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 Tag: prescription drugsOur newsletter features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. It is emailed in an HTML format from the galen@galen.org email address, via Constant Contact, and you may have to adjust your email settings and junk mailbox to ensure that you don’t miss an issue.NewslettersJuly 25, 2008
A Crystal Ball?House action on changes to government health programs this year foretell more sweeping changes that are likely to come next year if Democrats make expected gains in the November elections. First example: Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, plans to introduce a bill soon that will extend price controls in the Medicaid program to some private Medicare Part D prescription drug plans. The legislation would target the plans that serve the six million people who qualify both for Medicare and Medicaid. House action on changes to government health programs this year foretell more sweeping changes that are likely to come next year if Democrats make expected gains in the November elections.First example: Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, plans to introduce a bill soon that will extend price controls in the Medicaid program to some private Medicare Part D prescription drug plans. The legislation would target the plans that serve the six million people who qualify both for Medicare and Medicaid. Waxman released a report yesterday saying that U.S. drug manufacturers are reaping "windfall" profits because Medicare's private prescription drug benefit plans pay more for the same drugs than the price-controlled Medicaid program does. Rep. Thomas M. Davis III of Virginia said that Waxman's plan would be a "short-lived and painful" way to capture savings. He and others warned that such price controls would slash industry spending on research and significantly curtail development of new drugs. They argue that the Part D benefit is costing seniors and taxpayers much less than expected, largely because of the forces of private competition. According to the Department of Health and Human Services, the average senior is paying $25 a month in Part D premiums this year, 40% below the original estimate of $41, and beneficiaries are saving an average of $1,200 a year in drug spending. Compared to original projections, the cost to the taxpayers of the new drug benefit is $243.7 billion, or 39%, lower over 10 years than original estimates. A minority report said that moving those dually eligible for Medicare and Medicaid back to Medicaid drug coverage "would likely be opposed by advocates of low-income seniors, dual-eligible seniors, and states" because they have a better drug benefit under Part D. "While the Medicaid program is required to cover a broad array of drugs, states have responded to budgetary concerns by using a number of tools that effectively limit access to certain prescription drugs or quantities of drugs." But, as Congressional Quarterly reported yesterday, "The change proposed by Waxman would strike at the heart of the 2003 law, which relies on competition between private plans rather than government-mandated discounts, the tool used to keep Medicaid prices down, to control prescription drug spending in Medicare." Other actions show the lure of Congress to expand government control over the health sector with, in many cases, significant support from Republican members:
Grace-Marie Turner Recent News Articles and Studies State Fiscal Relief: Protecting Health Coverage in an Economic Downturn State Fiscal Relief: Protecting Health Coverage in an Economic Downturn Robert B. Helms, American Enterprise Institute The congressional proposal to temporarily boost the Federal Medical Assistance Percentage (FMAP) to the states is misguided, writes AEI's Robert Helms in his testimony before the House Energy and Commerce Subcommittee on Health. The open-ended nature of the FMAP formula creates a set of perverse incentives that encourages states to engage in accounting and taxing schemes to increase federal funding rather than trying harder to improve the efficiency and medical effectiveness of their programs, writes Helms. The proposed temporary increase in the FMAP does nothing to reform these perverse incentives and, in fact, makes them worse by rewarding this kind of behavior with an even higher matching rate, he writes. If additional assistance to the states is needed, it should be made available in the form of a fixed grant, concludes Helms. Further, if the funds could be allocated to the states on the basis of their economic performance and their populations of the poor and the disabled, the chances of improving the health and well-being of our most vulnerable populations would be greatly improved. Legislation should be put forward that would require states to post their Medicaid patient encounter data on the Internet for all to see, writes Jim Frogue of the Center for Health Transformation. This is administratively simple, cheap, and would have a profoundly positive impact on the quality of care delivered via Medicaid. In addition, it would dramatically increase accountability for how Medicaid dollars are spent thereby decreasing the likelihood that state leaders would return to seek still more money from Congress, writes Frogue. American Cancer Care Beats the Rest David Gratzer, Manhattan Institute A study to be published in the August issue of Lancet Oncology finds that U.S. medicine bests the cancer treatment available to people in 30 other countries, writes Gratzer. The Concord study compares five-year cancer survival rates for several malignancies and finds that the U.S. leads in the field of breast and prostate cancer. The results are in line with a study published in the Lancet last August, which compared American and European care and found that the U.S. fared better in 13 of the 16 cancers studied. Five-year survival rates for cancer care in men, for example, are 45% in England but 60% in the U.S. The British lag behind American survival rates because screening standards are different, writes Gratzer. In the U.S., internists recommend that men 50 and older get screened for colon cancer; in the U.K.'s National Health Service, screening begins at 75. British patients also wait much longer to see specialists. Further, novel drugs offered here often aren't available there, writes Gratzer. For instance, Avastin, a drug for advanced colon cancer, is prescribed more often in the U.S. than in the U.K., by some estimates as much as ten-fold more. Little Bang for the Buck: Is the Tax Code to Blame for the Paltry ROI on U.S. Healthcare Spending? Economic Research Initiative on the Uninsured, 07/08 Harvard Economics Professor Katherine Baicker, who served as a member of President Bush's Council of Economic Advisers, discusses the reasons for the disappointing return the United States gets on its health care spending, the need for tax code reforms and other changes that might boost that return, as well as the need for policymakers to look at health care spending and universal coverage together. "We need to address the problem of rising costs and the problem of the uninsured together. Proposals that focus exclusively on getting people covered by insurance run the risk of not being able to afford that coverage tomorrow if costs rise. Similarly, policies that focus just on containing costs will miss opportunities to promote much better health and more efficient use of health resources by getting people insured," said Baicker. "We should focus on policies that get higher value health care, which might then end up spending more on some people, spending less on other people…There will be fundamentally hard choices that have to be made, and policy makers have to think about who is going to make those choices. Somebody -- individuals, the government, employers, insurers -- has to decide how to allocate scarce resources. We want to set up a system where we're devoting resources to producing as much health as we can." Health Plan From Obama Spurs Debate Kevin Sack The dollar values that Sen. Barack Obama has attached to individual components of his health plan are beginning to attract scrutiny from health analysts and economists, writes The New York Times. His words about lowering "premiums" by $2,500 for the average family of four have been fairly consistent, but the health policy advisers who formulated the figure say it actually represents the average family's share of savings not only in premiums paid by individuals, but also in premiums paid by employers and in tax-supported health programs like Medicare and Medicaid. A number of health policy experts have also questioned whether the $2,500 projection is either fiscally or politically realistic, writes the Times. "There is no easy money because, as the saying goes, one person's fraud and abuse is another person's income," said AEI's Joe Antos. "I wouldn't think that four years or eight years or probably 10 years will be enough to see numbers of that sort." You Get What You Pay For: A Global Look at Balancing Demand, Quality, and Efficiency in Healthcare Payment Reform PricewaterhouseCoopers' Health Research Institute, 07/08 As the pressure to control health spending increases, payers and governments face the difficult challenge of balancing quality, efficiency, and demand through payment reform, according to a report from PricewaterhouseCoopers' Health Research Institute. Key findings:
Towers Perrin, 01/08 Health care costs for U.S. employers will increase by 6% in 2007, according to Towers Perrin, a global consulting firm. The survey also finds that employers are continuing to explore account-based health plans, such as HSAs, as an attractive solution to control rising costs. Approximately half (46%) of survey respondents had account-based health plans in place in 2007 and a further 7% plan to implement them in 2008. The survey also finds that the majority of employers (84%) surveyed disagreed that the U.S. should have an exclusively government-run system and more than 60% anticipate major federal health care reforms will become law during the next two presidential terms. Roughly three-quarters of respondents view the states as drivers of change and expect that over half of the state legislatures will enact significant reforms within the next decade. Upcoming Events Grace-Marie Turner speaking on the In The Booth Show Grace-Marie Turner speaking on the Morning News Watch Show Can Consumers Save Medicare? Rising Rates of Chronic Health Conditions: What Can Be Done? Grace-Marie Turner speaking on the Mark Maxon Show An Interstate Commerce Route to a National Market for Health Insurance Reforming the U.S. Health Care System: Supporting the Role of Individuals  Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at http://rs6.net/tn.jsp?t=bpphnpcab.0.0.xkzt75bab.0&ts=S0351&p=http%3A%2F%2Fwww.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.
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Medicare June 20, 2008
Wake-Up CallsKey members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." Highlights
A Federal Health Board? Key members of Congress got another wake-up call this week about the serious threat that rising government health spending poses to the future of our health sector — and our economy. During a summit sponsored on Monday at the Library of Congress by the Senate Finance Committee, Federal Reserve Chairman Ben Bernanke told members "The decisions we make about health care reform will affect many aspects of our economy, including the pace of economic growth, wages and living standards, and government budgets, to name a few." The numbers are, in fact, frightening. Bernanke said that "higher government spending on health care spending will, of necessity, require reductions in other government programs, higher taxes, or larger budget deficits." So what was the solution offered by the chairman of the Finance Committee? Sen. Max Baucus said he wants to create an "independent federal health board" to make controversial health policy decisions involving payments through Medicare and other health programs. Which would mean that Congress would delegate to an unelected board the authority to make decisions over hundreds of billions of taxpayer dollars to provide medical care for tens of millions of Americans. What kind of democracy is that? Federal health boards are common in single-payer and other government-dominated health systems. The Clinton plan in the 1990s had a federal health board. This is a very bad idea that needs to be put to rest immediately. Tackling difficult decisions is the responsibility of Congress. The good news is that members may be paying attention to the critical importance of this issue. But sound decisions need to be made in the open political arena about spending and benefits. Congress can't punt on this one, and it needs to get serious about reform while it still has options.
Single-Payer Health Care? And speaking of bad ideas, advocates of single-payer health care continue their push, especially on the Left Coast. California State Senator Sheila Kuehl, chairman of the state's powerful Health Committee, continues to press for her bill to enact a health plan in which the state would collect taxes to pay the health care bills for all Californians, and the state would pay doctors, hospitals, and other providers directly — hence the name "single payer." But she, too, got a wake-up call from a new study by the state's highly respected and nonpartisan Legislative Analyst's Office: It concluded, basically, that the single-payer health reform plan would be a fiscal train wreck. Sen. Kuehl's single-payer plan would be more than $42 billion in the red in the first year! The state would collect $167 billion with a new 12% payroll tax and similar levies on small business and even on investments but would be faced with an estimated $210 billion in health care bills in the first year of operation (2010). And the red ink would continue to flow, year after year. To close the shortfall, these taxes would have to be raised to at least 16%, and then higher every year after that. Has anyone told Silicon Valley about this? Talk about a jobs and economic killer! That familiar song would have to be changed to "Nevada, here we come!"
Market Innovations: Meanwhile, in the real world, common sense and market innovations are continuing: Assurant Health announced this week that it has partnered with TelaDoc Medical Services to provide its customers with access to a network of board-certified, licensed primary care physicians on demand, over the telephone, 24/7. Fast. Convenient. And cost effective. Isn't that what consumers are looking for in health care? And it also helps people living in rural and other medically underserved areas and those with transportation challenges — including $4-a-gallon gas. Assurant Health focuses on individual and small group health insurance and is a major player in the HSA marketplace. The company always is looking for ways to distinguish itself from bigger competitors — such as offering same-day decisions to people who apply for health insurance. Now it is taking innovation another step further by partnering with TelaDoc. TelaDoc, with one million subscribers, offers quick and convenient access to a physician consultation anytime of the day or night, 365 days a year. It helps people avoid the time and expense — and delay — of an office visit or a trip to the emergency room. And last year, Assurant announced that MinuteClinics would be covered as an in-network provider of health care services for policyholders. Can you possibly imagine these kinds of market innovations taking root in California under a single-payer system?
Medical Tourism: And finally, the American Medical Association, in its annual meeting in Chicago this week, issued its first-ever guidance for patients considering traveling abroad for medical care. The fledgling medical tourism industry is gaining interest and attention as hospitals around the world — in India, Thailand, Guatemala, and elsewhere — are marketing their new facilities and services. An estimated 150,000 Americans are expected to receive care overseas this year. The AMA acknowledges that people with limited resources and even companies searching for lower-cost medical care for their employees are turning to medical tourism. But the AMA lists nine principles to guide consumers venturing into medical tourism, including making sure the decision to seek care outside the U.S. is voluntary, that facilities are accredited, patients are well-informed about risks, and that there are provisions for follow-up care. The AMA also reportedly has amended its long-standing position on tax credits and health insurance. We'll investigate that and report back next week. Grace-Marie Turner Recent News Articles and Studies Medicare: Drifting Toward Disaster Medicare: Drifting Toward Disaster Health and Human Services Secretary Michael O. Leavitt HHS Secretary Michael Leavitt gave a visionary but chilling speech about the looming threat that Medicare presents to taxpayers, to our economy, and to other government responsibilities during a major forum jointly sponsored by the Galen Institute, The Heritage Foundation, and the American Enterprise Institute. "This is serious business involving trillions of dollars and the lives of hundreds of millions of people," he told a large audience assembled at the Newseum on April 29 in Washington, D.C. This is the full transcript of his important speech, with introductions by Grace-Marie Turner, Bob Moffit, and former Sen. John Breaux. Tom Miller of AEI, a co-host and panel moderator at the event, has written a paper elaborating on the remarks he presented. He argues that presidential candidates, policymakers, and the public do not yet want to deal with Medicare's fundamental problems. Until they do, he says, we need incremental action on many fronts to get better results for the money we will continue to spend in the traditional Medicare program. Grace-Marie Turner, Galen Institute The Service Employees International Union (SEIU), the AARP, the Business Roundtable, and the National Federation of Independent Business (NFIB) have joined together in a campaign called "Divided We Fail" to show that employers, employees, and labor unions all place a high priority on health and employee benefit reform. While the four groups may seem to have common problems and even goals, they will find it very difficult to reconcile their principles when they get down to the task of actually talking about solutions, writes Grace-Marie Turner. Regardless of the business community's wishes, legislators inevitably would require employers to contribute. Indeed, every recent push for universal coverage has included a "play or pay" mandate requiring businesses to either provide insurance to their employees or pay a fine or a fee toward a public insurance pool. It's understandable that businesses want urgent action on health issues, but bringing competition and choice into our health sector to get prices down would be a much more powerful force than more government control and expensive new mandates on employers, writes Turner. In its unorthodox attempt at unity, the business community could unwittingly provide political cover to special interests with a decidedly anti-business agenda. The Success of Medicare Advantage Plans: What Seniors Should Know Robert E. Moffit, Ph.D. Medicare Advantage, which enrolls 20% of all Medicare beneficiaries in private plans, is a success in giving seniors unprecedented choices with superior benefits at affordable prices offered by health plans competing to provide value. But Medicare Advantage is only the first stage of reform. Given Medicare's $36.3 trillion in unfunded liabilities, Congress must start the process of comprehensive reform that builds on the success of the competitive Medicare Advantage model. Congress will have to restructure the existing payment system to provide seniors a generous but fixed contribution that can be adjusted for such factors as age, income, and health condition. And it will have to learn to be a reliable business partner, with payments based upon real market conditions not arbitrary payment formulas. In a separate paper, Moffit criticizes Congress for blocking efforts by the government to require competitive bidding for durable medical equipment and supplies in the Medicare program. If Members of Congress, Democrats and Republicans alike, cannot allow for competitive bidding to commence, it is hard to imagine how they will summon the fortitude when larger challenges inevitably arrive, Moffit writes. Behind the Numbers: Medical Cost Trends for 2009 PricewaterhouseCoopers' Health Research Institute, 06/08 The growth in medical cost trends for the private sector is expected to level off in 2009 following five years of deceleration, according to a new report from PricewaterhouseCoopers' Health Research Institute. Costs are expected to grow 9.6% in 2009 compared with 9.9% in 2008. Other key findings from the report:
Health Care 2008: A Political Primer James C. Capretta, Ethics and Public Policy Center Capretta provides an overview of the current health care reform movement, from its political origins in the 1990s to the forces driving today's debates. He describes how a 1991 Pennsylvania senator's campaign became a watershed moment in the health care debates, the Clinton health care plan, and Senator John McCain's dramatic proposal for reforming the tax preference for employment-based health insurance. It is crucial to see just how much progress has been made since the first iteration of the health care debate, and just how much better positioned Republicans now are to take the initiative, writes Capretta. Indeed, health care reform just might turn out to be what tax reform was in the 1980s and welfare reform was in the 1990s: a platform for a focused conservative effort to achieve through market forces and economic incentives what the left has failed to do through government. Canada's Drug Price Paradox 2008 Brett J. Skinner and Mark Rovere Prices for generic drugs in Canada are more than twice as high as those in the United States because government policies in Canada distort the market for prescription medicines, according to a new study from the Vancouver-based Fraser Institute. The study found that Canadian prices for generic prescription drugs in 2007 were on average 112% higher than U.S. prices for identical drugs in 2007. Of the total prescriptions dispensed in Canada in 2007, 48% were for generic drugs and 52% were for brand name drugs. In the U.S., 67% of prescriptions were for generics with just 33% for brand name drugs. If Canada repealed policies that distort the market for prescription drugs, net savings for Canadians could reach between $2.9 billion and $7.5 billion (2007) annually for total retail pharmacy sales of generic and brand-name drugs. Sally Satel, M.D., American Enterprise Institute Satel provides a compelling account of the questions raised recently when four members of the Japanese mafia received liver transplants at a UCLA medical center (two of whom later donated $100,000 to the center). When resources are scarce — transplantable organs being the classic example — should some institution pass judgment when facts about a patient's criminality are known? It's a perfect storm of ethical anxieties and calls to mind a time when character did determine access to scarce treatment, writes Satel. In 1962, Seattle's Swedish Hospital established the "God Committee," which considered nonmedical traits, including marital status, net worth, nature of occupation and church attendance, to decide which terminal patient would get access to dialysis machines. No one wants to return to the days of the character biopsy — judging a patient's social value — in deciding who gets access to rare treatments, but the UCLA story and others like it will continue to offend our sense of fairness as long as the nation's dire organ shortage persists. The only way to dispel the ethical quandaries that stem from rationing is to expand the pool of organs so that more people can receive lifesaving transplants, writes Satel. Repealing the ban on donor compensation would permit the federal or state governments to devise a safe, regulated system in which would-be donors are rewarded for giving an organ to the next stranger on the list. Upcoming Events A Health Care Debate: What is the Best Way to Control Costs, Improve Quality and Expand Access? Health Information Technology and Its Future: More than the Money BigGovHealth.org Premiere Health Insurance Reform Elements: A Look at Wellness, Adverse Selection and Consumer Based Health Plans New HSA Rules Webinar Aging and Future Health Care Spending: Red Herrings, Time to Death, and Insurance Choices
Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.
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Single Payer April 11, 2008
Join Us!Please mark your calendars now to join us on Tuesday, April 29, for a major address on Medicare featuring HHS Secretary Michael Leavitt. The program, which we will jointly host with several other think tanks, begins at 9:45 a.m. at the brand new Newseum at 555 Pennsylvania Avenue in Washington. This will be the secretary's major address on the massive threat that Medicare and other entitlement programs present to our nation's economy, followed by a forum featuring experts presenting their ideas and research on solutions.
As we feared, the House Ways and Means Committee did indeed approve legislation on Wednesday that would require every expenditure from Health Savings Accounts to be approved, injecting new complexities, driving up costs, and discouraging HSA enrollment. Wisconsin Rep. Paul Ryan was the hero to HSA-advocates in leading the battle to strike the provision, but his amendment was defeated on a largely party-line vote. The measure was a tempting target for Democratic leaders in Congress who generally dislike HSAs and are always looking for new ways to raise money to pay for other spending. The Joint Tax Committee said the provision would save more than $300 million because the IRS will be collecting more penalties on HSAs and because contributions to HSAs will go down. They admitted that the HSA "substantiation" provision would have a significant impact on the HSA market. It's not clear that the Democratic leadership would have realized the damage they could do with this one seemingly small change, and there is a lot of anger at the Republican lobbyist who offered the idea on behalf of a self-interested benefits management company. And the legislation is totally unnecessary. Under current law, if people with HSAs use the money in their accounts for non-medical purposes, they have to pay taxes on the money, plus a 10% penalty — the same as if they had withdrawn the money directly. When people take a deduction for other kinds of medical expenses on their tax returns, they can claim anything they want, but if they are audited and can't validate the expense, they are subject to penalties. Chairman Rangel offered an amendment that would delay implementation by two years (until 2011) so there is still time to bring sense to this debate as it moves to a less-certain fate in the Senate. Clearly this was not a good week on Capitol Hill: The House Energy and Commerce Health Subcommittee approved legislation to block for a year the Bush Administration's rules to curb some of the fraud and abuse in the Medicaid program. You will recall that I testified on this last week, offering examples about Medicaid money being used to pay for transportation to bingo games and other non-medical expenses. The special interests won. The taxpayers lost. The measure passed on a voice vote, and Ranking Member Joe Barton signaled that it would be very difficult to override if the president were to veto to the bill. If nothing else, this shows how difficult it is to curb even documented abuse once a government health spending program is established. The only solution is to avoid expanding these programs that take on a life and constituency of their own. And I returned at 2 a.m. today from a six-day speaking trip that started last Saturday in Chicago, with a talk on transparency to the American Board of Quality Assurance and Utilization Review Physicians. Then on to Las Vegas to speak at the beautiful new Red Rock Resort to a Public Affairs conference of the National Association of Manufacturers on Monday. Then back to Harrah's on the Strip in Las Vegas for a talk on Medicare hosted by former Medicare Trustee Tom Saving at the Association of Private Enterprise Education conference on Tuesday. And finally, yesterday, a talk on "Can We Repair What's Wrong with Our Health Care System through Christian Principles?" at the Acton Institute's Lecture Series in Grand Rapids, Michigan, right after a quick visit to the beautiful President Ford Museum and Library there. These speeches and visits outside Washington are always encouraging to show, despite our problems with legislators in Washington, the wisdom and clear-headedness of the American people about the importance of keeping our health sector free and giving people new choices in a competitive economy. Grace-Marie Turner Recent News Articles and StudiesIn Massachusetts, Universal Coverage Strains Care In Massachusetts, Universal Coverage Strains Care Massachusetts' law requiring everyone to have health insurance is putting added pressure on primary care physicians and lengthening the wait for appointments — an unintended consequence of universal coverage, reports The New York Times. Physician Patricia A. Sereno said an influx of the newly insured to her practice just north of Boston has stretched her daily caseload to as many as 22 to 25 patients, up from 18 to 20 a year ago. To fit them in, she limits the number of 45-minute physicals she schedules each day, thereby doubling the wait for an exam to three months. "It's a recipe for disaster," Dr. Sereno said. "It's great that people have access to health care, but now we've got to find a way to give them access to preventive services. The point of the legislation was not to get people episodic care." Universal Coverage One Head at a Time — The Risks and Benefits of Individual Health Insurance Mandates The risks associated with individual mandates suggest that they are no panacea, writes Glied. One important concern is that the government will provide insufficient funds for the subsidies intended to accompany the mandate. In that case, the mandate will act as a very regressive tax, penalizing uninsured people who genuinely cannot afford to buy coverage. This concern has led Massachusetts to create a hardship exemption for its mandate — an escape clause that effectively undoes the mandate if subsidies are inefficient. The ease with which it is possible to lift the mandate if the legislature fails to appropriate funds may make the individual mandate a rather rickety form of universal coverage. Further, if subsidies are insufficient or benefits inappropriate, the mandate will be very difficult to enforce and draconian in effect. To be effective, an insurance mandate should be in place at the beginning of an insurance term, ensuring that people have coverage when an adverse event occurs. Developing a system to promptly identify and penalize scofflaws will take effort and ingenuity, particularly in our diverse and mobile country and may require a degree of intrusiveness and bureaucracy that some will find unpalatable. Medicare Coverage and Strategies: Impact of the MMA and PBMs AEI's Joe Antos describes ways in which the Centers for Medicare and Medicaid Services exerts its influence over the health sector in the wake of the Medicare Modernization Act and in the face of evidence-based medicine standards. Medicare's outpatient prescription drug benefit has ratcheted up CMS's direct involvement and influence on every aspect of the pharmaceutical industry, from research and development of new products to pricing and distribution to the end-user. The immediate impact of Part D has largely been beneficial to manufacturers, distributors, health plans, employers, and Medicare beneficiaries, he says. However, the substantial shift in pharmaceutical spending from private payors and Medicaid to Medicare will focus intense political pressure on every part of the supply chain. A CMS veteran, Antos also provides a chronology of CMS's role, from the agency's inception to today, and offers insight into CMS's strategy and tactical effects on the American health care system. To begin to address Medicare's looming insolvency, the federal government should allow Medicare beneficiaries to take full advantage of consumer-driven reforms that exist in the private sector, such as health savings accounts, writes John R. Graham of the Pacific Research Institute. Dutch and German Health Ministers Talk With Leading U.S. Analysts In Health Affairs Web Exclusive Interviews As the United States debates health reform, the Dutch and German health systems have been increasingly put forward as potential models. These nations have achieved universal coverage through competition among non-governmental insurers within a governing regulatory framework, along with government subsidies for those with low incomes. In interviews with Prof. Uwe Reinhardt and Tsung-Mei Cheng of Princeton and Prof. Alain Enthoven of Stanford, German Health Minister Ulla Schmidt and Dutch Health Minister Ab Klink discuss their health systems, including efforts their countries are making to increase competition. For example, Klink says: "Competition now is especially at the level of the insurance companies. Still, many of the prices for care are fixed by the Dutch government. What we are trying to do in the coming years is to free prices, on the one hand, and to make insurance policies transparent, so that these two issues form pillars of the competition that we want to achieve." The Misguided War Against Medicines Government spending on prescription drugs is not to blame for the Canadian health system's lack of financial sustainability, according to the Fraser Institute. This study shows that prescription drugs accounted for only 9.3% of total government spending on health in 2006, down from 9.6% in 2005. Patented prescription drugs accounted for only 6.3% of total government health spending in 2006, down from 6.8% in 2005. After spending on drugs is subtracted, all other areas of health care accounted for 91.4% to 90.7% of total government health spending between 2002 and 2006. The study also found no statistical link between annual growth rates in total government health spending and increased spending on drugs. Additionally, the study found that Canadian government data showed average prices for existing patented prescription drugs in Canada have grown at a slower annual pace than the general rate of inflation for 17 of the last 19 years. Covering Uninsured Children in the State Children's Health Insurance Program Orszag's testimony on the State Children's Health Insurance Program (SCHIP) focuses on its impact on the number of uninsured low-income children and the extent to which it displaces private coverage. According to CBO's estimates, the portion of children in families with income between 100% and 200% of the poverty level who were uninsured fell by about 25% between 1996 (the year before SCHIP was enacted) and 2006. In contrast, the uninsurance rate among higher-income children remained relatively stable during that period. CBO has concluded that for every 100 children who gain public coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children. Orszag also discusses the Administration's August 17, 2007 directive to state health officials that imposes certain minimum requirements on states seeking to enroll children in SCHIP whose families have income above 250% of the poverty level. CBO's analysis suggests that the directive's impact on enrollment is likely to be modest. Upcoming Events Cracking Down on Killer Drugs: Dora Akunyili and the Nigerian Success Story The Impact of Health Insurance in Developing Countries: Experiences from China and Colombia Health Care in Crisis: What's Driving Health Reform in Canada and the United States? Election Year 2008: Health Care Reform Debate Nudge: Improving Decisions about Health, Wealth, and Happiness Hospital CEO Roundtable: Balancing Cooperation and Competition 2008 Leadership Development Breakfast Innovations in Health Care Delivery An address by Health and Human Services Secretary Michael Leavitt Jointly sponsored by the Galen Institute, The Heritage Foundation and the American Enterprise Institute Tuesday, April 29, 2008, 9:45 a.m. Washington, DC SAVE THE DATE! Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.
Tags:
health savings accounts, substantiation, HSA, Medicaid, Massachusetts, universal coverage, individual mandate, Germany, the Netherlands, Canada, prescription drugs, SCHIP
Categories:
HSAs |
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