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Tuesday, April 30, 2019

Health Care Reform Articles - April 30, 2019

America’s Biggest Lie: We Can’t Afford Medicare for All

 by Les Leopold - Common Dreams - April 23, 2019

Pundits and politicians repeatedly warn us that the country cannot afford costly social services. They  caution about the perils of a rising national debt, the supposed near bankruptcy of Medicare and Social Security, and the need to sell public services to the highest bidder in order to save them.  We must tighten our belts sooner or later, they tell us, rather than spend on social goods like universal health care, free higher education and badly needed infrastructure.
To many Americans this sounds all too true because they are having an incredibly tough time making ends meet. According to the Federal Reserve, “Four in 10 adults in 2017 would either borrow, sell something, or not be able pay if faced with a $400 emergency expense.” To those who are so highly stressed financially, the idea of paying for a costly program like Medicare for All sounds impossible.
"The point is to give Americans what they have been long denied – high quality universal healthcare AND a real wage increase by providing Medicare for All with no co-pays, no deductibles and no premiums."
We are the richest country in the history of the world, however, and certainly could afford vastly expanded and improved vital public services if we had the will. What stands in the way is runaway inequality. Our nation’s wealth has been hijacked by the super-rich, with plenty of aid from their paid-for politicians.
Over the past 40 years the top fraction of the top one percent have systematically denied working people the fruits of their enormous productivity. The results of this wage theft can be seen clearly in the chart below which tracks productivity (output per hour of labor) and average weekly wages (after accounting for inflation) of non-supervisory and production workers (about 85 percent of the workforce).
The red line shows the rise of American productivity since WWII. While not a perfect measurement of the power of our economy, it does capture our overall level of knowledge, technical skills, worker effort, management systems, and technology. Ever-rising productivity is the key to the wealth of nations.
As we can see clearly, the productivity trend has been ever upward. Today the average worker is nearly three times as productive per hour of labor as he or she was at the end of WWII. And the workforce is more than three times as large.  That means we are a colossal economic powerhouse. But unless you are an economic elite, it doesn’t feel that way.
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To understand why we need to look at the blue line – average real worker wages.  From WWII to the late 1970s or so, as productivity rose so did the average real wage of nearly all American workers.  Year by year most working people saw their standard of living rise.  For every one percent increase in productivity, about two-thirds went to labor, and the remaining one-third went to capital investment and profits.
After the late 1970s, however, the story changes dramatically. Real wages stall for more than 40 years, while productivity continues to climb. Had wages and productivity continued to rise in tandem, the average weekly earnings of the American worker would be almost double what it is today, rising from today’s average of $746 per week to $1,377 per week.
What happened? Where did all the money go that once went to working people?
The fatalistic story sold to us by elite-funded think tanks is that the rise of international competition and the introduction of advanced technology crushed the wages of those without the highest skill levels. The typical worker, it is claimed, is now competing with cheap labor from around the world and hence sees his or her wages stall and even decline.  And since there really isn’t much anyone can do about globalization or automation, there’s nothing we can do about the stalling wages. Such a convenient story to justify runaway inequality!
"So next time you hear someone say we can’t afford a public good, that we need to tighten our belts and get used to austerity, think about all that wealth that has flowed to the very top."
The real story is far more complex and troubling. Yes, globalization and automation contribute to stagnant wages. But as the International Labor Organization shows in their remarkable 2012 study, only about 30 percent of this wage stagnation can be attributed to technology and globalization. The main cause is the neo-liberal policy agenda of deregulation of finance, cuts in social spending and attacks on labor unions. And within that mix the biggest driver of wage stagnation can be attributed to financialization – the deregulation of Wall Street which permitted — for the first time since the Great Depression — the rapacious financial strip-mining of workers, students, families and communities.  Put simply, the neo-liberal model ushered in by Thatcher and Reagan, and then intensified by Clinton and Blair, moved the wealth that once flowed to working people to financial and corporate elites.  (For a more thorough account see Professor William Lazonick’s “Profits without Prosperity.” )
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How much money are we losing?   
More than we can imagine. Here’s a back-of-the-envelope estimate for just the most recent year on the chart, 2017: The gap between the productivity wage and the current average wage is $631 per week. That is, if the average weekly wage continued to rise with productivity, it would be $631 higher than the current average wage. In 2017, there are 103 million of these workers.  So the total amount of “lost” wages that flowed to economic elites is a whopping $3.4 trillion!  (103 million x $631 x 52 weeks) And that’s just for one year.
Here’s how to pay for Medicare for All
Current estimates for a single payer system come in at about $3 trillion per year. Americans already are paying $1.9 trillion in payroll and income taxes that go to Medicare, Medicaid and other government health programs.  So, we would need to raise another $1.1 trillion to provide universal healthcare and prescription drugs with no co-pays, no deductibles and no premiums.
In the name of fairness, that additional $1.1 trillion to pay for Medicare for All  should be raised by taxing back a portion of the $3.4 trillion in wealth that has flowed to the super rich instead of to working people. After all, working people have not had a real wage increase in more than forty years as economic elites have siphoned away tens of trillions of dollars of income that once went to working people, (the gap between the two lines). Wouldn’t it be more than fair to ask the superrich to pay the $1.1 trillion needed for Medicare for All?
There are numerous ways for these economic elites pay their fair share:
  • Financial transaction tax on stock, bond and derivative transactions;
  • Wealth tax on those with over $50 million in wealth;
  • Minimum corporate tax of 35 percent on all corporations with over $100 million in profits who now pay little or nothing like Amazon did this past year;
  • Raise the marginal tax bracket to 70% on all income over $10 million per year;
  • Increase the inheritance tax on the super-rich to prevent the creation of a permanent oligarchy…and so on.
The point is to give Americans what they have been long denied – high quality universal healthcare AND a real wage increase by providing Medicare for All with no co-pays, no deductibles and no premiums.
Think about how much your income would go up if you didn’t have to pay for healthcare at all. That would begin to close the gap between productivity and wages for the first time in a generation.
Wait! Shouldn’t working people pay something for health care coverage?
We already are. We pay payroll taxes for Medicare and a portion of our regular taxes go to fund Medicaid and other public health programs for veterans, Native Americans and public health-related research and regulation.
So next time you hear someone say we can’t afford a public good, that we need to tighten our belts and get used to austerity, think about all that wealth that has flowed to the very top. Think about that big fat gap between productivity and real wages. Think about how runaway inequality has allowed the wealth of the richest nation in history to be hijacked by the super-rich.
It’s time the American people got a real wage increase and Medicare for All would deliver just that.

Follow the link above to access the graphics embedded in the original article.

-SPC

Universal Health Care Might Cost You Less Than You Think

by Matt Breunig - NYT - April 29, 2019

As the national debate about health care kicks off ahead of the 2020 presidential election, we’re going to be hearing a lot about the costs of increasingly popular progressive proposals to provide universal health care, like Bernie Sanders’s Medicare for All plan.
One common refrain on the right and the center-left alike: Since the rich can’t foot the bill alone, are middle- and working-class supporters of a more socialized health care system really ready to pay as much for it as people do in some of the high-tax nations that have one?
The problem is, we already do, and we often pay more.
It’s true that by conventional measures, taxes on workers’ wages in the United States are comparatively very low and even very progressive, affecting the lowest-earning workers the least and taxing those who can afford it more.
But these measures obscure an important fact of American life: Unlike workers in many other countries, the vast majority of American employees have private health insurance premiums deducted from their paychecks.
If we reimagine these premiums as taxes, we’d realize that Americans pay some of the highest and least progressive labor taxes in the developed world.
Just how heavy is the burden placed on American workers by employer insurance premiums? By combining data from the O.E.C.D. Taxing Wages model with data from the Medical Expenditure Panel Survey, we can see what percentage of each worker’s compensation — a figure that includes cash wages as well as the taxes and benefits employers pay on behalf of their employees — goes toward taxes and health care, and how progressive these payments really are.
What this data shows is that lower-income workers, higher-income workers, single workers, and married workers with children all contribute around 40 percent of their pay toward taxes and health premiums. And when those health care costs are taken into account, the less well off no longer pay less than high-earners, as they do in taxes alone.
So, while opponents of comprehensive plans like Medicare for All claim those plans will greatly burden middle-class families, the truth is that we already have an unfair system. Middle-class workers in America are charged the same health insurance fees as upper-class workers despite the vast income differences between the two groups, and pay more of their earnings toward taxes and health care than workers in many wealthy countries.
For instance, according to this analysis, when an American family earns around $43,000, half of the average compensation when including cash wages plus employer payroll tax and premium contributions, 37 percent of that ends up going to taxes and health care premiums. In high-tax Finland, the same type of family pays 23 percent of their compensation in labor taxes, which includes taxes they pay to support universal health care. In France, it’s 2 percent. In the United Kingdom and Canada, it is less than 0 percent after government benefits.
Consider the impact of these insurance premiums on American families with children. Through the earned-income tax credit and the child tax credit, the federal tax code does a lot to ensure that the effective tax rates of lower-middle-class workers go down considerably when they have kids. But these efforts are effectively negated by the burden of employer-based health insurance.
When single workers decide to start a family, they need to switch from an individual health plan to a family health plan. The average individual health plan has an annual premium of just under $6,400 — with employees directly paying around $1,400 of that. For family plans, the premium is around $19,000 with employees responsible for around $5,200.
This jump in premiums for workers who start families is what ensures that middle-class workers with children put around 40 percent of their labor compensation toward taxes and health care, despite policies that reduce their formal taxes.
Moving from our system to a European-style system would make our overall system of taxes and health insurance payments much more progressive for the majority of Americans, because the elimination of private health premiums would more than offset the rise in formal taxes for all but the wealthy.
Although the financing details of Medicare for All remain provisional at the moment, a RAND report on a more concrete single-payer proposal for New York State found that the plan would cut health care costs dramatically for the lowest income group, while increasing them by about 50 percent for the highest income group. Middle-class people would also experience net savings on health care equal to around 10 percent of their income, with only those earning 10 times the federal poverty line or above — that’s $134,000 for an individual or $276,000 for a family of four — paying more than they do now.
If we don’t move toward a European-style health program, we’ll remain stuck in a system where Americans, regardless of their incomes, pay ever larger amounts out of their paychecks to fund health care. The fact that we don’t call these payments “taxes” doesn’t change that fact, so it shouldn’t blind us to the best solutions.
If policymakers in America want to boost the fortunes of the middle class, and especially middle-class families with children, shifting the health insurance burden up the income ladder while bringing down overall health care costs, as Medicare for All would, is one of the surest ways to do that.
Matt Bruenig is the founder of People’s Policy Project, a think tank funded by small donors.
https://www.nytimes.com/2019/04/29/opinion/medicare-for-all-cost.html?smid=nytcore-ios-share

Trump Is Making ‘Socialism’ Sound Pretty Good

And in any case, Democrats are not planning to seize the means of production anytime soon.
by Jamelle Bouie -NYT - February 14, 2019



Only a handful of Democrats in Congress (and just one Democrat-adjacent presidential contender) identify as “socialist,” but they appear to be the chief targets of President Trump as he faces a confident Democratic opposition in the House of Representatives. “We are alarmed by new calls to adopt socialism in our country,” he said in his State of the Union address two weeks ago, declaring that “America will never be a socialist country.”
The White House actually presaged this strategy last October, just before the midterm elections, in a report from its Council of Economic Advisers. They cite calls for single-payer health care and higher tax rates as evidence that “socialism is making a comeback in American political discourse,” with, they argue, dire consequences for the American economy. Next came the president’s address to Congress. And this week at a rally in El Paso, Tex., Trump went after the “radical left,” blasting a caricature of progressive climate policies. “I really don’t like their policy of taking away your car, of taking away your airplane flights, of ‘Let’s hop a train to California,’” he said, bizarrely adding that under the Green New Deal resolution introduced by liberal Democrats, “You’re not allowed to own cows anymore.”
The clear expectation is that many or most Americans will recoil at any hint of “socialism,” either on principle or because of its association with Venezuela, which the administration has tried to elevate as a major adversary. That might have been true in Trump’s cultural and political touchstone, the 1980s, when Ronald Reagan’s hard-line anti-Communism defined American foreign and domestic policy. But in 2019, the Cold War is long over. The Soviet Union is a memory. And there is no comparable global ideological struggle over economic systems that might give weight to Trump’s rhetoric. There’s not much fear to monger. Instead, the president’s decision to make “socialism” his opponent might have the opposite effect, potentially bolstering the movement and its ideals.
Because the Cold War is well in the rearview mirror of history, the United States also has a growing cohort of voters with no experience of its political environment. Thirty-five percent of voters in the 2018 elections were born in November 1973 or later, according to exit polls from CNN. The oldest in that group would have been teenagers during the fall of the Berlin Wall; the youngest were born nearly 10 years afterward. Making the ground even less fertile for the “socialist” charge is the fact of the 2008 recession, which produced worsening views of capitalism, especially among young Americans, who showed growing receptivity to views such as “basic health insurance is a right for all people” and “basic necessities, such as food and shelter, are a right that the government should provide to those unable to afford them.” In truth, these ideas fit well into the modern history of capitalist governance. But the politics of the past 10 years have given them a left-wing tinge.
Specifically, in their vehement opposition to the Obama administration, conservatives narrowed “socialism” down to virtually any attempt to intervene in the economy on behalf of the broad public. The effort to save the American car industry? Socialist. Regulated markets to purchase health insurance? Socialist. Market-based measures for reducing carbon emissions? Also socialist.
This aggressive labeling coincided with a rise in favorable attitudes toward socialism among Democrats. In 2010, according to Gallup, 53 percent said they had a positive view of socialism. In 2016, it was 58 percent. Some of this is the effect of Bernie Sanders’s presidential campaign, which brought “socialism” back into mainstream political conversation. But conservative demonization of liberal Democratic policies as socialist played a major part as well.
It’s worth comparing what conservatives call “socialism” to actual models for it, like this one proffered by the Czech thinker Radoslav Selucky and quoted by the American social critic Irving Howe in his 1985 book “Socialism and America:”
The means of production are owned socially and managed by those who make use of them. Social ownership of the means of production is separated from the state. Producing and trading enterprises are autonomous from the state and independent of each other. They operate within the framework of the market which is regulated by a central indicative plan.
The institutions which provide health, education and welfare services are wholly exempt from the market. The right to participate in direct management of the work units operating in the market is derived from labor. The right to participate in direct management of the work units exempt wholly or partly from the market is derived proportionally from labor, ownership, and consumption of the provided services and utilities.
No one in or around the Democratic Party has proposed the radical changes that might lead to such a state. No one has called for nationalization of major industries or creation of what the American democratic socialist Michael Harrington called “social property” — worker-owned firms and cooperatives governed by “the direct participation of the actual producers.”
What we actually have are ideas like the “co-determination” plan proposed by Senator Elizabeth Warren, which would give workers a significant say in corporate governance — a major change from the status quo of shareholder-driven capitalism but a far cry from abolishing capitalist ownership itself. Similarly, the Medicare for All Act introduced by Bernie Sanders would move every American onto a new government plan but would also permit supplemental private insurance and retain the present system of privately owned hospitals and other medical providers.
Even the Green New Deal falls within the tradition established by its namesake, which itself was attacked as a harbinger of socialism. It provides new economic guarantees to Americans while substantially altering, but not fundamentally rearranging, power relationships within the economy. Reform, not revolution.
Having said that, profound changes in American society since the 1930s may give the Green New Deal less transformative potential than its predecessor. The social base of the original New Deal was a large and powerful labor movement with the capacity to, as the historian Ira Katznelson wrote in a 1989 essay, “disrupt capitalism at the point of production” and potentially “lead a social democratic breakthrough in American politics.” The egalitarian vistas of the Green New Deal may ultimately be compromised by the absence of such a movement, although its ambition could galvanize the constituencies that might make such a movement possible.
But we’re getting ahead of ourselves. At this moment, the proposed policies of the Democratic Party — from modest initiatives to incentivize savings to expansive programs for guaranteed employment — aren’t socialism. Even if they were, Americans are less afraid of the label than one might think: 37 percent say they have a positive image of socialism, a two-point increase from 2016. Given the continued popularity of Bernie Sanders and the rise of politicians like Representative Alexandria Ocasio-Cortez, these numbers have room to grow. And those who hope to see them grow almost certainly got an assist from Trump when he elevated the term in his State of the Union address.
The mechanism is simple: Trump is unpopular and drives Americans away from his positions. According to a Gallup survey last summer, after almost a year and a half of anti-immigration rhetoric from the president, 75 percent of Americans said immigration was a “good thing” and 29 percent said immigration levels should “decrease.” Most wanted either stasis or an increase in the number of immigrants. Just this January, in a poll taken during the partial government shutdown, 58 percent of Americans said they opposed “substantial expansion” of a border wall between the United States and Mexico, a direct rebuke to the president.
If anything can put socialism in a more positive light, it is Trump raging against it. Which means conservatives and Republicans may want to think a little harder before they embrace a campaign strategy that relies on him for messaging. If “socialism” is like every other idea Trump has attacked and disdained, then the Republican Party should prepare for even more Americans embracing the term — and the ideas that come with it.
https://www.nytimes.com/2019/02/14/opinion/trump-socialism-ocasio-cortez-sanders.html?smid=nytcore-ios-share

Capitalism and the Democratic Party

The most successful economic system shouldn’t be a dirty word.
by Bret Stevens - NYT - March 8, 2019

John Hickenlooper ought to be a poster child for American capitalism. After being laid off from his job as a geologist during the oil bust of the 1980s, he and his business partners turned an empty warehouse into a thriving brewery. It launched his political career, first as a problem-solving two-term mayor of Denver, then as a pragmatic two-term governor of Colorado, and now as a centrist candidate for the Democratic presidential nomination.
Yet there he was on MSNBC’s “Morning Joe,” squirming in his seat as Joe Scarborough asked if he would call himself “a proud capitalist.” Hickenlooper protested the divisiveness of labels. He refused to reject the term “socialism.” He tried, like a vegetarian who still wants his bacon, to have it both ways: “There are parts of socialism, parts of capitalism, in everything.”
But Hickenlooper did allow this: “We worked 70, 80, 90 hours a week to build the business; and we worked with the other business owners in [Lower Downtown Denver] to help them build their business. Is that capitalism? I guess.”
He guessed right.
Today, despite Friday’s disappointing jobs report, unemployment in the United States clocks in at a rock-bottom 3.8 percent. Wage growth, at 3.4 percent, is at a 10-year high. The median household income is as high as it has ever been. The United States is the world’s most competitive economy, as well as the wealthiest once you exclude small countries like Qatar.
None of this should be difficult to celebrate. An economy in which private property is protected, private enterprise is rewarded, markets set prices and profits provide incentives will, over time, generate more wealth, innovation and charity — and distribute each far more widely — than any form of central planning.
This is not a theory. It’s as true in Nordic countries like Denmark (often mislabeled “socialist”) as it is in hyper-capitalist Singapore. It’s the empirically verifiable conclusion from the 20th century’s bitter contest between capitalist and socialist states. It’s not a race we should have to run twice.
Nor should it be hard for someone like Hickenlooper to acknowledge as much — while also insisting on the distinction between unrestrained and regulated capitalism, market prices and moral values. One of the reasons why the right-wing charge of “socialism” against the Democratic Party rarely stuck was that it was generally untrue. To smooth the edges of capitalism, even to save it from itself, doesn’t mean to disdain and disavow it.
There’s a difference between taming a horse and shooting it.
Until about, oh, a year ago, few Democrats would have disagreed. Not anymore. Moderate Democrats are by no means an endangered species, but increasingly they act like a hunted one. Watching Hickenlooper, you could read his mind as if it were a chyron at the foot of the screen. Don’t say “proud capitalist,” John. Don’t say it. Twitter will kill me if I do. Death by Twitter mob — or pre-emptive surrender to it — is how politics is largely conducted these days.
Is this good politics? I doubt it. As Geoffrey Kabaservice noted in the Guardian last November, “Nearly all of the Democrats who flipped the seats of moderate Republicans are themselves moderate. Few support the socialist agenda of Senator Bernie Sanders.” Progressive favorites like Andrew Gillum lost his race against a weak Republican opponent. And Joe Biden tops most Democratic primary polls by a wide margin.
It’s also especially bad politics for someone like Hickenlooper, who can’t get away with filibustering about the merits of capitalism if he hopes to get near the nomination. To the extent that Sanders’s concept of democratic socialism has gained traction, it’s not because capitalism has failed the masses. It’s because Sanders, beyond any of his peers, has consistent convictions and an authentic persona.
To prevail, a moderate Democrat will need to behave likewise. The message can go like this: Capitalism has worked for millions of Americans. It worked for me. We need to reform it so it can work for everyone.
Is Hickenlooper the guy to do this? Doubtful. Then again, Donald Trump is gearing up to run a campaign based on a thriving economy (check), a country at peace (check), a mess of congressional investigations that will quickly confuse and bore the public (check), Democrats who want to turn Silicon Valley into a giant utility (check), an inconclusive Mueller report (likely check), and a Democratic Party that can neither bring itself to censure an anti-Semitic congresswoman nor publicly embrace the free-market system (check, check).
Democrats still seem to think 2020 is going to be a referendum on the president. It’s not. It’s going to be a choice. Right now, the Trump campaign could hardly ask for a bigger favor from its overconfident opponents.
https://www.nytimes.com/2019/03/08/opinion/hickenlooper-capitalism-democrats.html?smid=nytcore-ios-share

Socialism and the 2020 American Election

In Europe, socialism carries no red-scare potency. It’s part of life, and Europe is not Venezuela.
by Roger Cohen - NYT - March 8, 2019


Two of my children were born in socialist France. They survived. In fact, their births were great experiences: excellent medical care, wonderful postnatal follow-up, near-zero cost. My son’s bris, in a Paris deserted through the August exodus, was another story, but I won’t get into that.
France has one of the world’s most elaborate social protection systems. The ratio of tax revenue to gross domestic product, at 46.2 percent, is the highest of all Organization for Economic Cooperation and Development countries. In the United States, that ratio is 27.1 percent. Look no further to grasp Franco-American differences.
This French tax revenue is spent on programs — universal health care, lengthy paid maternity leave, unemployment benefits — designed to render society more cohesive and capitalism less cutthroat. Of the French Revolution’s three-pronged cry — “Liberté, Égalité, Fraternité” — the first has proved most problematic, freedom being but a short step, in the French view, from the “Anglo-Saxon” free-market jungle. Socialist presidents have governed France for half of the past 38 years.
The country has paid a price for its social solidarity, particularly in high unemployment. But France has prospered. It has a vibrant private sector. It is a capitalist economy, among the world’s seven largest. Its socialism is no European exception. The Continent decided after World War II that cushioning capitalism was a price worth paying to avoid the social fragmentation that had fed violence.
The parties that produced Europe’s welfare states had different names, but they all embraced the balances — of the free market and the public sector, of enterprise and equity, of profit and protection — that socialism or its cousin social democracy (as opposed to communism) stood for. Socialism, a word reborn, has none of the Red Scare potency in Europe that it carries in the United States. It’s part of life. It’s not Venezuelan misery.
A 21st-century American election is about to be fought over socialism. Amazing! When the Berlin Wall fell beneath communism’s weight three decades ago, capitalism unbridled strode forth over the rubble in search of global opportunity. Ideological struggle seemed over.
But growing inequality and marginalization — byproducts of financial globalization — have thrust socialism center stage. Grace Blakeley, an economist and self-styled democratic socialist in London, told me, “For most people today, socialism is freedom from a lousy warehouse job or working 80 hours a week in a job you detest for people you detest.”
Right. The charismatic voice of such sentiment in the United States is the Democratic congresswoman Alexandria Ocasio-Cortez, the lightning rod of a new American politics.
“The definition of democratic socialism to me, again, is the fact that in a modern, moral and wealthy society, no American should be too poor to live,” Ocasio-Cortez tells NBC’s Chuck Todd. Like Britain’s leftist Labour Party leader, Jeremy Corbyn, she favors significant state intervention in the economy. Trump, unerring in his instinct for the jugular, declares, “We believe in the American dream, not the socialist nightmare.”
Europe demonstrates, however, that socialism and the free market are compatible. The basic issue before the Democratic Party now is how far left to go. Bernie Sanders calls himself a socialist. Kamala Harris calls herself a progressive. John Hickenlooper, conciliator, says he can “get stuff done.”
The notion that American elections are won in the center was buried by Trump. The energy in the Democratic Party lies in the progressive camp. It stems from anger at a skewed economy and millennial disgust at the elitist turn that cost the Democrats their working-class base and much of small-town America. This opened the way for Trump. My own inclinations are centrist, but not a “centrism” that cares more for Goldman Sachs than the opioid crisis. I don’t see how the Democrats can eschew a new era’s left-leaning energy and win.
A word of caution: The United States was founded in contradistinction to, not as an extension of, Europe. Self-reliance is to America what fraternity is to France: part of its core. American space — so immense, so un-European — conjures in Americans a bristling independence of spirit that wants government out of their lives.
Nations do not cast off their cultural essence. I don’t think soaking the rich — Ocasio-Cortez’s proposed 70 percent wealth tax — is going to get a Democrat to the Oval Office. Nor are the accusations of “worker exploitation” that chased Amazon and 25,000 jobs out of New York — a stupid waste.
The dirty secret of European welfare states is that they tend to be business-friendly. As Monica Prasad, a sociology professor at Northwestern University has pointed out, Sweden has a lower corporate tax rate than the United States. The sweet spot for Democrats is getting business to buy in to progressive reform. America can be nudged in a French direction without losing its self-renewing essence.
France is also home to the yellow-vest protests from the marginalized. So much for social cohesion, you might say. But there’s a lesson. As James McAuley observed in The New York Review of Books, those vests reflect, above all, a “material demand to be seen.” Socialism is no silver bullet. The basic requirement of any Democratic candidate is to make the forgotten, the struggling and the invisible of American society feel visible again.
https://www.nytimes.com/2019/03/08/opinion/socialism-democrats-2020-europe.html?smid=nytcore-ios-share

Can We Please Relax About ‘Socialism’?

Only in America is the word freighted with so much perceived menace. 
by David Bentley Hart - NYT - April 27, 2109

To be trapped in the boarding area of a smallish airport in the upper Midwest is, as often as not, to be subjected to that bestial din of fricatives, gutturals, plosives and shrieks of hysterical alarm that constitutes political discussion on Fox News, pouring incessantly from those obnoxious pendulous ceiling televisions. And unless one fancies running the T.S.A.’s gantlet of gropers again, there’s no escape. The experience is especially nasty if one’s wait coincides with the prime-time shows hosted by those two almost indistinguishable fellows with the suety faces, bouffant coiffures and nerve-racking mezzo-castrato voices.
That fate, at least, I avoided a few weeks back. Instead, there I was with the commentator Ben Stein hovering over me like some grim heathen god, exuding all the effervescent charm of a despondent tree sloth, glumly wobbling his jowls and opining that Representative Alexandria Ocasio-Cortez espouses a political philosophy that in the past led to the rise of Hitler and Stalin.
Now, I realize that this has become axiomatic on America’s excitable right. I know also that in this country we employ terms like “socialism” with wanton indifference to historical details and conceptual distinctions. I grasp too that many among us truly believe that, say, a higher marginal tax rate or a public subsidy for poor children’s dentistry is only a step away from the gulags. And I am painfully aware that the male Fox commentariat nurtures its sickly obsession with Ms. Ocasio-Cortez partly because they resent her cleverness, charisma and moral vitality, but mostly because they suspect that in high school she was one of those girls they had no hope of getting a date with (though, really, she comes across as someone who could look past a face of even the purest suet if she thought she glimpsed a healthy soul behind it).
Just then, however, I was emotionally unprepared for this particular assault on my intelligence. I cast a fond, forlorn glance back in the direction of those T.S.A. agents and their warm inviting paws.
Absurd as it was, though, Mr. Stein’s remark was not all that far removed from mainstream American public opinion. Even the liberal “left” in this country is densely populated with politicians whose stated views on socialism seem scarcely more exact.
It may be amusing to hear Republicans assert that a military kleptocracy like Venezuela is a socialist country because its government uses that word when lying about itself (rather in the way that North Korea claims to be a people’s democratic republic). It may make one wince to see Senator Bernie Sanders obliged (as he was on Monday at a town hall hosted by CNN) to explain once more that the totalitarian statism of the Soviet Union had nothing to do with the (far older) tradition of democratic socialist thought. But fair’s fair, it’s not much less bizarre to hear a “progressive” like Julián Castro, the former housing secretary, assert that “socialism” simply means state seizure of all the means of production. (Had Marx and Engels only known this, they might have spared themselves the effort of denouncing the socialists of their time for failing to call for a completely centralized economy.)
Well — only in America, as they say. Only here is the word “socialism” freighted with so much perceived menace. I take this to be a symptom of our unique national genius for stupidity. In every other free society with a functioning market economy, socialism is an ordinary, rather general term for sane and compassionate governance of the public purse for the purpose of promoting general welfare and a more widespread share in national prosperity.
In countries where, since World War II, the principles of democratic socialism have shaped public policy (basically, everywhere in the developed world except here), the lives of the vast majority of citizens, most especially in regard to affordable health care, have improved enormously. This is acknowledged by almost every political faction, whether “liberal” (like Social Democrats), “conservative” (like Christian Democrats) or “progressive” (like Greens). And the preposterous cost projections that American conservative propagandists routinely adduce to prove that “socialized medicine” or a decent public option would exhaust our Treasury are given the lie in each of those countries every day.
Democratic socialism is, briefly put, a noble tradition of civic conscientiousness that was historically — to a far greater degree than either its champions or detractors today often care to acknowledge — grounded in deep Christian convictions. I, for instance, am a proud son of the European Christian socialist tradition, especially in its rich British variant, as exemplified by F.D. Maurice, John Ruskin, William Morris, R.H. Tawney and many other luminaries (including, in his judiciously remote way, C.S. Lewis), but also in its continental expressions (see, for example, Pope Pius XI’s encyclical Quadragesimo Anno, with its prescient warnings against the dangers of unfettered capitalism).
True, I have lived abroad often enough to be conscious of the flaws in various nations’ social democratic systems. But I know too that those systems usually make possible something closer to a just and charitable society than ours has ever been. I can also tell the difference between Venezuela and today’s Germany, or the Scandinavian states, or France, or Britain, or Australia, or Canada (and so on).
One need not idealize any of these nations or ignore the ways in which they differ in balancing public and private financing of civic services. But all of them are, broadly speaking, places where — without any unsustainable burden on the national economy — the cost of health care per capita is far lower than it is here and yet coverage is universal, where life spans are longer, where working people are not made destitute by serious illnesses, where a choice between food or pharmaceuticals need never be made, where the poor cannot be denied treatments by insurance adjusters, where pre-existing health conditions could never be denied coverage, where most people have far more savings and much lower levels of debt than is the case here, where very few families live only a paycheck away from total poverty, where wages generally keep pace with inflation, where every worker has decent vacation time each year, where suicide and opioid addiction are not the default lifestyle of the working poor, where homelessness is exceedingly rare, where retirement care is humane and comprehensive and where the schools are immeasurably better than ours are.
Americans, however, recoil in horror from these intolerable impositions on personal liberty. Some of us are apparently even, like Mr. Stein, canny enough to see the shadow of the death camps falling across the whole sordid spectacle. We know that civic wealth is meant not for civic welfare, but should be diverted to the military-industrial complex by the purchase of needless weapons systems or squandered through obscene tax cuts for the richest of the investment class. We know that working families should indenture themselves for life to predatory lending agencies. We know that, when the child of a working family has cancer, the child should be denied the most expensive treatments, and then probably die, but not before his or her family has been utterly impoverished.
We call this, I believe, being free. And as long as we have access to all the military-grade guns we could ever need to fight off invasions from Venus, and to assure that our children will be slaughtered at regular intervals in their schools, what else can we reasonably ask for?
https://www.nytimes.com/2019/04/27/opinion/sunday/socialism.html?smid=nytcore-ios-share

Insurer, hospital lobbyists unite against Medicare for All proposals

by Shelby Livingston - Modern Healthcare - April 27, 2019

NASHVILLE—The audience of healthcare executives had expected the heads of the influential insurance and hospital lobbying groups to butt heads. But Matt Eyles, CEO of lobbying group America's Health Insurance Plans, and his counterpart Chip Kahn of the Federation for American Hospitals were on the same page Wednesday while discussing potential threats to their industries and who they consider the culprit in the nation's healthcare costs conundrum.
They were so congenial that audience members at the Nashville Health Care Council discussion prodded the moderator to find some topic they could spar over. But there were few points of contention. Eyles and Kahn were united in their opposition to the Medicare For All proposals, which they agreed are largely symbolic but something to be taken seriously.
Their comments came on the heels of the House Democrats' introduction on Wednesday of a bill with more than 100 co-sponsors to extend Medicare to all Americans and eliminate private insurance. AHIP and the FAH, which represents investor-owned hospitals, released statements saying the legislation would disrupt care for Americans. The two, along with many other healthcare industry groups, have also launched an initiative called the Partnership for America's Health Care Future to fight the growing support for Medicare for All.
"That bill being introduced is a tremendous disappointment for me," Kahn said Wednesday, adding that it should be taken seriously because "the Trump election showed we can't predict anything anymore in terms of how far the public will go…and the leadership."
Kahn explained that the Partnership for America's Health Care Future, which was his brainchild, was formed to provide "counter-messaging" against Medicare for All: "We have to tell the people we serve and give them messages about how we feel about this, knowing that we want to serve them, and we know healthcare needs to be financed but this is the wrong way to go."
When Kahn called AHIP, Eyles said the organization was among the first groups to join. On Wednesday, he reiterated AHIP's stance that "people want to fix what's broken" instead of beginning again with an entirely new health system.
"Even within the context of this legislation, I believe it was a 2-year transition," Eyles said. "Can you imagine transitioning 20% of our economy in a two-year period? That's an unrealistic element. But we do need to take it seriously and come up with what a better way is forward" to achieving universal coverage.
The two also blamed the pharmaceutical industry for the rise in drug spending and agreed that coming down on pharmacy benefit managers and health plans for the rebates they negotiate fails to fix the drug pricing problem at its root.
"To blame PBMs and plans for rebates, when you control the price...is really a deflection," said Eyles, who before AHIP spent years at drug companies Eli Lilly and a division of Pfizer. "Not once did anyone ever say, 'how much did we spend on research and development for this product?' when we were trying to figure out what the price would be. It was what would the market bear and how high could we go?"
But the drug pricing problem isn't an easy one to fix, Kahn said. The Trump administration's proposal to peg Medicare Part B drug payments to the lower prices paid in European countries worries the Federation of American Hospitals, Kahn explained, because it worries the administration coulld move to regulate all the prices in the private healthcare sector.
A growing body of research shows hospital prices are a big driver of increasing healthcare spending.
AHIP was more supportive of the reference pricing proposal, but only in circumstances in which a drug on the market has no therapeutic alternative and no competition because of patent, Eyles said. He stressed the importance of bringing competition to the drug industry by encouraging biosimilars and ending drug patent gaming, for instance.
Eyles also said the industry is watching what the hospital-led not-for-profit drug company Civica Rx accomplishes in addressing drug prices and shortages of drugs used in the hospital setting, and "trying to think through if there's some model on the small molecule, on the pill side, that you could adopt as well."
Eyles and Kahn also agreed in that there's a need for federal legislation to combat surprise billing, which sometimes occurs when a patient visits an in-network hospital but is unknowingly treated by an out-of-network physician, such as an anesthesiologist.
But finally, the two clashed when it came to hospital mergers and acquisitions. Eyles argued that while the spate of so-called vertical insurance mergers is less about gaining market power and more about achieving better patient outcomes through integrated care, hospitals' and health systems' habit of buying up physician practices have led to higher prices.
Those deals "are largely invisible, not regulated, and you only know when you go to your physician's office one day and have a new logo, and you're like well, what changed here? Probably the price changed, but not much else changed other than that" Eyles said.
While Kahn didn't address hospital acquisitions of physician practices, he argued that consolidation among hospitals is inevitable because of declining inpatient services coupled with requirements for electronic health records, among other regulatory pressures. Freestanding hospitals are no longer viable, he said.
"All the noted economists, insurance company CEOs and others and policymakers who complain about hospital consolidation are living in a total fantasy world," he said.
https://www.modernhealthcare.com/government/insurer-hospital-lobbyists-unite-against-medicare-all-proposals


Health Industry Lobbyists Pump More Money into Democrats’ Congressional Campaign Arm

by Andrew Perez - Readsludge - April 23, 2019

This story is a collaboration between Sludge and MapLight, a nonpartisan research organization that tracks money’s influence on politics.
Corporate lobbyists collected almost $1 million for the Democratic Congressional Campaign Committee (DCCC) during the first quarter of 2019, according to an analysis by MapLight and Sludge.
The amounts have been rising gradually since the first of the year, with lobbyists bundling almost $515,000 for the committee in March—the month that the DCCC began drawing criticism from progressives for banning its political vendors from working for candidates who plan to challenge incumbent Democrats.
The total collected by the DCCC’s corporate lobbyist bundlers between January and March is already more than double the amount that corporate lobbyists raised for the committee in 2017. The group’s lobbyist bundling is on track to surpass the $1.9 million raised in the 2018 election cycle.
The DCCC has already raised more than $32 million overall—a record first-quarter haul for the committee, according to Illinois Rep. Cheri Bustos, a moderate Democrat who leads the campaign arm.
The committee’s seven corporate lobbyist bundlers and their firms represent health care and energy interests whose balance sheets are threatened by key progressive priorities like a “Medicare for All” health-care system and a “Green New Deal” to address climate change. So far, Democratic leaders have resisted both proposals.
The DCCC did not respond to questions from MapLight and Sludge.
Some of the lobbyists collecting checks for the DCCC represent companies and trade organizations that are members of the Partnership for America’s Health Care Future (PAHCF), a nonprofit “dark money” organization created to oppose Medicare for All and other progressive proposals to reshape the nation’s health care system.
Since 2009, the DCCC has received almost $1.3 million in direct contributions from employees and political action committees for companies and organizations that are part of PAHCF. Sludge and MapLight found that the DCCC’s 2019 bundlers and their lobbying firms have represented at least 12 PAHCF members.
A PAHCF spokesperson said that the organization “is not involved with fundraising for the DCCC or House Democrats.”
Chip Kahn is the chief executive and president of the Federation of American Hospitals, one of the coalition’s members. In February, Kahn took credit for coming up with the idea of PAHCF, according to Modern Healthcare. The Federation has donated more than $170,000 to the DCCC over the past 10 years, including $15,000 last month.
Although the coalition was created last year, PAHCF only registered to lobby Congress for the first time last week. The lobbying firm Forbes-Tate disclosed that it’s been hired by the partnership to lobby Congress on “issues related to Medicare for all style proposals.” PAHCF opposes the concept of a universal, single-payer health care system, as well as more limited ideas, like a public health insurance option that would compete with private health insurers or allowing people to buy into Medicare when they turn 50.
Here are the DCCC’s corporate lobbyist bundlers:
Vic Fazio, a senior advisor at lobbying firm Akin Gump Strauss Hauer & Feld and former California Democratic congressman, has raised nearly $130,000 for the DCCC this year. He has lobbied for Pharmaceutical Research and Manufacturers of America (PhRMA), a PAHCF member and the nation’s largest pharmaceutical trade association.
An Akin Gump lawyer signed PAHCF’s business registration paperwork in Delaware last year, state records show. PAHCF’s spokesperson said the attorney “simply helped the Partnership with its incorporation.” Akin Gump declined to comment.
Zach Pfister, a former House Democratic staffer, has bundled more than $280,000 for the DCCC this year. Pfister lobbies for managed care company Centene and registered last month to lobby for pharmaceutical company Novartis. He is also registered to lobby for drugmakers AbbVie and Harmony Biosciences. Pfister’s firm, Brownstein Hyatt Farber Schreck, has lobbied for two PAHCF members—the Blue Cross Blue Shield Association, a consortium of health insurers, and hospital chain operator Ardent Health Services.
David Thomas of Mehlman Castagnetti Rosen & Thomas has bundled $133,000 for the DCCC this year. Primarily a health industry lobbyist, Thomas worked for Vice President Al Gore and California Rep. Zoe Lofgren, D-Calif. He lobbies for at least four PAHCF members: America’s Health Insurance Plans, the health insurance industry’s top trade group; the American Medical Association, a physician trade organization; the Association of Accessible Medicines, which represents generic drugmakers; and Ascension Health, a Catholic nonprofit health provider.
One of Thomas’ colleagues at Mehlman Castagnetti has advised House Speaker Nancy Pelosi as she’s worked to negotiate a deal with the White House on a prescription drug-pricing bill. Thomas has also lobbied for Chevron and the Edison Electric Institute, a trade organization for utility companies.
Former House Majority Leader Dick Gephardt, (D-Mo.) raised $106,000 for the DCCC last month. His firm, Gephardt Government Affairs, lobbies for UnitedHealth Group, whose CEO said last week that Medicare for All would “destabilize the nation’s health system.” The firm is also registered to lobby for German pharmaceutical giant Bayer.
Gephardt has represented electric utility Ameren Services and the coal-fired electric plant Prairie State Energy Campus. Ameren’s latest filing says the company has lobbied on legislation that would call on the federal government to enact a Green New Deal, specifically on its “sections associated with energy sector emission reductions.”
“I think the Green New Deal is aspirational,” Gephardt said in March. “I don’t think it is entirely practical. But there is a lot going on already that moves us toward a carbon-free society or country, and electrification of vehicles, I think, is a really important part of this.”
Steve Elmendorf, a former top-ranking Gephardt staffer, has bundled $175,000 for the DCCC this year. He currently lobbies for the Biotechnology Innovation Organization, a PAHCF member that represents pharmaceutical interests. He is also registered to lobby for the Federation of American Hospitals, oil company BP America and Wall Street giant Goldman Sachs.
Former Democratic House and Senate staffer Heather Podesta, of Invariant LLC, has collected almost $100,000 for the DCCC this year. She lobbies on behalf of pharmaceutical company GlaxoSmithKline. Her firm also represents health insurer Cigna and drugmaker Baxter Healthcare Corporation.
John Michael Gonzalez, a former Democratic House staffer, is a lobbyist with Peck Madigan Jones, and he has bundled $30,500 for the DCCC this year. He represents numerous health industry clients, including PhRMA and drugmakers Amgen, Astellas Pharma U.S., AstraZeneca, Celgene, Merck, and Novartis. He also lobbies for Cigna, America’s Physician Groups and InnovaCare.https://readsludge.com/2019/04/23/health-industry-lobbyists-pump-more-money-into-democrats-congressional-campaign-arm/?

 

They Want It to Be Secret: How a Common Blood Test Can Cost $11 or Almost $1,000

Huge price discrepancies like that are unimaginable in other industries. Also unusual: not knowing the fee ahead of time.
by Margot Sanger-Katz - NYT - April 30, 2019


Huge price discrepancies like that are unimaginable in other industries. Also unusual: not knowing the fee ahead of time.
It’s one of the most common tests in medicine, and it is performed millions of times a year around the country. Should a metabolic blood panel test cost $11 or $952?
Both of these are real, negotiated prices, paid by health insurance companies to laboratories in Jackson, Miss., and El Paso in 2016. New data, analyzing the health insurance claims of 34 million Americans covered by large commercial insurance companies, shows that enormous swings in price for identical services are common in health care. In just one market — Tampa, Fla. — the most expensive blood test costs 40 times as much as the least expensive one.
If you’re a patient seeking a metabolic blood panel, good luck finding out what it will cost. Although hospitals are now required to publish a list of the prices they would like patients to pay for their services, the amounts that medical providers actually agree to accept from insurance companies tend to remain closely held secrets. Some insurance companies provide consumers with tools to help steer them away from the $450 test, but in many cases you won’t know the price your insurance company agreed to until you get the bill. If you have an insurance deductible, a $400 — or even a $200 — bill for a blood test can be an unpleasant surprise.
Outside of health care, a swing of prices as huge as the one for blood tests in Tampa is unheard-of. Recent studies of the retail prices of ketchup and drywall, for example, showed much less variation. A bottle of Heinz ketchup in the most expensive store in a given market could cost six times as much as it would in the least expensive store. But most bottles of ketchup tended to cost around the same. And, in every case, you would know the price of your ketchup before buying it.
“It’s shocking,” said Amanda Starc, an associate professor at the Kellogg School of Management at Northwestern, who has studied the issue. “The variation in prices in health care is much greater than we see in other industries.”
In some cities, the blood test prices look more like the prices for consumer goods. Most tests in Baltimore cost around $30. Most in Portland, Ore., cost around $20. But if you live in Miami or Los Angeles, the price becomes much harder to predict.
Hospitals and insurers negotiate over prices in private, and they don’t want competitors to know about the deals they’ve been able to cut. The data in this article comes from the Health Care Cost Institute, which pools bills from three large insurance companies. (Even the institute can’t say which insurers and providers are attached to the different prices, and it has eliminated certain markets with less competition where it might be easy to guess.)
The Trump administration may eliminate this secrecy, making numbers like the ones in these charts more common and easier to find. As The Wall Street Journal has reported, the administration has asked for comments on a proposal to require doctors and hospitals to publish negotiated prices.
The institute examined several common procedures and observed two kinds of pricing differences. Prices vary considerably between markets. And, in many metro areas, they range widely between one health care provider and another.
Because these are prices paid by insurance companies, many experts say the differences between markets matter more, because they affect insurance premiums that all those with insurance in that area pay, even if they don’t get a blood test or an operation. On average, a cesarean section birth in the Bay Area costs more than three times as much as one near Louisville, Ky., according to the institute’s data.
The average hotel room in the San Francisco area last year cost only around double the average hotel room in Louisville, according to STR, which tracks the industry.
The swing within markets increasingly matters for patients, too, as the share of employer plans with sizable deductibles keeps rising. That means that choosing a provider where your insurance company has failed to strike a good deal could mean significant out-of-pocket costs.
In some cases, prices may be higher because the quality of services or the cost of doing business in a given market is higher. More influential is market power, either that of insurers or hospitals, research shows.
Sherry Glied, a health economist who is the dean of the Wagner School of Public Service at New York University, said a bigger factor is probably how many patients your insurer sends to a given hospital. Popular places are likely to offer better prices, because the insurance company negotiates a bulk discount. The most expensive providers tend to be the ones where the insurance company has little negotiating leverage — and where the service is so rarely used it doesn’t mind the higher price.
“One person buys one hamburger, and another buys 1,000,” she said. “And it completely makes sense that the guy who buys 1,000 hamburgers gets a better price.”
That sort of market power can work in the opposite direction, too. In markets where there is a dominant hospital chain, or a powerful hospital that many patients insist on using, insurers tend to face high prices, with less leverage to bargain the hospitals down. Martin Gaynor, a professor of health economics at Carnegie Mellon University, was a co-author of a recent study showing that in markets where fewer hospitals competed for patients, the hospitals tended to be paid more.
“Some of these really simple diagnostic tests — what the heck?” Mr. Gaynor said. “It does mean, in a sense, the market is broken in terms of problems with market power.”
The prices that hospitals and doctors charge to patients who are not in their insurance networks also range widely, and are typically (though not always) higher than the prices that insurers pay. The Obama administration began publishing these list prices for some of the most common medical services on a government website. The Trump administration recently began requiring hospitals to also publish a comprehensive list of prices on their own sites, though the data can be challenging to use.
For years, Jeanne Pinder, who runs the consumer-oriented website Clear Health Costs, has been collecting the cash prices for medical procedures around the country. She said the only health care services with predictable pricing were the cash-only treatments that insurance doesn’t cover, like Lasik eye surgery, Botox and tooth whitening. “When you get into M.R.I.s, ultrasounds and blood tests, they are crazy,” she said. “The secrecy in pricing all over this marketplace encourages this behavior.”
The data from the Health Care Cost Institute shows real, negotiated prices for services in metropolitan areas among patients with private employer insurance through Aetna, Humana and UnitedHealthcare. The prices range from the 10th percentile to the 90th percentile, but eliminate the lowest and highest prices from the range. For outpatient services, the price is the cost for a single C.P.T. code. For inpatient services, the number represents all payments from an admission associated with the relevant D.R.G. code, so some of the variation reflects differences in care as well as price.
https://www.nytimes.com/2019/04/30/upshot/health-care-huge-price-discrepancies.html




 

Pfizer shareholder meeting offers an inside look at the pharma industry

by George Goehl and Felicia Wong - STAT - April 24, 2019

Pfizer’s board of directors will gather in New Jersey on Thursday for the company’s annual shareholders meeting. They will celebrate the enormous success Pfizer had in 2018, having made $53 billion in revenue and over $11 billion in profits, on top of the $11 billion windfall they posted from the Trump tax cuts alone at the end of 2017. Those numbers make Pfizer one of the most profitable companies on Earth.
Despite these enormous profits, or perhaps to generate them, Pfizer raised prices on 41 of its prescription drugs in January. This includes the company’s big-selling breast cancer medication, Ibrance, a pack of 21 pills used to treat breast cancer, that cost $12,000 in 2017, up 5% from the previous year.
Pfizer’s price increases track the skyrocketing cost of medications across the United States despite calls from President Trump to lower prices. For example, annual medication and other health care costs for people with type 1 diabetes rose from $12,467 in 2012 to $18,494 in 2016, according to a report released by the Health Care Cost Institute. That’s an enormous burden on American families.
Pfizer executives will say their drugs are expensive because developing them requires an enormous amount of testing, research, and development. In other words, they’re expensive now because a lot of money went in to produce them on the front end. That is the central myth that allows this industry to reap great profits.
But the company’s internal records paint a different picture. Pfizer is not lacking for resources and could lower the cost of its products. In 2017, the company spent almost 60% of its net profits on payments to shareholders in the form of dividends and buybacks. Following the passage of Trump’s corporate tax cuts, Pfizer’s spent 180% of its net income in 2018 to pay shareholders in the form of dividends and buybacks, which means the company used a combination of cash reserves or debt to pay shareholders. Other companies do the same thing: Between 2006 and 2015, 18 pharmaceutical companies in the S&P 500 spent 11% more on payments to shareholders than on research and development.
Research by economists Öner Tulum and William Lazonick shows that Pfizer generated most of its revenue by acquiring companies that already had drugs on the market; relatively little revenue came from new drug development. Since 2001, only four internally generated products have created significant revenue for the company.
In 2017, as Pfizer jacked up the price of a number of its prescription products, it did the same with then-CEO (and now chairman of the board) Ian Read’s salary: a 61% pay raise that put his annual compensation just north of $27 million. And that salary doesn’t come close to topping the list of pharmaceutical CEO pay.
Pfizer, like other pharmaceutical firms, has invested a lot in peddling the myth of expensive drugs driven by research costs, whether at a February hearing on Capitol Hill or through a multimillion dollar ad campaign that’s convinced 69% of Americans that this fable is true; or through $11.4 million in lobbying in 2018 alone.
While Pfizer executives and shareholders are patting themselves on the back on Thursday, we need to ask ourselves how to change this level of corporate extraction at the price of American families. Fortunately, there is no shortage of common-sense reforms available.
First, we must curb the concentration of power across the economy, and in the pharmaceuticals industry in particular, that makes it possible for companies like Pfizer to extract enormous wealth from people who need medicines. We can do this by raising taxes to restructure incentives for industry executives who take home record pay. We can reform and enforce antitrust laws to break up monopoly power in the pharmaceutical industry, which undermines the free market. We can curb or outlaw stock buybacks, which Pfizer uses extensively, to pay shareholders and executives at the expense of delivering affordable and quality pharmaceuticals for the American people.
Second, we must deploy government power in new, more expansive ways. Government could establish priority areas for pharmaceutical research, as it does in defense and other areas. It can rewrite the rules that the pharmaceutical industry abides by when government research dollars result in new drug innovations, so patients are no longer paying twice for the medicines created through government research dollars. And the government could consider directly producing certain drugs to compete with the private market.
The need for reform is clear and popular support for lowering drug prices is growing. In moving these proposals forward, we have a chance to create a society in which having fair and affordable access to the life-improving medicines people need supersedes outlandish profit for a few. The result would be a healthier America, and a healthier American economy.
George Goehl is director of the nonprofit People’s Action. Felicia Wong is the president and CEO of the Roosevelt Institute.
https://www.statnews.com/2019/04/24/pfizer-shareholder-meeting-pharmaceutical-industry/?

Our View: Mainers should have access to Canadian drugs

Until the U.S. government offers the kind of protection that other countries provide, Maine should do what it can. 
by The Editorial Board - Portland Press Herald - April 25, 2019

Until the U.S. government offers the kind of protection that other countries provide, Maine should do what it can.
When Maine seniors started boarding buses for Canada more than 20 years ago, the outrageous cost of prescription drugs became national news.
They weren’t just making a political statement. They were really filling prescriptions, buying the same life-saving medicines on the other side of the border that they could not afford to buy here.
It was scandalous in those days to hear from people who would cut their pills in half instead of taking the prescribed dose, or choose between filling a prescription and buying food while the drugmakers raked in profits. And it should be scandalous today when we hear the same kinds of stories. There have been numerous efforts since the late 1990s, including the creation of Medicare Part D, an optional insurance policy that covers some prescription-drug costs, but the fundamental problem remains the same.
Why are drugs more affordable in Canada? Canada regulates drug prices, and the United States doesn’t. So even when you are buying an American-made product, you pay much less for it in Canada. Senate President Troy Jackson, D-Allagash, has introduced two bills that would take the bus-trip concept to bigger level.
L.D. 1272 would create a wholesale importation program for the whole state, to give Mainers access to the drugs at Canadian prices, typically 30 percent less than in the States. The other bill, L.D. 1387, would create a program for individuals to purchase drugs from Canada without violating federal law.
Neither of these approaches is perfect. For one thing, Canada has the highest drug prices in the developed world after the United States. The price controls in other countries are much more effective at making prescription medications widely affordable.
That’s one of the reasons given by the pharmaceutical industry for charging such high prices in the United States. They claim that because their revenues are limited in other countries, they have to charge more here to make enough money to afford the trial-and-error of developing new drugs. But they neglect to point out that domestic sales also contribute to high profit margins and lucrative executive compensation. And it’s not a free market for their customers, who often can’t refuse to buy without putting their health at risk, and can’t always switch to a competitor’s product because many of the most effective drugs are patent protected.
Buying more drugs from Canada won’t solve the underlying problems that U.S. consumers face, created by the federal government’s refusal to do what other nations do to protect the health of their people and control prices. But until Washington decides to act, there are a few things that states can do.
The bus trips to Canada called attention to the problem two decades ago. Jackson’s bills to bring the whole state on a virtual bus ride across the border could again put this issue at the center of the national debate, while providing Mainers with some relief from high drug prices.
https://www.pressherald.com/2019/04/25/our-view-mainers-should-have-access-to-canadian-drugs/

Critics take aim at plan to allow prescription drug imports from Canada

Pharmacists and others warn of unintended consequences in a bill that aims to reduce medication costs in Maine. 
by Joe Lawlor - The Portland Press Herald - April 24, 2019

Pharmacists and some health experts are opposing a proposal to permit the bulk importation of drugs from Canada to Maine, arguing that it could result in unsafe drugs being brought into the state and have unintended consequences, such as causing drug shortages in Canada.
Proponents of Senate President Troy Jackson’s bill say those fears are unfounded, and believe it could be one of several proposals that would help to rein in prescription drug prices in Maine. The bill will go before the Legislature’s Health Coverage, Insurance and Financial Services Committee on Wednesday. If approved, the state would designate a wholesale purchaser of drugs from Canadian wholesalers.
Retail prescription costs per capita were $1,100 in the United States versus $669 in Canada in 2016, according to research by The Commonwealth Fund. Prescription drug prices in Canada are regulated by a national board, while no such system of price controls exists in the United States.
Kenneth McCall, past president of the Maine Pharmacy Association, said that trying to use the Canadian health care system to reduce drug prices in Maine is a flawed model.
“We all are looking for strategies to lower prescription drug prices, but let’s fix our own problems rather than relying on a country (Canada) that’s one-tenth the size of the United States,” McCall said. The Canadian Pharmacists Association opposes similar proposals from the U.S. at the federal level, saying it could cause drug shortages in Canada.
UNCHARTED TERRITORY
There is no real-world example of what might happen if Maine lawmakers approved and Democratic Gov. Janet Mills signed into law the wholesale bulk importation bill. Maine would be only the second state to approve such a measure, and the first, Vermont, is still awaiting federal approval before its law goes into effect. The Trump administration hasn’t yet signaled whether it will support Vermont’s efforts.
McCall contends that it would be difficult to ensure the safety of the drug supply. He said many of the drugs bought and sold in Canada come from overseas countries and are of dubious quality, and the number of unscrupulous sellers has skyrocketed in recent years.
The regulated supply of drugs in Canada is not the issue, McCall said. Instead, issues arise when sellers of prescription drugs in Canada – when advertising to U.S. customers – pretend to be selling Canadian drugs, but are actually peddling drugs of poor quality from other countries. He said many sellers do that now online to individual buyers, pretending to be hawking Canadian drugs.
McCall said to start a wholesale purchasing program from Canada, there would need to be “robust” state oversight in Maine, and he’s not sure that can be done and still provide a cost savings.
Also, McCall said there would be no recourse if Maine patients were harmed by drugs that do not meet U.S. safety standards.
“At the end of the day, we wouldn’t have any jurisdiction over a foreign entity,” McCall said.
BUILT-IN SAFEGUARDS CITED
Trish Riley, executive director of the Portland- and Washington, D.C.-based National Academy for State Health Policy, provided the model legislation for Maine, Vermont and several other states that are considering similar legislation.
Riley said the legislation has several safeguards built in to ensure that the drugs purchased from Canadian wholesalers would meet U.S. Food and Drug Administration standards, including testing for safety and to make sure the drug has the correct amounts of active ingredients.
She said the wholesale purchasing from Canada will only be used on drugs where there is a substantial cost difference between what Canadians pay and what a U.S. customer would pay – so the wholesale purchasing wouldn’t be used on generic drugs. Riley said she’s not worried about supplies in Canada, because wholesalers will work to meet the extra demand to make more money.
“It’s a market-based solution by using the market in Canada, where prices are controlled,” Riley said.
She added that the drug supply chain is already global, even without factoring in purchasing from Canada.
“If you go to Hannaford today to get your prescription filled, 40 percent of the drugs there are manufactured in some other country,” Riley said.
CONSULTANT: DEVIL’S IN THE DETAILS
However, Mitchell Stein, an independent, Maine-based health policy consultant, said drug manufacturers are not going to want to increase the volume of drugs going to Canada in a price-controlled setting when they can make more money selling to the more unregulated U.S. market.
“There is absolutely no reason to think they will increase the volume to provide more drugs than what Canada actually needs,” Stein said. “It sounds like a good idea, but the more you get into the details, the less realistic it sounds.”
Stein said more savings could be found if the United States focused on its own solutions to prescription drug pricing, rather than trying to piggyback off the Canadian system.
Other bills submitted by Senate Democrats that await committee votes would create a prescription drug payment board in Maine, regulate pharmacy benefit managers – the middlemen who can exclude certain medications from insurance plans – require more transparency in drug prices, and permit individuals to import drugs from Canada.
In addition, state Sen. Matt Pouliot, R-Augusta, has also sponsored a bill that would regulate pharmacy benefit managers.
https://www.pressherald.com/2019/04/24/pharmacists-oppose-drug-importation-from-canada-to-maine/

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