| Your Weekly Medicare Consumer Advocacy Update June 25, 2009 • Volume 9, Issue 25 PhRMA, the brand-name drug manufacturers’ lobby, promised this week that drug companies would provide a 50 percent discount on brand-name drugs in the doughnut hole, the coverage gap built into the Part D drug benefit. The discounts would be available starting July 1, 2010, to Part D enrollees who have incomes and assets that are too high to qualify for the Extra Help program, which provides coverage through the doughnut hole, but below about $85,000 for an individual ($170,000 for a couple). People with Medicare who have hit the doughnut hole must pay the full price of their medicines. Because of the high cost of drugs, many are forced to pick which drugs they can afford to buy, even if forgoing a medicine puts their health at risk. So it is tempting for consumer advocates to provide unquestioning support for PhRMA’s plan. But we do have questions. According to PhRMA’s announcement, the discounts for brand-name drugs would count toward the out-of-pocket limit ($4350 this year). That means the full price of the drug—both what the consumer pays and the discount—are added together and when the limit is reached, consumers would enter catastrophic coverage and pay no more than 5 percent of the cost of their medicine. Currently, Medicare does not allow discounts or giveaways provided by drug manufacturers to count toward the out-of-pocket limit. The reason is that such manufacturer assistance programs can entice consumers to use higher cost drugs, when a cheaper medicine, such as a generic, is equally effective. Encouraging people to use higher cost drugs can raise the costs of the Part D program, which are paid by taxpayers and people with Medicare (through the premiums they pay). Read the rest of this entry » |
Archive for June 26th, 2009
PhRMA’s Big Promise
Posted by James O'Rourke on June 26, 2009
Posted in *Healthcare Issues, Medicare | Tagged: *Healthcare Issues, Medicare | Leave a Comment »
The Two Trillion Dollar Solution
Posted by James O'Rourke on June 26, 2009
Center for American Progress
Saving Money by Modernizing the Health Care System
Fundamental health system reform involving just three strategies will lead to federal savings of about $550 billion over the next decade.
SOURCE: iStockphoto
By Melinda Beeuwkes Buntin, David M. Cutler | June 24, 2009
Read the full report (pdf)
Download the executive summary (pdf)
Read also: Payment Reform to Improve Health Care: Ways to Move Forward, by Ellen-Marie Whelan and Judy Feder
The fundamental challenge in health reform is to reduce the growth rate of health care costs. If annual cost increases can be lowered, then workers’ incomes will increase, labor market distortions will decline, and government budgets will move closer to balance. If we cannot “bend the curve” of increasing health care costs, then we will not be able to afford our current commitments to Medicare, Medicaid, and the State Children’s Health Insurance Program, let alone the cost of covering the 45 million uninsured Americans.
The enormity of the challenge is widely recognized. So too are the fundamental ideas about how the problem should be met. These widely accepted solutions include bringing health care into the information age, reforming health insurance markets, and learning what works and which health care providers are better at what they do. Reform will also require reorienting payments away from fee-for-service every time a patient visits a doctor, checks out of a hospital or is prescribed a battery of clinical tests. Health reform instead must move us toward value-based systems that pay for entire episodes of care, stressing prevention and not just acute treatment.
Based on a wide array of research, our best guess is that fundamental health system reform involving just three of these strategies will lead to federal savings of about $550 billion over the next decade. First, investments in health information technology and other types of health care-provider infrastructure could bring direct federal savings of $196 billion between 2010 and 2019, primarily through administrative simplification and the more productive use of time by physicians and nurses.
Second, creating insurance “exchanges,” local or national organizations designed to act as clearinghouses for health insurance policies, could foster competition and drive down administrative costs for individual and small group policies. We estimate these reduced costs could bring in additional federal revenues of $64 billion over the next 10 years.
Finally, payment system reforms based on the idea that quality care should be rewarded rather than just more and more expensive care would create incentives to improve quality and efficiency. This could save the federal government $299 billion over this period, primarily by reducing the frequency and intensity of hospitalizations. Read the rest of this entry »
Posted in *Healthcare Issues, Issues | Tagged: Health Care Reform | Leave a Comment »
The Public Health Insurance Option As A Strong Competitor
Posted by James O'Rourke on June 26, 2009
Featured blog entries-CAF 5/28/09 4:25 PM Jason Rosenbaum2 Health Care for All 501c(3) health insurance public plan Issues Now!
Jacob Hacker at Campaign for America’s Future laid out the case for a Medicare-like public health insurance option:
A Medicare-like public plan would be much more stable and secure than other approaches. It would provide the broadest possible choice of doctors. It could be offered throughout the nation on the same terms. It would have the lowest administrative costs. And its bargaining power and large risk pool would allow it to offer the most affordable possible premiums and most effectively restrain costs while upgrading the quality of care.
I could go on, but the point is clear – Medicare’s supposed administrative and medical cost advantages are not real. That does NOT mean a public plan option isn’t viable. In fact, there is a government plan that is kicking the collective private health plan industry’s rear end. It’s the Veteran’s Administration, and rather than Medicare, i’d base a national plan on a dramatic expansion of the VA.
Who’s right? Well, both—or neither.
First, I should take issue with one of Paduda’s assertions. Medicare does indeed hold down health care costs. Its costs are growing slower than private insurance. Now, that doesn’t mean costs aren’t growing; they are. If we don’t control health care costs, Medicare will indeed break the bank. That’s why we need the public health insurance option.
To analyze which type of public health insurance option will work best, I think it helps to understand the goal of the public health insurance option. First and foremost, the public health insurance option should exist to provide people with a place they can go to get quality health insurance if and
when their private insurance fails to provide them with what they need. People should always have a choice to get out of the private, monopolistic system if they want.
This choice will lead to increased competition. (I’m not sure why Paduda says it “may” lead to more competition; it seems to me that increased competition is pretty much a guarantee.) The public option should be able to bargain with providers for lower rates, and with less overhead, it will be able to provide services for at least nominally less than private insurance right off the bat. This, combined with an insurance program designed to protect people’s health and not a corporate bottom line, will make the public health insurance option a strong competitor. Private insurance will be forced to respond.
This competition between public and private seems to me to be the main driver of lower costs and better outcomes. Private insurers will likely get creative finding ways to out-deliver and undercut public insurance. And public insurance, with access to a vast pool of data and government transparency regulation, will be able to really understand costs in the health care system in a new way, and derive further solutions from that, solutions like the ones Atul Gawande has proposed in this must-read article in the New Yorker.
So, in a way, it doesn’t matter much if the public health insurance option is Medicare-like or Veteran’s Administration-like. As long as it provides people with quality health care and peace of mind, it will be popular. And as long as it is a strong competitor, it can adapt down the line to ratchet down health care costs even further.
Posted in *Healthcare Issues | Leave a Comment »
IMMIGRATION
Posted by James O'Rourke on June 26, 2009
thinkprogress.org
Time For The ‘Heavy Lifting’ To Begin
At a bipartisan meeting with congressional lawmakers yesterday, President Obama pledged “that he would push for a sweeping overhaul of the nation’s immigration system by early next year.” “It’s going to require some heavy lifting,” Obama said. “It’s going to require a victory of practicality and common sense and good policymaking over short-term politics. That’s what I’m committed to doing as president.” Before the meeting, which had been delayed twice, the New York Times reported that although they agreed with the need for comprehensive immigration reform, some lawmakers, such as Sen. John Cornyn (R-TX), “refused to put their political capital at risk without some assurances that Mr. Obama will spend some of his own.” The meeting at the White House appears to have put those concerns to rest. “I don’t think he could have be[en] clearer today or more committed today that he wanted to make comprehensive immigration reform a reality,” said Rep. Luis V. Gutierrez (D-IL), who had previously expressed frustration with Obama’s commitment to the issue. “A lot of cynicism and a lot of doubt were left behind.” According to Rep. Anthony Weiner (D-NY), Obama told the lawmakers that he was “ready to speak out publicly, ready to use whatever capital he had left to make sure immigration reform happens.” Substantively, Obama announced at the meeting that Homeland Security Secretary Janet Napolitano will lead a group of lawmakers on the issue from the House and Senate ”to start systematically working through” what the Associated Press calls “the stickiest, most emotional questions.”
COMPREHENSIVE REFORM CAN’T BE DELAYED: Acknowledging that “there is not by any means consensus across the table” about the particulars of immigration reform, Obama said he was encouraged that “after all the overheated rhetoric and the occasional demagoguery on all sides around this issue, we’ve got a responsible set of leaders sitting around the table who want to actively get something done and not put it off until a year, two years, three years, five years from now, but to start working on this thing right now.” Lawmakers on both sides of the aisle agreed with the sense of urgency. “We’ve got one more chance to do this,” said Sen. Lindsey Graham (R-SC), adding, “If we fail this time, no politician’s going to take this up for a generation, and that’d be a shame for the country.” “We’ve all shouted at each other on television enough. Now it’s time to get down to work. I think the time politically is ripe,” Weiner said. Earlier this month, when the Reform Immigration for America campaign was officially launched, Center for American Progress President and CEO John Podesta refuted “opponents of reform” who argue that “at a time when American workers are hurting, the best solution isn’t reform – but deportation.” “This argument fails to recognize the critical role that immigrants play in economic growth,” Podesta said. “We need solutions that restore the rule of law while aiding our economy by making taxpayers of all immigrants. So, to those opponents of reform we say this — immigration reform and economic recovery are not at odds with each other, but rather go hand in hand.” Read the rest of this entry »
Posted in Issues | Tagged: immigration | Leave a Comment »
