Sen. Bernie Sanders will focus on high health care costs as head of the HELP committee
Next month, Senator Bernie Sanders will become chair of the Senate Health Education Labor and Pensions (HELP) committee. HealthcareDive reports that, in that role, among other things, Sanders will focus on high health care and prescription drug costs as well as elder care.
In a recent video, Senator Sanders spoke of the huge profits in the pharmaceutical industry at the same time that Americans are going without critical drugs because they are unaffordable; many are dying. The Inflation Reduction Act is a first step towards reining in high drug costs for people with Medicare. It gives the government some power to negotiate drug prices for the 60 most expensive drugs over the next several years, beginning in 2026.
But, Senator Sanders points out that the government’s prescription drug negotiating power is quite weak and explains that Congress has a lot more to do to rein in drug prices. As I see it, Congress should immediately open its borders to drug importation from verified pharmacies around the world and require insurers to cover imported drugs prescribed by treating physicians. That is not a long-term solution to high drug prices, but it is a likely way to put downward pressure on drug prices quickly and help ensure that Americans can afford their medicines. Americans usually pay many times what residents of other wealthy countries pay for prescription medicines.
The Inflation Reduction Act also caps annual out-of-pocket drug costs for people with Medicare at $2,000 beginning in 2025.
Senator Sanders said the HELP committee would hold many hearings with health care and pharmaceutical company executives. Senator Wyden, as chair of the Finance Committee, has focused on the pharmaceutical industries’ failure to pay corporate taxes through international tax law shenanigans.
Private equity buying up orthopedics practices
Harris Meyer reports for Kaiser Health News on the rise in private equity ownership of orthopedics practices. At least some large orthopedics practices have not been able to stay afloat financially. Instead of selling themselves to large hospital systems or health insurance companies, they have allowed private equity firms to buy them. Based on what we know about private equity ownership in dental care, eye care, emergency room services and more, Americans should be prepared to see costs increase and quality of care suffer for orthopedics services.
Tip: If you need orthopedic surgery, do your homework. Make sure that the specialist you choose puts patients first and is not being directed to deliver less than you need.
In 2021, orthopedic surgeons earned an average of $634,000. Private equity ownership gives these specialists a big upfront payment. In theory, private equity ownership could reduce orthopedic surgery costs through reliance on lower cost outpatient surgery out of a hospital system. In practice, it is more likely to lead to higher costs for both insurance companies and patients.
One study published in JAMA Network looked at 578 private equity owned dermatology, gastroenterology, and ophthalmology physician practices. Within two years of private equity ownership, charges were 20 percent more than at places that were not private-equity owned. There is also data showing that physicians working for private equity firms are often pressured to do more with less help, which could mean poorer quality care.
One chief medical officer of an orthopedics group that refused to sell themselves to a private equity company said that the only goal of private equity is to make greater profits and then sell. The only way they succeed is by expecting physicians to work more and do less.
Private equity is still relatively new to medicine. Companies only began buying orthopedics practices in 2017. But, many private-equity owned orthopedics practices are now for sale again. Georgia, Texas, Florida and Colorado, along with eight other states have seen the greatest buyout of orthopedic practices by private equity.
Why is private equity looking at orthopedic practices? You guessed it. It’s following the money. Patients spend almost $50 billion each year for orthopedic surgery to treat back pain alone! Then, there’s all those knee and hip replacements, which many people need. One knee replacement can easily cost more than $40,000.
Some physicians, whose businesses are now owned by private equity, claim that they are still in charge. They don’t see any changes. If you ask me, if they haven’t yet, they will. It’s only a matter of time.
One expert explains that private equity is looking at short-term returns. That likely means that in a capitated payment system, where the physicians are paid a flat fee for their work, physicians will do less than people need. In a fee-for-service system, they will do more than needed.
Right now, the future of independent physicians looks pretty grim.
Medicine at the Mercy of Wall Street
The drug price controls in the recently enacted Inflation Reduction Act (IRA)—touted as the first-ever defeat for the drug industry lobby in Washington—offer the latest example of how the industry manages to outrun its harpooners. While the new law finally gives the federal government the power to negotiate drug prices for seniors (who constitute just a third of the nation’s drug spending), intense industry lobbying limited its reach to just 10 drugs starting in 2026, growing to only 20 drugs in 2029.
The law does not apply to drugs purchased by private payers, who cover more than half the population. It does nothing to rein in launch prices for new drugs, which have increased from $1,376 in 2008 to $159,042 in 2021. (The median price for drugs launched in 2022 has reached a staggering $257,000 per year!) And its hard-to-enforce provision giving the government the right to claw back price increases above the inflation rate will undoubtedly be subjected to extensive industry opposition during the rule-making process and eventually in the courts.
The industry’s public posture during the debate leading up to passage of the IRA was little changed from its historic justification for high drug prices. Their argument, reduced to its essence, is a form of blackmail targeting patients with chronic and incurable diseases. PhRMA, the industry’s lobbying group, repeatedly says that without high prices, industry investment in research and development will decline and medical innovation will wither. It is the same argument the industry made in the late 1950s when Senator Estes Kefauver held hearings on the antibiotic cartel; in the early 1990s when the first biotechnology drugs came to market at exorbitant prices; in the mid-1990s when AIDS activists protested the high price of the new medications that turned their death sentence into a manageable disease; and in the early 2000s when President George W. Bush, anxious to eliminate any potential roadblock to his reelection, pushed through a Medicare prescription drug benefit with no constraints on industry’s pricing power.
But while the industry’s public posture hasn’t changed, its behind-the-scenes argument has shifted subtly in the past decade. Without abandoning its false claim to be the fount of innovation, its top executives and their enablers in think tanks, academia, and patient advocacy groups (mostly funded by the industry) have added the assertion that the high prices charged for the latest FDA-approved drugs are justified by the value they bring to patients and the economy.
The pharmaceutical industry’s lobbying group says that without high prices, industry investment in research and development will decline and medical innovation will wither. Their argument is a form of blackmail targeting patients with chronic and incurable diseases.
To back that claim, the industry applies cost-benefit analysis to pharmaceuticals. Using patient outcomes data gleaned from the clinical trials submitted for Food and Drug Administration approval of a new drug, industry economists measure the number of quality-adjusted life years (QALYs) gained by its use, calculate a net present value for all the personal and economic benefits accrued by averting downstream disease, and set a price that is slightly below that total. Voilà. Price justified.
It is that argument, and industry’s claim that its central role in the innovation process justifies their capturing the lion’s share of that value, that Dr. Victor Roy, a post-doctoral fellow at Yale University, effectively demolishes in his new book, Capitalizing a Cure. Roy’s doctoral thesis at the University of Cambridge conducts a deep dive into the development and marketing of Gilead Sciences’ Sovaldi, the hepatitis C drug whose $84,000 price tag for a 12-week course sent shock waves through patients, payers, the press, and the public after it was approved by the FDA in late 2013. Roy convincingly shows through this example how venture capital, Wall Street, and the industry’s top executives have turned small biotechnology firms and Big Pharma corporations into vehicles for extracting wealth from the health care system, even as these ostensibly health-promoting companies deny access to millions of needy people at home and abroad and undermine the financial well-being of patients and payers.
Roy begins his story with a familiar tale: how government-funded academic researchers were largely responsible for the development of the drug sofosbuvir, which Gilead later named Sovaldi. (I say familiar because I published a book on this subject in 2004 that covered medical innovation in the last quarter of the 20th century, which, full disclosure, Roy generously credits.) This government-to-industry development path is, if anything, even more central to the drug development process today than it was two decades ago. Government-funded research lies behind the development of the COVID-19 vaccines; the latest cancer therapeutics, like CAR-T; and new drugs for treating many rare diseases.
Roy also reminds readers that at the dawn of the neoliberal era, it was deliberate government policy to turn the fruits of its research over to private industry without any strings attached. The Bayh-Dole Act of 1980 allowed the National Institutes of Health and universities housing government-funded scientists to patent and transfer (for royalties, of course) their scientific discoveries, research tools, and drug candidates to private developers. The 1982 Small Business Innovation Development Act accelerated the process by creating small business innovation research (SBIR) grants, which primarily went to biotech start-ups to develop these new tools and drugs. The new laws weren’t limited to biomedicine, of course, but surveys of university technology managers show that four out of every five transferred patents and SBIR grants involve medical technologies. That’s not surprising, given that the NIH’s budget—$45 billion in 2022—consistently weighs in at about five times the size of the National Science Foundation, which funds all other sciences.
Hepatitis C is a bloodborne pathogen that causes liver disease. It is primarily found in current or former intravenous drug users and people at risk of sexually transmitted diseases. In the mid-1990s, it became a prime target for academic researchers who had been involved in the hunt for an AIDS cure because the genetic makeup of the two viruses is similar. These researchers included Emory University’s Ray Schinazi, who in 1996 created a biotech company called Triangle Pharmaceuticals to develop an AIDS drug discovered in his university lab called emtricitabine. By 2004, with emtricitabine showing great promise in clinical trials, Schinazi and his partners sold Triangle to Gilead Sciences for $464 million, laying the foundation for that company to become the leading purveyor of AIDS antivirals. Schinazi cleared a third of the $200 million lavished on emtricitabine’s developers through the sale of their start-up’s stock.
He used that capital to launch another company, Pharmasset, to develop drugs for other viral diseases, including a candidate for treating hepatitis C, which had also been developed with government grants. As Roy points out, the company’s name embodied its business strategy. The idea was to develop intangible financial assets—patents on promising drug candidates—that could then be sold to Big Pharma. Less than a decade later, Schinazi became a repeat winner in the biotech sweepstakes when he sold Pharmasset to Gilead for $11 billion, from which he cleared an estimated $440 million.
How could a small biotech company that had only one promising drug for hepatitis C—a disease that infected only 4 million Americans and 15 million people worldwide, only 30 to 40 percent of whom would develop liver disease—sell for that staggering sum? The only existing treatment, interferon, cost over $30,000 for its course of treatment. It only helped about half of patients and had severe side effects. In Pharmasset’s early efficacy trials, sofosbuvir had shown that it could clear the virus in well over 90 percent of patients. It was all but an assured bet for the Big Pharma company that bought it; and, given its greater efficacy and sharply reduced side effects, sofosbuvir could command a price that was more than twice that of interferon.
The drug’s eventual price had nothing to do the cost of development (Roy estimates that the government, Pharmasset, and Gilead spent less than $1 billion over the decade it took to develop the drug); the risks Gilead took; or the value the drug delivered to patients and the broader economy. Roy writes,
Gilead’s senior leadership saw their company as a late-stage acquisition specialist, buying compounds in their final steps of development and thereby taking control of potential future earnings streams just as the compounds neared and then crossed the regulatory finish line …
Gilead’s approach had by then become common across the industry. [Emphasis in original.]
Though from a science and regulatory perspective sofosbuvir was Secretariat, Gilead’s bet paid off like a long shot. Drug purchasers coughed up more than $46 billion in the first three years sofosbuvir-containing products were on the market—four times Pharmasset’s purchase price and 50 times the amount invested in R&D by all parties. “Gilead’s power to project this future drew on two sources: its anticipation of acquiring Pharmasset’s intellectual property and gaining monopoly power over prices; and its confidence that health systems could be compelled to pay more for a better drug,” Roy writes.
Only after Gilead set its price did it turn to the new argument that it reflected good value for payers and patients. For that, the company relied on high-powered health economists whom it funded in academia. Looking at the savings from reduced liver transplants and hospitalizations, one study, funded by Gilead and published in Health Affairs, estimated that giving sofosbuvir-based treatments for hepatitis C could generate $610 billion to $1.2 trillion in value to the U.S. economy and $139 billion in health care cost savings—even though people with advanced liver disease from hepatitis C rarely get liver transplants. Amitabh Chandra of the Kennedy School of Government at Harvard made a similar argument in the Harvard Business Review, where he also disclosed funding from Gilead.
Even as these academics were defending Gilead’s extraordinarily high price, the company was using the largest portion of its windfall to buy back stock, lavishly reward its top executives, and renew its hunt for new drug candidates on Wall Street. Meanwhile, federal agencies like the Veterans Administration, Medicaid, and the nation’s prisons had to ration access to the drug. The denials of care “disproportionately fell on those populations at the most risk for worsening hepatitis C as well as transmission of the infection: low-income patients and those with a history of injection drug use,” Roy writes.
Is there any evidence to suggest that the arrival of Sovaldi created significant value from a health care perspective? After all, it is a miracle drug. It wipes out the infection in almost all patients with only a three-month course of treatment. Yet, according to the Centers for Disease Control and Prevention, there are still anywhere from 2.7 million to 3.9 million people in the U.S. living with hepatitis C, only slightly below where we were a decade ago. Why? There are more than 100,000 new infections every year, in part because access is limited by the drug’s high price. Moreover, there were 9,236 liver transplants in 2021, the highest number ever, according to the United Network for Organ Sharing. The total has gone up in every year since the FDA approved sofosbuvir.
Venture capital has turned small biotech firms and Big Pharma corporations into vehicles for extracting wealth from the health care system, even as these ostensibly health-promoting companies deny access to millions of needy people at home and abroad.
In other words, by allowing publicly funded research to be turned into a privately held financial asset; by allowing venture capitalists and Wall Street to drive up the price of that asset; by allowing a private corporation to set a maximum price point for that asset; and by watching hired economists justify that price point using questionable value metrics, the U.S. health care system has created the ultimate unvirtuous circle. Pricing for value as Wall Street defined it made rationing inevitable and turned a significant breakthrough by medical science into a setback for both public health and fiscal sustainability.
Roy’s book concludes, as all would-be harpooners’ tales must, with an alternative vision for developing innovative medicines. First, reformers must break the cycle that allows academic scientists and their venture capitalist backers from turning publicly financed cumulative knowledge into monetizable assets through the patent system. Once patent control is turned over to biotech start-ups and big drug companies operating as acquisition specialists, the inevitable outcome is a system that maximizes returns to venture capitalists and the big firms’ stockholders and executives even as it ignores the needs of most patients, payers, and public health.
It also debases the scientific process by emphasizing the development of drugs with the greatest revenue potential, which, Roy notes, “reduces companies’ appetite for making the long-run and risk-laden investments needed to create breakthrough medicines.” Instead, too many companies invest their own R&D dollars into me-too drugs that replicate products already on the market. And, even when a breakthrough drug like sofosbuvir comes along, the patent system as presently constructed incentivizes firms to postpone development of improvements until existing patents expire, which in turn leads to the high prices, rationing, and patent gaming that maximize the revenue stream over the drug’s patent life.
Instead, Roy resuscitates a vision for developing innovative technologies that was first articulated by New Deal–era Senator Harley Kilgore of West Virginia. In contrast to the FDR science adviser Vannevar Bush, who thought the government should stick to basic science, Kilgore called for public financing of the entire development process and a patent system that protected government-financed inventions from private-sector profiteering. Roy calls for the creation of a publicly financed Health Innovation Institute that would take responsibility for developing government-funded inventions, all the way from perfecting the molecules to financing final clinical trials. The goal would be pricing them closer to their manufacturing costs so access and affordability were no longer problems.
The idea is not unique to him, nor is it far-fetched. Indeed, there are many examples where government has performed nearly every task involved in a drug’s development. These range from developing the process for mass production of penicillin during World War II to running trials for the earliest AIDS drugs to doing everything from start to finish for the first hormone replacement treatments for genetic mutation-caused rare diseases. Since the 1970s launch of the war on cancer, government has financed an extensive academic network for conducting cancer clinical trials. It remains to be seen if President Joe Biden’s newly created Advanced Research Projects Agency for Health at the NIH will include technology development as part of its mission.
The problem is not skill, it is political will. The one good thing you can say about the financialization of drug development is that it provides a huge incentive for private investors to invest over many years in biotech start-ups. R&D for new drugs takes a long time and, in most cases, does not pan out. To hedge against failure, venture capitalists take a portfolio approach. The gargantuan payoff from the one in 10 drug that succeeds not only pays for the failures, it provides a more than generous return for investors.
A government-run public option alternative would have to take a similar long-term approach—without the promise of huge returns other than improved public health and cheaper medicines. That requires permanent funding (perhaps a surcharge on all drug expenditures, something like the gas tax that funds roadbuilding) and insulation from political manipulation.
It also does not deal with the legacy problem that the public already pays far too much for many drugs. Here, I think, Roy is too dismissive of the nascent price controls in the IRA. The camel’s nose is inside the tent. The political capital needed to create an effective drug development agency is even greater than what it would take to expand the government’s drug price negotiating authority and eliminate patent gaming, two reforms that would provide a more immediate counter to the problem of drug prices that are just too damn high.
Health care: ‘Our current system is crumbling’
Re: “Health care: U.S. ‘system’ has failed” [Dec. 25, Northwest Voices]:
I am a registered nurse at a small community hospital working through this pandemic. I very much agree with a recent letter writer regarding our failed health care system. I also agree that our Medicaid reimbursements are not adequate for many hospitals to provide needed services to their communities.
The letter writer is correct, and the studies have all proven, that we can provide increased benefits for our state and country by moving to an expanded and improved Medicare for All health care system either at the federal or the state level, and save money.
How long will we continue to allow our health care dollars to enrich wealthy CEOs and to coerce our elected officials to further prop up such a failed health care system? In my career, the expansion of Medicare to all age groups has been on the table for the last 50 years. Our current system is crumbling in the aftermath of this pandemic. It doesn’t need more money funneled into it. It needs improved allocation of our resources and soon.
CEOs argue they deserve 18% raises, but are they truly essential? Enough is enough.
Kathryn Lewandowsky, BSN, RN, Arlington, Whole Washington board vice chair and One Payer States treasurer
Privatization Scam Threatens to Replace Traditional Medicare Altogether by 2030
Medicare Advantage serves private health insurers and investors at the expense of the public interest.
Many Americans know Medicare Advantage as the Medicare program heavily advertised during its enrollment periods, including its special enrollment period that ended just last month. The incessantly repeated television ad for Medicare Advantage, which has often been narrated by 1960s quarterback Joe Namath, is full of disinformation — and it’s a profitable scam for health insurers. The disingenuously named privatized program has all kinds of disadvantages compared to the traditional Medicare program that dates back to 1965. Medicare Advantage could more accurately be called Medicare Disadvantage, based on its track record:
- Medicare Advantage plans, now mostly investor-owned, cherry-pick the market for healthier enrollees who are likely to need less care, then skimp on care by denying necessary care; a 2021 inspector general’s report found an 18 percent inappropriate denial rate, most commonly for such imaging procedures as MRIs and CT scans.
- Despite advertising full access to physicians and hospitals, Medicare Advantage networks are usually restricted and subject to change; as a result, enrollees then pay more for “out-of-network” coverage.
- When patients become sicker and less profitable to private insurers, they are often disenrolled; then with new pre-existing condition(s), they often find it harder to get back on traditional Medicare, even with a supplemental Medigap plan, because of those additional pre-existing conditions.
- Private insurers regularly profiteer by getting chart reviews of enrollees to find additional diagnoses in order to increase their risk scores and overstate the severity of their illnesses, then “upcoding” their bills to gain higher reimbursements. Through this kind of risk adjustment, Medicare Advantage plans have cost taxpayers and the federal government $143 billion more than traditional Medicare over the past 12 years.
- After delaying or denying care to maximize profits, privatized Medicare Advantage plans frequently overbill the government by fraudulently billing for care that was not provided.
- According to the Commonwealth Fund’s International Health Policy Survey of Older Adults in 11 high-income countries, high-need older adults in the U. S. experience greater cost barriers to receiving care than in any of the comparison countries; Medicare Advantage plans do have an annual out-of-pocket cap, but it can be as high as $7,550!
In 2016, the Trump administration instituted a new little-known federal agency, the Center for Medicare and Medicaid Innovation, which has been moving enrollees, often without their consent, to for-profit middlemen known as Direct Contracting Entities (DCEs). Rather than saving money and supposed greater efficiency, they add to the cost of coverage by taking their own cut of profits.
As a redesign of the DCE model, the Centers for Medicare and Medicaid Services (CMS) has allowed an expanded ACO REACH (Accountable Care Organization Realizing Equity, Access, and Community Health) program to start on January 1, 2023, with more than twice the number of DCEs. This is a corporate agenda being promoted and accelerated by CMS, with the ultimate goal to privatize and replace traditional Medicare altogether by 2030, without even a vote in Congress. Despite all those good words in its title — equity, access and community health — the 35-year track record of Medicare Advantage has failed on all of those counts. According to a 2021 in depth review of its experience, privatized Medicare Advantage plans have “failed to meet their primary objective of controlling costs while preserving the quality of care…. Risk score gaming is today necessary for business success in MA … [but] it is extremely costly to continue to ignore the corrosive, insidious effects of this defective risk adjustment system.”
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The Big Five private health insurers (Aetna, Anthem, Cigna, Humana and United Health Group) already are being kept afloat at taxpayer expense. Overall, privatized Medicare and Medicaid account for more than one-half of the insurance giants’ annual revenue through overpayments. Beyond that, the private health insurance industry also receives about $685 billion a year in government subsidies, with that amount expected to double by the end of this decade.
Complaints to CMS about deceptive private sector marketing of Medicare Advantage more than doubled between 2020 and 2021. They led to an inquiry by the Senate Finance Committee that examined information from 14 states. The committee’s final report was damning. It found widespread television advertisements that claimed that seniors were missing out on benefits (even for higher Social Security benefits), that their physicians would be covered by their Medicare Advantage plans and avoided mention about access and cost problems. It also found that seniors shopping in local grocery stores were being approached by insurance agents asking them to switch their Medicare coverage over to a Medicare Advantage plan. Even worse, the committee learned that some insurance agents across states were changing vulnerable seniors’ and people with disabilities’ health plans without their consent!
It is clear from the above that Medicare Advantage plans fail patients, their families and taxpayers. This is a profit-driven scam serving private health insurers and investors at the expense of the public interest, and if perpetuated, could threaten the future of traditional Medicare, which has served our seniors well for some 57 years. We need to shine a bright light on this continuing scam and advocate for a widespread call to action for reform in this new year.
Medicare Begins to Rein In Drug Costs for Older Americans
Reforms embedded in the Inflation Reduction Act will bring savings to seniors this year. Already some lawmakers are aiming to repeal the changes.
by Paula Span - NYT - January 14, 2023
A retired nurse in Philadelphia, Mr. Lubin relies on Medicare for health coverage, including a Part D plan to cover drug expenses. Yet his out-of-pocket costs kept mounting, including a deductible of $480, monthly supplies of two forms of insulin, and higher prices once he entered the “coverage gap.” His total insulin tab in 2022: $1,582.
So Mr. Lubin, 68, was cheering for the sprawling federal Inflation Reduction Act, which among other provisions called for capping insulin prices for Part D beneficiaries at $35 a month, with no deductible. He signed petitions circulated by the American Diabetes Association and the Pennsylvania Health Access Network asking Congress to vote yes.
“My income is definitely down from when I was working, and the expenses go up,” he said. “It’s difficult.”
But Mr. Lubin also supported the bill because, after working in an intensive care unit for years, he had seen patients suffer the serious consequences of diabetes when they could not afford their prescriptions.
“You’d take their history and find out that they were rationing their insulin or couldn’t take it at all,” he recalled.
In August, Congress passed the bill, and President Biden signed it. Mr. Lubin’s out-of-pocket insulin costs for 2023 will fall to $630. The legislation establishes other requirements to lower drug prices for Medicare beneficiaries, about three-quarters of whom have Part D plans.
“It’s one of the biggest changes to the way Medicare deals with prescription drugs,” said David Lipschutz, associate director of the Center for Medicare Advocacy. “It signals lawmakers’ willingness to take on a very powerful lobby.”
Some provisions took effect on Jan. 1; others will phase in over several years. “Collectively, these represent substantial out-of-pocket cost savings, especially for those who use expensive drugs,” said Juliette Cubanski, deputy director of the Kaiser Family Foundation’s Medicare policy program. They could also bolster Medicare by reducing its spending.
Beneficiaries will see three significant changes in 2023.
The first is the $35 monthly cap on insulin, which will affect more than a million insulin users who have Part D through Medicare Advantage plans or free-standing plans purchased along with traditional Medicare.
From 2007 to 2020, beneficiaries’ aggregate out-of-pocket insulin costs quadrupled, even though the number of users only doubled. They spent an average $54 a month on insulin in 2020, according to a Kaiser Family Foundation analysis.
The cap will save average users at least 35 percent and applies immediately, without requiring them to first pay the Part D deductible, which amounts to $505 in 2023. About 10 percent of Part D insulin users, like Mr. Lubin, paid more than $1,300 out of pocket in 2020 and will save much more.
Although all Part D plans must cap the cost, they aren’t required to offer every form or brand of insulin.
“People should make extra sure their plan isn’t dropping their insulin from the formulary,” Dr. Cubanski said.
But Medicare’s open enrollment period ended on Dec. 7, and its online cost comparison tool doesn’t reflect changes mandated by the new law, which was passed after Part D plans had already set prices.
“People might have made different choices if they’d had more information,” Dr. Cubanski said.
So Medicare has begun a one-time special enrollment period through the end of 2023, allowing insulin users to drop, add or change Part D plans. Beneficiaries have to call the 1-800-MEDICARE number to make a switch. Counselors at State Health Insurance Assistance Programs can also help with the decision.
In the second major change, adult vaccines covered by Part D, typically offered at pharmacies, are now free, without deductibles or co-pays, just as the flu and pneumonia vaccines (covered by Part B) have been.
That will in particular improve access to the shingles vaccine, the most expensive adult vaccine. In 2018, the Kaiser Family Foundation reported, Part D enrollees paid $57 per dose out of pocket — and each recipient needs two doses.
Although shingles risk rises with age, only 46 percent of adults over age 65 had been vaccinated by 2020, the Centers for Disease Control and Prevention reported. Rates were much lower among Black and Hispanic older adults.
“It’s disappointing because this is a spectacularly effective vaccine,” said Dr. William Schaffner, an infectious disease specialist at Vanderbilt University Medical Center. Shingrix, the current vaccine, is about 90 percent effective, and a new study has found that its protection persists a decade after vaccination.
A serious disease in itself, shingles can also cause the lingering nerve pain called post-herpetic neuralgia. “It varies from being annoying to being absolutely life-changing,” Dr. Schaffner said.
With Shingrix available at pharmacies without charge, “the receptivity to vaccination for older adults will increase substantially, especially among underserved populations,” he predicted.
Also free: hepatitis A and hepatitis B vaccinations, and Tdap, which protects against tetanus, diphtheria and pertussis (whooping cough).
The third major change: When prices for drugs covered under Part D, and some under Part B, increase faster than the inflation rate, the law now requires drug manufacturers to pay rebates or face stiff penalties.
Although those rebates will go to Medicare, not to individuals, “if you’re responsible for a portion of a drug’s cost and there are limits on how much that can increase, in theory your costs should decrease,” Mr. Lipschutz said.
It will take months for Medicare to determine which price increases will prompt rebates and how much the rebates will amount to. But the Congressional Budget Office has estimated that this provision will save Medicare more than $56 billion over 10 years.
Medicaid has employed a similar strategy since 1990. “It definitely has an effect on keeping spending in check,” Dr. Cubanski said. “The hope is that it will have the same effect for Medicare.”
The changes in subsequent years will be more dramatic.
In 2025, Medicare will set a $2,000 annual limit on out-of-pocket spending for Part D beneficiaries. “Nowadays, a lot of drugs can cost $500 or $1,000 a month,” Dr. Cubanski said. “Or maybe you take 10 medications, and that adds up to high out-of-pocket costs.”
A kind of cap will take effect even sooner, in 2024. That’s when Medicare will eliminate the 5 percent co-pay that beneficiaries are responsible for once they pass the catastrophic expenditure threshold, effectively limiting out-of-pocket costs to about $3,250. The $2,000 cap takes hold the following year. Access to low-income subsidies will broaden, as well.
Probably the most significant policy change is that the new law requires Medicare to begin bargaining with drug manufacturers, “the first time the federal government is not just allowed but required to negotiate prices on behalf of Medicare beneficiaries,” Dr. Cubanski said.
Starting in 2026, the prices of 10 brand-name drugs covered by Part D, selected from those with the highest Medicare spending, will reflect those negotiations. The drugs must have been on the market for several years with no generic or biosimilar competitors.
Medicare will provide negotiated prices for 15 additional drugs the following year, another 15 in 2028 and 20 each year thereafter. Negotiated prices for selected Part B drugs will be available in 2028.
Given the thousands of covered drugs, “it’s a pretty modest proposal when it comes to restraining the cost,” Mr. Lipschutz said. Nevertheless, he added, “the pharmaceutical industry is likely to try to undermine this law — it will be looking for loopholes and escape hatches.”
Republicans in Congress, nearly all of whom voted against the Inflation Reduction Act, have already introduced legislation to repeal the measures intended to lower drug prices, and supporters are braced for court challenges, too.
But for now, the law is in effect. “It can give people peace of mind,” Dr. Cubanski said. “They won’t go bankrupt or go into medical debt to afford the prescriptions they need.”
https://www.nytimes.com/2023/01/14/health/medicare-drug-prices.html
Nurses Are Burned Out and Fed Up. For Good Reason.
by Lydia Polgreen - NYT - January 18, 2023
It is enraging but not particularly surprising that our health care system is failing the most essential of its workers. Nurses are the keystone holding up our rickety and raggedly uneven health care system. We desperately need more of them, but we have created a health care system — indeed, a broader society — that, as if by design, devalues them and takes them for granted. Like workers in other female-dominated professions in the care economy, nurses are spoken of, often with a whiff of condescension, as heroes. But just like teachers, social workers, health aides, day care workers and mothers, we sure don’t treat them that way.
In the early days of the Covid-19 pandemic, America’s nurses were rightly praised for the central role they played. But nurses are burned out. Many are simply leaving the profession. Thousands across the country are doing what the nurses at Montefiore and Mount Sinai in New York City did last week: go on strike.
Their No. 1 demand is not more pay or better benefits, the traditional stuff of labor negotiations. Instead, they want hospitals and nursing homes to hire more nurses and commit to set ratios of patients to nurses, something institutions have long resisted, in order to reduce their workload and increase patient safety.
In a major victory for the nurses’ union, Mount Sinai and Montefiore medical centers, two of the biggest in New York, agreed last week to do just that, ending the strike in three days.
Given how heavily regulated and bureaucratic America’s health care system is, it may come as a surprise that hospitals aren’t legally required to have a certain number of nurses on hand per patient. Especially since similar rules are in place in other highly regulated industries. Federal regulations require a strict minimum number of flight attendants on each flight depending on the type of aircraft. If the airline is even one short, the plane remains on the tarmac.
Yet nurses in an intensive care unit, a cancer ward, an emergency room or a labor and delivery ward can routinely find themselves juggling many more patients than common sense would suggest they could care for, never mind best practices recommended by medical experts. One striking nurse I interviewed last week told me that he routinely had to juggle 15 to 20 patients, significantly more than the recommended number. Only California regulates the ratio of nurse staffing in every hospital unit. Efforts to expand this practice elsewhere have failed.
This is not a problem created by the pandemic. For years America has been grappling with a nursing crisis, which is now peaking just as our health care system faces perhaps the biggest challenge in its history: the relentless care needs of the aging baby boomer generation.
Yet at precisely this moment, when demand for health care is surging and pay for nurses is rising, tens of thousands of nurses have already fled the profession. Even before the pandemic, surveys showed that roughly half of nurses reported experiencing burnout and one in four were planning to leave their job in the next year. Now it is about one in three. By 2025, the U.S. health care system could be short as many as 450,000 nurses.
We have known for a long time that inadequate nurse staffing leads to more patient deaths. In a 2002 peer-reviewed study, researchers found that each additional patient assigned to a hospital nurse increased the likelihood of death by 7 percent. And yet understaffing is the rule, not the exception.
How did we get here? America spends more on health care per capita than any other developed nation, but what we get in return is a highly uneven set of health outcomes. We pride ourselves on leading scientific advancement of medicine, and the quality of specialists who treat serious illness requiring advanced care is envied the world over.
But the United States is near the bottom of the list of developed nations on some of the most common health problems, like asthma, diabetes and heart disease. It is a scandal that America’s maternal mortality rate is more that double that of many other wealthy nations. There are many factors that lead to these poor outcomes, many of them systemic, like poverty and racism. But a major reason we are sicker and live shorter lives on average than people in other rich nations is our lack of access to the kind of basic, primary care and monitoring that is the bedrock of nursing.
“It’s not a sexy thing, but that’s really what we do day in and day out: Control the traffic and be the beacon for problems, and get the right people in the room when something’s going wrong,” said Christopher Friese, a professor of nursing at the University of Michigan.
Hospital administrators say they are desperate to hire more nurses. Mount Sinai and Montefiore, for instance, have hundreds of openings they have not been able to fill. Part of the problem is that there just aren’t enough nurses who want to work in hospitals, largely for the reasons I’ve outlined: overwork and a feeling of futility from not being able to provide adequate care. This leads to a vicious cycle, as nurses flee tjobs in hospitals or profession altogether early in their careers, making it all the more difficult to attract new ones.
Hospitals operate under the brutal and confounding economics of American health care. Medicare and Medicaid reimbursement rates are set by the government, and, according to the hospitals, don’t cover the actual cost of care. Private insurance companies negotiate to pay as little as they can, frequently creating perverse incentives that skew care toward expensive, high-tech testing and procedures and away from the labor-intensive basics of primary care. So when it is time to cut costs, administrators inevitably look at labor, and nurses almost always make up the biggest work force, said Alexi Nazem, a physician and the chief executive of Nomad Health, a health care staffing company. Our system treats nurses more as a cost center than a value creator, so that the goal in too many cases becomes as few nurses as possible caring for as many patients as possible.
That is incredibly shortsighted, Linda Aiken, a professor of nursing at the University of Pennsylvania, told me. In 2021, she and a group of researchers published a study examining proposed legislation in New York that would require hospitals to meet minimum nursing staffing ratios. They studied a group of Medicare patients in New York and found that better staffing ratios could have prevented more than 4,000 deaths and saved upward of $700 million in medical costs over a two-year period — a conservative estimate given the scope of the study.
But the hospital industry lobbied hard against the proposed bill, arguing that hospitals need more staffing flexibility. According to the Healthcare Association of New York State, an industry group, four of five hospitals in the state are either losing money or operating on unsustainable margins.
“Hospitals are pretty much driven by their balance sheet, and not over the long term,” Aiken told me.
The version of the New York legislation that ultimately passed did not include fixed staffing ratios, mandating instead that a committee of nurses and hospital administrators work together to set ratios. If they cannot agree, the law permits the hospital to unilaterally impose its own staffing plan.
This is a real missed opportunity. Like many caring professions, nursing has long been undervalued and taken for granted. It is not a coincidence that these jobs, like so many others that involve caring for others, are performed overwhelmingly by women, though the number of male nurses has been growing.
Gabriel Winant, a labor historian at the University of Chicago who has written a book about health care, said that the failure to value care work of all kinds hurts everyone: “The only way in our society people get access to care is: one, a woman does it for free through the family; or two, an industry figures out how to make money off of it.”
The pandemic showed us all how frayed and unsustainable our systems of care are. Nurses sit at the top of the care hierarchy, and they have a big role to play in transforming the way we value care work, Winant said.
“We could imagine nurses at the leadership of a broad, small-d democratic coalition or movement for higher quality care for all,” he told me.
We spend a lot of time in our politics talking about the need for meaningful jobs that support a middle-class life. It is hard to imagine a more meaningful job than nursing. But to get people interested in doing this job, and sticking with it for the long haul, we need to invest in making it sustainable as a long-term career, imbued with the respect and dignity it deserves. Our lives depend on it.
https://www.nytimes.com/2023/01/18/opinion/nurses-strike-pay-staffing-ratios.html
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