six times the standard industry rate.
The Medicaid department initially released only a summary of the report, and then it released a report with numerous redactions that were made at the demand of the pharmacy benefit managers, CVS and OptumRx.
The pharmacy benefit managers and the state have been locked for months in a court battle over release of the full report. The sides haggled until early December just over rules governing how to handle the redacted information.
Franklin County Common Pleas Court Judge Jenifer French delayed a hearing on the matter until April 30. That would push a decision and possible release of the redacted information past the time when Ohio will get a two-year budget from Gov. Mike DeWine and possibly past the time when the federal court decides whether to approve the CVS-Aetna merger.
State Medicaid officials hinted last year that there could be problems with reimbursements to the larger chain pharmacies, but never disclosed the scope of the problem.
Barbara Sears, then the director of the Ohio Department of Medicaid, told colleagues last fall at a conference of the National Association of Medicaid Directors in Washington, D.C., “there were some allegations that there may be some anti-competitive behavior going on both with reimbursement differentiation between independent pharmacies and the larger pharmacies.”
But even as early as March 2018, Sears noted, “This is not an Ohio Medicaid problem. This is impacting all 50 states. It’s a CVS Caremark issue, and it’s not just impacting independent pharmacies.” Sears said “larger chains” also have complained about reimbursement rates.
Sears announced in August that Medicaid would switch to a transparent, pass-through-pricing model that pays pharmacy benefit managers a set fee per transaction and requires them to pay pharmacies the same amount they bill the state.
“We are going to try and follow every penny,” said Sears, who resigned as the state Medicaid director at the end of last year.
Ohio’s community pharmacists long have complained that in the Medicaid program, CVS has reimbursed them below their costs and then offered to buy their stores. They’ve been skeptical of CVS’ statements that a strict “firewall” keeps it from sharing information gleaned by its middleman business with its retail operation.
Sood, of USC, said it doesn’t have to share the information to derive an advantage.
“Despite whether there’s a firewall, CVS Caremark knows CVS retail is part of the same business,” Sood said. “It’s not like they’re blind to which pharmacy they’re negotiating with.”
As Ciaccia of the pharmacists' association put it, “Caremark knows what they contracted to pay Kroger. Caremark knows what they contracted to pay Walmart. They have to know that when they slide an offer across the table to CVS, it’s a lot more.”
http://gatehousenews.com/sideeffects/cvs-paid-far-major-competitors-report-says/

Maine Voices: Medicare uniquely suited to facilitating health care for all Americans

It eliminates the balkanization and fragmentation that make our current, for-profit system inefficient.

by Philip Caper - Portland Press Herald - February 2, 2019

A commonly held misperception is that Medicare is simply one more type of health insurance. But there are many important differences. Medicare is social insurance, created to facilitate medical care for its beneficiaries. In contrast, commercial insurance is dominated by publicly traded, for-profit companies whose focus, necessarily, is to create wealth for their owners.
Underlying the core business of commercial health insurance companies is a practice known as “medical underwriting.” Underwriting divides insurance beneficiaries into risk pools based on the probability they will use medical services. The practice of denying coverage for pre-existing conditions is but one example of medical underwriting, and is currently outlawed by the Affordable Care Act. But that restriction is now under political attack.
Medical underwriting is a key tool, widely used by insurance companies, to enable them to discriminate against people who are sick or are likely to become sick.
Medical underwriting is complicated and costly. It requires the collection and analysis of detailed and intrusive data.
Using such data, policyholders are segmented into many different risk pools that are priced accordingly. Multiple factors come into play in assessing the likelihood that somebody will need medical care, many completely beyond the policyholder’s control. They include age, gender, occupation, previous medical history, lifestyle, place of residence and access to medical care.
In contrast, social insurance programs such as Medicare use a fundamentally different mechanism to deal with risk. Instead of segmenting and pricing risk, Medicare groups all eligible individuals into a single pool. Instead of charging many different premiums and designing different benefit packages for each, they use public sources to generate a common pool of money and create a common package of benefits that covers most or all eventualities that could face any of the beneficiaries of the program.
By doing this, social insurance eliminates the need to have detailed data, and with it much of the complexity and administrative costs of the commercial insurance system.
In 2012, the National Academy of Medicine (then named the Institute of Medicine) estimated the inefficiencies in our current for-profit health care system to be $190 billion a year nationwide, much of it attributable to medical underwriting and the resulting complexity of our health insurance system. For Maine alone that cost works out to about $800 million a year, money that can and should be used to provide coverage to every Mainer.
Having everybody in a single pool has another benefit – the ability to restrain the now out-of-control overall costs of health care. A single financing pool can be budgeted, something that is impossible in the current multipayer system, leaving us no choice but to attempt to manage costs one service at a time – a very costly, intrusive, contentious and ineffective approach.
There are other advantages to financing health care using a single pool. Our current balkanized and highly fragmented system sets the stage for a great deal of political conflict. Everybody is concerned primarily with making sure their own piece of the system – private insurance, Medicare, Medicaid, the Veterans Affairs system, Obamacare and others – works for them.
A program with just one pool of beneficiaries that serves everybody, such as Medicare, is perceived to be much fairer. Americans sense fairness. Our current balkanized system is perceived to be anything but fair.
That is the key to understanding both Medicare’s efficiency and its broad public appeal. People like it because it’s fair, it works well for everybody and it costs far less than commercial insurance. Public funding also ensures that everybody pays only what they can afford. That’s why such systems work well in most other wealthy countries at a fraction of the cost of ours.
In a universal “Medicare for All” system, we would all have a stake in making sure that system is adequately funded and continues to work well. The public strongly supports universal healthcare for economic, moral, political and practical reasons. It’s time to make the transition to “Improved Medicare for All.”
https://www.pressherald.com/2019/02/02/maine-voices-medicare-uniquely-suited-to-facilitating-health-care-for-all-americans/

Medicare for all model can be good for Maine

LTE - Bangor Daily News - January 15, 2019

Thank you for the very enlightening article last week about imminent changes in our local hospitals. The article explains how the cost to patients could rise, the billing may become more complicated, and the only recourse to the patient, before they receive treatment in the emergency room, would be to ask what components of care would be in/out of network.

With our current status quo, too many people rely on ER services for their health care needs, too many people go without care, too many people struggle with complicated billing and are bankrupt by medical costs, and too many people suffer, with untenable consequences.

It is long overdue that we address the need for fundamental health care reform. Preventive care should be readily available. Those requiring treatment should be able to focus on the care their doctors would prescribe, without distracting and paralyzing financial concerns.

Mainers care about this issue; they have first-hand experience of this broken system. Health care is fundamental to our well-being as individuals and as a nation, and should not be treated as a source of profit. A reformed system on the lines of Medicare for all can be efficient, financially sound, politically sustainable and provide benefits fairly distributed to all. It can be affordable and provide peace of mind. Checkout maineallcare.org for more information.

Valerie Dornan

Hancock

http://eedition.bangordailynews.com/olive/APA/BangorDailyNews/#panel=document

The Medicare for All Trap
by David Leonhardt - NYT Newsletter - January 29, 2019

A couple of weeks ago, one of the country’s most respected health care pollsters — Kaiser Family Foundation — conducted a survey on “Medicare for All.” And the top-line results looked great for advocates of the idea, like Bernie Sanders and Kamala Harris.

Some 56 percent of respondents said they favored “a national plan called Medicare for All in which all Americans would get their insurance through a single government plan.” A large majority of Democrats backed the idea. Almost a quarter of Republicans did, too.

The poll’s details, however, were a lot of less positive about Medicare for All. In fact, they showed why single-payer health care may turn out to be one of the few problematic issues for Democrats heading into 2020 — if the party isn’t careful. Harris has highlighted the tensions this week, saying on Monday night that she supported the most aggressive version of Medicare for All before moderating her position, via aides, late yesterday.

When Kaiser pollsters were putting together their survey, they understood that not all Americans thought of “Medicare for All” as meaning the same thing. So the poll asked people whether they believed that they would be allowed to keep their private insurance plan under such a system. Almost 60 percent of respondent said yes. “In reality,” as HuffPost’s Jonathan Cohn wrote, in an analysis of the poll, “the whole point of Medicare for All would be to wipe away current insurance arrangements and replace them with a new public plan.”

Not only that, but when the pollsters described a version of Medicare for All in which private insurance was wiped away, support plummeted. The idea flipped from being popular to unpopular: 37 percent of respondents favored it, and 58 percent opposed it.

This same hostility to change helped sink Bill and Hillary Clinton’s health care plan in the 1990s. It also became the mainline of Republican attack against Barack Obama’s health care law — and one reason that law remained unpopular (until President Trump started attacking it). Many Americans are happy with their current insurance, polls show. Even among those who aren’t, many worry about being forced into a new plan. “Loss aversion is a hell of a drug,” notes Brendan Nyhan, a University of Michigan political scientist.

I understand the arguments in favor of mandatory Medicare for All. It could reduce bureaucratic waste and insurance-company profit skimming. It could help the United States lower its world-leading medical costs. And I’m thrilled to see presidential candidates willing to offer bold economic ideas.

But I think this particular plan is an unforced error. It comes with huge political vulnerabilities — and a less problematic, but still bold, alternative exists: A vastly expanded version of Medicare that allows people to buy in voluntarily. That plan could also be called Medicare for All. And if it proved to be as popular as Democrats expect, advocating for the mandatory version would become much easier. Until then, as Nyhan says, the mandatory approach “splits Ds and unites Rs. That’s the opposite of smart politics.”

The next Democratic president will need to prioritize among several big issues. I’d much prefer a winnable health care fight that also leaves room for action on climate, taxes, civil rights and other issues to an all-consuming uphill battle.

Elsewhere …

Watch Harris explain her position during the town hall on Monday night. CNN’s Jake Tapper said to her: “I believe it will totally eliminate private insurance. So for people out there who like their insurance, they don’t get to keep it?” Harris’s answer: “Well, listen, the idea is that everyone gets access to medical care. And you don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require. ... Let’s eliminate all of that. Let’s move on.” On Tuesday, her aides said she was also open to other approaches.

Philip Klein of The Washington Examiner tweeted: “Gallup poll finds that 70% of those with private insurance rate their coverage as ‘excellent’ or ‘good’; 85% say the same about the actual health care that they receive.”
“Democrats ... will have to navigate a tricky gap between what voters think of when they hear ‘Medicare for All,’ and what politicians mean when they say it,” Molly Hensley-Clancy of BuzzFeed News wrote, in a reported piece from Nebraska last year. “Pressed on the details of Medicare for All, many voters in Omaha expressed skepticism — or outright distaste — about the single-payer plan that Sanders has championed.”
In Jacobin, Tim Higginbotham recently offered a more favorable view of mandatory Medicare, arguing that the transition wouldn’t be as disruptive as some Americans fear. “It will certainly face complications, but the Medicare bureaucracy will be able to sort these out as they come,” he wrote.

Sarah Kliff and Dylan Scott of Vox have analyzed the various versions of Medicare for All, as well as other Democratic health- care plans.

Elizabeth Warren, Kirsten Gillibrand and Julian Castro — three other presidential candidates — also support the Sanders version of Medicare for All that Harris backs. But they have generally not been as clear about ending private insurance as Harris was on Monday. When Gillibrand was asked about that part of the plan on a recent episode of “Pod Save America,” she sidestepped the question.

My view is that the best answer is a version of: I’m for Medicare for All. If you want Medicare, you can have it, regardless of your age. If you’d rather keep your private plan, you can do that, too. This approach will give us universal coverage, lower costs and consumer choice. Oh, and I’m in favor of tax increases on the wealthy and corporations to help pay for it. They’re not paying their fair share right now.

Medicare for All Is Even Better Than You Thought

by Tim Higgenbotham - Jacobin - December 3, 2018

edicare for All advocates just received an early holiday present: a new study from the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst finds that single-payer health care will save the US $5.1 trillion over a decade while drastically cutting working-class Americans’ health spending. It’s the most robust, comprehensive study yet produced on Medicare for All, which has long been in need of easily citable research.

The study analyzes Sen. Bernie Sanders’s Medicare for All Act from top to bottom, elaborating on several key aspects of the bill, including what the transition to a fully public, comprehensive, free-at-the-point-of-use health care system might look like and what impact the program will have on US residents. Most significantly, it answers the most common question single-payer advocates face: “How will we pay for it?”
The findings are impressively thorough. Reaching nearly two hundred pages in length, the report has been praised by health policy experts for its sound methods and clarity. Alison Galvani of the Yale School of Public Health predicts it will become recognized as the “seminal analysis” of Medicare for All.
Long plagued by accusations of ambiguity and impracticality, Medicare for All now has credible economic research its advocates can cite to supplement their core arguments: that single-payer health care will be a major working-class victory, that it will save lives, and that it will represent a seismic shift toward a more just, solidaristic society.

How Will Medicare for All Affect Outcomes?

Before getting into any discussion of costs and savings, the PERI study zeroes in on the major improvement in health outcomes that Medicare for All will motivate. This is appropriate, as the fight for Medicare for All has always been first and foremost a fight for a better, healthier society. As the authors themselves state, “Medicare for All cannot be simply evaluated on the basis of economic impacts.”
The research here is pretty well-established and self-explanatory. By guaranteeing high-quality health care as a human right and eliminating financial barriers to care, Medicare for All would provide preventative care and necessary treatment to huge swaths of the population who cannot currently afford it.
Today, 28 million people are uninsured and an additional 85 million are underinsured, meaning out-of-pocket costs prohibit them from seeking necessary care. It’s not hard to understand why fully covering all of these people — together about one-third of the US population — will improve overall health outcomes.
With universal coverage, people are more likely to receive regular primary care, helping to better manage chronic illnesses like heart disease. Doctors are also more likely to catch illnesses like cancer before they spiral out of control.
Unsurprisingly, countries with single-payer systems surpass the US in nearly every health category, including life expectancy and mortality reduction, despite spending far less on health care than we do.
Removing health care from the market and guaranteeing it instead as a right is the primary goal of single-payer health care. Doing so will eliminate countless early deaths and bankruptcies. But in order to make it possible, we need to answer practical questions about financing and transitioning into it. That’s where the PERI study shines.

How Much Do We Need to Raise?

In order to tackle the question of paying for Medicare for All, we first need to know exactly how much it will cost the government.
To come up with an accurate spending number, the PERI study takes two main factors into account: that demand for care will rise with universal coverage, bringing total annual health care spending up from $3.2 trillion to $3.6 trillion (likely a high estimate); and that massive savings in administrative, pharmaceutical, and provider payment spending will then bring total expenses back down from $3.6 trillion to $2.93 trillion.
Using $2.93 trillion as its annual target, the study then factors in already existing public spending, which accounts for over 60 percent of total health spending. This includes spending for Medicare, Medicaid, and other public programs; health care coverage for federal employees; and the $332 billion in tax subsidies the government currently pays to private insurance companies.
Altogether, public health care spending totals $1.884 trillion annually, which we can then subtract from the $2.93 trillion target. This means the government will actually need to raise just $1.05 trillion to fund Medicare for All.

How Will We Pay for It?

The most important thing to remember when discussing taxes and Medicare for All is that the new taxes are not an additional net cost or spending burden. Rather, they will amount to a mere fraction of what Americans currently spend on premiums, co-pays, and deductibles, which will all be eliminated.
The PERI authors are quick to point out that there are many workable approaches to raising the needed $1.05 trillion in tax revenue, and that their proposed methods are not definitive. Their approach differs from the approach offered in Sanders’s bill, for instance. But they explain that they decided on these particular taxes in an effort to finance the program in a progressive manner, with the greatest savings going to the working class and the greatest burden falling on the wealthy.
Here are the four taxes proposed in the study.

1. Business premiums:
  As a rule, these will be set at 8 percent less than what a business currently spends on health care. Employers that don’t currently provide insurance will instead pay $500 per uncovered employee, with the smallest businesses excluded. After three years, this will transition into a flat 8.2 percent payroll tax. This will raise an estimated $623 billion each year, bringing us nearly 58 percent of the way to the $1.05 trillion goal.
2. A sales tax on nonessential goods:
  This is the proposed tax that will most impact working people. Set at 3.75 percent and exempting families who would currently qualify for Medicaid, it will raise an estimated $196 billion. By only applying to nonessential goods, it’s intended to spare lower-income families — who spend a greater percentage of their income on essentials like food and housing — from being too harshly impacted. It’s a debatable approach, but as we’ll see, it nonetheless leads to massive overall savings.
3. A tax on net worth over $1 million:
  A recurring tax of 0.36 percent on all wealth over $1 million, this will generate $193 billion annually. One of its stated goals is combating rising wealth inequality. It will in fact reduce inequality, but only slightly. For example, it will bring the average return for the wealthiest 1 percent of families down from 5.96 percent to 5.58 percent. This tax could easily be raised and the sales tax lowered. As the PERI authors repeatedly say, there are many workable approaches here.
4. Taxing long-term capital gains as regular income:
  By taxing assets held for one year or longer as ordinary income (which is how short-term capital gains are already taxed) the government could raise a nice $69 billion per year. This will mostly impact the wealthy.

Altogether, these proposed taxes will raise $1.08 trillion. This will completely fund Medicare for All and leave the program with an estimated $30 billion surplus.

How Will This Impact Americans?

The PERI study’s analysis on the economic impact on American families makes clear that Medicare for All will be a major victory for the working class. Uninsured families are often unable to seek needed care and are forced to pay out of pocket for the care they do seek. Individually insured middle-income families, meanwhile, spend a remarkable 15.5 percent of their income on health care on average.
Contrast this to the top 20 percent of Americans (those making over $221,000). These families spend an average $7,980 on health care each year. At the same time, they receive $8,290 in tax exemptions for health spending, including both the share paid by them and the share paid by their employers. This means they receive, on average, a surplus of 0.1 percent of their income through health spending. The top 5 percent of families, meanwhile, receive a 0.9 percent surplus.
Medicare for All will more or less reverse this. Uninsured families who make $35,000 would pay about $600 in taxes and would no longer face any financial barriers to medical care. Middle-income families who make $60,000 currently spend up to $10,000 per year on health care, while under Medicare for All they would spend only $900 in taxes. High-income families, on the other hand, would see their subsidy disappear and instead begin paying a meager 3.9 percent of their income in taxes.
Again, co-pays and deductibles would completely disappear. High-quality health care would be guaranteed to all as a right. Everyone would have total choice in their preferred provider.
It’s hard to overstate how big of an impact this will have on the working class. Currently faced with prohibitive out-of-pocket costs and insufficient insurance, under Medicare for All they would pay a mere hundreds of dollars in taxes and receive comprehensive, high-quality, free-at-use medical care in return. This is not to mention the improved health outcomes they’d see.

https://www.jacobinmag.com/2018/12/medicare-for-all-study-peri-sanders

As Wasserman Schultz Exemplifies Muddled Stance, This Reminder: Medicare for All "Ain't a Slogan. It's a 94-Page Bill"

by Jake Johnson - Common Dreams - January 30, 2019

As some Senate Democrats offer up half-measures that fall far short of Medicare for All and rush to distance themselves from Sen. Kamala Harris' (D-Calif.) expressed support for eliminating private insurance, Rep. Debbie Wasserman Schultz (D-Fla.) on Wednesday made heavy use of buzzwords and verbal gymnastics—with phrases such as "the moniker of what you call the concept"—in an attempt to paper over these substantive and crucial healthcare policy differences within the Democratic Party.
"If a Democratic presidential contender offers you Medicare for All, read the fine print."
—Addy Baird, ThinkProgress
"I think we have to look past the surface-level name for it," Wasserman Schultz said during a CNN appearance when asked about Harris' remarks and what Medicare for All really means.
"The moniker of what you call the concept, which we are all fully embracing, is that healthcare is a right and should not be treated as a privilege that is only available to those who can afford it," the Florida congresswoman continued. "That is what Democrats are for, that's what you'll see every Democratic presidential candidate be for. And, as you would expect, they will take different approaches to getting there."
Wasserman Schultz went on to dismiss "the black and white choice of are you or are you not for Medicare for All" as meaningless, arguing that the more important "litmus test" for Democrats is "making sure that everyone in America can get access to quality affordable healthcare."
Watch:

Democratic Rep. Debbie Wasserman Schultz: “Health care is a right and should not be treated as a privilege...That is what Democrats are for, that’s what you’ll see every Democratic presidential candidate be for…they will take different approaches to getting there." pic.twitter.com/r6PZ7hJ2zL
— CNN Newsroom (@CNNnewsroom) January 30, 2019

Single-payer advocates have long warned of efforts by politicians to co-opt Medicare for All as a useful and popular campaign slogan while stripping the program of its substance. As Common Dreams reported last week, Medicare for All advocates have also denounced Democrats like Sens. Tim Kaine (D-Va.), Dick Durbin (D-Ill.), and others for advocating various incremental public option plans that would not adequately confront America's for-profit healthcare crisis.
Concisely summarizing the wariness among longtime single-payer activists, Addy Baird of ThinkProgress wrote on Wednesday, "If a Democratic presidential contender offers you Medicare for All, read the fine print."
Harris' remarks in support of eliminating the private insurance industry—which her team has since walked back—during a CNN town hall earlier this week intensified an ongoing national conversation about what Medicare for All would actually look like and how the transformative policy might be implemented.
Warren Gunnels, policy director for Sen. Bernie Sanders (I-Vt.), pointed to the Vermont senator's Medicare for All Act and emphasized in a tweet on Tuesday that Medicare for All "ain't a slogan. It's a 94-page bill."

There's only 1 bill in the Senate that guarantees health care as a right, saves families & businesses thousands a year & reduces total national health care expenditures by at least $2T over 10 years. It ain't a slogan. It's a 94-page bill: #MedicareForAll https://t.co/gvw1aBOXa5
— Warren Gunnels (@GunnelsWarren) January 30, 2019

Democratic Socialists for Medicare for All—a single-payer campaign organized by the Democratic Socialists of America (DSA)—declared that the recent "obfuscation" by Democrats on the definition of Medicare for All is why they go out of their way to "define Medicare for All according to five guiding principles":

This kind of obfuscation is why we define Medicare for All according to five guiding principles:
1) a single, public program
2) comprehensive coverage
3) free at the point of service
4) universal
5) a just transition for workers#NothingLess will do.https://t.co/YBt9ztrLXw
— DSA for Medicare for All (@dsam4a) January 30, 2019

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License
https://www.commondreams.org/news/2019/01/30/wasserman-schultz-exemplifies-muddled-stance-reminder-medicare-all-aint-slogan-its?

Veterans Will Have More Access to Private Health Care Under New V.A. Rules

Jennifer Steinhauer - NYT - January 30, 2019

WASHINGTON — Veterans who live as little as a 30-minute drive from a Veterans Affairs health care facility will instead be able to choose private care, the most significant change in rules released Wednesday as part of the Trump administration’s effort to fix years-old problems with the health system.
Veterans who can prove they must drive for at least 30 minutes to a Department of Veterans Affairs facility will be allowed to seek primary care and mental health services outside the department’s system. Current law lets veterans use a private health care provider if they must travel 40 miles or more to a V.A. clinic. Measuring commuting time rather than distance will greatly open the private sector to veterans in rural and high-traffic urban areas.
Supporters say the new policy, which is likely to go into effect in June, will help veterans get faster and better care. But critics fear it will prompt the erosion of the largest integrated health care system in the country as billions of dollars are redirected to private care.
The goal of the new policy, officials say, is to provide veterans with easier, streamlined access to health care.

“This is the most transformative piece of legislation since the G.I. Bill,” Robert Wilkie, the secretary of veterans affairs, said in a telephone interview this week. “It gets us on the road to becoming a 21st-century health care institution.”
The move has been anticipated for months, after congressional lawmakers passed legislation last spring that empowered the administration to make substantial changes to veterans health care.
Current law lets veterans facing a wait of 30 days or more for an appointment at their closest V.A. facility seek private care, but under the new policy, that would be reduced to 20 days, and with the goal of 14, by 2020. Veterans will also be allowed access to walk-in clinics; however, those will require co-pays for treatment after a third visit. If seeking a specialist after the new policy takes effect, veterans must prove a drive of at least 60 minutes.
Taken together, the percentage of veterans eligible for what officials refer to as “community care” currently — roughly 8 percent of the seven million treated annually — would rise to between 20 and 30 percent, according to Department of Veterans Affairs officials.
Lawmakers and veterans advocacy groups — which have been wary of large-scale moves into the private sector — were largely briefed about the program on Wednesday after the new policy was released. This caused some to argue that they had been blindsided, which has been a frequent complaint by Democrats and many traditional veterans advocates during the Trump administration.

“While we are glad the V.A. has finally informed us of how it plans to implement the V.F.W.-supported V.A. Mission Act,” said Joseph E. Davis, a spokesman for the Veterans of Foreign Wars of the United States, “we are disappointed the V.A. chose not to incorporate the voice of our 1.6 million members in the decision making process.”
In recent years, Veterans Affairs hospitals have struggled to keep up with patient loads as service members returning from Iraq and Afghanistan — many with complex injuries and post-traumatic stress — hit the system at the same time that aging and increasingly ill older veterans made more use of it.
A scandal in 2014 over hidden waiting lists at V.A. facilities sent lawmakers in search of solutions, with many Republicans favoring more use of the private sector and Democrats preferring to add doctors and medical centers to the government-run system.

Congressional Republicans and the Trump administration have been greatly influenced by Concerned Veterans for America, an advocacy group with ties to the billionaire industrialist brothers Charles G. and David H. Koch, which has long championed expanding the use of private health care for veterans. Traditional veterans service organizations, which have largely opposed these changes, have had less say under Mr. Wilkie.
“These proposed access standards will ensure veterans have better access to health care and will give them more choices in how they receive their care,” said Dan Caldwell, the executive director of Concerned Veterans for America. “These standards are simple and straightforward, eliminating much of the confusion created by the Veterans Choice Program and the V.A.’s other community care programs.”
The legislation that was passed last spring and signed by President Trump in June, the Mission Act, increased funding for the Department of Veterans Affairs and earmarked more money for private care. It is up to Congress to beef up both pots of money each year.
“I can’t imagine the V.A. being shortchanged in any way,” Mr. Wilkie said. “I can’t imagine anyone doing that.”

Critics fear that private health care, which tends to have higher costs than government-provided care, will force the department to cut corners elsewhere. Mr. Trump has instructed his cabinet secretaries to cut each department’s budget, and a prior budget agreement that lifted caps on spending is set to expire soon, leading many to wonder if Veterans Affairs will be able to pay private providers and maintain its own services.
A congressionally mandated report in 2016, by 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. That same commission found quality of care at the Department of Veterans Affairs to be very high, one area of agreement between department officials and those who use and advocate the system.
The new standards were developed after V.A. officials studied both the military’s insurance plan, Tricare Prime, which sets a lower bar for access to private care than the department has historically had, and the Medicare Advantage program, which allows Medicare beneficiaries to buy private health insurance plans instead of using government-run fee-for-service Medicare.
The Department of Veterans Affairs will remain at the center of care coordination, and the private providers — who would be paid by the department at rates roughly comparable to the Medicare program — would not be permitted to cherry-pick the healthiest patients, V.A. officials said. About 26 percent of veterans pay a co-payment, and they would have similar co-payments at private doctors.
The department, however, has struggled greatly with its information technology systems in recent years, and studying those systems is now the purview of a House subcommittee. Whether the department can successfully coordinate care with myriad health care providers will be a concern that Congress will doubtlessly follow.
Department officials — including Mr. Wilkie — have repeatedly insisted that the department should and probably will remain the provider of choice for most veterans, who prefer the culture of a V.A. hospital to that of the private sector. But a shrinking veteran population over all in the United States and more reliance on private providers could lead to the closings of some government hospitals, some veterans groups and members of Congress warn.
Mr. Wilkie insisted that was not the goal of the new policy, and said that fears of full privatization were unfounded.

“I think it’s simple: People don’t want change,” he said of such concerns. “That is a normal human reaction.”
Some veterans groups have decided to wait to judge the policy until the spring as the standards continue to be tweaked.
“I’ve asked people not to take a negative stance,” said Sherman Gillums Jr., the chief advocacy officer for American Veterans, or Amvets, one of the largest of the six congressionally chartered veterans service organizations. “The president asked the secretary to present a plan and now that he’s given us another step in the plan, it’s our job to help him successfully implement it.”
https://www.nytimes.com/2019/01/30/us/politics/veterans-health-care.html?

With taxes, Charlie Baker is a governor without a party to call home

by Joan Vennocci - Boston Globe - January 30, 2019

Now it’s really over between Charlie Baker and the Republican Party.

It’s one thing to get behind transgender rights and other social liberalisms. But backing new taxes? For conservatives, that’s the ultimate red line. Yet Baker crossed it in a budget that calls for more spending on education, transportation, and climate change mitigation — and more taxes to support that agenda.

So much for 2020. With President Trump looking a little more vulnerable, moderates like Maryland Governor Larry Hogan — another Republican running a blue state — are gaining some presidential altitude. But after last spring’s shout-out from Never-Trumper Bill Kristol, Baker is MIA from the current mention list. The most popular governor in America is essentially a man without a party to call home. He’s way too liberal for Republican primary voters, yet still much too conservative to get anywhere as a Democrat.

“Charlie’s too far left to be a viable Republican presidential candidate who can win primaries. That’s the bottom line. That’s already where he was. Raising taxes cements that position,” said Rob Gray, a Republican strategist and media consultant.

It also cements the chance to be something more than a tall governor with high approval ratings. With this proposal, Baker gets to be a governor of biggish ideas, some of which will make him a little less popular, but a lot more interesting. And lucky for him, he seems unafflicted by Potomac Fever: “I have always been pretty clear that my interests with respect to elective office have been focused on Massachusetts,” he said via e-mail — which is pretty much what he always says. Trying to wheedle some deeper thoughts out of him, I asked about the Hogan headlines and what they mean for the next election cycle. “Should be a pretty wild 22 months,” he offered up.

Classic low-key Baker — and a bit of a disappointment after an elated election night promise that his second term would be “nonstop, pedal-to-the-metal, let it rock.”

Who knew that meant raising taxes?

Conservatives saw it coming. When Baker was running for governor in 2014 and refused to sign the Taxpayer Protection Pledge, anti-tax activist Grover Norquist warned, “There’s only one reason not to take the pledge and that’s because you want to raise taxes and if you’re not going to do it, you put in writing.”

Last summer, Baker signed a payroll tax increase to fund family and medical leave. But it wasn’t a tax, he said, because it paid for a “new service” and wasn’t used to balance the budget. With a budget proposal that would raise real estate transfer taxes by 50 percent and levy a new tax on opioid drug manufacturers and e-cigarettes, Baker’s no longer pretending this isn’t about revenue-raising. All it took was the confidence that comes with winning 1.7 million votes in last November’s gubernatorial election — and perhaps an acknowledgment that there’s absolutely no place for him anyway in today’s GOP. The party he signed up for is an ideologically rigid corpse, compliments of Trump and his crew of Republican enablers. Even in Massachusetts, Jim Lyons, a conservative who lost his bid for reelection to the Massachusetts House last fall, beat out Baker’s choice to head the Massachusetts Republican State Committee.

Still, when Trump’s GOP is finally dead and buried, someone will have to reinvent the party he destroyed. Why not someone like Baker? The country’s politics are already trending away from Trump’s base. According to a recent report by the Pew Research Center, young people, including Republicans, are shifting left on social issues and on what they believe government should deliver. That next generation of voters will redefine both parties, or maybe decide to create a new one.

In the meantime, Massachusetts is an excellent laboratory for political experimentation, with maximum national exposure. Baker has not ruled out a third term. As he starts his second, he seems focused on building a legacy by trying to do right by Massachusetts.

Too bad his party wants nothing to do with that.

https://www.bostonglobe.com/opinion/columns/2019/01/30/with-taxes-charlie-baker-governor-without-party-call-home/fzek32FTsUrzz6o5huatLM/story.html?

Hospitals 'furious' at Trump's Medicaid block grant proposal
by Joan McCarter - Daily Kos - January 21, 2019

The Trump administration is reportedly finalizing a proposal to begin dismantling Medicaid, bypassing Congress in the process. The administration is considering fulfilling the long-held Republican dream of turning the program into a block grant through a waiver process, which would allow states to forego the normal funding stream for what the administration calls "flexibilty."
The nation's hospitals call it bullshit. If states decide to use the block grants, federal funding for the program will be capped, and states would then be responsible for filling healthcare needs beyond that cap, either by kicking people out of the program, or reducing payments to the hospitals that care for the uninsured and to nursing homes.
Chip Kahn, CEO of the Federation of American Hospitals, told Modern Healthcare that he is worried about what this would mean for hospitals and access to coverage, and he also "questioned whether the [Centers for Medicare and Medicaid Services] can legally allow these waivers."
His organization isn't the only one "furious" at the proposal. "We have long voiced concerns about how block granting Medicaid could ultimately result in losses of coverage and negatively impact access to quality care," said Ashley Thompson, senior vice president of public policy analysis at the American Hospital Association. That's one of the reason the AHA, along with the other hospital groups, strenuously opposed a block-grant proposal from South Carolina Republican Sen. Lindsey Graham and Louisiana Republican Sen. Bill Cassidy offered up as Obamacare repeal. The AHA officially opposed the proposal, telling congressional leaders that it would have "serious negative consequences for communities across America" unless alternative coverage for low-income Americans was guaranteed.
The bill ended up going nowhere because there weren't enough Republican senators supporting it. Which is why the Trump administration is trying to get it done this way. Probably illegally. As usual.
https://www.dailykos.com/stories/2019/1/21/1827149/-Hospitals-furious-at-Trump-s-Medicaid-block-grant-proposal

David Torchiana, chief executive of Partners HealthCare, unexpectedly announces departure

by Priyanka Dayal McCluskey - Boston Globe - January 29, 2019

Dr. David Torchiana, the chief executive of Partners HealthCare, has unexpectedly announced his departure, after his push to integrate the sprawling health system encountered rising tensions from other Partners leaders.

Torchiana, 64, told the Partners board Monday night that he will retire at the end of April, after four years leading an organization that is also the state’s largest private employer.
Over the past several months, the opinionated former heart surgeon had stirred internal concerns with plans to expand Partners and rethink the direction of the organization and its flagship teaching hospitals. Disagreements have arisen on a range of issues, from who will control new outpatient clinics to how aggressively the company should pursue out-of-state expansion plans.
Partners, the largest health system in Massachusetts, is the parent of Massachusetts General and Brigham and Women’s — two of the most prestigious hospitals in the nation.

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The company on Tuesday confirmed Torchiana’s planned departure after inquiries from the Globe. Torchiana, in a brief statement, said he looks forward to retirement and has “full confidence in the future of our organization.”
“I am fortunate to have worked at MGH and Partners for my entire professional life and to have been given the opportunity to lead us forward at the culmination of my career,” he said.
Partners officials said they will run a national search for a successor — though all of the organization’s past leaders have come from either Mass. General or the Brigham.
The company will undergo a leadership change as it also faces its first serious challenge from a large new competitor. Beth Israel Deaconess Medical Center and Lahey Health are planning to finalize their merger in the coming weeks.
Mass. General and the Brigham formed Partners HealthCare in 1994 to fight back against what its founders saw as the lopsided power of health insurance companies. By bringing together two of the most renowned hospitals in Boston, the parent company was able to negotiate far higher payments for their services. The Partners system has since grown to include thousands of doctors, more than a dozen hospitals, and an insurance business.
Tensions between Partners’ corporate office and its two flagship teaching hospitals have simmered for years. The friction has grown as Torchiana has led what is called a “transformation” effort to cut costs and rethink Partners’ system-wide strategy, according to several people with knowledge of the situation.
The broad initiative involves a series of committees to assess prickly issues such as the governance structure and the brand of Partners and its hospitals. The process has sparked heated debates.
Two of Torchiana’s recent moves in particular have stoked concerns among leaders at Mass. General and the Brigham.
He has pushed to expand aggressively beyond the borders of Massachusetts by working on deals with the two largest health care providers in Rhode Island. Partners is still seeking approval to acquire Care New England Health System of Providence, but it has shelved a more controversial plan to pursue a deal with the Lifespan system in Rhode Island.
In addition, Torchiana rankled other Partners leaders when he began negotiating a possible takeover of Harvard Pilgrim Health Care, the state’s second-largest commercial health insurer. Torchiana told the Globe in November that the merger talks were on hold, noting that a deal would face tough scrutiny from regulators. He also said Partners and Harvard Pilgrim were unsure if they were “functionally organized to be able to pull it off.”
Meanwhile, the presidents of Mass. General and the Brigham, Dr. Peter Slavin and Dr. Elizabeth Nabel, respectively, generally have preferred to stay focused on their core business of providing patient care.
“Hospitals want to run their own show,” one person aligned with Torchiana said on the condition that he not be named. “There’s always this tension that exists. It never goes away. They want Partners to do what they need them to do, but not to go too far.”
Disagreements have also risen over plans for Partners to open several outpatient clinics over the next five years. How those new locations would be branded, and what services they would offer, remain unclear.
Scott Sperling, chairman of the Partners board of directors, said Torchiana — who goes by the nickname “Torch” — has contemplated retirement for some time. He said Torchiana’s four years at the helm is about the average tenure for a Partners CEO.
“It’s a hard job, and Torch has been doing yeoman’s work,’’ he said in an interview. “It’s not without wear and tear.’’
Sperling acknowledged that as Torchiana moved to implement his own vision for the organization, which included greater integration and more care delivered outside the big teaching hospitals, disagreements escalated over strategy.
“There are strong opinions,’’ he said. “These are people who could be the CEO of almost any medical system in the world. We want them to express their strong views. That doesn’t make the Partners CEO job any easier.’’
Torchiana is known as a methodical, data-driven leader with a soft voice and strong opinions. The 6-foot 6-inch Coke-drinking executive, who is a voracious reader, earned praise as a cardiothoracic surgeon at Mass. General, where he became chief of cardiac surgery in 1998. He later served as chief executive of the Mass. General physicians group before replacing Dr. Gary Gottlieb as Partners CEO.
As the head of Partners, Torchiana pushed back against the notion that the nonprofit health system — which state reports have shown to be higher priced than its competitors — is too expensive. He has argued that Partners receives lower reimbursements than its national competitors, and he has noted that health care costs, when compared to incomes, are not especially high in Massachusetts.
Partners has grown under Torchiana — for example, through the acquisition of Massachusetts Eye and Ear in 2018. Last year was particularly profitable for Partners. The company earned $310 million on operations in the fiscal year that ended Sept. 30, 2018, and collected revenue of $13.3 billion.
“Torch understood that Partners and its hospitals had an important community mission beyond the academic and patient care mission,” said Andrew Dreyfus, the chief executive of Blue Cross Blue Shield of Massachusetts, the state’s largest insurer. “He devoted himself to some big, tough issues, like the opioid crisis, and increasing burnout of clinicians, and I think that will be part of his legacy.”
Torchiana earned total compensation of $4.7 million in 2016, the most recent year for which figures are available. That includes a base salary of $2.1 million and other pay.
Torchiana sometimes found himself defending Partners from legislative proposals that would have cost the company financially, including a 2016 ballot campaign by a labor union, 1199SEIU United Healthcare Workers East, to slash insurance payments to Partners. The company and the union later reached an agreement.
“We’ve had a good experience working with Dr. Torchiana, and we wish him well in his next endeavor,” Tim Foley, executive vice president of the union, said in a statement. “Though we’ve had disagreements from time to time, we appreciate his work to improve quality care.”
A Partners spokesman said Torchiana was not available for an interview Tuesday.
The tensions among Partners hospitals have worsened in recent years as Mass. General becomes financially stronger than the Brigham, said Paul Hattis, a professor of public health and community medicine at Tufts University School of Medicine. “Part of the CEO’s job is to keep it in check,’’ he said.
Hattis said this is a chance for a new Partners CEO to say to the Brigham and Mass. General: “Even though we fight with each other, we can’t not figure this out, because we are going to have more viable competition.’’
https://www.bostonglobe.com/business/2019/01/29/partners/9CcTBXYbD0vHbGtEkJydhO/story.html?et_rid=1744895461&s_campaign=todaysheadlines:newsletter

Health Care Reform Articles

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David Torchiana, chief executive of Partners HealthCare, unexpectedly announces departure

by Priyanka Dayal McCluskey - Boston Globe - January 29, 2019

Dr. David Torchiana, the chief executive of Partners HealthCare, has unexpectedly announced his departure, after his push to integrate the sprawling health system encountered rising tensions from other Partners leaders.

No comments:

Post a Comment

Pages

Saturday, February 2, 2019

Health Care Reform Articles - February 2, 2019

Editor's Note -

- SPC

As Drug Prices Rise, Is Boston’s Prosperity Based On A Moral Crime?

by Vikas Saini - Commonhealth - January 31, 2019

Opinion | Editorial: Charlie Baker takes on Big Pharma

Editorial - The Boston Globe - January 30, 2019

Opinion | Robert K. Coughlin: Governor Baker’s proposal on drug-pricing will hurt biotech — and consumers

by Robert K. Coughlin - The Boston Globe - January 30, 2019

Drug costs plague seniors, but legislative relief may be elusive - The Boston Globe

by Robert Weisman - Boston Globe - January 28, 2019

CVS paid itself far more than somemajor competitors, report says

by Marty Schladen and Kathy Candisky - The Columbus Dispatch - January 20, 2019

Maine Voices: Medicare uniquely suited to facilitating health care for all Americans

Medicare for all model can be good for Maine

LTE - Bangor Daily News - January 15, 2019

Medicare for All Is Even Better Than You Thought

by Tim Higgenbotham - Jacobin - December 3, 2018

How Will Medicare for All Affect Outcomes?

How Much Do We Need to Raise?

How Will We Pay for It?

How Will This Impact Americans?

What About the Workers?

Looking Forward

https://www.jacobinmag.com/2018/12/medicare-for-all-study-peri-sanders

As Wasserman Schultz Exemplifies Muddled Stance, This Reminder: Medicare for All "Ain't a Slogan. It's a 94-Page Bill"

by Jake Johnson - Common Dreams - January 30, 2019

Veterans Will Have More Access to Private Health Care Under New V.A. Rules

Jennifer Steinhauer - NYT - January 30, 2019

With taxes, Charlie Baker is a governor without a party to call home

by Joan Vennocci - Boston Globe - January 30, 2019

David Torchiana, chief executive of Partners HealthCare, unexpectedly announces departure

by Priyanka Dayal McCluskey - Boston Globe - January 29, 2019

Dr. David Torchiana, the chief executive of Partners HealthCare, has unexpectedly announced his departure, after his push to integrate the sprawling health system encountered rising tensions from other Partners leaders.

No comments:

Post a Comment

CVS paid itself far more than some
major competitors, report says