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PHARMA/POLICY: Yet more revisionism in Part D

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It’s incredible how a couple of bullshit surveys, dishonestly conducted have changed the rhetoric a little on Part D. Now there’s a very odd article about Part D in The LA Times, which has been speaking truth to one power (Kaiser Permanente) all last week. Apparently it’s all going swimmingly well.

By the May 15 deadline, federal officials expect to have more than 20 million seniors enrolled in plans under Medicare Part D, as the benefit program is called. That would include at least 7 million who previously lacked insurance for outpatient prescriptions. Of the millions who have signed up, many are enjoying significant savings, sometimes $1,000 a year or more. That’s a considerable achievement for a government that has not tried to roll out such an ambitious entitlement program since the days of Lyndon B. Johnson. It’s especially so for President Bush, who is no fan of big government.

And read on because it quotes lots of dinisterested parties like everyone’s favorite lobbyist and truth-teller Karen Ignagni, and the flack from the AEI, before it gets to the real triumph of Medicare Part D. It’s cheap, much cheaper than we were told!

Mike Leavitt, HHS secretary was happy to point that out:

As proof that privatization is already working, Leavitt points to estimates that the program’s net cost to the federal government will be $678 billion over 10 years, instead of the $737 billion projected last year.

Funny that because this is what the PBS Newshour reported in March 2004

When the Medicare law was passed last November, Congress’s scorekeeping arm, the Congressional Budget Office, pegged the cost at $395 billion over ten years. Contrast that with the $534 billion estimate from HHS’ Centers for Medicare and Medicaid Services, or CMS. The Bush administration released that estimate last month as part of its 2005 federal budget request.

So we’re not yet hitting some of the wilder estimates of the program cost, and we’re only going to be (maybe) $280 billion over the original budget promised, or a mere $140 billion over the real estimate that was deemed so explosive that it was forcibly hidden from Congress by Tom Scully, the Bush flack then running CMS. That must mean that the whole thing is cheap and shows that the market is working!  And of course we can trust everything that these guys say, as in every other aspect of their performance.

Pity that if we just paid the prices the VA gets we could cover all seniors with no donut hole for less money, but at least we’re helping out with private enterprise and promoting choice! Because that’s such a great thing.

Martha Straub, 86, a retired secretary from Woodland Hills, gives her new drug benefit an A and the signup ordeal a D. That averages out to a C+. "It’s very hard for an individual to dial in the plan that’s going to be most beneficial to you," said Straub’s daughter, Lorna Bashara, who helped her mother. "It was like looking for a needle in a haystack."

(Cross posted over at TPMCafe, who’s blog on the subject is somewhat quietening down)

POLICY/PHARMA: Tierney on Limbaugh–A Taste of His Own Medicine

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Rush Limbaugh, idiotic conservative and drug-addict—who I hear in 1990 on his show saying that drug addicts should be “written off” and lately was attacking medical marijuana users, has according to Tierney been given A Taste of His Own Medicine . I’ve been waiting to comment, but Tierney has done so, even if he’s a little kind to him, but his article is well worth reading. I reproduced it below because it’s behind the NY Times firewall. It’s also worth remembering that while Richard Paey stood up and is doing 25 years while clearly innocent of the crime he’s accused of, Limbaugh was too cowardly to obtain his own drugs, and got his housekeeper to do it for him. But I guess that’s a minor point. Here’s Tierny:

Now that Rush Limbaugh has managed to keep himself out of prison, the punishment he once advocated for drug abusers, let me suggest a new cause for him: speaking out for people who can handle their OxyContin.

Like Limbaugh, Richard Paey suffers from back pain, which in his case is so severe that he’s confined to a wheelchair. Also like Limbaugh, he was accused of illegally obtaining large quantities of painkillers. Although there was no evidence that either man sold drugs illegally, the authorities in Florida zealously pursued each of them for years.

Unlike Limbaugh, Paey went to prison. Now 47 years old, he’s serving the third year of a 25-year term. His wife told me that when he heard how Limbaugh settled his case last week — by agreeing to pay $30,000 and submit to drug tests — Paey offered a simple explanation: “The wealthy and influential go to rehab, while the poor and powerless go to prison.”

He has a point, although I don’t think that’s the crucial distinction between the cases. Paey stood up for his belief that patients in pain should be able to get the medicine they need. Limbaugh so far hasn’t stood up for any consistent principle except his right to stay out of jail.

He has portrayed himself as the victim of a politically opportunistic prosecutor determined to bag a high-profile trophy, which is probably true. But that’s standard operating procedure in the drug war supported by Limbaugh and his fellow conservatives.

Drug agents and prosecutors are desperate for headlines because they have so little else to show for their work. The drug war costs $35 billion per year and has yet to demonstrate any clear long-term benefits — precisely the kind of government boondoggle that conservatives like Limbaugh ought to view skeptically.

Yet conservatives go on giving more money and more power to the drug cops. When critics complained about threats to civil liberties in the Patriot Act, President Bush defended it by noting that the government was already using some of these powers against drug dealers. Why worry about snooping on foreign terrorists when we’ve already been doing it to Americans?

Limbaugh objected when prosecutors, unable to come up with enough evidence against him, demanded to be allowed to go through his medical records in the hope of finding something.

He managed to stop them in court, but other defendants can’t afford long legal battles to protect their privacy.

Drug agents and prosecutors go on fishing expeditions to seize doctors’ records and force pharmacists to divulge what they’re selling to whom. With the help of new federal funds, states are compiling databases of the prescriptions being filled at pharmacies. Once their trolling finds something they deem suspicious, the authorities can threaten doctors, pharmacists and patients with financially crippling investigations and long jail sentences unless they cooperate by testifying against others or copping a plea.

Paey was the rare patient who refused to turn on his doctor or plead guilty to a problem he didn’t have. He insisted that he’d been taking large quantities of painkillers because he needed them. He wanted to protect his own right to keep taking them, and others’ rights as well.

“They say I was stubborn,” he told me last year. “I consider it a matter of principle.”

Limbaugh got off partly because he could afford the legal bills (which he says ran into millions of dollars) and partly because he cooperated with prosecutors. He confessed to being an addict, went into rehab and swore to remain clean.

Perhaps he really was one of the small minority of pain patients who hurt themselves by compulsively using drugs like OxyContin for emotional, not physical, relief. But most pain patients can become physically dependent on large doses of opioids without being what doctors consider an addict. They take the drugs not to escape reality, but to function normally.

Even if Limbaugh believes that drugs like OxyContin are a menace to himself, he ought to recognize that most patients are in Richard Paey’s category. Their problem isn’t abusing painkillers, but finding doctors to prescribe enough of them. And that gets harder every year because of the drug war promoted by conservatives like Limbaugh.

It has been said that a liberal is a conservative who’s been arrested. I wouldn’t wish such a conversion on Limbaugh. But a two-year investigation by drug prosecutors should be enough to turn a conservative into a libertarian.

CONUSMERS/INDUSTRY: Consumer health care conference in SF coming up next week

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Next week I’ll be at some of the Consumer Directed Health Care Conference in SF. It’s a weird match of the business guys trying to extort the last dollar out of the HDHP/CDHP buzzword before it dies its inevitable death, the wing-nuts promoting it who still can’t do basic math, and the real long term players, mostly on the IT side, who are trying to figure out how to put customer service and patient self-involvement into the care process. Sadly all too few of the latter, and none of the Information Therapy crowd who actually know something about it.

I’ve already interviewed Grace-Marie Turner about this, (no prizes for guessing which category she fits into) they have everyone’s favorite (lack of) market-theorist Reggie Herzlinger (although earlier than I like to get out of bed, so I’ll probably skip it) and even Newt is making an appearance.

It’s kind of funny that Grace-Marie and Sally Pipes are on suggesting in a only slightly loaded way that a Consumer Driven Health Care System will Succeed and a Government Run/Single Payor System will Fail and there is no one from the other side to respond. Couldn’t they afford Uwe? Was Jamie Robinson busy? David Himmelstein unavoidably detained by the FBI? Alain Enthoven couldn’t make the drive up from Stanford? Ian Morrison booked elsewhere. Couldn’t find my phone number on my web site? (UPDATE: apparently they talked to Brian Klepper, found out he wasn’t a fan and never called back).

Don’t worry, they did find one blogger’s number—Dmitriy Kruglyak of The Medical Blog Network is giving a talk on Blogs & Open Media: A New Force in Consumer-Driven Healthcare. I don’t know what he’s going to say, but the title looks good and correct.

However, given that this is a conference about making health care an easy experience for the consumer, you’d think that they would have paid a little attention to “their” consumers the attendees. So you want to see Reggie’s talk on the first day? Go to this screen — look at the far right and tell me what time Reggie’s on in the 8.30 to 12 range. Meanwhile go to any session and hit the “session description” button. It launches a word document no less, which for most browsers spells trouble. And on the three that I’ve opened at random there’s no more info than is in the session description on the main page.

OK. Let me stop griping about user interfaces, remind you that good customer service, patient-centered care and high deductible health plans are not necessarily causally or even collinearly related, go the conference and report back.

POLICY: A Conversation with Paul Fronstiin from EBRI

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You won’t see this guy, Paul Fronstin from EBRI on the CDHP rah-rah circuit. But like many sober analysts of health care, what he has to say is very important and very sharp. So go read  A Conversation with Paul Fronstin in Managed Care magazine. If you’re too lazy/bored/time-constrained to do that, ponder at least this exchange which I don’t agree with—in that I think he’s not factoring in the outsourcing revolution—but is a pretty provocative viewpoint.

FRONSTIN: In the short term, I don’t see a tremendous erosion of coverage. One thing that people outside of health care tend to forget is the impact of the overall economy on health care. In the late ’90s, the strong economy enabled the managed care backlash. The lower unemployment rate drove employers to enhance benefits and drove small employers to offer benefits. Once unemployment drops below a certain threshold, the economy starts to have an impact on what employers do and don’t do. The likelihood that a small business offered health benefits increased 20 percent between 1998 and 2000, even though small businesses saw almost a 20 percent increase in premiums over those two years. That tells me that employers will do what they have to do to recruit and retain workers if they think it will affect the success of their business. Even if health care costs are increasing rapidly, if employers think cutting back on those benefits will affect their business, they’ll make other tradeoffs but they’ll maintain health benefits.MC: You see indications that we’re heading for another period like the late ’90s?FRONSTIN: Right now, we’re at 4.8 percent unemployment. The economy is certainly moving in the right direction as far as unemployment is concerned. We’re not that far away from that threshold. I don’t know if the threshold is 4.6 percent, 4.4 percent, 4.2 percent or 4 percent, but we’re within a percentage point of it as opposed to being within 3 percentage points. If unemployment continues down that path, employers will postpone abandoning health insurance

HEALTH PLANS/POLICY: RAND shows that HDHPs will only havea modest impact

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There’s an important article out in Health Affairs showing that, as has been suggested on THCB many times, contrary to some (and it is only some) of the HDHP/CDHC advocates rantings, the move to lower premium higher deductible health plans even with premium subsidies for the poor will have relatively little overall impact, and certainly won’t change the uninsurance numbers much. Here’s the Press Release and the money quote:

Price subsidies have only modest effects on overall participation in the individual health insurance market, RAND Corporation senior economist Susan Marquis and coauthors report in a Health Affairs Web Exclusive published today.

“A 20 percent [premium] subsidy would increase the number of subscribers in the individual market by 5-11 percent and decrease the number of uninsured people by 1-3 percent,” the researchers report. That comes from 1-2 percent more potential purchasers deciding to buy insurance and about 15 percent fewer current enrollees dropping coverage, as a result of the 20 percent subsidy.

I’ll be back later when I’ve read the article.

UPDATE: Damn, didn’t even get a chance to read this and I’ve already been interviewed about it. I must be getting famous. Wealth surely to follow?

POLICY/POLITICS: The McLaughlin Group Library : Transcript

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You probably know The McLaughlin Group. It’s that political talk show where a panel of extreme right-wing Republicans (Buchanan & Blankley) argue with a pair of extreme right-wing Democrats (Clift & O’Donell), and they call it representing the spectrum of American politics. God knows, it probably does.

So last weekend while I was in the gym in NYC I noticed that they were having a special on health care. Filling in for the extreme right wingers were HHS Sec Leavitt and Pfizer CEO Hank McKinnell. Filling in for the right-wing Democrats were Susan Denzter, the PBS health reporter, and Jay Crosson from Kaiser Permanente. I guess they pass for liberals these days!

I spoke with Humphrey Taylor at WHCC and he told me that the Harris data shows now that 36% of the nation thinks that the health care system needs to be completely dismantled and rebuilt — and that basically no one thinks it’s going well. That number was at 40% when Clinton was elected, so we’re on our way!  But of course that point of view wasn’t going to get represented in our mainstream "liberal" media. Here’s the transcript

As you might expect, there was a fair load of pap talked. What was said on the show is italics, my comments are in between

McLaughlin–This HSA plan puts the individual in charge of health spending, not the insurance company, so the consumer becomes the buyer, and the buyer will pay attention to the price of medical services. Patients will shop. Patients will negotiate. Patients will put the economy of the market to work. Health care will suddenly become transparent.

Grace-Marie Turner sure got to him. Has he never heard of PPO contracting?

Question: How essential is the market dynamic for health cost containment and quality? Jay Crosson.

MR. CROSSON: Savings accounts are a great deal.

Someone from Kaiser said that? Can he do basic math? Isn’t his organization reeling from the problems of competing with the HDHPs? His buddy Robbie Pearl certainly thinks so.

They’re a wonderful deal for people, and they make a lot of sense. We just need to make sure that the deductible part of these plans does not interfere with patients’ access to those very services we need to prevent the complications of heart disease, hypertension and the like.

And why oh why would that be a problem for a pre-paid HMO with lots of chronically ill people? (Don’t answer, it’s rhetorical). And if it is, why are HSAs a "great deal".

Don’t worry, there’s a journalist here to talk some (and I mean only some) sense. 

MS. DENTZER: It’ll help at the margin. Most of these plans essentially are high-deductible health insurance plans. But broad coverage is going to kick in for people at $5,000 or $10,000. So if you have a serious chronic illness, you’re going to shoot through that in no time. So it’s not going to influence — if we think about the fact that 80 percent of health spending is related to 20 percent of individuals who are high-cost, very sick individuals, as Hank says, it’s not going to affect those people. It’ll help, but it reminds me of a bumper sticker I saw recently that said, "You should buckle your car seat belt because it will keep aliens from snatching you out of the car." I mean, it’s a good idea to buckle your seat belt, but it’s not going to create these enormous effects that some people claim.

But who needs sense when a pharma CEO who’s presided over his company’s stock going into the tank can rehash some real rubbish, that is coincidentally, bad news for his company!

MR. MCKINNELL: Well, an informed consumer, in a free market with choices, improves quality and reduces costs. We have many, many examples of this; two, actually, in the medical field. One is cosmetic surgery. The other is Lasik surgery, where, in the last four years, the quality has improved and the cost to the consumer has fallen by half. It does require transparency in pricing and quality, and that’s an enormous hurdle that we’re going to have to —

Let’s ignore the fact that Lasik surgery not only doesn’t represent the major problem–dealing with chronic care–but that actually the "proof" of its price decline has been shown to be bullshit by Paul Ginsberg. And that when you get to the many examples, it’s not two out of many; it’s two–Lasik and boob jobs. 

MR. MCLAUGHLIN: Well, as a matter of public policy, would you recommend to the president that he make mandatory health insurance for 45 million Americans who don’t have it, on the basis — MR. CROSSON: Yes. Not now.  I think it’s a reasonable plan, but we need to see how it works in Massachusetts. They have some big problems they have to overcome first.

Very brave Mr. Crosson. But don’t worry, if you want to hear some real ignorance ask a pharma CEO.

MR. MCKINNELL: Well, there’s two important characteristics of the Massachusetts plan. One is it was a bipartisan effort. I can’t see that happening in Washington today, unfortunately. Secondly, it is a way to solve what we call the problem of the uninsured.

<Here comes the real rubbish

But the uninsured don’t have a problem. They get access to health care. It’s a problem for all of us who pay taxes and all of us who pay medical bills.

The uninsured get access to health care? In the middle of "Cover the Uninsured Week", and with the IOM saying that 18,000 Americans die a year from being uninsured, McKinnell couldn’t think of a single qualifier to put in that sentence?

The real answer here is to provide an insurance mechanism, which they’ve done, but it also needs to be able to purchase a high-quality plan. That high-quality plan has not been defined yet.

But what he didn’t say is "if you let us write the bill like we did in 2003 we’ll make sure that the ‘high-quality health plan’ covers all our expensive drugs, and that the tax payer gets screwed".

Meanwhile he’s still speaking the mantra of "I want to be a consumer goods company":


MR. MCLAUGHLIN: If you carry your thinking to its logical conclusion,
you’re going to recommend the elimination of employer- sponsored or
underwritten health insurance for employees. Is that correct?


MR. MCKINNELL: I do think that would be a good idea, for the simple
reason that employers aren’t particularly good at providing health
benefits to their employees. We don’t provide life insurance or
automobile insurance. Why would we provide health insurance? Let’s put
that in the hands of the consumers spending their own dollars.

Given the very effective job pharma’s done running up its profits at the hands of third party payers over the years, I’m baffled as to why they think they’re going to do better given that the margins of a typical consumer goods company are way below theirs. Perhaps he thinks a 40% decline in their stock price isn’t enough…or is he just possibly saying something he doesn’t really mean. If so that habit was catching, and Leavitt was getting infected:


MR. MCLAUGHLIN: The president likes bold moves. Will you recommend to
him, Mr. Secretary, that he mandate health insurance for 45 million
Americans and the other Americans who don’t have it? LEAVITT: It’s (the Mass plan) a powerful idea, and it needs to be tried. And
if it works, other states will follow. And who knows? Maybe the United
States will.

On the other hand he forgot to say….."err, no. We don’t believe in that communistic single payer government run health care nonsense".

Then of course they went on to the real issue of health reform–or at least the one everyone can agree to agree on. More IT please. And then McKinnell actually said something sensible:


MR. MCKINNELL: Well, you won’t get any disagreement on this panel of
the need for electronic medical records. But let me caution you that it
will take a lot longer than we think.

And then we’re onto the predictions–

SEC. LEAVITT: In five years, that irritating medical clipboard they
always hand you when you walk into the clinic will be a thing of the
past.

Maybe we should be buying Phreesia stock then.

MR.
MCKINNELL: My prediction: During our lifetime, the pharmaceutical
industry will eliminate the risk of cancer and heart disease for our
children and grandchildren.

And put itself out of business! But don’t worry I’ll be long retired

MR. CROSSON: This time the health-care crisis is real. The country will
solve it. We always get to the right answer.

Gotta love an optimist. After all we’ve cracked the problems of the Middle east, energy, education, the drug war, etc, etc. What’s this little nugget compared to those!

MS. DENTZER: Medical research will lead us to universal coverage,
because people won’t stand for giving up the benefits that it will show
us in the next 15 years.

And I think she may well be right, but it’ll  be coverage that either McKinnell and the industry or the taxpayer is not going to likeMR. MCLAUGHLIN:  The Massachusetts experiment will work and it will spread.

So a show just like our health care system. Everyone screaming stuff that they heard they ought to be saying without thinking whether it benefited them. The lone journalist having to play the sensible analyst without a real industry critic being let in the room. And no discussion or thought about those who are really getting the shaft. Then again, a show just like Washington.

POLICY/INDUSRY: Scenarios and planning for them

In this pretty impressive article, The Consequential Divide: Which Direction Healthcare?, Preston Gee points out that too many people face the future in health care by "wishing  would make it so".  This was something that we had to contend with at IFTF all the time–people saying "you want X, therefore you’re predicting X" about our forecasts. That’s certainly what most people like to do, and then are unprepared when Y arrives instead.

One way around this–which we used extensively at IFTF–is to create scenarios which give alternate views of the future, and provide clues so that the client could recognize which scenario it ended up in. Then you develop a plan for each scenario, and enact it according to the future you find yourself in.

My only problem with Gee’s argument is that he suggests we’re either going to a consumerist-HSA future or to a single payer one. If I was forced to guess I’d say that we’re going through a consumerist-HSA future to a single payer one–and a damn violent upheaval it’ll be too. So that will make the timing of many initiatives very tricky.

But there are plenty of other potential scenarios: consumerism might remain a small deal for most health care providers, or a modest upturn in the employment world might release some of the cost pressure off employees, or a rash of hospital bankruptcies lead us to the "Blade runner" or "Brazil" scenario, or a sensible coming together of providers, plans and employers plus an individual mandate gets us to a quasi-universal insurance with modest price controls. (If you want the full list you’ll have to hire me!)

Bill Walsh probably figured out the best way to use scenarios. In his day the 49ers had a play ready for virtually every eventuality (e.g. for 3rd and 15 on the opponents 30, losing by 6 with 45 seconds on the clock, Montana would fake to rice and dump off to the fullback, or whatever). Scenario-based strategic planning doesn’t have to be that complex. But health care organizations need to realize that there are a range of possible futures out there, and if they want to be live in all of them, they need to prepare.

POLICY: Email from Baghdad

By JOHN IRVINE

“Iraqi troops injured in the fighting must pay their own way at civilian hospitals as the  Iraqi military has no military hospitals of its own …” Marketplace reports this morning.

I’ve seen plenty of TV footage of Iraqi troops being treated by U.S.forces, but this certainly raises a question about what the official policy is. If it’s true, it’s outrageous.

The audio is here.

I emailed Iraqi blogger Zeyad about this story earlier this morning. Zeyads runs the excellent Healing Iraq blog. (As it happens, Zeyad is the author of an good piece on official corruption in the Iraqi healthcare system which ran on the Guardian’s web site recently.) 

Here was his response to my email:

Indeed, Iraq’s only military hospital (the Rasheed hospital south of Baghdad) was destroyed in the war and was never rebuilt.  As far as I know, there is a temporary facility set up to treat Iraqi soldiers at the Taji military base north of Baghdad. Most of the time, though, Iraqi soldiers are treated for emergencies at civilian hospitals all over the country, except during joint operations with Americans. This is what I know and I may be wrong.

You should read Zeyad’s take on working at an Iraqi clinic. It’s really good.

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