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PHARMA/HEALTH PLANS/PBMs/POLICY: Meanwhile Ignangi on drug pricing, best price and fraud

• 1

I’m listening to the webcast of the KFF Forum on Medicare, and in the middle Karen Ignagni comes out with this gem.

But Karen Ignagni, president and CEO of America’s Health Insurance Plans, countered that so far, health insurers are beating Uncle Sam at the negotiating table. "I’m hearing shock from (state) Medicaid directors that we’re getting better prices than they are," she told UPI. "I don’t know of any other government program where the real costs are less than the estimates," she said, arguing that the plans are offering "affordable products" with low premiums and low deductibles.

Ignagni is either lying here (or massively overstating the truth from a few anecdotes), or going to find a few men in sharp suits from the rich part of K street funded by big Pharma coming down to see her carrying baseball bats.

You see, Medicaid plans get from pharma manufacturers what’s known as “best price”. In other words if they give a better price to another customer, they also have to give that price to Medicaid. Medicaid is still of course buying its drugs for its non-Medicare dual eligible population. The drug companies know this, so I doubt that what she’s saying is true. But if it is true that Ignagni’s health plan members are getting a better price than the states are, then the states can go back to the pharma manufacturers to get a better rebate — oh, and also prosecute Pharma companies for fraud over not giving them best price, as has happened many times.

PHARMA: McKinell’s over-Exubera-nce

• 1

Diabetes sufferers will have to wait a longer for Exubera, an inhaled insulin drug that supporters say transform the lives of people with the condition. Pfizer shares soared this morning after CEO Hank McKinnell said the drug has received FDA approval.

Turns out Mckinnell was just excited…..or perhaps over – Exubera-nt?

Anyway the stock market seems to think that he knows something.

PFE

 

POLICY/POLITICS: Our fearless leader demonstrates his vast understanding of the health care system

• 11

Here’s the man himself interviewed in the run up to the State of the Union by the the friendly WSJ:

The Wall Street Journal: Thanks for taking the time for us. We wanted to think forward to the State of the Union a little bit, next week. Obviously, health care is something that has moved back to the top of the agenda. You’ve got employers and employees both equally concerned about cost and availability. What’s the approach going to be this year, philosophically and specifically?President Bush: The government must work to reduce costs through the spread of information technology, which many in the health field say will help reduce the rising costs substantially; litigation reform to prevent these frivolous lawsuits from running up the cost of medicine, either through the practice of defensive medicine and/or premium increases, and actually drive good docs out of business. I’m particularly concerned about OB/GYNs; we have an OB/GYN crisis in states because of these lawsuits. The patient-doctor relationship is a crucial relationship in helping control the costs of medicine. The more transparent pricing is and the more opportunities patients have to make decisions in the health-care field, the more likely it is costs will not increase as dramatically as they have in the past.I believe in the expansion of HSAs [health savings accounts]. I will talk about my philosophy for health care in the State of the Union. I will specifically address issues that I want the Congress to take up over the course of this month, including how to expand HSAs to make them achieve an objective, which is to have a patient-doctor relationship that will have market forces within the decision-making process and the pricing of medicine; as well as have a system that’s portable for our workers, to recognize that we are a society which has significant job turnover, and therefore one of the uncertainties in a society in which there is job turnover is whether or not health care will go from one job to the next.As well, HSAs, in my judgment, as well as other innovative programs, like association health plans, will enable the small-business sector of the economy, in which there’s a lot of working uninsured, to be able to more likely afford health care. That’s what I’m going to be talking about.WSJ: How do you turn that into a bipartisan movement?Mr. Bush: The question going into the ’06 year is how do we take health care or entitlement reform, or all these issues, into something that the country really wants — which is a bipartisan look at issues, as opposed to what many interpret to be needless politics, so whether it be in health care or in a variety of issues we’ll be discussing. And that’s the challenge of the ’06 year.One big issue is competitiveness, of which health care is an important component. If our health-care system is such that small businesses, for example, can’t afford to stay in business, it’s going to obviously hurt our people, but it’s also going to make our country less competitive. The war on terror is a big issue. And I will continue to talk about a bipartisan approach to beating the terrorists. So whether it be in health care or these other issues, it’s, no question, a challenge.

So that’s it. 45 million uninsured, crisis at every level in the health care system and even rich people in Florida scared about the future and Bush believes that we going to solve it all by using IT to save money and sticking it to those blood sucking attorneys. Then of course we’re going to use the easily available transparent pricing to beat providers to death with market forces.  Finally, he thinks the remaining solution is HSAs, which any analysis shows cost the system money overall. At least that’s apparent to anyone who can do basic math, a group which doesn’t seem to include Bush or virtually anyone in his party.

OK. What’s actually going to happen? Not much is my guess. The House is in disarray since Delay’s indictment, and the Senate is in some risk of going back to the Dems in the November election, and the biggest health care story — Medicare part D — is shaping up to be a disaster for the Administration. So why would any Republican in a position of influence get behind these ideas? Especially as most of them are actually counter to the interests of the big contributors at the AHA, AMA and AHIP.

Oh, I know. It’s because health care is just another form of terrorism, and that demands bi-partisan cooperation. Yup, the important thing is to link the two. Only Bush and PhRMA can manage to do that.

POLICY: Wealthy Floridians fear health care costs

• 2

Brian Klepper steers THCB to this cracker of a headline from the state of endless sunshine and rampant voting fraud. Poll: Wealthy Floridians fear health care costs.

Apparently Florida’s wealthiest residents (although the story doesn’t define wealthy) fear that the high cost of health care may drain their financial assets. Nearly one in three wealthy Floridians polled agreed with the statement "health care costs will ultimately consume a major portion of my financial assets."

As Brian notes, if they’re scared, what about the poor people? Perhaps there’s room for a coalition here.

POLICY: Over at TPMCafe, Medicare Part D

• 13

I have joined in a coversation about Part D with some other old farts and a couple of young punks (but very smart young punks — I was strugling to learn how to pick my nose at their age, and they’re health policy whizzes!) at TPMCafe. The section is called Drug Bill Debacle

Also don’t miss this cracker from a surgeon, Me and my HSA in which she shows why it’s great for her, but terrible for America!

POLICY/THCB: Ron speaks

• 9

So while I was making my lunch and walking the dog everyone’s "favorite" THCB commenter Ron Grenier called me and talked, and talked, and talked. What was he talking about?  Your guess is as good as mine, but let’s just say that he talks exactly like he writes! Oh, and apparently he’ll be doing a radio-show soon, Actually he’s make a very good Sean Hannity-type pontificator, although he’s probably a little too non-profane to make it in the rough and tumble world of loony conservative talk-radio.

But for those of you who thought he was an invention of the loony left to make the loony right look bad–nope he’s real!

PHARMA/POLICY: Drug coverage in Medicare Catastrophic (1988) and in the Clinton plan (1994), by MedPac

• 4

This is taken straight from a hard to navigate PDF document created in 2000 by MedPac (and advisory body on Medicare for the Congress). It’s a good primer on what happened, especially to  drug coverage under the by now forgotten Medicare Catastrophic Act. I reprint it here because there’s some confusion over that issue and I don’t want to have to do more writing myself when they’ve explained it so well!

Policymakers previously approached the issue of adding Medicare prescription drug coverage: in 1988, with the Medicare Catastrophic Coverage Act (MCCA) of 1988, and in 1994, with the Health Security Act. Both efforts failed, but for different reasons and under different circumstances.

Medicare Catastrophic Coverage Act of 1988

In 1988, Congress added a catastrophic benefit to Medicare that would have provided comprehensive coverage for outpatient drug expenses greater than $600 in 1991 with a 50 percent coinsurance, and those greater than $652 in 1992 with a 40 percent coinsurance. The coinsurance was to be lowered to 20 percent in 1993. The intent was to revise the deductible  annually, providing 16.8 percent of beneficiaries with benefits each year. The new coverage was to be entirely financed by  Medicare beneficiaries through an increase in the Part B premium and a supplementary surcharge. The surcharge was to cost higher-income beneficiaries those with incomes greater than about $40,000as much as $800 in 1989 and $1,050 in 1993 (Congressional Quarterly 1988, Coster 1990). Opposition to the new benefit was fueled by confusion about the specifics of the financing (many lower-income beneficiaries thought they had to pay the full surcharge), as well as other concerns.

First, enrollment in the program was mandatory, but many beneficiaries would never receive any benefits because their drug costs would never exceed the cap. Second, beneficiaries who already had drug coverage, from either Medigap or an employer-sponsored retiree plan, would be required to pay twice for the same benefit; these people also were the ones most likely to pay the maximum premium surcharge (although it is likely that retiree insurance premiums would either decline due to Medicare coverage or be a wrap-around benefit). Third, beneficiaries were required to start paying the supplemental premium in 1989, two years before the full benefit began. The law was ultimately repealed in 1989; few benefits had taken effect by this time.

Continue reading…

HOSPITALS/PHYSICIANS/POLICY: More data on specialty hospitals suggests the obvious

• 2

HSC is out with another study on local markets, and this time it’s looking at specialty hospitals. Not a new tune. HSC finds that purchasers in three local markets where there are plenty of specialty hospitals believe that the hospitals add to overall healthcare costs without improving quality. While purchasers may get lower prices from the new hospitals, they perceive that more procedures are recommended by physicians driving up their number of procedures and therefore overall costs. In addition, traditional community hospitals have been forced to compete by building new facilities, the costs of which get passed onto purchasers in the end, and have been raising their prices for services that specialty hospitals do not offer to compensate for their losses where the specialty hospitals have taken their business.

Yup, it’s all a scam. A war between docs and hospitals with the payers (and the taxpayer) picking up the tab. Of course, as discussed multo–times on THCB, if this was done within the context of some type of fixed budget, then maybe specialty hospitals or teams would be found to be the best way of delivering care. But in a FFS-based cost-unconscious system, they’re just adding to the death of health care affordability by a thousand cuts.

QUALITY/PHARMA: Statins in the water in the UK, but generic ones

• 2

And in more from the UK, statins are now going to be put in the water. Well not quite, but allowed to be given to anyone ever suspected of maybe in the future developing heart disease given to anyone ever suspected of maybe in the future developing heart disease, which in the UK is basically anyone.

Almost six million people in England and Wales — nearly 15 per cent of all adults — are from today eligible for treatment with statins under ground-breaking NHS guidelines. A report by the National Institute for Health and Clinical Excellence (NICE), which advises on best treatments, will recommend that anyone at risk of cardiovascular disease should be prescribed the drug.About 1.8 million adults in England and Wales currently take statins, which are thought to save 7,000 lives a year. Doctors believe that the new ruling will double uptake to 3.4 million people, saving another 10,000 lives a year.

While this might sound like fantastic news for the drug companies, I think that the decision might somehow be connected to the fact that most of the big statins (with the exception of I believe Lipitor and Crestor) have gone off patent in the UK, and one suspects that Pravachol and Zocor will be most popular!

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