61% OF MEDICARE DOLLARS THAT WILL BE SPENT TO BUY MORE PRESCRIPTIONS TO REMAIN WITH DRUG MAKERS AS ADDED PROFITS

Congress has declared its commitment to keeping prescription drug prices high under any Medicare drug benefit.  This report shows that these unrestrained prices-given the remarkably low real cost of producing the added volumes of pills that Medicare patients need-will bestow enormous windfall profits on prescription drug makers.

An estimated 61.1 % of the Medicare dollars that will be spent to buy more prescriptions will remain in the hands of drug makers as added profits.  This windfall means an estimated $139 billion dollars in increased profits over eight years for the world's most profitable industry. At $17 billion annually, this means about a 38 percent rise in drug maker profit. This is the main reason why the proposed legislation gives patients only a scanty drug benefit, with high continued cost-sharing.  The gift to drug makers is also why the plan requires a high taxpayer subsidy-money borrowed from our children and grandchildren. 

CLICK HERE for the Report (Acrobat)

US COULD SAVE AT LEAST $286 BILLION ANNUALLY WITH NHI

A study by researchers at Harvard Medical School and Public Citizen published in the International Journal of Health Services finds that health care bureaucracy last year cost the United States $399.4 billion. The study estimates that national health insurance (NHI) could save at least $286 billion annually on paperwork, enough to cover all of the uninsured and to provide full prescription drug coverage for everyone in the United States.

The study was based on the most comprehensive analysis to date of health administration spending, including data on the administrative costs of health insurers, employers health benefit programs, hospitals, nursing homes, home care agencies, physicians and other practitioners in the United States and Canada. The authors found that bureaucracy accounts for at least 31 percent of total U.S. health spending compared to 16.7 percent in Canada. They also found that administration has grown far faster in the United States than in Canada.

Published in Jan 2004 in the International Journal of Health Services

Best link at PNHP CLICK HERE

COVERAGE AND COST IMPACTS OF THE PRESIDENT'S HEALTH INSURANCE TAX CREDIT AND TAX DEDUCTION PROPOSALS

The President's tax credit and tax deduction proposals for non-group health insurance, when fully implemented, would increase the number of people with health insurance by almost 1.3 million, at a cost of more than $4,700 per newly insured person ($2.1 BIL in total cost). While the net change in the number of people with insurance is relatively small, these policies would result in a substantial movement of individuals away from employer-based coverage and into the non-group market, or in some cases, into being uninsured. Also of significance, the tax credit and tax deduction policies together result in a lower number of newly insured people, and a higher cost for each person newly insured, than the tax credit policy would achieve standing alone.

By offering tax subsidies for non-group health insurance, the policies would reduce the preference under current tax law for employer-based coverage over non-group insurance, with the likely result that fewer employers would offer health benefits to their employees. In some cases, these employees would not find other insurance, either because they would not want to pay the premiums for non-group insurance or because health problems could make it difficult for them to find affordable coverage in some states. People with health problems who lose employer-based coverage would likely face higher premiums and more coverage restrictions in the non-group health insurance market than they currently face when receiving health benefits through work. These same problems-relatively high premiums and coverage restrictions-already exist for people with health problems purchasing non-group health insurance in most states today.

Who benefits from the proposed policies? The newly insured under the tax credit policy (and the results for the combined policies are almost identical) tend to be younger and healthier than the uninsured overall, and tend to be younger than the under 65 population as a whole. This raises the question of whether these policies could be modified to provide more assistance to older or less healthy uninsured people, or whether an additional policy response, such as a public coverage expansion, would be needed to increase insurance access for these more costly groups of uninsured people.

Published in Jan 2004 in the International Journal of Health Services

Best link at PNHP CLICK HERE

INFLUENCE OF DIRECT TO CONSUMER PHARMACEUTICAL ADVERTISING AND PATIENTS' REQUESTS ON PRESCRIBING DECISIONS: TWO SITE CROSS SECTIONAL SURVEY

Barbara Mintzes, Morris L Barer, Richard L Kravitz, Arminée Kazanjian, Ken Bassett, Joel Lexchin, Robert G Evans, Richard Pan and Stephen A Marion

Only the United States and New Zealand allow advertising of prescription drugs directed at patients. US spending on such advertising grew rapidly during the 1990s, reaching $2.47bn in 2000. The dramatic increase in investment by the US pharmaceutical industry is evidence of an expected effect on sales. On the rationale that such advertising provides important information to consumers and patients who may benefit from advertised products, pharmaceutical manufacturers have campaigned in the European Union and Canada for the relaxing of current regulatory restrictions. We examined the relation between direct to consumer advertising and patients' requests for prescriptions and the relation between patients' requests and prescribing decisions.

BUSH, CONGRESS SHOULD DEVELOP UNIVERSAL HEALTH SYSTEM, IOM PANEL SAYS

The Institute of Medicine issued a report in which the agency for the first time formally recommended that by 2010 the United States implement a universal health insurance system to "prevent more unnecessary suffering, death and economic costs to society," the Washington Post reports (Stein, Washington Post, 1/15). The IOM based the report, titled "Insuring America's Health: Principles and Recommendations," on three years of research and five previous reports on the cost of health insurance (Kemper, Los Angeles Times, 1/15). A committee of academics, business leaders, health insurers and health care providers drafted the 205-page report (Appleby, USA Today, 1/15). The report concluded that the large number of uninsured U.S. residents -- about 43.6 million, or 15.2% of the population -- "results in unnecessary sickness and death, weakens the nation's economy and undermines the entire health care system," the Times reports (Los Angeles Times, 1/15).

According to the 16-member committee, "The lack of health insurance for tens of millions of Americans has serious negative consequences and economic costs not only for the uninsured themselves but also for their families, the communities they live in and the whole country," adding, "The situation is dire and expected to worsen." The five previous IOM reports found that uninsured residents receive about 50% less medical care as those with health insurance, a trend that "tends to leave them sicker and likely to die younger," the Post reports.  

About 18,000 residents die each year because they lack health insurance. [In terms of loss of life that's a World Trad Center attack every two months, even if its "business as usual for the Bush Administration"]

Summary at IOM CLICK HERE

EARLY EXPERIENCE WITH HIGH-DEDUCTIBLE AND CONSUMER-DRIVEN HEALTH PLANS

P Fronstin and SR Collins

The first national survey of individuals with high-deductible health plans who also have savings accounts (HSA or HRA), or so-called consumer-driven health plans (CDHP), and people with high-deductible health plans who are eligible to contribute to a health savings account but who currently do not have an account (HDHP).

When combined with premiums, outlays on health care as a share of income rose substantially among those with HDHPs and CDHPs, particularly among those with low incomes or health problems. 42% of people with HDHPs and 31% of those in CDHPs spent 5% or more of their income on out-of-pocket costs and premiums, compared with just 12%. Nearly everyone with HDHPs with incomes under $50,000 spent at least 5% of their income on out-of-pocket costs and premiums, and one-third spent 10 percent or more. People with health problems in HDHPs were also vulnerable to spending large shares of their income on out-of-pocket costs and premiums: 18% spent 10% or more.

While people reported using health services at similar rates across health plans, adults with CDHPs and HDHPs were significantly more likely to report that they had avoided, skipped, or delayed health care because of costs than were those with comprehensive insurance, with problems particularly pronounced among those with health problems or incomes under $50,000. More than 70% of people enrolled in CDHPs and 60 percent of those in HDHPs agreed that the terms of their health plans made them consider costs when deciding to see a doctor when sick or fill a prescription.

Realistic, useful, accessible health-cost information-does not yet exist on a widespread basis. Further, the survey also demonstrates that cost-related reductions in demand are highest among individuals with the most to lose-those who are sick and those who have low incomes. To the extent that the health care cost problem is a problem owned by all of us, early evidence from the consumerism movement suggests that solving it through blunt, demand-side instruments like high deductibles gives disproportionate responsibility for the problem to the most vulnerable among us.

Employee Benefit Research Institute, December 2005

The full report may still be available at CLICK HERE

EVALUATING THE EFFICIENCY OF CALIFORNIA PROVIDERS IN CARING FOR PATIENTS WITH CHRONIC ILLNESSES

By JE Wennberg, ES Fisher, L Baker, SM Sharp and KK Bronner

The study finds significant variation in Medicare spending for chronically ill patients in California. For example, hospitals in Los Angeles received an average of 60% more for inpatient reimbursement for Medicare patients during the last two years of life than Sacramento-area hospitals. In fact, Medicare paid some hospitals in the state as much as four times more than other hospitals to care for patients with similar conditions. Yet the additional care provided did not improve medical outcomes or patient satisfaction. Rather, as the volume of care increased, the quality of care and patient satisfaction actually declined.

The comparisons suggest that savings could be achieved by improving efficiency with no impact on quality. For example, Medicare could have saved $1.7 billion in the Los Angeles area alone if medical practice patterns there, the most expensive region, resembled those of Sacramento, the least expensive.

Health Affairs of November 16, 2005

The full report may still be available at CLICK HERE or at: CLICK HERE

DEVELOPING A BETTER LONG-TERM CARE POLICY: A VISION AND STRATEGY FOR AMERICA'S FUTURE

SP Burke, J Feder and PN Van de Water

Transforming long-term care ultimately requires fundamental reform of its financing and a substantial commitment of federal resources. Because the need for long-term care is a risk, not a certainty, it should be handled like other unpredictable and potentially catastrophic events-that is, through insurance. Private long-term care insurance, while growing, is affordable for only 10-20% of the elderly. To assure access to long-term care without making families face impoverishment, federal involvement is therefore essential. Expanded federal financing could take the "Universal Approach" modeled after Social Security and providing everyone access to a basic, limited long-term care benefit, supplemented by private insurance for the better-off and enhanced public protection for the low-income population. Or federal financing could take the "Means-Tested Approach", possibly with a national floor of income and asset protection that would reform or replace Medicaid's coverage of long-term care. People could purchase private long-term care insurance to protect a larger amount of assets.

Other countries have demonstrated that either approach - or a hybrid of the two - can target benefits to those in greatest need, retain personal responsibility through cost-sharing, and control costs. Our analysis gives us reason to believe that the public does indeed perceive government action as not only appropriate but necessary to address long-term care financing concerns. Other nations, with far larger proportions of elderly citizens than we have in the US today, have adopted a variety of policies that more fairly balance personal or family responsibility and public support. Adopting similar policies is a challenge not to our abilities but to our political will.

National Academy of Social Insurance, November 2005

The full report may still be available at CLICK HERE

A WIDENING RIFT IN ACCESS AND QUALITY: GROWING EVIDENCE OF ECONOMIC DISPARITIES

RE Hurley, HH Pham, G Claxton

Many recent investments and initiatives are focused on affluent communities and are accessible mainly to people with employer-based or Medicare coverage. For people with Medicaid or no coverage at all, access to basic care is worsening, as a result of stalled coverage expansions and service cutbacks. An improving economy could forestall further cuts and permit reversal of earlier ones, but progress in closing this rift does not appear imminent.

There is every reason to expect that Americans will demand and receive more and better health care, shifting more resources into the health care sector. However, not all will be able to afford this care, and there is growing evidence that US society is prepared to tolerate trading off pursuing excellence for some, at the expense of deteriorating care for others.

Health Affairs of December 6, 2005

The full report may still be available at CLICK HERE

WHICH WAY FOR COMPETITION? NONE OF THE ABOVE

RA Berenson

Despite growing documentation that the conditions needed to support competition in health care do not exist, consumer-directed health care has been offered as the new market-based solution to cost inflation. Consumer-directed care threatens important societal values-in particular, the goal of establishing relationships between patients and clinical professionals based on trust.

The article may still be available at: CLICK HERE

HEALTH CONFIDENCE SURVEY: COST AND QUALITY NOT LINKED

R Helman, M Greenwald and P Fronstin

Americans with employment-based coverage and those who report their health status has gotten worse over the past five years are more likely to report health coverage cost increases.

Those who have experienced cost increases have compensated by making changes in the way they use health care. 54% say they now go to the doctor only for more serious conditions or symptoms. 40% have delayed going to the doctor [either of these 'cost savers'increases the costs of our system by treating illnesses in later stages. Besides being financially a bad idea this use of our system also results in people walking around and working who feel worse and are less productive, and also infecting others.]. (21 %) report cost increases have caused them to not take their prescribed medication [thats another great 'cost saver' which will jack up the costs of our system by precipitating more grave illnes]. Lower-income Americans and those in poorer health are more likely to report making each of these changes.

Employment Benefit Research Institute, EBRI Notes of November 2005

The article may still be available at EBRI: CLICK HERE

THE PRICE SENSITIVITY OF DEMAND FOR NONGROUP HEALTH INSURANCE

This paper examines how the price of insurance effects the public's decisions to purchase insurance in the individual, or "nongroup," insurance market.  This is a central aspect of tax credits and other price-based incentives which are theorized to stimulate the purchase of private health insurance by lowering the cost. The paper focuses on those without access to group insurance through an employer.

A 10% reduction in insurance premiums was estimated to result in a 5.7% increase in health insurance coverage in the nongroup market in our sample of single workers, 16% of whom had nongroup coverage at the time of the survey in 2002. The less-healthy appear to be less responsive to premium changes than the more-healthy. [Of course!  Those who are chronically ill have high priced insurance, or the coverage specifically excludes covering their main chronic condition.  Tax credits and other incentives will not help these folks.  Oh, and by the way, with a bit of bad luck any of us (virtually all working American) could quickly fall into that group of chronically ill and poorly covered.]

Congressional Budget Office, August 2005

CLICK HERE for this Report

PAY FOR PERFORMANCE: THE NEXT BEST THING

C Bayley

One concern about pay for performance plans is that, absent knowledge about whether a particular clinical process results in a better outcome (and absent reliable consensus about what a "better outcome" is), they may tie compensation to something over which a doctor or hospital has no control. Often, though, plenty of evidence supports the intervention that the programs are designed to increase. Diabetes and asthma, for example, affect large numbers of people, with painful, protracted, and expensive consequences. Controlling blood sugar and managing asthma with medication prophylactically are not just good guesses they really do help patients stay well and they really do save money. Getting that aspirin into a person with chest pain in the ER really has demonstrated effectiveness in reducing mortality from heart attacks. These are good things to reward doctors and hospitals for doing.

Pay for performance may be a way to play the current health care game more prudently, more cost effectively, and with better outcomes for those inside it. But why does "rearranging the deck chairs on the Titanic" come to mind? Because pay for performance is only the next best thing. The very best thing would be to stop playing the current game and design a costworthy system, predictably priced, prevention-oriented, and quality-rewarded system that works for everybody. [Real everybody? Like "everybody in, nobody out" ?]

Carol Bayley is vice president for ethics and justice education at Catholic Healthcare West, a nonprofit hospital organization in California, Arizona, and Nevada. Excerpt from her essay, the full text of which can be found at:

Hastings Cent Rep. 2006;36(1):4.

THE BREAK-EVEN POINT: WHEN MEDICAL ADVANCES ARE LESS IMPORTANT THAN IMPROVING THE FIDELITY WITH WHICH THEY ARE DELIVERED

SH. Woolf and RE Johnson

Society invests billions of dollars in the development of new drugs and technologies but comparatively little in the fidelity of health care, that is, improving systems to ensure the delivery of care to all patients in need. Using mathematical arguments and a nomogram, we demonstrate that technological advances must yield dramatic, often unrealistic increases in efficacy to do more good than could be accomplished by improving fidelity. In 2 examples (the development of anti-platelet agents and statins), we show that enhanced efficacy failed to achieve the health gains that would have occurred by delivering older agents to all eligible patients. Society's huge investment in technological innovations that only modestly improve efficacy, by consuming resources needed for improved delivery of care, may cost more lives than it saves. The misalignment of priorities is driven partly by the commercial interests of industry and by the public's appetite for technological breakthroughs, but health outcomes ultimately suffer. Health, economic, and moral arguments make the case for spending less on technological advances and more on improving systems for delivering care [Such that everyone has access. Or maybe we should improve access to care as our first priority and then efficiently pursue technological advances?]

An objective observer would concede that the United States devotes most of its resources to the second aim, the enhancement of efficacy. The pharmaceutical industry spends $32 billion annually to develop new drugs and biologics. This amount exceeds the entire $29 billion budget of the National Institutes of Health, which, in turn, spends most of its research dollars on basic science and translational research to bring new drugs and technologies to market. Although progressive institutions exemplified by the Veterans Administration, have enacted bold system redesigns and achieved notable success in delivering the right care at the right time, most health systems and private practices have moved less boldly. Policy makers have not resolved the barriers to access and health insurance that deny care to at least 45 million Americans.[using official census data which count about half of the actual uninsured in any given month CLICK HERE ]

Suppose a disease claims 100,000 lives each year and a drug is available that reduces the mortality rate from that disease by 20%. The drug therefore has the potential to save 20,000 lives each year, but if only 80% of eligible patients receive the drug, only 16,000 deaths will be averted. If society made no effort to improve the efficacy of the drug but managed to deliver it to 100% of eligible persons, 4,000 additional lives would be saved. But if society retains the 20% gap in delivery and works to enhance the efficacy of the drug, efficacy would have to rise above 25%, what we call the break-even point, to do as much good.

As a society, we should confront the price we pay in human lives by maintaining a health care system that is not designed to deliver care well. Society can realign its priorities. It can spend less profligately on the enhancement of drugs and technology, and redesign systems of care to ensure a standard of excellence that fulfills the attributes of quality outlined in the Chasm report and the Future of Family Medicine project. Failure to act to correct deficiencies in fidelity is, in effect, an affirmative choice to subject patients to greater illness and suffering.

This article is from the Ann Fam Med. 2005;3(6):545-552.

ONE IN THREE: NON-ELDERLY AMERICANS WITHOUT HEALTH INSURANCE, 2002-2003

Released in Sept 2003, based on US census data for 2002 (the most recent available still) while 43.6 million Americans were uninsured by the "official count" which was between 14.6 and 15.2% of the US population. However counting in the number of people uninsured for part of the year the number was 81.8 million and 93% of those were uninsured for 3 months of a year or longer. NC was much like the nation on a whole with 33.7% uninsured.

Calculations for a "typical month" of the year were not done, but can be approximately calculted for any particular state from the data which is given, since the breakdown for number of months people were uninsured is given. Report examines how many people under age 65 were without health insurance for all or part of 2002 and 2003 and includes national- and state-level data, including data broken down according to work status, income level, race and Hispanic origin, age, and region of the country.

Look for this article at Families USA: CLICK HERE .

HEALTH SPENDING PROJECTIONS THROUGH 2015: CHANGES ON THE HORIZON By C Borger, S Smith, C Truffer , S Keehan, A Sisko , J Poisal , MK Clemens from Health Affairs of Feb 22, 2006

Health Cost Projections for 2006:

$2.2 TRIL - National health expenditures (NHE), $7,110 - NHE per capita, 16.5% - NHE as percent of GDP

Health spending is expected to consistently outpace gross domestic product (GDP) over the coming decade, accounting for 20% of GDP by 2015. Stable trends through 2015 likely mask important changes to the US health care system across payers and types of care.

Look for this article in Health Affairs CLICK HERE .