The view from here

Labels: federal funding, medicare, waste

Too Little Bang For The Buck In Drug Research? "Whenever critics complain about the high cost of prescription drugs, the pharmaceutical industry's standard defense is that companies have to plow so much money into researching innovative new medicines. But a recently released report from the Government Accountability Office casts doubt on that rationale. Yes the industry is spending heavily on R&D, the GAO found, but it turns out big pharma isn't actually generating such a good return on their investments. The congressional watchdog agency's 48-page study came up with disturbing numbers. From 1993-2004, spending by U.S. drug companies on research and development jumped 147%, from $16 billion to nearly $40 billion annually. But the number of applications the pharmaceutical firms submitted to the Food and Drug Administration for potentially groundbreaking new drugs during that 10-year period increased only a meager 7%. And since 1995, the applications for these innovative drugs have been dropping each year. 'The productivity of research and development investments has declined,' the GAO concluded." (Time)

Labels: drug companies, pharmaceuticals

Rep. Keith Ellison (D-MN) blogs on the “myth of scarcity.”

In America today, we are encouraged to believe in the myth of scarcity - that there just isn’t enough - of anything. But in the story of the miracle of the loaves and fishes, Jesus, who the Muslims call Isa, found himself preaching to 5000 (not including the women by the way) at dinner time, and there didn’t appear to be enough food. The disciples said that there were only five barley loaves and two fish. We just have to send them away hungry. We simply don’t have enough. But Jesus took the loaves and the fish and started sharing food. There was enough for everyone. There was more than enough. What was perceived as scarcity was illusory as long as there was sharing, and not hoarding. … If scarcity is a myth, then poverty is not necessary. America need not have 37 million Americans living below the poverty line. It is a choice. Hunger is a choice. Exclusion of the stranger, the immigrant, or the darker other is a choice.

Labels: Medicaid

Kevin Drum writes: One of the arguments in favor of limited universal health care proposals -- like the one Arnold Schwarzenegger unveiled on Tuesday for California -- is that it's the best we can realistically hope for. Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen. Better to mollify the special interests and take what we can get.

Over at TNR, Jonathan Cohn suggests that it's not that simple. In fact, his guess is that special interests will fight just as hard to kill any plan, no matter what we do to try to get them on board:

This is one reason that, paradoxically, plans like Schwarzenegger's -- which seek to graft universal coverage onto the existing private insurance system, rather than create a single-payer plan that would supplant private insurance altogether -- may actually be as hard, if not harder, to accomplish politically. Any plan for universal health care is bound to offend at least some special interests. And these special interests will fight hard. So while trying to soften their opposition with a less radical plan helps, it may be more important to craft an alternative that captures voters' imaginations and rallies support behind it -- even if that means proposing even more sweeping changes.

The same thing is true nationally. Although Schwarzenegger would surely resist the comparison, his plan has more than a few elements in common with the Clinton health-care plan. The architects of that scheme tried very hard to come up with something that would please various stakeholders. That's a big reason that they, like Schwarzenegger, rejected calls for a single-payer system and settled instead on a proposal in which most people would continue to get insurance through the private sector. Yet, to their dismay, few of those stakeholders became enthusiastic supporters of the Clinton health-care plan. In fact, quite a few attacked it, pretty much sealing its defeat. It's easy to imagine a similar scenario playing out here.

This is the reason I swing back and forth on whether it's worth supporting half-hearted plans like Schwarzenegger's.

On the pro side: (1) It's better than nothing. If it helps people even a little bit, that's better than letting them suffer while we all wait for nirvana. (2) Liberals have gotten burned more times than I can count by not accepting half measures when they were offered. Inevitably, a decade later, we wish we'd accepted the compromise and then worked to improve it. (3) It might work. Stranger things have happened.

On the con side: (1) Cohn is right. You need public support to overcome special interest inertia, and the only way to get that is with a simple plan that people understand. Compromises just don't generate the requisite enthusiasm. (2) Compromise plans sometimes lock weird incentives into place forever. Just take a look at how the United States ended up with employer-based health care in the first place. (3) One of the whole points of single-payer health care is that it saves a lot of money by reducing administrative costs. Compromise plans don't. Without the cost savings, it's possible that we'll end up with a system that's even worse than what we have now.

In the end, the reason I support Schwarzenegger's plan is because it includes insurance company regulation, and in particular because it enforces community rating (i.e., a requirement that insurers accept all comers at the same price, regardless of age, occupation, or medical history). And while I can't back this up with a solid argument, my gut tells me that community rating will eventually put private health care insurers out of business. Even with universal coverage, there are just too many contradictions in trying to run a profit-making insurance company while being forced to insure even people that you know for an absolute fact you're going to lose money on.

I might be wrong about that. Insurance company managers are clever folks, after all, and might very well figure out how to game the system just well enough to stay around. But there's at least a chance that Schwarzenegger's plan will lead to their eventual demise, and thence to a more efficient, more rational health care system. For now, that prospect is enough to get me on board.

Labels: insurance, universal

You want reform? Then the time has come to drive a stake through the heart of the for-profit insurance industry and replace this merciless, cruel and anti-American beast with a taxpayer funded single-payer system.

And if you don't believe me, maybe you'd like to take a look at what Paul Krugman has to say about our imploding system.

Go to the link I've provided and you can read his entire column for free.

Universal health care, much as we need it, won’t happen until there’s a change of management in the White House. In the meantime, however, Congress can take an important step toward making our health care system less wasteful, by fixing the Medicare Middleman Multiplication Act of 2003.

Officially, of course, it was the Medicare Modernization Act. But as we learned during the debate over Social Security, in Bushspeak "modernize" is a synonym for "privatize." And one of the main features of the legislation was an effort to bring private-sector fragmentation and inefficiency to one of America’s most important public programs.
http://www.dohiyimir.org/...

His reference to the private-sector is a polite euphemism for the for-profit U.S. insurance industry. The for-profit insurance industry is the crown jewel of the U.S. health care system. And never forget that every dollar they spend on your health care goes against their corporate bottom line.

Let me explain again that paying your health care bills is bad, very bad indeed for the financial health of the insurance industry. And therein lies the blood curdling reality.

Back to Krugman.

The process actually started in the 1990s, when Medicare began allowing recipients to replace traditional Medicare — in which the government pays doctors and hospitals — with private managed-care plans, in which the government pays a fee to an H.M.O. The magic of the marketplace was supposed to cut Medicare’s costs.

The plan backfired. H.M.O.’s received fees reflecting the medical costs of the average Medicare recipient, but to maximize profits they selectively enrolled only healthier seniors, leaving sicker, more expensive people in traditional Medicare. Once Medicare became aware of this cream-skimming and started adjusting payments to reflect beneficiaries’ health, the H.M.O.’s began dropping out: their extra layer of bureaucracy meant that they had higher costs than traditional Medicare and couldn’t compete on a financially fair basis.

Now if you're wondering why your mother, father, grandmother or grandfather was shoehorned into a plan which is cynically named Medicare Advantage, it's because the scum Congress which passed the vile Medicare D legislation (of which Tommy Thompson says he's so darn proud) made certain that there were big bucks for the for-profit insurance industry. Here's what Krugman has to say.

That should have been the end of the story. But for the Bush administration and its Congressional allies, privatization isn’t a way to deliver better government services — it’s an end in itself. So the 2003 legislation increased payments to Medicare-supported H.M.O.’s, which were renamed Medicare Advantage plans. These plans are now heavily subsidized.

According to the Medicare Payment Advisory Commission, an independent federal body that advises Congress on Medicare issues, Medicare Advantage now costs 11 percent more per beneficiary than traditional Medicare. According to the Commonwealth Fund, which has a similar estimate of the excess cost, the subsidy to private H.M.O.’s cost Medicare $5.4 billion in 2005.

Enough on Medicare D.

Let's move onto the health care reform being championed by the Republican governor of California. Again, don't take my word for anything. Take a look at this brave and brilliant op-ed which was in the Los Angeles Times yesterday.

WHEN Gov. Arnold Schwarzenegger, on crutches, unveils his expected grand redesign of the state's health insurance system Monday, he must tackle the biggest obstacle to insuring the uninsured: insurance companies.
The governor said recently that California's high number of uninsured residents — about one in five — acts as a hidden tax on the insured by forcing them to pay higher premiums, deductibles and co-pays. He has strongly hinted that he favors a system requiring individuals to buy health insurance, as well as assuring coverage for all children in the state (who constitute about 12% of the uninsured).

But he's said nothing about reforming insurance companies or HMOs.

http://www.latimes.com/...

This is the truth you must understand. Everywhere you look, all you see when the subject of health care reform is discussed is, in reality, more of the same. It's all about maintaining the status quo of the for-profit insurance industry. And what does this mean for you and me? More of the same too, delay, deny and deceive.

Delay and deny us lifesaving health care, delay and deny us and our health care providers payment for services rendered. Deceive us about everything: Trial lawyers are responsible for spiraling health care costs (Wrong!); Health savings accounts are good for you and me (Wrong!)

Schwarzenegger's experience with health insurers is not your average citizen's. Anyone as rich as he is doesn't have to worry about medical expenses. He and his surgeon surely didn't have to seek permission for treatment. They didn't have to argue with a cost-control center demanding something cheaper — such as outpatient surgery. The governor won't fear that his insurer will retroactively cancel his policy or double his premiums because of the surgery.

Not only is Schwarzenegger immune to most people's struggles with insurers, he's also enjoyed nearly $1 million in direct political contributions from them, according to public contribution reports.

It is this political relationship that should worry Californians hoping for real health care reform. Insurance companies, after all, will spend whatever it takes and call in every favor they're owed to stop reforms that restrict their profits, curb their extravagant overhead or limit what they can pay their chief executives.

The money paragraph from the L.A. Times.

California insurers won't like these proposals, and won't be shy in reminding the governor and Legislature about favors owed. Whether our elected officials respond to the desires of insurers or the needs of California will determine everything about health care reform.

Will Democrats stand up for the American people or their insuance industry patrons?

It's become almost oxymoronic. As the guy said: "I don't mind paying a doctor, but I don't understand why I have to pay an investor every time I get sick."

Labels: insurance

Labels: insurance

Labels: insurance, universal