Better Health: Smart Health Commentary Better Health (TM): smart health commentary

Latest Posts

How Medicare Controls Costs: Insight From Biotech

At the recent Medicare Policy Summit, Tim Hermes, the Senior Director of Government Affairs for Sepracor, offered an overview of Medicare’s current cost control strategy. These six strategies are part of Medicare’s policies, but are not necessarily applied evenly or consistently.

1. Functional Equivalency: if 2 drugs are deemed to be functionally equivalent, then their average sales price may be linked so they are reimbursed at the same rate.

2. Inherent Reasonableness: CMS has the right to decrease payments for treatments, that are deemed not to be inherently reasonable, by increments of 15% at a time.

3. Widely Available Manufacturing Price (WAMP): when the average sales price of a drug is higher than the WAMP, CMS has the right to reduce the drug’s price to the WAMP.

4. Coverage Restrictions: CMS can choose to restrict coverage for any drug, especially for off-label uses.

5. Judicial Bar: Only Medicare beneficiaries can sue CMS. Manufacturers may not.

6. Congress: there are several committees that have jurisdiction over Medicare, including the Senate Finance Committee, the House Ways and Means Committe, and the House Energy and Commerce committee. Congress can enact legislation to decrease the average sales price of drugs, and can influence Medicare cost control mechanisms.

Health Care Policy Summit Brings Together Unlikely Allies

Better Health’s policy writer, Gwen Mayes, caught wind of an interesting new conference being held tomorrow in Miami. She interviewed Ken Thorpe, Ph.D., one of the conference organizers, to get the scoop. You may listen to a podcast of their discussion or read the highlights below. I may get the chance to interview Billy Tauzin and Donna Shalala later on this week to get their take on healthcare reform initiatives likely to advance in 2009. Stay tuned…

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.


Mayes:  Tell us about the upcoming conference in Miami on January 28th called “America’s Agenda: Health Care Policy Summit Conversation.”

Thorpe:  The conference will start a conversation on the different elements of health care reform such as making health care more affordable and less expensive, finding ways to improve the quality of care and ways to expand coverage to the uninsured.  The conference is unique in that we’ve brought together a wide range of participants including government, labor, and industry for the discussion, many of whom have been combatants over this issue in the past.

Mayes:  Will there be other meetings?

Thorpe:  This is the first of several.  There will others in other parts of country over next several months.  President Obama and HHS Secretary Designee Tom Daschle have talked about engaging the public in the discussion this time around.  So part of this is an educational mission and part of it is to reach consensus among different groups that have not always agreed in the past.

Mayes:  What encourages you that these groups will be more likely to reach consensus now when they haven’t in the past?

Thorpe:  The main difference is that the cost of health care has gotten to the point that many businesses and most workers are finding it unaffordable.  In the past, most businesses felt that, left to their own devices, they could do a better job of controlling health costs by focusing on innovated approaches internally.  What we’ve found, despite our best efforts, working individually we haven’t done anything to control the growth of health care spending.    The problems go beyond the reach of any individual business or payer and we need to work collectively.

Mayes: How will health care reform remain a priority in this economy?

Thorpe:  The two go hand in hand.  As part of our ability to improve the economy we’re going we have to find a way to get health care costs down.  Spiraling costs are a major impediment to doing business and hiring workers.  To the extent we can find new ways to afford health care it will be good for business and workers.

Mayes:  Health information technology is also an important aspect.  What are the common stumbling blocks to moving forward?

Thorpe:  There are three issues we have to deal with.  First, we have to have a common set of standards for how the information flows between physicians and physicians, and with payers and hospitals.  What we call interoperability standards.   Second, we have to safeguard the information.  Finally, cost is the biggest challenge because most small physician practices of 3 or 4 physicians don’t have electronic record systems in place.  To put in a state-of-the-art system can cost $40,000 per physician and most cannot afford this expense.  I think the stimulus bill will provide funds to help with these costs.

Mayes:  There’s always growing interest in the patient’s role.  How will this be addressed?

Thorpe:  We have to find a better way to engage patients in doing better job of reducing weight, improving diet and those with chronic disease to follow their care plan they worked out with their physician.  We also want to make it more cost effective for patients to comply with the plan.  Patients who comply with health plans will have better outcomes at lower costs. 

Mayes:  Who’s on the agenda in Miami?

Thorpe:  It’s at the University of Miami so it will be hosted by President Donna Shalala who was Secretary of HHS under the Clinton administration so she is well versed on health policy.  Also attending is the head of PhRMA, Billy Tauzin, a former Congressman and former majority leader of the House, Dick Gephart.  There will be some lay people as well for a nice cross section of consumers, labor, providers, business and others.

Mayes:  How can people learn more about American’s Agenda and the conference?

Thorpe:  The executive director of American’s Agenda is Mark Blum.  He can be reached at 202-262-0700 or at America’s Agenda.org.

The Healthcare Agenda For The New President And Congress?

The Kaiser Family Foundation and Harvard School of Public Health teamed up to survey Americans about their healthcare reform priorities (Kaiser has been doing this every year since 1992). A random sample of 1,628 adults participated in the telephone survey between December 4-14th, 2008. The results were presented at a press conference that I attended on January 15th.

Although you might want to view a presentation of the entire webcast here, I’ll summarize the points that I found the most interesting:

Dr. Robert Blendon (Professor of Health Policy at the Harvard School of Public Health) offered some fascinating commentary on the survey results:

1. Americans Are Fickle About Healthcare Reform Issues. Most public opinion polls do not take into account the degree of conviction with which people describe their health reform priorities. In reality, the public is generally quite ambivalent regarding the specifics of how to achieve reforms like improved access to care, and decreased healthcare costs. The Kaiser survey clearly demonstrated the public’s tendency to agree with specific reform ideas, but then change their minds when the potential downsides of such initiatives were described. So for example, most survey respondents liked the idea of an employer insurance mandate (requiring employers to subsidize employee health insurance costs), but when asked if they would favor it if it might cause some employers to lay off workers, then they no longer supported the mandate.

2. Public And Government Priorities Differ. While the public is primarily focused on relief from skyrocketing healthcare costs, the government is focused on healthcare delivery reform.

3. Americans Don’t Want Change To Affect Them. An underlying theme in the survey was that the average respondent didn’t want to pay more for healthcare, and they also did not want to be forced to change their current care and coverage arrangements.

4. It’s All About Money. America is in a near economic depression, and therefore the healthcare reform climate is very different from that of 1992 (when the Clinton reform plan stalled). Middle income Americans in an economic downturn are not willing to pay more taxes. The only way forward in our current economy is to find a revenue stream for reform that does not increase taxes on the average American. Blendon summarizes:

“It isn’t enough that all the groups agree on how to spend money on healthcare. ‘Who is going to pay?’ is the critical issue.”

At this point in time, it looks as if the American public is most supportive of the healthcare reforms listed below (but their opinion is certainly subject to change, depending on how the political discussions unfold, and how the media influences the debate). Blendon also cautions: “This doesn’t mean that this is a sensible health reform plan, it’s just what has public support at the moment.”

Healthcare Reform Initiatives Currently Favored By Americans

Expanding Coverage

1. Health insurance mandate for children

2. Fill the Medicare doughnut hole

3. Tax credits to employers to help them offer coverage to more employees

4. Health insurance for the unemployed

5. Eliminate medical underwriting (“pre-existing condition” carve outs and such)

6. Expand Medicare to cover people ages 55-64 who are without health insurance

7. Require employers to offer health insurance to their workers or pay money into a government fund that will pay to cover those without insurance

8. Increased spending on medical care for veterans

9. Increased spending on SCHIP

Controlling Costs

1. Negotiate for lower drug costs under Medicare

2. Allow Americans to buy prescription drugs imported from Canada

3. More government regulation of healthcare costs

4. More government regulation of prescription drug costs

5. Regulate insurance companies’ administrative spending and profits

Raising Revenue

1. Increase the cigarette tax

2. Increase income taxes for people from families making more than $250,000 a year

***

As you can see, the public supports reform that would result in substantial increases in healthcare spending without a clear idea of how to pay for those initiatives. Our government, in partnership with healthcare’s key stakeholders, is going to need to come up with a reform plan that identifies new revenue streams to cover the costs associated with expanding coverage. I find it hard to believe that increasing taxes on cigarettes (and a few very wealthy Americans) is going to be sufficient. If ever there were a time to nurture our American entrepreneurial spirit, it’s now.

Latest Interviews

IDEA Labs: Medical Students Take The Lead In Healthcare Innovation

It’s no secret that doctors are disappointed with the way that the U.S. healthcare system is evolving. Most feel helpless about improving their work conditions or solving technical problems in patient care. Fortunately one young medical student was undeterred by the mountain of disappointment carried by his senior clinician mentors…

Read more »

How To Be A Successful Patient: Young Doctors Offer Some Advice

I am proud to be a part of the American Resident Project an initiative that promotes the writing of medical students residents and new physicians as they explore ideas for transforming American health care delivery. I recently had the opportunity to interview three of the writing fellows about how to…

Read more »

See all interviews »

Latest Cartoon

See all cartoons »

Latest Book Reviews

Book Review: Is Empathy Learned By Faking It Till It’s Real?

I m often asked to do book reviews on my blog and I rarely agree to them. This is because it takes me a long time to read a book and then if I don t enjoy it I figure the author would rather me remain silent than publish my…

Read more »

The Spirit Of The Place: Samuel Shem’s New Book May Depress You

When I was in medical school I read Samuel Shem s House Of God as a right of passage. At the time I found it to be a cynical yet eerily accurate portrayal of the underbelly of academic medicine. I gained comfort from its gallows humor and it made me…

Read more »

Eat To Save Your Life: Another Half-True Diet Book

I am hesitant to review diet books because they are so often a tangled mess of fact and fiction. Teasing out their truth from falsehood is about as exhausting as delousing a long-haired elementary school student. However after being approached by the authors’ PR agency with the promise of a…

Read more »

See all book reviews »