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POLICY/PHARMA: Cato calls the Republicans on the Part D deceipt

I approve of government programs done well. Michael Cannon doesn’t approve of them done much at all. We both disapprove of them being done expensively and then having so-called Conservatives in power lie bold face about their costs and enrollment rates. Yup, I’m sending you over to the Cato Institute blog. That might be a first for TPM Cafe, but it’s a great explanation of what’s wrong with Part D.

(Also posted at TPMcafe)

CODA: I haven’t made it thorugh Kling’s book yet, and I had a real problem with Cannon’s — as it missed the point so badly that I didn’t think it was worth reviewing. But with Radley Balko keeping up on the drug war stuff, Cato remains the thinking man’s right wing think-tank.

POLICY: talking about the inefficiencies of the insurance market…

A Commonwealth Fund study from HSC in the latest Health Affairs reminds us that employees in small firms pay 18% more for health insurance when adjusted for value of plan adjusted premiums.  Here’s the full Health Affairs study

Meanwhile, to the surprise of absolutely nobody that’s been paying attention, another study in the same Health Affairs shows that increased competition in the  Medicare risk/Advantage program (i.e. the private plan part of it) is associated with greater use of advertising targeting healthier patients. More from PNHP’s Don McCanne on that.

PBMs: Is the edifice crumbling–not yet!

Conundrum—It was reported in their most recent 10K that what Medco got in rebates from manufacturers went down, and that really hit profit from that sector of their business in the most recent quarter. But their overall profits went up?  How did they manage it?

Well I know (and told a private client all about it in research report) and have given you some hints before about where they make their money. But now Barbara Martinez at the WSJ has figured it out—their margins on generics are huge. And of course they control that channel by pushing their clients into mail order where they can make the generic substitutions as soon as the rebates go away. So the more generics they sell, and the more mail order they sell, the higher their margins are —even if they keep less of the rebate on the branded product.

And, as the WSJ article says, luckily for them their clients are too dumb to figure it out. (Other than Horizon Blues of New Jersey which is suing Medco)

But wait there’s a little more. Remember last year? That’s when the trade association of the big PBMs (PCMA) put out a report explaining what great savings mail order provided for purchasers of drugs. But the entire report neglected to mention that mail-order pharmacies are significantly more profitable then regular pharmacies, and it further neglected that the owners of the major mail-order houses are, of course, the big PBMs.

CONSUMERS/BLOGS: CDHC Conference

Dmitriy did a nice job at his talk at the CDHCC meeting yesterday. You can see his slides here

I was the skunk in the room on a couple of panels. I asked a “question” at the payments and financial services panel, which basically said that HSAs were going to turn doctors into collections agencies….and got surrounded by lots of people afterwards who either agreed with me, or who told me that they were on the point of building the real-time credit guaranteeing, deductible adjudication network that was going to save physicians, and guarantee them that the patients with HDHPs actually pay their bills. They’d better be right, or else the doctors will start thinking that single payer, but one that at least guarantees to pay, is a pretty good alternative!

I was not the only skunk in the room on the Sally Pipes/Grace-Marie Turner debate (!) which I pointed out was as much of a  debate as the Republican Convention. One questioner stood up and said that the pro-HSA crowd (which he was on) would have to prove that they weren’t just about employers cost shifting to employees, or they’d lose the ideological battle. Too bloody right—unfortunately the data is in and that is exactly what’s going on. The PRI guys (Graham and Pipes) want to go to meetings to combat State Senator Sheila Kuhl’s call for single payer—what they are confused about is why the single payer guys think that HSAs are a godsend for their cause. Apparently they think everyone wants to have an HSA and take part in health care “ownership”.

I tried to be a moderate and merely pointed out that the ideologues in the HSA movement are treading on very dangerous ground as Americans love their employer-based insurance and know that there’s not much to replace it with. Just wait till they find out how dreadful life is in the individual market!

PHARMA/POLICY: Yet more revisionism in Part D

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

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.

BLOGS/PHARMA: The sexy world of drug reps–Have the link now

The Daily Show interviews the totally hot Miss Florida who’s also a drug rep and criticizes Jeffrey Avorn for promoting generics using non-hot nurses and pharmacists. Best bit is when they berate a senior for using generics and taking bread out of Miss Florida’s mouth. Hysterical…

UPDATE: Here’s the link. (only seems to work with  Explorer, Firefox just hangs)

This is a must see. I bet Avorn just didn’t understand what the hell was going on…

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