Category: health care Page 25 of 35

If Trumpcare Fails

On March 24, 2017

Update: And, they have pulled the bill. Now Trump needs to get a win. (Note: This would have been a loss if it had actually passed, though Trump may not realize that.)

It will be for the best for both America and Trump. The original deal was bad, and the deal that Ryan and Trump have negotiated would have been disastrous–literally worse than no bill at all.

This is true for Americans, who would have worse quality care, along with less, more expensive coverage; and it is true for Trump, who promised something better and whose marginal followers will know he betrayed them. Indeed, polls have shown a collapse of Trump’s approval ratings since the first viewing of the draft bill.

If Trump is pushing for a vote when he knows he doesn’t have the vote, perhaps there’s some dim idea of that fact in there. A bad deal, as Trump knew in the 1980s, is worse than no deal at all.

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The GOP Healthcare Plan

By Ian Welsh

On March 7, 2017

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This is a good overview.

I’m not going to waste a lot of time on it. Other than the changes to state-based regulations, the removal of the individual mandate and the removal of the tax on good healthcare plans (so-called gold-plated plans), as it stands, this plan is slightly worse than Obamacare in pretty much every way.

It is not an improvement, it is not what Trump promised in his speeches, though it’s not far from what was in his policy documents. It is also not a disaster, but it certainly won’t be a win for Trump or make his followers feel better off and it was one of two ways he could, or can, do so. The other would be to improve their economy.

This matters far more to Trump’s future, and his presidency, than all the noise over immigration or Russia. He should have pushed hard for something simple that was an obvious win; something Democrats would find it hard to oppose.

This is not a win for his supporters, or for him.

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Market Failure, Epinephrine Injections, and Societal Failure

By Ian Welsh

On February 13, 2017

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This is not a competitive market:

Pharmaceutical company Kaléo – already under fire for raising the price of an overdose antidote – now plans to put an alternative to the EpiPen on the market for more than seven times the cost of the leading $608 drug.

Kaléo’s epinephrine injector, used to stop severe allergic reactions, will go on sale for $4,500 for a pack of two beginning on February 14. The auto-injector’s innovative audio instructions walk caregivers through administering less than $5 worth of epinephrine.

Remarkably, because of a system of coupons and discounts, Kaléo’s epinephrine injector Auvi-Q may have the lowest out-of-pocket costs for patients, a strategy some critics say may help some customers, but leads insurance companies to redistribute the cost of the drug through insurance fees to remain profitable.

The materials in such epinephrine injectors are worth about $8.

This is market failure. In a free market without collusion, if something is this high-priced, the price drops to more closely match the cost of production as other producers move into the market. It does not radically increase. As it stands, if you need an epinephrine injector and don’t have one, you stand a good chance of dying.

The rational reaction to these sorts of market failures, increasingly common in pharma, would be: (1) to either restructure the market to prevent them, which would require breaking up big pharma companies, streamlining approval processes, and allowing reverse-engineered knock-offs, or; (2) more simply, for the government to just manufacture them itself and charge a fair price.

There are some government services which should be kept entirely in-house. (The military, for example. Mercenaries are failure mode for any government.) There are many other services for which the government should be one provider among a number. The government stays in the business, providing about a third of the service; because if you aren’t in the business yourself you can’t always know if you’re being rooked by private companies and if you are being rooked, it’s very difficult to do anything about it because you don’t have the expertise to provide the service yourself.

At the same time, you want private companies involved to keep the in-house providers honest. You have multiple contractors, and those who do the best for the least are rewarded, so they have incentives to improve. You swap out the lowest performing ones on a regular basis, especially allowing a few upstarts in at the lowest viable level, so that radical new ideas can be tried.

If those new ideas work, everyone, government and private, adopt them.

At any rate, the market failures in pharma, with price markups in the thousands to tens of thousands of percents, are now so common that it’s clear that a radical solution is needed. The simplest solutions are price control and government getting into the business. Ideally, both should be done at the same time.

Note that price control includes forcing companies to take a profit. Dumping is (theoretically) illegal for a reason. If the government was to get into epinephrine injectors, for example, the logical solution for private enterprise would be to undercut their prices until the government pulled out because, “The private sector is more efficient.” Then, once the government was out of the business, they would jack their prices back up.

So you mandate a healthy profit, and because you’re in the business, you have a decent idea what a healthy profit is, not just for manufacturing, but also for distribution, sales, and so on. “You will make inflation +X percent on this.”

None of this is particularly complicated to do, in theory or in practice, though that isn’t to say that the technical details of setting it up are easy. But pharma is full of scientists and engineers who hate their jobs, and there have been vast waves of lay-offs as well; there’s plenty of expertise lying around.

I should add that this is a solved problem. It is simple to fix. This sort of price-gouging simply wasn’t tolerated in the past, and it is now, and pharma executives know it. Stop tolerating it, and it will go away.

But private pharma is a stupid way to invent and produce drugs anyway. They spend more on advertising than on research, they sponge off publicly-funded research, and they have vast incentives towards palliatives because a pill a day for life is far more profitable than a cure.

Medicines in the public interest, such as new antibiotics, receive little research because they are not profitable, and medicines long out of patent are subject to horrific price-gouging, and so on.

If you’re sick, you’ll pay almost anything for a cure. Medicine, drugs, and medical devices are one of the last things which should be provided through the private sector. If they are, they must be very highly regulated or in an engineered market with careful oversight–one from which the profit motive is largely excised at any level where decisions of patient care are being made.

The fact that our societies can no longer manage something as simple as drug prices is yet another sign of deep social failure.

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Trump Promises to Reduce Drug Prices

By Ian Welsh

On January 12, 2017

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So, there was a lot of hoopla over Trump’s press conference, most of it concentrating on the release of the oppo research file on him, containing not one proven assertion.

I decided, once again, to read the actual transcript. And found out that there was little coverage of something which should matter more to most Americans: Trump’s promise to lower Pharma prices.

We’ve got to get our drug industry back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.

Pharma has a lot of lobbies and a lot of lobbyists and a lot of power and there’s very little bidding on drugs. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to start bidding and we’re going to save billions of dollars over a period of time.

The business press seem to be taking this seriously.

It is also, AGAIN, something which should have been tackled long ago. Obama deliberately refused to allow price negotiation with pharma and so did Bush. In both cases, they gave into the lobby. Insane.

Nor, as some say, will this mean that pharma prices will have to rise overseas. Pharma is a profitable industry which spends more on marketing and advertising than on drug research, which researches mostly the wrong drugs, and so on. They can just make less money–high profits to Pharma are mis-allocated resources.

Next Trump talked about the F-35 (for those who don’t keep track, it basically can’t fly and is vastly over cost.)

And we’re going to do that with a lot of other industries. I’m very much involved with the generals and admirals on the airplane, the F-35, you’ve been reading about it. And it’s way, way behind schedule and many, many billions of dollars over budget. I don’t like that. And the admirals have been fantastic, the generals have been fantastic. I’ve really gotten to know them well. And we’re going to do some big things on the F-35 program…

AGAIN something which should have already been dealt with.

Trump thinks like a deal-maker and a business man, and what he sees is that the government is vastly over-paying for services and products, and he doesn’t like that. And what he sees is that Americans are overpaying as well, because the government refuses to act on their behalf.

I’m sorry, I’m very sorry. Trump will certainly do bad things, but if he follows through on these two things (especially pharma), he’ll be doing very good things that people like Obama would not do.

This is of a piece with Trump killing the Trans Pacific Partnership, while reports have regularly indicated that getting it passed was Obama’s most important legislative priority, likely for his entire Presidency.

Understand clearly that this is the sort of stuff that Trump was elected to do, along with bringing jobs back, curtailing immigration, and so on.

The next thing to watch will be what replaces the ACA (Obamacare). I am not optimistic, because health care accounts are a terrible idea. But let’s see. (Or, alternatively, call your Congress critters and insist the ACA not be repealed. You might win.)

But right now, as I score it, Trump is more or less on track to do what he said he would do. I think his tax cuts will be disastrous, especially in the long run. I don’t like Obamacare, but I expect him to replace it with something worse. However, in a lot of areas, he’s talking about doing things that should have been done long ago.

When the people too many liberals think are “good” (like Obama), won’t do what everyone knows what must be done, they will eventually be done by people liberals consider “bad,” in ways liberals might not like.

There’s a lesson there.

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The Public Option for Obamacare Was Not Impossible

By Dan

On January 9, 2017

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***This is a Guest Post by Dan From T.O.***

Back in 2009-2010, Chris Bowers, co-founder of openleft.com, (at the time an “A-List” liberal/progressive blog by all accounts*) and Adam Green of the PCCC led a set of outsider “whip count” exercises in support of improving & passing the Affordable Care Act.

The initial whip count effort in 2009 was focused on garnering 60 votes for cloture in the Senate in support of a public option (the House bill had one). This actually succeeded,** and had all 60 Democratic senators on the record in support of a public option, until 4 Senators backed out.

In early 2010, a whip count was run to gain Senate support to pass health care under reconciliation rules (meaning only 51 votes were needed for passage). This also succeeded, and ultimately the ACA included a “side-car” reconciliation fix once Democrats lost the 60^th vote in the Senate via the MA Senate special election.

Concurrently with #2, another whip count was run to pass a public option via reconciliation. This also succeeded and Bowers & Co had 50 or 51 Senators publicly in favour of passing a public option through reconciliation.

All this is to say: The Public Option was very plausible. Even Joe Lieberman & Ben Nelson were open to it and, really, they weren’t needed as it could have been done under reconciliation. Is it 100 percent certain that it could have passed? Of course, no counterfactual can be perfectly certain. Given how close Bowers et al. got without much support from the Democratic leadership, and in fact the secret opposition of Obama who had traded away the Public Option, it is not ascribing magical powers to the Bully Pulpit to think that if Obama had wanted a Public Option in the bill, he could have got one.

The history here in this set of posts by Bowers is worth a review of the chicanery in play. In both occasions, progressive activists were given seemingly impossible tasks to get a public option passed, did so, and somehow had the goal posts moved. The posts read like a House of Cards plot to manipulate activists; not giving them what they wanted while still appearing sympathetic. For instance, this excerpt from Bowers’ 2009 post-mortem:

Back on May 21st, there were only 28 Senators in support of a triggerless public option. Through your tireless participation in a whip count effort, by October 8th we raised that number to 51 when Jon Tester came out in support. By October 30th, when Evan Bayh said he wouldn’t filibuster, we were up to 56 Democrats for cloture on health care reform with a public option.

From that point, the only four Senators we still needed all lied to us in one form or another. Both Mary Landrieu and Blanche Lincoln signed a document stating that they supported a public option, only to reverse their positions. Blanche Lincoln’s website still comically claimed she supported a public option even as she was declaring her opposition to one on the Senate floor.

Still, Landrieu, Lincoln and Ben Nelson were all part of the group of ten Senators who forged a deal on the public option that included a Medicare buy-in. Further, immediately after that deal was reached, Harry Reid contacted Joe Lieberman to see if he liked the deal. Lieberman told Harry Reid that he was liking what he was seeing, and just wanted to wait for the CBO report. Further, Lieberman had supported an even stronger Medicare buy-in (for Americans aged 50-64) as recently as September 2009.

Six days later, Lieberman and Nelson went on national television to engage in some more mendacity. Lieberman said he would filibuster the deal, despite the facts that he’d told Reid he liked it and had recently advocated for it. Ben Nelson badmouthed the deal even though he helped forge it.

Tell me that does not read like Obama’s team working behind the scenes to flip Lieberman & Co. back to ensure the deal with Pharma was kept.

The demise of the Public Option in the 2010 effort comes off about as bad, with a bad-faith exercise in finger pointing between the House & Senate over who should add the Public Option to the bill, and even a bonus arm-twisting of Bernie Sanders to try to prevent him from doing so by amendment.

All of this is “I told you so” of course, but I-told-you-so is important at times so mistakes aren’t repeated. The ACA is most likely going to be gutted or repealed entirely and the lack of a Public Option has certainly not helped it ever get the strong base of public support it needed to survive a term of opposition government. If one reviews the history of polling on the ACA, it is clear that between the “it’s ok” camp and the “it needs to be expanded/made more liberal” camps there is consistently well over 50 percent support for it, but in straight up approval polling, the law was always more unpopular than popular.

The theory from the law’s proponents back in 2009-10 was that once it took effect and started helping people, it would get more popular. This was plausible except that it isn’t really what happened–probably because private insurance companies are awful to deal with. Thus, more people felt the ACA was hurting rather than them as time went on:

The public option would have meant that those people finding they hated the exchanges could have opted out of that mess and bought into some version of government provided plan that could have been simple, not subject to major price changes, and regular cancellations (frequently a problem for ACA plans). It also would have meant more people attributing their shiny new access to health care to Obama and the Democrats which only could have helped in those mid-term blowouts.

Like his unforced errors on the too-small stimulus, HAMP helping banks instead of people and not prosecuting Wall Street fraud, this error is on Obama: He chose to not have a public option in the ACA and if he’d wanted one, it is quite likely he could have had it.

* – See here for Hillary Clinton herself being sent an openleft.com post from 2010 per the Podesta email dumps.

** – Sorry, link rot has really set in on a lot of this. Someone (Bowers himself possibly) is maintaining the archive of openleft.com posts I am linking to but most of the links from those posts no longer work.

The Simple, Obvious, and Correct Fix for Pharma

By Ian Welsh

On August 30, 2016

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There are a variety of issues around private companies producing pharmaceuticals. They basically come down to: (1) It’s expensive; (2) There are huge regulatory barriers to entry, and; (3) People who need medicine will often pay almost any price for it.

Worse, companies that sell medicine don’t want cures, they want palliatives–drugs you have to take for the rest of your life which don’t actually heal what’s wrong with you.

The simple, obvious solution is as follows:

The government takes over all manufacturing of cures and the distribution system. Even if this is “inefficient” the government’s “inefficiency” will not result in the price gouging in which these private actors engage.
The government offers bounties for new medicines. Very large bounties in the billions.

Yes, there are plenty of details to be worked out, but this outline works because government, when not captured by private actors, is incentivized to want cheap medicines and cured people; sick people don’t pay as much tax and government pays so much of the health-care bills. This is true even in the US. Between Medicare, Medicaid, and huge subsidies, the US government pays as much per capita as most universal health care countries, without actually getting universal health care.

Bounties will change the focus from palliatives (though some are good) to cures, simply by offering huge bounties for cures.

Yes, some research funds are necessary, but the bounty must be large enough that people won’t want to keep doing research to get those funds, but will want the big payoff at the end.

This isn’t my idea, many economists have suggested bounties.

But it’s a good, obvious, idea.

There are other ways to do this. In particular, you could just move all research to the public sector (which funds most of it anyway) and have an agency which is responsible for getting new medicines through the approval process, which is most of what Pharma does. Make sure scientists will get a modest bonus for a cure and know they’ll be moved to another problem rather than let go, and voila, they’ll want to create cures.

Add in a patent fix of mandatory licensing and shorter patent periods, and you’re pretty much done. (EpiPen and insulin prices are not patent issues, but patents are the cause of much elevated price-related suffering elsewhere.)

Fixing Pharma is like fixing most other problems. It’s only difficult because we refuse to do the obvious, and we refuse to do that because the people who are making a killing at it have bought the government.

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It’s Not Just EpiPen Which Is Seeing Huge Price Increases, So Is Insulin

By Ian Welsh

On August 28, 2016

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All those involved should go to jail, maximum security, where the nasty people are, and pharma production should simply be taken over by the government, while all patents are moved to a mandatory licensing system with durations slashed to the bone (that’s right, neither insulin and EpiPen are in patent protection, which shows just how broken the US system is).

Here’s your insulin prices on crapitalism (not capitalism. Actual capitalism doesn’t allow this.)

“This borders on the unbelievable,” Davidson said, citing an extremely concentrated insulin which “in 2001 had the wholesale price of $45. By last year, the cost had skyrocketed to $1,447” for the same monthly supply.

….

From 2011 to 2013, the wholesale price of insulin went up by as much as 62 percent. From 2013 to 2015, the price jumped again, from a low of 33 percent to as much as 107 percent

There is simply no question that this will kill people. Those involved should be charged with negligent homicide.

But, hey! Rich people are fine, so it isn’t actually a crisis.

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Single Payer Healthcare: Bernie Sanders vs. The Wonks

By Ian Welsh

On April 19, 2016

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comparative-health-care-costs_html_m36226ab1

“Liberal wonks” have been sniping at Sanders healthcare plan: Single payer. In a single payer system, the government acts as the sole insurer for all basic medical needs. Think Medicare, except for everyone.

Single payer costs less than the American system–about one-third less. Take a look at the chart above and find the Canadian line. Notice what happens after Canada goes from a private to a single payer system—costs drop by about one third compared to the United States.

One can cavil about how Sanders will pay for single payer, but the fact is that it will cost Americans less than the current system.

A lot less.

The question then becomes: “Who will pay?” It makes no difference to a company’s balance sheet, or a person’s bank account whom they end up paying—private insurers, or the government. It only matters how much they pay.

Paying one-third less will be a win for everyone, except insurance companies, drug companies, and various health-care providers who price gouge, so long as it is intended that everyone win.

As for your coalition to get single-payer through, it is everyone not involved in the healthcare industry, and many people (like doctors who hate the current system) within the healthcare system.

Yes, insurance and drug companies, appliance manufacturers, private hospitals, and so on will spend an immense amount of money to campaign against single payer, but they are still a minority of the population and of businesses. There is a case to be made to every single non-healthcare company which currently offers insurance (these tend to be the large, more powerful businesses) to come out for single payer to save themselves money.

Single payer is a superior system. It costs less and produces better results on most metrics. Anyone who tells you otherwise is either lying, or has no idea what they are talking about.

“Wonks” who pretend otherwise through tedious arguments, are deceptive at best, making their bones within the system at worst. Or not actually competent “wonks.”

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