Friday, January 31, 2014

Fwd: qotd: Was the ACA "politically feasible"?

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Was the ACA "politically feasible"?
Date: Fri, 31 Jan 2014 10:32:02 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The Washington Post
January 5, 2014
The group that got health care passed is packing up and going home
By Harold Pollack

Harold Pollack: [S]ingle-payer folks ... might ask: "Wouldn't we have a
better system if we had a single payer? Why didn't HCAN [Health Care for
America Now] and its friends push for that?"

Richard Kirsch [chief executive of HCAN]: What's the expression: "If
wishes were horses, beggars would ride?"

Yes -- if we could wave a magic wand and design a rational health-care
system that would control costs while providing much better access, we
wouldn't design our current one. The ACA was the best that we could get
through the American political system. The fact that we failed in every
previous instance in the past 100 years reflects the reality that there
hadn't been a reform designed to deal with the realities of American


Health Affairs
January 2014
Implementing health reform: Four years later
By Timothy Jost

How did things go so wrong [for the Affordable Care Act]? Why is there
so much bad news?....

More devastating for the future of the ACA, however, were the 2010
midterm elections. Republicans picked up sixty-three seats in the House,
swinging control of the chamber from the Democrats to the Republicans.
Before the 2010 elections, Democrats controlled fifty-two state
legislative houses and the Republicans thirty-three; after the
elections, Republicans controlled fifty-three and the Democrats
thirty-two. Before the 2010 election there were twenty-six Democratic
and twenty-four Republican governors, and after there were twenty
Democrat and twenty-nine Republican. Many saw the election as a
referendum on the ACA.

Comment by Kip Sullivan, JD

Was the Affordable Care Act politically feasible? Was it "the best"
America could do in 2009 and 2010? Was single-payer legislation more or
less feasible than the ACA? It is still too early to pronounce on the
fate of the ACA, but it is not too early to discuss the political
feasibility question. We have much to learn from looking back at the
muffled debate about that issue among universal coverage advocates prior
to the enactment of the ACA.

Since the modern American single-payer movement was formed in the late
1980s, many supporters of universal coverage have claimed that
single-payer is not politically feasible. Those who made this argument
(Bernstein and Marmor refer to them as "political yes buts"
never explained why multiple-payer "solutions" would be more feasible
than single-payer. In the worldview of the "yes buts," only single-payer
proponents had to answer that question. If, on any given day,
single-payer proponents could not point to 60 votes in the US senate or
majority votes in the US House or in state legislative chambers, the
conversation was over: Single-payer was not politically feasible and had
to be taken off the table to make room for more "realistic" legislation.

This simple counting-noses definition of "political feasibility" avoided
two issues that many observers inside and outside the single-payer
movement consider paramount: Any legislation that proposes to achieve
universal coverage, or even to cut the uninsured rate substantially, is
not politically feasible, or at minimum is no more feasible than
single-payer legislation, if

(1) it doesn't simultaneously reduce health care spending or
(2) is so complex it cannot be implemented within a reasonable period of

This definition of feasibility asks not merely whether a given
legislative body can be pushed into enacting a given bill. This
definition asks as well, once the bill is enacted, is it politically
sustainable? By this more realistic definition of political feasibility,
a bill might have enough votes to pass a given legislative body, but if
the bill can't contain costs or can't be implemented within a reasonable
period of time, it shouldn't be assumed to be politically sustainable
and therefore should not be assumed to be more politically feasible than
other approaches.

Sustainability depends ultimately on how the public perceives
legislation after it is enacted. If the public punishes lawmakers who
voted for the putative "universal coverage" legislation and rewards
legislators who are hostile to government doing anything to help the
uninsured and to lower health care costs, the legislation may die on the
vine or be repealed.

One would think that this definition of political feasibility would have
appealed naturally to the Democrats and their supporters who pushed the
ACA because it asks them to take into account the impact of the ACA on
voters' perceptions of Democrats. In other words, it asks Democrats to
consult their own self-interest in the course of picking a solution to a
problem. It is a noble thing to suffer retribution at the polls for a
bill that does good things for people when you know it's going to work.
But it is foolish to suffer retribution for a bill you suspect, or
should suspect, will fail, or at minimum, will perform far below the
expectations your rhetoric about the bill has created.

When in June 2009, congressional Democrats unveiled the health care
"reform" bills that would become the ACA, I and many others were filled
with apprehension. Our concern was not that some version of these bills
might not pass. To the contrary, our concern was that it might pass (and
thereby demonstrate it was "politically feasible" in the narrow sense of
the phrase) but not be politically sustainable. In a June 2009 comment
on this blog entitled, "Democrats' hype about health care reform will
hurt them," I said:

"President Obama and Democratic congressional leaders are playing a
dangerous game with health care reform. They are raising the public's
expectations sky high before figuring out how to meet those
expectations. They are promising to give us the moon – significant cuts
in health care costs and universal coverage or something close to it –
but even at this late hour they have failed to publish anything
resembling a detailed plan to do that. And the hints they have given us
about the 'reforms' they are likely to endorse indicate they haven't got
a clue how to cut costs."

I wanted a real debate about the political feasibility of the Democrats'
multiple-payer solution versus our single-payer proposal, and I thought
the most effective way to make my argument was to appeal to Democrats'
self-interest, not just their altruism. Although I doubted the altruism
of some members of Congress, I didn't doubt the altruism of the vast
majority of ACA supporters -- I knew their desire to minimize the
suffering inflicted on this country by our health care system was real.
What I questioned was their understanding of how expensive and complex
the ACA was going to be. If they didn't understand that, how could they
grasp what a political liability the ACA would be for Democrats? How
could they intelligently evaluate the risk that future Congresses might
not have enough Democrats in them to protect the ACA from underfunding
or outright repeal?

But the debate about political feasibility that I and many others hoped
for never came to pass. The single-payer and multiple-payer wings of the
American universal coverage movement never discussed whether the ACA
would be more feasible -- that is, be more likely to pass AND be more
sustainable -- than a single-payer. We never debated whether the
simplicity and efficiency of a single-payer made it more feasible, or at
least no less feasible, than the costly and insanely complicated ACA.
ACA proponents simply pronounced single-payer "off the table" on the
ground that powerful opponents would have made a majority vote in
Congress impossible. And that was that.

Four years have now passed since the enactment of the ACA. The sky is
clotted with chickens coming home to roost. Evidence that the ACA was
never as sustainable as its proponents implied is all around us. This
evidence includes evidence of the damage the ACA has inflicted on
Democrats. Timothy Jost's article in the January 2014 Health Affairs
contains an excellent summary of the unhappy history of the ACA. One of
the most important paragraphs in his paper is the one quoted above in
which he notes the damage Democrats suffered during the 2010 elections
and that many believe this damage was due in part to the enactment of
the ACA in March of 2010. Jost also predicts more bad news for the ACA
as a substantial portion of the people insured through exchanges
discover their choice of provider has been restricted and their
out-of-pocket payments are very high. We are going to see more
heartwarming stories about sick people finally getting the medical care
they deserve, thanks to the ACA, but it will not be enough to forestall
more damage to Democrats (especially if Republicans manage to nominate
candidates who can refrain from discussing "legitimate rape" and similar

None of us have a crystal ball. I don't claim that if Democrats and
groups supporting the ACA had used the opportunity presented to us in
2009-2010 to promote HR 676 instead of the ACA that HR 676 would have
passed by March 2010 or even by now. I'm reasonably sure something good
would have been enacted -- for example, an expansion of traditional
Medicare and Medicaid to more people (Bob Kuttner makes a similar
argument here

I am, however, absolutely certain about one thing: The universal
coverage movement in America would be in a much better position to bring
the long fight for universal coverage to a successful conclusion than we
are now. There are several reasons why I'm so sure about that.

First, whether we had won big or won some incremental improvements in
2010, the public would have been exposed to a debate about a real
solution to the health care crisis as opposed to a debate about
make-believe cost containment schemes such as exchanges, "accountable
care organizations" and punishing hospitals for "excess" readmissions.

Second, the health insurance industry would be receiving less money from
the taxpayer and would be, therefore, less powerful than they are now.
The insurance industry has been driving away private-sector customers in
droves over the last few decades. If public purchasers -- state and
federal governments -- had long ago stopped throwing money at Aetna et
al. with legislation like the ACA, schemes to overpay Medicare Advantage
plans, and legislation privatizing state Medicaid programs, the industry
would by now be a shadow of its former self and a much less potent
opponent of universal coverage.

Third, the political environment for health care reform would be less
toxic than it is today, not because conservatives wouldn't be leveling
the same extreme charges they level at all forms of health care reform
no matter how innocuous, but because the public would be less vulnerable
to extremism and ultimately less cynical about real reform.

ACA proponents may disagree with my assessment of where we might be
today if they had joined ranks with the single-payer movement and had
fought for HR 676. What they can't deny is they refused to engage in a
real debate about the political feasibility (narrowly defined) AND
sustainability of the ACA versus single-payer. They might have learned
something if they had.

Thursday, January 30, 2014

Fwd: qotd: State Medicaid opt-out will cost over 7, 000 lives, maybe 17, 000

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: State Medicaid opt-out will cost over 7, 000 lives,
maybe 17, 000
Date: Thu, 30 Jan 2014 08:58:27 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs Blog
January 30, 2014
Opting Out Of Medicaid Expansion: The Health And Financial Impacts
By Sam Dickman, David Himmelstein, Danny McCormick, and Steffie Woolhandler

The Affordable Care Act (ACA) was designed to increase access to health
insurance by: 1) requiring states to expand Medicaid eligibility to
people with incomes less than 138 percent of the Federal Poverty Level
(FPL) ($19,530 for a family of three in 2013), with the cost of expanded
eligibility mostly paid by the federal government; 2) establishing
online insurance "exchanges" with regulated benefit structures where
people can comparison shop for insurance plans; and 3) requiring most
uninsured people with incomes above 138 percent FPL to purchase
insurance or face financial penalties, while providing premium subsidies
for those up to 400 percent of FPL.

Recent studies suggest that Medicaid expansion will result in health and
financial gains. Older studies also found salutary health effects of
expanded or improved insurance coverage, particularly for lower income

The Supreme Court ruled in June 2012 that states may opt out of Medicaid
expansion, and as of November 2013, 25 states have done so.

The Consequences of Opting Out

The Supreme Court's decision to allow states to opt out of Medicaid
expansion will have adverse health and financial consequences. Based on
recent data from the Oregon Health Insurance Experiment, we predict that
many low-income women will forego recommended breast and cervical cancer
screening; diabetics will forego medications, and all low-income adults
will face a greater likelihood of depression, catastrophic medical
expenses, and death.

The ACA's tax subsidy for insurance purchase on the Exchanges is only
available to persons with incomes above 100 percent of FPL. People
below this threshold in opt-out states (the so-called low-income
"coverage gap") will see no benefit as the law goes into effect. They
may even see harm because the ACA cuts disproportionate share (DSH)
funding to safety net hospitals, reducing the resources available to
care for the remaining uninsured.

Examining the numbers

Nationwide, 47,950,687 people were uninsured in 2012; the number of
uninsured is expected to decrease by about 16 million after
implementation of the ACA, leaving 32,202,633 uninsured. Nearly 8
million of these remaining uninsured would have gotten coverage had
their state opted in. States opting in to Medicaid expansion will
experience a decrease of 48.9 percent in their uninsured population
versus an 18.1 percent decrease in opt-out states.

We estimate the number of deaths attributable to the lack of Medicaid
expansion in opt-out states at between 7,115 and 17,104. Medicaid
expansion in opt-out states would have resulted in 712,037 fewer persons
screening positive for depression and 240,700 fewer individuals
suffering catastrophic medical expenditures. Medicaid expansion in these
states would have resulted in 422,553 more diabetics receiving
medication for their illness, 195,492 more mammograms among women age
50-64 years and 443,677 more pap smears among women age 21-64. Expansion
would have resulted in an additional 658,888 women in need of mammograms
gaining insurance, as well as 3.1 million women who should receive
regular pap smears.

Comment: Apparently for no other purpose than to make a political
statement, politicians in about half of our states are willing to expose
about 8 million poor people to further financial hardship and greater
impairment in health care access. More than 7,000 of those people will
die as a result. That's not simply politics; that's a crime!

In a PNHP press release, Dr. David Himmelstein, co-author of the study
and co-founder of PNHP said it well: "Medicaid is far from perfect. In
many parts of the country Medicaid pays so little that patients have
trouble finding a doctor who will accept it. A single-payer program like
Canada's that covers all Americans is a far better solution for both the
poor and the middle class. But until we get to single payer, Medicaid is
the only safety net for many low-income Americans."

PNHP press release:

Monday, January 27, 2014

Fwd: qotd: Bayer designs its products for the market, not for poor people

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Bayer designs its products for the market, not for poor
Date: Mon, 27 Jan 2014 13:47:41 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Financial Times
FT Global Pharmaceuticals & Biotechnology Conference 2013
December 3, 2013
Buffering the Pharma Brand: Restoring Reputation, Rebuilding Trust (A
panel discussion)

With recent surveys revealing pharmaceutical companies now ranking in
trust perceptions below producers of spirits and tobacco, and physicians
basing prescribing decisions as much on brands as on products, the need
for pharmaceutical companies to understand and address the factors
contributing to poor reputation has never been greater. How can pharma
companies restore reputation and increase trust?

Marijn Dekkers, Chairman of the Board of Management, Bayer:

India for us was an unusual situation. Our patent was not questioned. I
mean, other companies patents are questioned. In our case. the Indian
government said, "No, no, your patent is valid." - and this is a product
for kidney and liver cancer - "Your patent is valid. We just think that
you charge too much, and because you charge too much you have to do a
mandatory license to a generic company in India that is now going to
make this drug and sell it, and on that low price that they will sell it
for, you will get six percent royalty." And that was a government
decision. So, we had a patent, but somebody else is allowed to make this
product, and because there is not enough access to this product for poor
Indians. I don't know if you have ever been to India. There are a lot of
poor Indians obviously, and the hospitals aren't that close by (laughs)
where they live. So we found that this was extremely politically
motivated and essentially, I would say, theft of the Indian government
of a capability of a company that has patented and therefore a patent
right. So, now is this going to have a big effect on our business model?
No, because we did not develop this product for the Indian market -
let's be honest - we developed this product for Western patients who can
afford this product, quite honestly. It is an expensive product, being
an oncology product. But, you know, the risk in these situations is
always spillover. A generic Indian company is now going to sell this
product, in South Africa, and then in New Zealand, you never know how
this is going to spill over. That puts the whole industry, and the
patent right of an industry, at risk.


Mail Online
January 24, 2014
'We didn't make this medicine for Indians… we made it for western
patients who can afford it': Pharmaceutical chief tries to stop India
replicating its cancer treatment
By Daily Mail Reporter

The CEO of phamaceutical giant Bayer has sparked fury after announcing
one of the firm's drugs was for 'western patients who can afford it'.

Marijn Dekkers made the inflammatory comments after the Indian company
Natco Pharma Ltd. were granted a government licence to produce a copy of
Bayer's cancer drug Nexavar which they will sell for 97 per cent less
than the original product.

Under Indian law the government grants compulsory licenses to domestic
firms to produce copies of drugs if the original isn't available locally
at a reasonable price, regardless of whether they are under patent.

Mr Deekers, who has previously described India's patent laws as
'essentially theft', said: 'We did not develop this medicine for
Indians. We developed it for western patients who can afford it.'

Nexavar, which is also known as Sorafenib, has been approved for the
treatment of kidney cancer, advanced liver cancer (hepatocellular
carcinoma), and thyroid cancers that are resistant to radioactive iodine

Currently a kidney cancer patient would pay $96,000 (£58,000) for a
year's course of the Bayer-made drug. However the cost of the Natco
version would be around $2,800 (£1,700).


December 5, 2013
Does Pharma Only Develop Drugs For Those Who Can Pay?
By John LaMattina

At the Financial Times Global Pharmaceutical & Biotech Conference this
week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer
didn't develop its cancer drug, Nexavar (sorafenib) for India but for
Western patients that can afford it. That's a pretty provocative
comment. At a time when Pharma's reputation is suffering, Dekkers'
comment does not help matters. Rather, it reinforces the notion that Big
Pharma is only interested in profits and those in need are out of luck
when it comes to life saving medicines.

Reader Comments:

Marijn Dekkers:


You write that I could have been more circumspect with my remarks.

I regret that what was a quick response from me within the framework of
a panel discussion at the recent FT Pharma conference has come across in
a different way as it was meant by myself. It could not be more opposite
to what I want and we do at Bayer.

Let me confirm that Bayer as a company wants to improve people's health
and quality of life with innovative therapies and we would like all
people to share the fruits of medical progress, regardless of their
origins or income.

However, I was particularly frustrated by the Indian government's
decision, to not protect a patent on Nexavar that was given to us by the
Indian patent authority. This was a unique event against Bayer's
intellectual property. But as you know best, the protection of our IP is
so vital to our ability to fund and advance new innovations to help
address some of the worst diseases in the world such as cancer.

I am very passionate about our ability to innovate and in the open and
candid discussion at the conference, as I was expressing my fundamental
frustrations, I should have made this more clear.

However, I remain firm that there is no excuse for any country to weaken
the intellectual property rights. Without new medicines people in
developing countries – as well as those in the more prosperous countries
– ultimately will all suffer. Bayer, like any other private company,
needs a sufficient return on investment to allow for future research and
therefore innovation. Generic manufacturers have a critical role to play
– but generic companies do not invest in researching and developing and
therefore don't ever bring any new innovative cures and treatments. Not
for the developing nor the developed markets!

Marijn Dekkers
Chairman of the Board of Management of Bayer AG



Dr David Hill
Chief Executive
World Innovation Foundation

It should be quite clear now that big pharma is 'only' interested in
vast profits and basically has no empathy with humankind other than it
being an immense cash-cow for them. Their actions and out-of-court
settlements speak volumes and where history cannot lie.

For the major drug companies throughout the world are continually being
found out for criminal and fraudulent activity in order to sell their
pharmaceuticals. Not me saying this but the world's media coverage and
the out-of-court agreements that they have settled and where in the past
5 years alone fines in excess of $17 billion have been agreed between
authorities and the big drug companies. These include but where they are
not a fully exhaustive list of examples,
$2.2 billion and $2.5 billion by J&J (2013),
£3 billion by GSK (2012),
$762 million by Amgen (2012),
$1.5 billion by Abbott (2012),
$95 million by Boehringer Ingelheim (2012),
$109 million by Sanofi-Aventis (2012),
$950 million by Merck (2011),
$520 million by AstraZeneca (2010),
$750 million by GSK (2010),
$423 million by Novartis (2010),
$460 million by Allergan (2010),
$2.3 billion by Pfizer (2009),
$1.42 billion by Eli Lilly (2009)
and $425 million by Cephalon (2008) – Source for all from the US
'Department of Justice' and reinforced by Wikipedia listing. Note also
that all of these actions had criminal activity as part of their
respective settlements. But because these huge global concerns make so
much money out of selling drugs, these fines have apparently now become
an in-built expense in the corporate cost of their drugs. Indeed in
GSK's 2012 case in the USA, nearly $30 billion was sold and where it was
estimate that even after the $3 billion fine was deducted, a profit of
$11 billion was made.

Therefore it certainly appears that the accepted corporate environment
that these giant corporations have structured internally for themselves
has created these illegal activities and where it is of their own making
and not predominantly the countries that they operate within – but I
have to say though, that it does help if there is government and
internal corruption to boot. But possibly the biggest sadness to date
has to come out yet in India where over 20,000 of the poorest children
in the world (between the ages of 10 and 14) have been used as human
guinea pigs for Big Pharma –
. Indeed over the past seven years, nearly 2,000 trials have taken place
in the country and the number of deaths increased from 288 in 2008 to
637 in 2009 to 668 in 2010, before falling to 438 deaths in 2011, the
latest figures available. Therefore the drive for corporate profits has
a very dark side to it and everyone should be fully aware of this fact.
Apparently this is not a problem for big pharma and where vast profits
and greed rise above human life itself. Governments just have to get to
grips with these huge corporations and fine then not just a small
percentage of their profits but all the estimated total profit. That is
the only way that they will ever alter their corporate mind-set and
strategic blue-print.

About The World Innovation Foundation:


NICE (National Institute for Health and Care Excellence)
Results for Sorafenib (Nexavar):

NICE does not recommend sorafenib for people with advanced
hepatocellular carcinoma. Sorafenib does not provide enough benefit to
patients to justify its high cost, even when special considerations were
applied, so NICE did not recommend it.

Bevacizumab, sorafenib and temsirolimus are not recommended as first
drug treatments for people with advanced and/or metastatic renal cell
carcinoma. Sorafenib and sunitinib are not recommended as second drug
treatments for people with advanced and/or metastatic renal cell carcinoma.


Médecins Sans Frontières (Doctors Without Borders)
January 23, 2014
MSF response to Bayer CEO statement that medicines developed only for
western patients
By Dr Manica Balasegaram, Executive Director, Médecins Sans Frontières
Access Campaign

The Bayer CEO going on record to say that they did not develop a cancer
medicine for Indians but only for 'western patients who can afford it'
sums up everything that is wrong with the multinational pharmaceutical
industry. Bayer is effectively admitting that the drugs they develop are
deliberately going to be rationed to the wealthiest patients.

This is a side-effect of the way drugs are developed today.
Pharmaceutical companies are singularly focused on profit and so
aggressively push for patents and high drug prices. Diseases that don't
promise a profit are neglected, and patients who can't afford to pay are
cut out of the picture. Drug companies claim to care about global health
needs, but their track record says otherwise.

It doesn't have to be this way. Medical innovation can be incentivised
differently, and research paid for in ways that deliver drugs but
without high prices that exclude millions of people from access.
Instead of being part of the problem, drug companies should work to be
part of the solution and change the dire state of medical research and
development today.

Comment: Bayer Chairman Marijn Dekkers wants to be honest with us when
he tells us that Nexavar (sorafenib), an expensive drug for certain
liver and kidney cancers, was developed for Western patients who can
afford it, but not for poor people such as much of the population of
India. Should markets be the controlling factor?

Today's New York Times reviewed the 2014 Rolls-Royce Wraith, a
spectacular two-door sedan available for $372,324, with the $12,925
option of a headliner with 1,340 LEDs that provides the ambiance of a
night sky filled with stars. Transportation is an important public
policy issue, but, I dare say, the sale of a Rolls-Royce should be left
to market dynamics.

What about health care? Should it be left to markets? Let's look at the
corporate market mentality in the case of Bayer's Nexavar. It was not
developed for all patients with hepatocellular or renal cell carcinoma;
it was developed only for those who could afford it. It was developed
for private markets, not for public health. It was intended that it be
priced near the maximum that the market would bear, rather than being
priced based on costs plus fair profits. The fear and grief of cancer
patients are used to leverage higher market prices for oncology drugs.
Thus the price of Nexavar was set at $96,000 - a price at which Bayer
decided that there was a large enough market of wealthy individuals with
these cancers who would willingly pay that amount.

Should the government intervene when drug pricing prevents access for
most patients? India thinks so. Bayer could, but won't, produce the
drugs for a much fairer price (since they didn't design it for the poor
people of India). So India is licensing generics, while honoring Bayer's
patent by giving them a six percent royalty for nothing other than
owning the patent.

In the United States, we have decided to leave much of the pricing of
drugs to the market, except for government programs such as the VA and
Medicaid. Although insurers and pharmacy benefit managers do some
negotiating, they are still part of the marketplace, and they are very
weak negotiators at that. Thus we pay much higher prices for
prescription drugs than do all other nations.

There is another point to be made when using the example of Nexavar.
England's NICE evaluates the benefits and costs of various therapeutic
measures, and they have decided that this drug is not recommended for
either advanced hepatocellular carcinoma or advanced renal cell
carcinoma. So why would anyone want to be treated with this medication?
One report submitted to NICE showed that Nexavar "on average improves
overall survival by 83 days" for hepatocellular carcinoma with Grade A
liver function, but "available evidence does not indicate that it delays
symptom progression or improves quality of life." Prolonging life at
well over $1000 per day might be worth it to some even if symptoms
progress anyway and quality of life does not improve.

The British and the Indians seem to understand the issues better. Maybe
someday we will too, but not until we get a better grasp on the proper
role of markets and the government. Markets will get you a Rolls-Royce
or 83 days of poor quality life, if you can afford it. The government
would get all of us the health care that we really need, if only we
would change our politics to make it happen.

But that Rolls… with its 624 horsepower 6.6-liter twin-turbo V12, you
can go from a standstill to 60 miles per hour in only 4.4 seconds… an
American dream! (Forget about the American nightmare of our health care

Wednesday, January 22, 2014

Fwd: qotd: Supreme Court upholds government’s right to negotiate drug prices for all of us (2003 decision)

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Supreme Court upholds government's right to negotiate
drug prices for all of us (2003 decision)
Date: Wed, 22 Jan 2014 11:19:22 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Applied Health Economics and Health Policy
February 2014
Remember the MaineRx
By Robert Kemp


In 2000, Maine became the first state in the US to enact a law to
establish maximum retail prices for prescription drugs for all qualified
state residents—MaineRx. The purpose was to lower prescription drug
prices for all eligible residents of the state. The state was to have
the ability to negotiate manufacturer rebates and pharmacy discounts.
Major drug manufacturers, represented by the Pharmaceutical Research and
Manufacturers of America, challenged MaineRx in the courts, going to the
Supreme Court where it was upheld in 2003. Fifteen other states enacted,
proposed, or filed price-control bills in their state legislatures. The
result would have been downward pressure on prices outside of the public
programs, and the first instance of state-sponsored monopsony power in
the US. MaineRx is viewed as one of the proximate causes of the
pharmaceutical industry's successful lobbying effort to implement
Medicare Part D in 2004. Medicare Part D is administered through private
Pharmacy Benefit Managers (PBMs); it made administration via state
government PBMs illegal. The lower prices that could have resulted from
MaineRx-type laws did not occur and the magnitude of these reductions is
commented upon.


Politics play an important role in health policy. In this case,
pharmaceutical companies, represented by the PhRMA, were able to
influence Congress to introduce a national solution to the threat of
state-run PBMs and the negotiation of positive lists. The companies were
instrumental in formulating Medicare Part D and lobbying for its
passage. It is speculated that Medicare Part D came about to put a stop
to state rebate programs such as MaineRx in fear of reduced profits for
the pharmaceutical companies. Thus, Medicare Part D terminated the
existence of state-run PBMs. The historical importance of MaineRx is
that it was an attempt of the state trying to contain healthcare cost
and expand prescription coverage. Had MaineRx been implemented, it might
have been a milestone on the path to reduced healthcare cost.

(Robert Kemp, Ph.D. is Associate Professor, Clinical and Administrative
Sciences, School of Pharmacy, The University of Louisiana at Monroe)

Comment: Government works for the benefit of the people, sometimes. The
government of Maine almost brought under control our outrageous drug
pricing in the United States. The Supreme Court even upheld Maine's
legislation that would do so. But then, with the conservatives in
charge, Medicare Part D was enacted which prohibited Maine or any other
state, or even the federal government itself, from using its monopsony
power to demand fair pricing of drugs by the pharmaceutical firms. This
time the government worked to the benefit of the plutocrats rather than
the people. We have to change that.

Tuesday, January 21, 2014

Fwd: qotd: Cancer, costs and single payer

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Cancer, costs and single payer
Date: Tue, 21 Jan 2014 13:37:15 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Physicians for a National Health Program
January 17, 2014
Oncologists call for single payer in leading cancer journal

A feature article published today in the Journal of Oncology Practice
contains an evidence-based appeal by two oncologists, including a past
president of the American Society of Clinical Oncology (ASCO), for their
colleagues to endorse a single-payer health system.

They say they do not believe that the Affordable Care Act, or
"Obamacare," will be able to solve the health care crisis that cancer
patients face.


Journal of Oncology Practice
January 2014
Why Oncologists Should Support Single-Payer National Health Insurance
By Ray E. Drasga, MD and Lawrence H. Einhorn, MD

Cancer leaves a patient in his or her most vulnerable state not only
physically but financially. Oncologists are in a unique position to
champion the cause of improving access to care for patients with cancer
and easing the financial burden they and their families face.

With ACA now the law of the land, and its retention of the private
insurance industry at the center of the health system, the trend toward
high-deductible health plans, underinsurance, and cost shifting to
patients will almost certainly worsen. 59 Years of private-sector
solutions have failed. There needs to be a major paradigm shift in our
approach to funding health care in the United States.

Because ACA will fail to remedy the problems of the uninsured, the
underinsured, rising costs, and growing corporate control over
caregiving, we cannot in good conscience stand by and remain silent.
Life is short, especially for some patients with cancer; they need help
now. We call on the American Society of Clinical Oncology (ASCO) to
advocate for a single-payer national health insurance program. Our
medical system must be oriented toward caregiving, not toward maximizing
investors' profits.

All of our patients deserve dignity. It is our moral and ethical
obligation as physicians to advocate for universal access to health
care. Oncologists, working in conjunction with ASCO, are well positioned
to educate legislators about single-payer national health insurance. The
time to start is now.


The New York Times
January 18, 2014
Patients' Costs Skyrocket; Specialists' Incomes Soar
By Elisabeth Rosenthal

Many specialists have become particularly adept at the business of
medicine by becoming more entrepreneurial, protecting their turf through
aggressive lobbying by their medical societies, and most of all,
increasing revenues by offering new procedures — or doing more of
lucrative ones.

That math explains why the incomes of dermatologists,
gastroenterologists and oncologists rose 50 percent or more between 1995
and 2012, even when adjusted for inflation, while those for primary care
physicians rose only 10 percent and lag far behind, since insurers pay
far less for traditional doctoring tasks like listening for a heart
murmur or prescribing the right antibiotic.

Oncologists benefit from the ability to mark up (and profit from) each
dose of chemotherapy they administer in private offices, a practice
increased dramatically in the late 1990s. The median compensation for
oncologists nearly doubled from 1995 to 2004, to $350,000, according to
the M.G.M.A. One study last year attributed 65 percent of the revenue in
a typical oncology practice to such payments.


The New York Times
January 20, 2014
New Truths That Only One Can See
By George Johnson

It has been jarring to learn in recent years that a reproducible result
may actually be the rarest of birds. Replication, the ability of another
lab to reproduce a finding, is the gold standard of science, reassurance
that you have discovered something true. But that is getting harder all
the time.

Fears that this is resulting in some questionable findings began to
emerge in 2005, when Dr. John P. A. Ioannidis, a kind of meta-scientist
who researches research, wrote a paper pointedly titled "Why Most
Published Research Findings Are False."

His work was just the beginning. Concern about the problem has reached
the point that the journal Nature has assembled an archive, filled with
reports and analyses, called Challenges in Irreproducible Research.

Among them is a paper in which C. Glenn Begley, who is chief scientific
officer at TetraLogic Pharmaceuticals, described an experience he had
while at Amgen, another drug company. He and his colleagues could not
replicate 47 of 53 landmark papers about cancer. Some of the results
could not be reproduced even with the help of the original scientists
working in their own labs.

Given what is at stake, it seems like a moral failing that the titles of
the papers were not revealed. That was forbidden, we're told, by
confidentiality agreements imposed by the labs.


March 28, 2012
Drug development: Raise standards for preclinical cancer research
By C. Glenn Begley and Lee M. Ellis

What reasons underlie the publication of erroneous, selective or
irreproducible data? The academic system and peer-review process
tolerates and perhaps even inadvertently encourages such conduct. To
obtain funding, a job, promotion or tenure, researchers need a strong
publication record, often including a first-authored high-impact
publication. Journal editors, reviewers and grant-review committees
often look for a scientific finding that is simple, clear and complete —
a 'perfect' story. It is therefore tempting for investigators to submit
selected data sets for publication, or even to massage data to fit the
underlying hypothesis.

Improving preclinical cancer research to the point at which it is
reproducible and translatable to clinical-trial success will be an
extraordinarily difficult challenge. However, it is important to
remember that patients are at the centre of all these efforts. If we in
the field forget this, it is easy to lose our sense of focus,
transparency and urgency.


Oncology Market Access
By Jill Sackman, D.V.M., Ph.D. & Michael Kuchenreuther, Ph.D

Confronted with unsustainable costs and inconsistent quality of patient
outcomes, the U.S. healthcare segment has been embroiled in a national
debate over healthcare reform. While nearly every division of the
industry has come under fire because of high healthcare costs, one
therapeutic area that has continued to win premium reimbursement is
oncology. Historically, cancer drugs have enjoyed premium pricing and
widespread off-label usage because of their designation for patients
with generally incurable diseases. Furthermore, new drugs have been
rapidly adopted despite weak clinical evidence and overall questionable
value. Thus, it is not surprising that spending on these drugs in the
U.S. has risen at twice the rate of total drug spending in recent years.

Comment: Cancer has become outrageously expensive to manage. A major
factor in the increased spending is the use of high-priced cancer drugs.
The newest drugs are priced at about $10,000 per month - a level at
which coinsurance payments by patients may not be affordable, if the
drug is even covered by the patient's plan.

What is particularly disconcerting is that the science behind these new
drugs is particularly weak. We are paying a lot for drugs that often are
not particularly effective and that frequently make people sick. Many of
these drugs are introduced into the market after showing scant
improvement but were approved because the nominal benefit reached the
level of statistical significance. Factors determining the prices of
these drugs include costs of research and marketing, like other drugs,
but the firms also include "what is a life worth" adjustments -
capitalizing on the grief of cancer patients and their families.

Of course there are therapeutic interventions in cancer that are very
effective, sometimes curative. With today's emphasis on outcomes, should
the oncologists be paid very high fees for the successful outcomes while
being paid little for futile therapy? Of course not. Their incomes
should depend on their provision of professional services regardless of
the prognosis of their patients.

The article in the Journal of Oncology Practice by Ray Drasga and
Lawrence Einhorn explains the rationale of a single payer system - a
rationale that should appeal to all oncologists who have faced the
dilemma of being able to offer only very expensive drugs that provide
unwarranted hope in a futile clinical situation, especially when the
drugs may impose a major financial hardship on the patient.

Imagine a situation in which money is removed from that scenario, made
possible by a single payer system. The patient does not have to consider
out-of-pocket costs when discussing options with her physician. The
physician receives the same income regardless of what clinical course
the patient selects. Clinical decisions are made by the patient using
the best information available, provided to her by her physician. Cost
decisions are made by the public administrator, including negotiated
pricing for cancer drugs, in an environment totally removed from the
clinical scene.

Cancer can be a very cruel disease over which physicians frequently
agonize, acutely aware of the physical and emotional pain of the
patient. We really need a system in which all of our attention can be
devoted to obtaining the very best care for the patient, totally removed
from the "business" aspect of medicine. A well designed single payer
system would do that.

Monday, January 20, 2014

Fwd: qotd: Martin Luther King Jr would support Oxfam’s recommendations to the World Economic Forum

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Martin Luther King Jr would support Oxfam's
recommendations to the World Economic Forum
Date: Mon, 20 Jan 2014 10:12:26 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

January 20, 2014
Working for the Few

In November 2013, the World Economic Forum released its 'Outlook on the
Global Agenda 2014', in which it ranked widening income disparities as
the second greatest worldwide risk in the coming 12 to 18 months. Oxfam
shares its analysis, and wants to see the 2014 World Economic Forum make
the commitments needed to counter the growing tide of inequality.

Given the scale of rising wealth concentrations, opportunity capture and
unequal political representation are a serious and worrying trend. For

• Almost half of the world's wealth is now owned by just one percent of
the population.

• The wealth of the one percent richest people in the world amounts to
$110 trillion. That's 65 times the total wealth of the bottom half of
the world's population.

• The bottom half of the world's population owns the same as the richest
85 people in the world.

• Seven out of ten people live in countries where economic inequality
has increased in the last 30 years.

• The richest one percent increased their share of income in 24 out of
26 countries for which we have data between 1980 and 2012.

• In the US, the wealthiest one percent captured 95 percent of
post-financial crisis growth since 2009, while the bottom 90 percent
became poorer.


Those gathered at Davos for the World Economic Forum have the power to
turn around the rapid increase in inequality. Oxfam is calling on them
to pledge that they will:

• Not dodge taxes in their own countries or in countries where they
invest and operate, by using tax havens;

• Not use their economic wealth to seek political favors that undermine
the democratic will of their fellow citizens;

• Make public all the investments in companies and trusts for which they
are the ultimate beneficial owners;

• Support progressive taxation on wealth and income;

• Challenge governments to use their tax revenue to provide universal
education and social protection for citizens;

• Demand a living wage in all the companies they own or control;

• Challenge other economic elites to join them in these pledges.

Oxfam Briefing Paper - Summary

World Economic Forum - Outlook on the Global Agenda 2014


The Guardian
January 20, 2014
Oxfam: 85 richest people as wealthy as poorest half of the world
As World Economic Forum starts in Davos, development charity claims
growing inequality has been driven by 'power grab'
By Graeme Wearden

Winnie Byanyima, the Oxfam executive director who will attend the Davos
meetings, said: "It is staggering that in the 21st Century, half of the
world's population – that's three and a half billion people – own no
more than a tiny elite whose numbers could all fit comfortably on a
double-decker bus."

Working for the Few - Oxfam report

Comment: Although Martin Luther King Jr is no longer here in body, he
did leave with us his moral guidance, reinforcing our ability to
recognize social injustice when we see it. It is left to us to seek an
end to these injustices.

Of industrialized nations, the United States is the world leader in
expanding the injustices of inequality - a first for us that matches our
first place in health care spending in a nation that is in last place
amongst wealthier nations in meting the goal of universality.

From the perspective of those of us who are morally outraged over
health care injustice, we need to "challenge governments to use their
tax revenue to provide universal health care." We cannot possibly do
this without adopting policies that would "counter the growing tide of

If Martin Luther King could speak to us today, he would certainly
challenge us to demand the opportunity for everyone to have an adequate
education which would help them understand better the injustices
inflicted upon us by, yes, the wealthy who control our plutocracy, and
to understand what our remedies should be. He would challenge us to
demand not only the right but also the opportunity for everyone to vote
for the government we need, especially a government that would create a
health care system that serves the health care needs of the people first
rather than the business goals of the insurers and the rest of the
medical-industrial complex. As he famously said, "Of all the forms of
inequality, injustice in health care is the most shocking and inhumane."

Listen. You can hear him now. Let's march.

Thursday, January 16, 2014

Fwd: qotd: Bare-bones plans still with us

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Bare-bones plans still with us
Date: Thu, 16 Jan 2014 13:34:13 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The Wall Street Journal
January 16, 2014
Bare-Bones Health Plans Survive Through Quirk in Law
By Theo Francis

The health-care overhaul was supposed to eliminate insurance plans that
offer skimpy coverage at cut rates. But a quirk in the law stands to
help some companies keep them going for years to come.

AlliedBarton Security Services, a closely held firm that employs more
than 63,000 people nationwide, has offered a modestly updated version of
its so-called mini-med plan to employees this year and it intends to do
so in 2015 as well, even though the cheap coverage fails to meet
requirements of the Affordable Care Act.

What makes the no-frills plan attractive is that it will save money for
AlliedBarton and for its security-guard employees who don't incur
substantial medical bills, many of whom want a low-cost option,
according to the company.

What makes it possible under the health law: As long as companies offer
at least one plan that complies with the law's requirements, they are
free to keep offering ones that don't.

That has enabled companies to find ways to comply with the law while
minimizing increases in their health-care costs. The result has been an
increase in lean insurance offerings such as "fixed-indemnity" plans.

Such plans, which might cost an employee just $80 a month in premiums,
generally pay a set amount for specific medical services—$70 for a
doctor's visit, for example, or $20 for a prescription—without regard to
the underlying cost. They limit the amount of payments or care available
in a year, and can exclude entire areas of coverage, such as
mental-health care. When catastrophic injury or illness strikes, they
often pay little.

AlliedBarton intends to offer its employees two low-cost insurance
options—one that meets the law's requirements for both scope of coverage
and affordability, and a cheaper plan that falls short. Offering the
compliant plan heads off the law's penalties. And offering the cheaper
plan—which the company thinks most of its security guards will
pick—keeps costs down.

Employees who pick the cheaper plan could have to pay the individual
penalty—though that could still cost them less than signing up for the
more expensive plan.

Fixed-indemnity coverage "violates the spirit of the law," said Jay
Angoff, a Washington lawyer who previously headed the federal
insurance-oversight office and served as Missouri's insurance
commissioner. "There's a strong argument that it is inherently
misleading, and it provides so little coverage that it shouldn't be sold
at all." Such plans, he adds, "were never intended to survive past 2014."

AlliedBarton's Mr. Buckman countered that workers are good at weighing
medical and financial trade-offs. "To a lot of people for a lot of good
reasons, fixed-indemnity plans may be a better choice, and we think it's
appropriate for people to be able to make choices," he said.

Comment: What kind of rule is this? As long as employers offer to their
employees a plan that complies with the requirements of the Affordable
Care Act (ACA), but a plan that the employees cannot afford to purchase,
then the employers are relieved of their penalties for providing them
with almost worthless "fixed indemnity" plans, even though that means
that the employees may have to pay a penalty for failing to be insured
with a qualified plan.

ACA was designed to interfere as little as possible with
employer-sponsored plans since supposedly that large sector of the
health insurance market was working so well. But it wasn't for far too
many. Employers offering mini-med style fixed indemnity plans is only
one of the potential deficiencies of employer-sponsored coverage, others
being high deductibles, narrow provider networks, and forgone wage
increases to pay for the coverage.

Right now, several respected journalists are criticizing single payer
advocates for being critical of the health care gains under the
Affordable Care Act. They have it all wrong. We are not critical of the
gains; we are critical of the failure to correct the major deficiencies
in our system that cause so much suffering and financial hardship.
Instead of tweaking a mediocre system, we should fix it. We could do
that with a single payer national health program - an improved Medicare
that covers all of us.

Tuesday, January 14, 2014

Fwd: qotd: Timothy Jost reviews what four years have brought us

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Timothy Jost reviews what four years have brought us
Date: Tue, 14 Jan 2014 11:00:04 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
January 2014
Implementing Health Reform: Four Years Later
By Timothy S. Jost

Despite enormous potential, the Affordable Care Act has been plagued by
controversy and confusion from day one.

Looking Ahead

It is likely that more complaints will be heard once people actually use
their ACA coverage. Many exchange carriers are offering limited provider
networks. Narrow networks allow insurers to reduce premiums as they
exclude the most expensive providers and negotiate steep discounts with
those who remain. Consumers will like the low premiums but will be
unhappy to learn that their doctors are not available and shocked to
discover charges from out-of-network specialists when they go to
in-network hospitals.

Consumers may also be surprised by the magnitude of cost sharing under
ACA plans. Bronze plans may have $6,000 deductibles, and silver plans
can have deductibles of $2,000 or more. Even at these levels, of course,
cost-sharing obligations will be lower than many policies found now in
today's nongroup market. But this is not free care, or anything close to it.

Millions of low-income Americans in states that refuse to expand
Medicaid will find themselves too poor to receive any help. This is, of
course, not the fault of the ACA but rather of its opponents. But the
public may not grasp this distinction.

Other problems will also attend the implementation of the 2014 reforms,
and all will be widely reported. Employers may continue to reduce
employees to thirty hours or otherwise try to avoid offering health
insurance to their employees. Insured and self-insured plans will bear
part of the cost of expanding coverage and reinsuring high-cost
enrollees in the individual market, increasing their costs. Finally,
public outrage is sure to hit the headlines again when tax filing time
arrives in 2015 as some individuals will be assessed the penalty for
remaining uninsured, while others will face a repayment demand for
overpaid premium tax credits.

Going forward, one of the most important challenges facing the ACA will
be whether its benefits become apparent quickly and dramatically enough
to offset the problems that are currently dominating the news coverage
of the health reform law. Even more important may be the question of how
much it will matter that the greatest beneficiaries of the ACA are
likely to be low-income Americans, who are less likely to be politically
active than many of the higher-income Americans who will be adversely
affected by higher insurance premiums and taxes.

In the end, the most important fact is that the ACA addresses a real and
dramatic problem: nearly fifty million uninsured Americans. Its
opponents in Congress have failed to put forth any credible proposal to
address this problem since the law was enacted. As disruptive as it may
in fact be, the ACA does address this problem. If it succeeds, America
will be a better place. If it fails, it is unlikely that another
solution will be forthcoming any time soon, perhaps not for another

Comment: Timothy Jost is one of the most astute, objective analysts and
observers of the unfolding of the Affordable Care Act. We should listen
to him when he describes the negative impact that ACA will have on
moderate- and higher-income Americans. They will be especially unhappy
with their loss of choice of physicians and hospitals because of the
narrow or ultra-narrow networks, and they will be greatly displeased
with out-of-pocket costs that are much greater than they previously

Although Jost suggests that the determination of the success or failure
will be based on how successful the enrollment of the 50 million mostly
lower-income uninsured Americans will be, it is more likely that those
with incomes above 400 percent of the federal poverty level who will be
bearing the full costs of their insurance, directly or through wage
concessions, will consider the shift in employer-sponsored plans toward
narrow networks and high cost sharing to be a failure of policy.

Although Jost also discusses the positive features of ACA, they do not
offset the negative since we did not have to accept such a compromised

Although he suggests that another solution is unlikely for a generation,
once the politically active people with good jobs and decent incomes
realize what happened and what they could have had, the demand for
single payer Medicare for all will move the process much earlier. At
least for their benefit, and for the benefit of all U.S. residents, we
hope so.

Monday, January 13, 2014

Fwd: qotd: Financial burden on Medicare households

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Financial burden on Medicare households
Date: Mon, 13 Jan 2014 12:53:05 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Kaiser Family Foundation
January 9, 2014
Health Care on a Budget: The Financial Burden of Health Spending by
Medicare Households
By Juliette Cubanski, Christina Swoope, Anthony Damico and Tricia Neuman

The Medicare program offers health and financial protection to more than
50 million seniors and younger people with disabilities. However, the
high cost of premiums, cost-sharing requirements, and gaps in the
Medicare benefit package can result in beneficiaries spending a
substantial share of their household budgets on health care.

Medicare households devoted nearly 14% of total household spending to
health-related expenses in 2012, on average — a substantially larger
share than non-Medicare households.

Spending on health insurance premiums, including for Part B, Part C
(Medicare Advantage), Part D and supplemental coverage (such as Medigap
and retiree health plans), was about two-thirds (65.4%) of Medicare
households' average health care spending in 2012, and 9.1% of Medicare
household spending overall. Medical services (such as hospital stays,
physician services, lab tests, and X-rays) were the next largest
component of Medicare households' health spending (18.5%), followed by
prescription drugs (13.0%) and medical supplies (3.1%).

The financial burden of out-of-pocket health spending is felt
disproportionately by some subgroups of Medicare households, including
older beneficiaries and those with incomes between 100% and 399% of poverty.

As policymakers consider options to address federal budget concerns,
including policies to rein in Medicare spending, these findings
highlight the importance of assessing the effects of such proposals on
out-of-pocket health care spending among Medicare beneficiaries — a
majority of whom already live on tight budgets.


Employee Benefit Research Institute
October 2013
Amount of Savings Needed for Health Expenses for People Eligible for
Medicare: More Rare Good News
By Paul Fronstin, Ph.D., Dallas Salisbury, and Jack VanDerhei, Ph.D.

Individuals should be concerned about saving for health insurance
premiums and out-of-pocket expenses in retirement for a number of
reasons. Medicare generally covers only about 60 percent of the cost of
health care services for Medicare beneficiaries ages 65 and older, while
out-of-pocket spending accounts for 12 percent. Furthermore, the
percentage of private-sector establishments offering retiree health
benefits has been falling, and where benefits are offered, they are
becoming less generous. This is true even in the public sector.

Couples at the 90th percentile in drug expenses would need $220,000 to
have a 50 percent chance of having enough money to cover health care
expenses in retirement. They would need $295,000 to have a 75 percent
chance of covering their expenses and $360,000 to have a 90 percent
chance of covering their expenses.

However, it should be noted that many individuals will need more than
the amounts cited in this report because this analysis does not factor
in the savings needed to cover long-term care expenses, nor does it take
into account the fact that many individuals retire prior to becoming
eligible for Medicare.

Finally, issues surrounding retirement income security are certain to
become an even greater challenge in the future, as employers continue to
scale back retiree health benefits and as policymakers begin to
realistically address financial issues in the Medicare program with
solutions that are likely to shift more responsibility for health care
costs to Medicare beneficiaries.

Comment: The bad news is that out-of-pocket expenses for those on
Medicare are significant and fall disproportionately on older
individuals and those with incomes between 100% and 400% of the federal
poverty level. Although some relief is anticipated with the closing of
the Part D donut hole, the overall burden is expected to increase,
especially with proposed policies that would increase spending on
Medicare insurance premiums.

A far more equitable system would be to completely separate payments for
the financing of health care from the benefits received. That is,
eliminate premiums, deductibles, co-payments and coinsurance and instead
use a single public fund for health care to which individuals contribute
based on ability to pay (i.e, progressive taxes). Then care is accessed
based only on medical need, not on ability to pay.

As long as Medicare remains a separate program exclusively for the
elderly and for individuals with long term disabilities, we are going to
see efforts made to try to limit federal spending on Medicare, passing
more costs onto the beneficiaries. Increases in premium revenues is
quite likely, not only for Part B and Part D of Medicare, but also for
private Medigap, Medicare Advantage, and retiree health plans. Also,
proposed taxes on Medigap premiums are on the agenda.

Both of today's articles demonstrate that the burden is already too
great, especially for the majority who are on tight budgets. Rather than
shifting yet more responsibility for health care costs onto the backs of
Medicare beneficiaries, we should be reducing it. If we were all in this
together, as we would be with an improved Medicare for all, we would be
demanding relief from excessive out-of-pocket costs while begrudgingly
paying our taxes.

Friday, January 10, 2014

Fwd: qotd: Maryland moving toward global budgets for hospitals

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Maryland moving toward global budgets for hospitals
Date: Fri, 10 Jan 2014 13:00:00 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Centers for Medicare and Medicaid Services
January 10, 2014
Maryland All-Payer Model to Deliver Better Care and Lower Costs

On January 10, 2014, the Centers for Medicare & Medicaid Services (CMS)
and the state of Maryland jointly announced a new initiative to
modernize Maryland's unique all-payer rate-setting system for hospital
services that will improve patient health and reduce costs.

Maryland operates the nation's only all-payer hospital rate regulation
system. This system is made possible, in part, by a 36 year old
Medicare waiver (codified in Section 1814(b) of the Social Security Act)
that exempts Maryland from the Inpatient Prospective Payment System
(IPPS) and Outpatient Prospective Payment System (OPPS) and allows
Maryland to set rates for these services. Under the waiver, all third
party purchasers pay the same rate. The State of Maryland and CMS
believe that the new model test announced today will provide an
opportunity for Maryland to reform its delivery system to align with the
goals of delivering better health, better care, and lower cost.

Terms of the Model

Maryland's all-payer rate setting system for hospital services presents
an opportunity for Maryland and CMS to test a unique model that has the
potential to inform CMS and other states. This opportunity is available
through the authority of the Innovation Center, which was created by the
Affordable Care Act to test payment and service delivery models.

Under the terms of the Maryland All-Payer Model:

• Maryland will agree to permanently shift away from its current
statutory waiver, which is based on Medicare payment per inpatient
admission, in exchange for the new Innovation Center model based on
Medicare per capita total hospital cost growth.

• This model will require Maryland to generate $330 million in Medicare
savings over a five year performance period, measured by comparing
Maryland's Medicare per capita total hospital cost growth to the
national Medicare per capita total hospital cost growth.

• This model will require Maryland to limit its annual all-payer per
capita total hospital cost growth to 3.58%, the 10-year compound annual
growth rate in per capita gross state product.

• Maryland will shift virtually all of its hospital revenue over the
five year performance period into global payment models, incentivizing
hospitals to work in partnership with other providers to prevent
unnecessary hospitalizations and readmissions.

• Maryland will achieve a number of quality targets designed to promote
better care, better health and lower costs. Under the model, the
quality of care for Maryland residents, including Medicare, Medicaid,
and Children's Health Insurance Program (CHIP) beneficiaries will
improve as measured by hospital quality and population health measures.

• If Maryland fails during the five-year performance period of the
model, Maryland hospitals will transition over two years to the national
Medicare payment systems.

• Before the start of the fourth year of the model, Maryland will
develop a proposal for a new model based on a Medicare total per capita
cost of care test to begin no later than after the end of the five year
performance period.

This model will test whether an all-payer system for hospital payment
that is accountable for the total hospital cost of care on a per capita
basis is an effective model for advancing better care, better health and
reduced costs. CMS expects that this model will be used to engage all
Maryland hospitals, as well as other care providers, in payment reform
and innovation.

CMS and Maryland expect that the All-Payer Model will be successful in
improving the quality of care and reducing program expenditures for
Maryland residents, including Medicare, Medicaid, and CHIP
beneficiaries. Moreover, the Maryland system may serve as a model for
other states interested in developing all-payer payment systems.


January 31, 2014
Guiding Principles for Implementation of Population­-Based and Patient
Centered Payment Systems: A Report from the Advisory Council to the
Maryland Health Services Cost Review Commission

The State of Maryland is leading a potentially transformative effort to
lower health care spending in the State while at the same time improving
access to care and quality of care. Stated in terms of the "Three Part
Aim," the goal is a health care system that enhances patient care,
improves health outcomes, and lowers total costs.

To achieve this goal, the State of Maryland worked closely with the
Centers for Medicare and Medicaid Services (CMS) throughout 2013 to
craft an innovation plan that would make Maryland a national leader
achieving the Three Part Aim and permit the federal government to
continue to participate in the four‐decade long all‐payer system that
has proven to be both successful and enduring. The federal government is
anticipated to approve Maryland's new Model Design application and
implementation begins in January 2014.

Building on the Commission's existing authority to regulate and set
hospital rates across all payers including Medicare, the State is
preparing to tie system‐wide hospital inpatient and outpatient payment
to economic growth. Effectively, the State is instituting a plan to
shift from payment based on inpatient hospital cost per admission to
total hospital cost per capita. The ultimate goal is to tie total health
care spending per capita to the per capita growth of the state's
economy. New health care delivery and payment models will be aligned
with numerous existing initiatives to help meet the goals.

Advisory Council Recommendations

2. Hospital Global Payment Models are the best strategy for the first
phase of implementation.

The HSCRC anticipates that most hospitals will be operating under global
payment models by early 2014. These models hold the most promise for
meeting the revenue targets in the early years because they move away
from incentives in fee‐for‐service payment that foster a greater volume
of services and offer strong budget discipline. In addition, global
payments provide clear and simple revenue targets with flexibility for
hospitals to manage within these macro goals. In the long‐run, these
models will need to evolve to ensure that the revenue in the system
follows the patients.

(DISCLAIMER: This is a draft document for discussion purposes which has
been prepared by consultants to the Advisory Council. The contents of
this draft have not been reviewed or approved by Advisory Council members.)

Draft Report:

Maryland Health Services Cost Review Commission
All Payer Hospital System Modernization: Advisory Council:

Overview of Proposed New All-Payer Model:

Comment: The model for a single payer national health program, as
proposed by Physicians for a National Health Program, includes placing
hospitals on global budgets. Just as police and fire departments are
funded by single, publicly-financed global budgets rather than being
paid for each fire or crime intervention as they arise, hospitals would
likewise be placed on single, publicly-financed global budgets that are
adjusted based on some reasonable index of inflation. Not only does that
cost less, partly by dramatically reducing administrative waste, it also
improves quality by providing the hospital administration with the
flexibility to improve the allocation patient care dollars, plus it
slows health care inflation to a sustainable level.

Maryland is the only state that currently has an all-payer hospital rate
regulation system. Under this system, all payers, including Medicare,
Medicaid, CHIP, private insurers, and individuals pay the same rates for
the same hospital services. This has reduced administrative complexity,
made payment for hospital services more equitable, and has slowed the
increases in hospital spending from one of the most expensive states
down to average.

Since their all-payer system pays for services provided, incentives
remain to increase volume of services. Under the new system just
approved by CMS, payment will still be all-payer but will not be based
on volume of services, but rather will be based on "the Medicare per
capita total hospital cost growth." In essence, that establishes "global
budget" as a form of hospital financing in the United States, though it
is limited to Maryland under the authority of the Innovation Center,
which was created by the Affordable Care Act to test payment and service
delivery models.

We certainly have many questions about the details that have not yet
been revealed. It does fall short of hospital global budgets as
envisioned by PNHP. For instance, this model still seems to pool funds
from multiple public and private sources, whereas the PNHP model would
use only public funds from a single pool funded by equitable taxes. That
is a crucial difference since multiple sources leads to administrative
complexity and inequities in funding.

In general though, it seems that we can celebrate this step towards a
more equitable and just financing system. It won't get us in the back
door of single payer, but it will provide us with another talking point
on policy - the fact that global budgets are an improvement but that we
can make them even better when we mesh them in with a bona fide,
comprehensive single payer system - an improved Medicare that covers

Thursday, January 9, 2014

Fwd: qotd: The Oregon Medicaid ED “experiment” and the overuse myth

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: The Oregon Medicaid ED "experiment" and the overuse myth
Date: Thu, 9 Jan 2014 13:53:55 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The New York Times
January 2, 2014
Emergency visits seen increasing with health law
By Sabrina Tavernise

Supporters of President Obama's health care law had predicted that
expanding insurance coverage for the poor would reduce costly emergency
room visits because people would go to primary care doctors instead. But
a rigorous new experiment in Oregon has raised questions about that
assumption, finding that newly insured people actually went to the
emergency room a good deal more often.

The study, published in the journal Science, compared thousands of
low-income people in the Portland area who were randomly selected in a
2008 lottery to get Medicaid coverage with people who entered the
lottery but remained uninsured. Those who gained coverage made 40
percent more visits to the emergency room than their uninsured
counterparts during their first 18 months with insurance. …

In remarks in New Mexico in 2009, Mr. Obama said: "I think that it's
very important that we provide coverage for all people because if
everybody's got coverage, then they're not going to the emergency room
for treatment." …

"I suspect that the finding will be surprising to many in the policy
debate," said Katherine Baicker, an economist at Harvard … and one of
the authors of the study….

Comment by Kip Sullivan, JD

Last Friday the New York Times, the Wall Street Journal and other media
outlets trumpeted the news that a recent study shows that low-income
people newly insured through Medicaid use 40 percent more emergency room
services than a control group of low-income people who remained
uninsured. In a sane world, this finding would not have deserved any
coverage, much less headlines on front pages. The conditions that would
cause Medicaid enrollees to visit the ER more than the uninsured have
been known for a long time, and it's well known that some of these
conditions have been getting worse. The conditions include:

• the uninsured use roughly half as many health care services as the

• the uninsured are in worse health than the insured and have more
unmet medical needs, and

• Medicaid enrollees have much more trouble finding primary care
doctors and specialists who will take Medicaid than the privately insured.

Anyone familiar with these facts could have predicted that if the State
of Oregon were to offer Medicaid coverage to 10,000 of its poor people
those people would make more visits to emergency rooms than an uninsured
control group. But the media's fascination with this paper suggests the
study's results were indeed surprising to "many in the [health] policy
debate," as Ms. Baicker asserted.
How do we explain the surprise? I nominate the overuse myth – the
conventional wisdom that the main reason America's per capita health
care costs are double those of the rest of the industrialized world is
that doctors order, and patients demand, great volumes of unnecessary
medical services. The overuse myth has led far too many policymakers on
the left and the right to think that emergency rooms are vastly
overused. Liberals like Obama use the myth to claim better coverage will
reduce all that unnecessary ER use and free up money to insure the
uninsured. Conservatives use the myth to decry more coverage. According
to conservatives, better coverage will just encourage poor people to
consume even more unnecessary care. As conservative blogger Avik Roy
wrote on the Forbes blog about the new study, "Because Medicaid was
nearly free to the program's enrollees, those enrollees ended up seeking
– and receiving – lots of inappropriate care."

In fact, researchers have determined (with the luxury of hindsight, it
should be noted) that only 10 percent of Medicaid enrollees go to
emergency rooms for non-urgent matters, which is close to the 7 percent
rate seen in the privately insured

Like all sturdy myths, the overuse myth has a kernel of truth to it –
some overuse of medical services does occur. But underuse is far more
common than overuse, even among the insured, possibly four times worse
according to a 2003 study by Elizabeth McGlynn et al. in the New England
Journal of Medicine. Even for some expensive procedures like heart
surgery underuse is far worse than overuse.
The media's surprise at the new study's finding and reporters' and
right-wing bloggers' eagerness to report the political winners and
losers of this story concealed the real problems, notably:

• Because America sequesters its poor people in a separate program
called Medicaid, it has never found the political will to pay the
providers who care for poor people anywhere near as much as we pay
providers for taking care of everyone else;

• this policy has made it difficult for Medicaid recipients to find

• this difficulty is further aggravated by the widespread use of
managed care in Medicaid programs which forces recipients to pick
doctors from "preferred" lists; and

• Despite these facts, Oregon sought to increase coverage under
Medicaid while doing little to increase the supply of primary care
providers or the resources available to those who treat Medicaid enrollees.

In a sane world, we wouldn't be debating whether a rich nation should be
attempting to insure a minor portion of its uninsured through a separate
and underfunded program for the poor. But if we must debate whether to
do that, the least we can do is focus on the real issues, not promises
of cost containment based on a false assumption, in this case, that
overuse is our main problem and underuse, high prices and excessive
administrative costs are nonexistent or trivial.

The truth is we are going to need to put more money into primary care in
this country, and it will have to come from somewhere. Single-payer
supporters propose that it come from reduced prices and reduced
administrative waste. By clinging to their pet version of overuse,
managed-care and high-deductible advocates dodge the issue. Managed care
advocates claim that even within the underfunded world of Medicaid
greater access to primary care can be paid for without harm to patients
by reducing overuse via capitation, report cards, pay-for-performance,
ACOs and other vaguely defined "changes to the delivery system."
High-deductible advocates claim consumption of medical services by poor
people can be reduced without harm (because the foregone services
weren't necessary), and the savings can be directed to lower taxes or a
lower deficit. Neither claim is credible.