The problems with our US 'Healthcare' system are well documented. We need to start with the solution!

Many sources of news have provided information that should be shocking on the abuses of the US “healthcare” industry. They include newspapers like the New York Times, Washington Post and the Guardian, non-profit policy organizations like the Commonwealth Fund and the Kaiser Family Foundation (KFF), and many smaller podcasts, substacks, and blogs (well, like this one). The rapacious profit-taking by corporations from dollars ostensibly allocated to provide our healthcare by the federal and state governments (through Medicare and Medicaid), our employers and, not least, ourselves, is regularly siphoned off for profits and administrative costs (like multi-million dollar C-suite salaries).

That this continues to happen and is built into the way our “system” (or better “non-system”) works seems to completely mystify our government and policy wonks. Their response is a hodge-podge of regulations that seek to try in some way to limit the negative health effects of our system, and to limit the number of people who are unable to access care because they have little money, no insurance, poor quality insurance, or have been excluded for reasons such as prior disease. The obvious solution – one single-payer health insurance system that automatically includes every single person of every age – has been anathema to them, despite the overwhelming evidence of it being pretty successful in every other developed country. And, even when far from perfect, always better than the US in terms of health access, health outcomes, and cost. We presume the reason is, essentially, corruption – that, as a result of getting fat and wealthy at the public (and our private) trough, these corporations give lots of money to politicians.

Just a few recent examples of what is wrong with not having single payer:

·        The NY Times reports on a “glitch” in many states incorrectly disenrolling children from Medicaid. Whoops.

 

·        The Healthcare Un-Covered substack takes a good long look a the practices of health insurance companies.

In the “good old days”–let’s call that period pre-2008–the majority of commercial insurance was full-risk: increases came out of payor profitability rather than employers’ and consumers’ pockets, and patients were protected from high out-of-network/out-of-pocket costs. In 15-20 years, everything has changed.  A lot.

Sure has. Its “poster child”, United Health Group, makes lots of money on its insurance business per se, denying people (whether on “regular” insurance or on Medicare-substitute plans like Medicare Advantage). Even more, it is making its most money on its owned physician practice subsidiary, Optum, as well as their pharmacy benefit mangers, using what is called “intercompany eliminations” to have one of its subsidiaries pay more to another of its subsidiaries than to competitors. Plus the Optum practice groups do not have the caps and regulations affecting the insurance group.

Practically, this means UnitedHealth Networks can pay its own physicians, UCCs, ASCs and the care delivery sites it owns above market rates–through something called intercompany elimination–then starve other providers with low rates. This accomplishes two things: it makes the starving providers more likely to sell their practices to Optum, and it allows UnitedHealth to post amazing profitability and stay under federal MLR caps. This is what we call “a good problem” in business.

Good problem for United Health. Big, bad problem for everyone else, including the providers in other groups and mostly the people (that is the English word for “patients”) who seek care.

·        The administration announces the first 10 incredibly-overpriced drugs that Medicare will negotiate the prices of.  Allowing Medicare to negotiate drug prices is one of the most popular issues in the US, across party lines; KFF found ‘in a survey late last year, 89 percent of Democrats and 77 percent of Republicans said they favored the plank of the Inflation Reduction Act that authorizes negotiations.’ Pharmaceutical companies of course push back, with completely bullshit claims that it will limit the number of new drugs. What it will, of course, threaten, is not whether they make a profit, but only the incredibly amount of money these companies are raking out of the economy in grossly excess profit. One good example of the vicious, avaricious abuses is found in The Lever, “Big Pharma’s American Con”, documenting how they rip us off while charging much less in the regulated environments in other countries.

·        The new administration regulations on nursing home staffing have angered both the operators (whose costs will go up, and also have trouble finding staff – at the salaries they pay) and the patient-advocacy groups who point out that they are far too little (patients have to be seen by someone 33 min a day??).

·        And on and on.

What do all these issues – and many more -- have in common? Well, of course, they are manifestations of insatiable and unregulated greed by corporations, and the willingness of our government to allow money that is supposed to be for our health go into corporate pockets. But they also have in common the fact that they can only exist in the absence of a single, rational, health insurance system for the American people. What can we do? We can – and I have, in this post and in many others – document and decry the absolute ripoff of the American people. For example, Medicare Advantage, which is great if you are pretty healthy and doing well, but not so much if you are sick and they deny you care, that are funded (even overfunded, paid more per recipient than is given to traditional Medicare) with the dollars that you have contributed over your working life to the Medicare trust fund. Of course, it is facilitated by the revolving door with government functionaries who are supposed to be regulating them but don’t, and facilitate their greed, and are rewarded by leaving the government and going to work for them for beaucoup bucks. One example is Billy Tauzin, the former Louisiana congressmen who chaired the committee that passed Medicare Part D and included a prohibition on Medicare negotiating drug prices, who became CEO of PhRMA. Or Tom Scully, the Center for Medicare and Medicaid Service director who oversaw  the development of privatized Medicare, who went on to join a major health private-equity firm and made out like the bandits he and they are, as detailed in American Prospect. The list of what is wrong seems endless.

So, I think, it is time to stop leading with all the skullduggery, rapacious, thievery, failure of public trust, and outright killing of people, and start with the solution. A single-payer health system. Everybody in, nobody out. Birth to death. No one is excluded, and no one can be “thrown out”. It covers the same things for everyone, regardless of income. If it is something people need for their health, it is covered; if it is unneeded, frivolous, or harmful it is not. Glasses, hearing aids, mental health, dental, long-term care. No out of pocket costs.

How can we pay for this? See above, all the money going to not-health-care. It would cost much less! Do not let your legislators off the hook. For example, Phoenix congressmen Ruben Gallego has co-sponsored Medicare for All legislation for years. Now he is running for Senate against wolf-in-sheep’s-clothing Democrat-turned-Independent Kysten Sinema and whatever yahoo the GOP drags up. But this year he has not signed on to the Medicare for All bill, HR 3421. I have made it clear in response to his daily solicitations that unless he does, no more money from me.

Demand a universal healthcare insurance system. Now.

Requiring TV drug ads to post list prices: a good step from HHS -- but not enough!

"What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices."

Terrific quote from the not-always-terrific Health and Human Services Secretary, Alex Azar. The Department of HHS will require TV ads for drugs to disclose the list price for the drugs they advertise. Sure, they will be at the end in the small print along with the side effects (‘nausea, vomiting, headache, baldness, serious infections, death, etc.’), and thus far there are no plans to require it in print ads, but it is a big step forward. There is so much evil being done by the Trump Administration that it is nice, every once in a (long) while to be able to point out something that is good. The #Trumpenik himself tweeted something very similar to Azar’s quote.

This has been one effort by the Administration to try and control drug prices by a very indirect route that, tellingly, does not include actually controlling drug prices. It does not even include allowing Medicare (the nation’s biggest drug purchaser) to negotiate drug prices with pharmaceutical manufacturers (that ban was built into the GW Bush era legislation that created the Medicare drug requirement, Medicare “Part D”). Still, it is something and something that is not insignificant. You can tell this from the reaction of the drug manufacturers, represented by PhRMA (the Pharmaceutical Research and Manufacturers of America), which said “We are concerned that the administration's rule requiring list prices in direct-to-consumer television advertising could be confusing for patients and may discourage them from seeking needed medical care." It takes some chutzpah to say such a thing; what PhRMA wants is for patients to demand these drugs (some of which cost upwards of $30,000 a year. Or, for some, a month!) from their doctors, and then the doctors to put pressure on insurers to cover them.

Yes, often the price paid by the insurance company will be much less than the list price that the new regulations will require them to put on their TV ads. But there will still be those, the poorly insured and uninsured, the most needy, who will have to go without, who, even if they are not discouraged from seeking needed medical care will find out that it is not really available to them. While PhRMA is the trade group for the most profitable industry in the US, their objection to posting list prices is mirrored by health providers, especially health systems, who argue that posting their prices from their “chargemaster” is deceptive because insurance companies often (usually) pay less. Yeah, so? Why not charge less and let them pay the charge? This is how it is in most other industries, and in healthcare in most other countries.

The pharmaceutical industry has a well-deserved reputation as an evil cabal, and it is not only the “outliers”. Yes, we have the fantastic extremes of Heather Bresch’s Mylan and its Epi-Pen®, and Martin Shkreli and colchicine, but we also have the “mainstream” pharmaceutical companies who have unconscionably raised their predatory pricing on key life-saving drugs, like insulin. NBC reports a doubling of the price of insulin from 2012-2016, and stories on people who are affected abound. In 2017, the pharmaceutical companies were accused of fixing the price of insulin. They deny it, but their actions belie that denial; in March, Eli Lilly agreed to sell a “generic” version of its Humalog® for half price and ExpressScripts, a pharmacy benefit manager (PBM, read either facilitator or middleman, but however you read it, it is “moneymaker”) said it would offer to cap insulin costs at $25/month. Interesting for a drug whose discoverers refused to patent it because they wanted it freely available to the public. (And, interestingly, insulin still does not require a prescription, although the needles and syringes do…) The NY Times recently reported that “Lawmakers in Both Parties Vow to Rein In Insulin Costs”, but we shall see.

Of course, while its reputation as evil is well-deserved, the pharmaceutical industry is not alone in making rapacious profits from our health needs. The entire “industry” is not about making people healthier, or even curing the sick, but on making money. This includes, of course, insurers, but also health providers, hospitals, health systems, nursing homes, doctors, etc. Ever try to get a price on any health care you need, besides drugs? Ever try to figure out a bill? Two stories from my own life I have written about before but will re-tell here:

Some years ago I had outpatient hernia surgery. I arrived about 6:30am and was back home in my bed by noon. Later I got the bill from the hospital for its charges (not including the doctors’): $10,000. Then my insurance company told me that I would pay $400, they would pay $1,600, and the hospital would write off the other $8,000 as a contractual adjustment.

Of course, if I had been uninsured, I would have not been billed for the $2,000 the hospital actually received, but for the whole $10,000! This is why they don’t want to list their charges. This obfuscation is motivated by insurance companies looking to show what a good deal they provide their customers (look! We saved you $8,000!). Of course, this is baloney; since the hospital was willing to settle for $2,000, that is what they should have charged, everyone.

And price lists? Time for the other story.

I live an hour from the border, and, with Medicare but no dental coverage, I go to Mexico to get my teeth cleaned. It costs $35; a lot less that in the US and is done quickly and thoroughly by a dentist. It costs everyone $35. If you have dental insurance (they take it), it costs $35. But say you need more – a filling, a crown, implants. Not only is it a lot cheaper than in the US but they can tell you exactly how much it is going to cost! A friend had several implants, and this cost thousands (but a fraction of the US cost); the point is they told her exactly what the cost would be up front. This, it turns out, is actually possible!

The article I cited at the beginning, from the Associated Press (and read by me in the Arizona Star, shout-out), quotes

‘Leigh Purvis, a pharma expert with AARP's research division, [who] said disclosure will help dispel a "cloak of darkness" around prices and encourage more informed discussions between patients and their doctors. But she cautioned against expecting too much.

‘"The overall idea of reducing drug prices is something for which there is no silver bullet," said Purvis. "This is just one step, one tool in what will have to be a very big arsenal."’]

She is right. I said it was a good step, worthy of praise, but it will not alone be enough to bring down drug prices. Or the cost of any of the health care we are regularly ripped off for. While the burden will continue, as always, to fall heaviest on those who can least afford it and have the greatest need, it is impacting everyone. Let’s start with letting Medicare negotiate drug prices. Let’s regulate insurance company profits. Let’s make everyone in the health industry post their prices.

Indeed, let’s have a universal, single-payer health system. #MedicareforAll!

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Breaking News: 

Lawsuit by 44 States Accuses Pharma Giants of 'Multi-Year Conspiracy' to Hike Drug Prices by Over 1,000%

Epi-Pen® and Predatory Pricing: You thought our health system was designed for people’s health?

Martin Shkreli, the former CEO of the drug company Turing, achieved his 15 minutes of fame (or infamy) last year through predatory pricing, raising the price of pyrimethamine, an old drug used to treat a parasitic infection in the brains of immune-compromised (usually HIV-infected) people from $13.50 to $750 a pill (Drug prices and corporate greed: there may be limits to our gullibility, September 27, 2015). Shkreli manage to further alienate people by his testimony before Congress, widely described using adjectives such as “smug” and “condescending”.  The most recent Pharma CEO to hit the news for price gouging, Heather Bresch of Mylan, seems to be trying to avoid Shkreli’s “doubling down” by making an apology, of sorts.

Bresch’s company, unquestionably with her active involvement, raised the price of Epi-Pen®, a self-injectable form of epinephrine that is sold to prevent people from dying from severe allergic (anaphylactic) reactions to a variety of substance, from peanuts to bee stings, from about $100 to $600 for a 2-pack. Two things: first, such pens are lifesavers. As a physician, when I tried to figure out what I needed to pack in an emergency first-aid kit for camping, it was #1. It was the only thing I could think of that actually could keep someone from dying in the woods. Second, epinephrine is an old, cheap drug. As ABC news reported, a doctor in Canada showed how a physician can prescribe a whole vial, plus small syringe and needle, for under $10, and a person can easily inject themselves, just under the skin. The “value” of the Epi-Pen is that it is self-injecting, but hard to even justify the $100. Or the somewhat higher cost of a generic (Mylan, indeed is a generic company.) Bresch, the daughter of a US Senator, was awarded an MBA by West Virginia University despite not finishing the coursework (which led to the resignation of the president). She protested that she wasn’t being predatory like Shkreli, and offered to sell the drug at a 50% discount, only $300! That is still a lot. I have a friend whose daughter is allergic to peanuts; both her day care centers require her to have a 2-pack of Epi-Pen®, with prescription (thus can’t do the epinephrine bottle) – this could cut her outlay from $1200 to $600. Of course, she will spend it to potentially save her daughter’s life, the key point that Mylan and Ms. Bresch understood when they raised the price. At more or less the same time, Ms. Bresch raised her own salary from a paltry less-than-$2 million a year to $18 million. I guess the rise in the price of Epi-Pen® funded that. MAD Magazine® used to do satire but its recent coverage of Epi-Pen® is almost investigative reporting (see picture).

Could it get worse? Sure, why not? Bresch’s father, Senator (and former Governor) Joe Manchin of West Virginia may or may not have been helpful to Mylan (it is, after all, a West Virginia company), but many politicians have been tied to helping drug companies make lots of money. Bill Moyers covers the role of Billy Tauzin, a former Congressman from Louisiana who chaired the House Energy and Commerce Committee when Congress passed the Medicare drug plan (Medicare Part D) under President G. W. Bush. That legislation prohibited Medicare from using its clout to negotiate lower drug prices. Tauzin left Congress in 2005 and became chief lobbyist for the Pharmaceutical Research and Manufacturers of America (PhRMA), converting his well-paid (by campaign donations) service while in Congress to a MUCH better-paid job lobbying his former colleagues. He is credited with having a major impact on the ACA, passed in 2010, ensuring its Pharma-friendly characteristics. And, to be sure, Tauzin, who left PhRMA after 5 years, was scarcely alone in pushing pharmaceutical industry interests in Congress, or in receiving big donations, as the Moyers piece documents. Congress appears to buy the idea that Pharma needs high prices for doing research and development (despite the fact that they spend many times their R&D budgets on marketing, and much of the basic research is done with government funding at universities) and that other countries’ restrictions on the prices of their drugs require them to charge Americans more. Of course, the real reason that pharmaceutical companies charge so much in the US is that they can get it. Whose interests is Congress working in when it does this? Not the American peoples’…

I recently discussed the fact that some large insurers (Aetna, United, Humana)  are leaving the health insurance exchange marketplace in some parts of the country because they are losing money (or, perhaps, just not making enough) because too many sick people and not enough healthy people are signing up, turning the insurance model on its head.  Although the ACA contains an individual mandate, lots of people with less money and/or fewer health needs are not signing up and paying the penalties, which are much less costly (if they are even “caught”). Of course, the ACA did not include a “public option”, which would have been much less costly, specifically to offer these insurers a competition-free field. This is discussed in detail by Princeton health economist Uwe Reinhardt in a JAMA Forum on August 25, 2016 “Why Are Private Health Insurers Losing Money on Obamacare?”. The reason comes down to the same one that has always been true, and that I discussed a number of years ago (October 20, 2009, Red, Blue, and Purple: The Math of Health Care Spending) – a small minority of people account for most health care costs. I have attached a graph from Reinhardt’s piece that makes the same point. And, although he explains the reason insurers lose money, Reinhardt does not excuse it. "If health care costs in the United States were lower, most people would probably agree that ill, low-income citizens should receive the needed health care that is available to better-off individuals. The problem is that our health system is in danger of pricing kindness out of our souls."

So we have both the greed of pharmaceutical companies and the greed of insurers. As discussed in many recent articles in the popular press, the bottom line is that the health benefit to Americans is at best a side effect of complex plans engineered to make profit. This perverted approach, almost unique to the US, has marginalized, bankrupted, and caused illness and death in many. This system doesn’t work for people. A fairly well-off couple caught in the bind of insurance costs is profiled by AP in its “The Big Story: “Without a subsidy, couple faces higher insurance premiums”. The husband notes the failure of our system to ensure that people’s health is a greater priority than corporate profit:  "Ultimately, it's clear that health care is not something that can be efficiently provided by the private sector. The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

Don McCanne, in his Quote of the Day,  provided that link on August 22. And then, on August 23, a profound and direct commentary from the editors of the Des Moines Register, “Editorial: Government should not rely on private insurers”:

“Americans’ access to health insurance should not depend on the profit margins, business dealings, or mergers of for-profit companies. Not in Medicare. Not in Medicaid. And not in exchanges created by health reform law. Instead of funneling tax dollars to private companies, government is better equipped to administer insurance. It is not beholden to stockholders. It does not seek to turn a profit. And it will not abandon the responsibility of providing health coverage to Americans.”

Professor Reinhardt and those editors are right. Our souls are certainly in jeopardy. And so are our pocketbooks. And so is our health.