Chapter 31
WHO KNEW . . .
“ The United States Rations HealthCare ”
Rationing HealthCare plays a major role
in Deciding . . . Who Lives and Who Dies . . .
Floyd, intuitively, is guided by the intrinsic
belief that
Humanity is defined
by compassion for all people.
Therefore, Floyd has recently asked me
“Why does the United States government,
many corporations and insurance agencies,
Ration Health Care?
I was reluctant to answer, Floyd’s question during
“National Breast Cancer Awareness
Month”.
However, Floyd shared with me, two articles that
she found on the internet
and encouraged me to change my mind.
I concluded that it is better to share her findings now, rather
than later.
The first article, Floyd discovered was . . .
From, the
New York Times was written by:
By EDUARDO
PORTER
Published: August 21, 2012
Older adults are understandably anxious about the
political sniping over the future financing of Medicare.
That is precisely the intention of the presidential campaigns.
Yet the cross-fire over who will cut Medicare by how
much sidesteps a critical issue about the future of our medical care: If we must
ration our care to hold down costs in the future, how can we do it in a fair,
efficient and transparent way?
Mitt Romney’s campaign was brazenly misleading in its
charge that the president’s health plan would cut medical services to older
adults by reducing Medicare spending by $716 billion. The president’s savings
will come mostly from smaller payments to managed care companies, which provide
the same services as Medicare at a higher cost, and from slower growth in
reimbursement rates to health care providers.
But the response of President Obama’s campaign also
aimed to stoke voters’ fears. It stressed — rightly — that the plan to curb
Medicare costs proposed last year by Representative Paul D. Ryan, Mr. Romney’s
vice-presidential running mate, would add thousands of dollars to older
Americans’ out-of-pocket expenditures. Yet it ignored Mr. Ryan’s recent efforts
to soften the plan.
Both campaigns claim they are out to protect future
health care. Yet the sniping hides the real issue. Protecting federal health
programs over the long term, as the population ages and medical costs keep
rising faster than economic growth, will require curbing the programs’ spending.
And we haven’t quite figured out how to do that.
The federal government’s spending on health care
consumes 4.8 percent of the nation’s economic production and is expected to eat
up 9.2 percent in 25 years, according to estimates
from the Congressional Budget Office. A vast majority of economists
agree that restoring a sustainable budget will mean either cuts in Medicare
and Medicaid
or a tax increase on the middle class.
Decisions will have to be made about what services are
not worth the cost. Yet so far, our political leaders have failed to acknowledge
this to voters, offering instead an illusion that we can resolve the matter
without any pain.
Recall the political firestorm in 2009 when the
Preventive Services Task Force recommended that women start regular screening
for breast
cancer at age 50 rather than 40. “This is how rationing begins,” said
Representative Marsha Blackburn, a Tennessee Republican. “This is when you
start getting a bureaucrat between you and your physician.”
The task force is an independent panel of experts
financed by the Department of Health and Human Services. Doctors and private
insurers usually follow its recommendations. Still, in 2010 — after Mr. Obama’s
health reform legislation passed Congress — the department said that insurers
should ignore its latest findings and instead go back to its recommendation from
2002: that women start screening at 40.
Does it make sense that older adults in their last
year of life consume more than a
quarter of Medicare’s expenditures, costing more than six times as much as
other beneficiaries? Are there limits to what Medicare should spend on a therapy
prolonging someone’s life by a month or two?
It’s a tough political call. In light of the
difficulties, our political leaders have preferred to punt on the issue, hoping
it doesn’t have to be decided on their watch. Instead, when they talk about
health care, they call rationing by some other name.
Rationing is inevitable in a world with finite
resources. We do it in this country, too, and it is still one of the least fair
and most inefficient rationing systems in the world. You get care if you have
the money to pay for it; if not, you probably won’t.
The 30 percent of the population who are the heaviest
users of health care account for nearly 89 percent of health care expenditures,
according to a government
study. But high-income Americans are more likely to see a doctor when they
are sick,
according to a study by the Organization for Economic Cooperation and
Development. And the disparity between rich and poor is much higher than in
other developed countries.
Meanwhile, tens of millions of Americans — those whose
employers don’t provide health
insurance, who are too poor to pay for it themselves and yet are too rich to
use Medicaid — get the least health care of all.
A study of hospital emergency rooms
in Wisconsin found that victims of severe traffic accidents without health
insurance got 20 percent less care. Hospitals spent $3,300 more on average for
each victim who was insured. They kept the insured 9.2 days, on average, and the
uninsured just 6.4 days. Unsurprisingly, the uninsured were 40 percent more
likely to die from their injuries.
Every health care proposal from the right and the left
includes some form of implicit rationing device. Mr. Ryan’s plan, on the
Republican side, would keep spending on Medicare under 4.75 percent of the
nation’s output until 2050 by giving older adults born after 1958 a dollop of
money to buy their own insurance, forcing many to choose cheaper plans or fewer
procedures.
The president’s health
care reform encourages rationing, too, by levying a tax on “Cadillac”
insurance plans, and in turn pushing employers to seek cheaper options and lower
costs. It creates an advisory board to cut costs from Medicare if spending rises
above a set rate. And it finances an institute to evaluate which therapies are
most clinically effective. Careful to avoid political blowback, the president’s
plan forbids Medicare to base its reimbursement decisions on the institute’s
findings.
But neither initiative seems likely to solve our
health care financing squeeze over the long term. The cuts proposed by Mr. Ryan
— shifting the risk of health care inflation onto the shoulders of older adults
— are certainly drastic. They also seem politically unfeasible. Under Mr. Ryan’s
most recent proposals, in 2030 Medicare would spend $2,200
less in today’s money on each new enrollee than under the most likely
outcome envisioned by the Congressional Budget Office based on current policies.
By 2050, it would pay $8,000 less. Voters seem
to think that might be too drastic a cut.
The president’s plan was more about offering health
insurance to all, to end our Dickensian system of rationing by income, than
long-term cost control. Savings mandated by the Affordable Care Act over the
next 10 years will be difficult to maintain beyond that.
It puts a lot of faith on eliminating waste, with
potentially large savings. David Cutler, a health economist at Harvard, argues
that a third of our health care dollars go to therapies that do not improve our
health. A lot of that waste could be slashed simply by no longer paying
providers a fee for each service, whether we need it or not, and paying them
instead to keep us healthy.
Going after waste seems sensible in a health
care system that costs more than almost any other in the developed world,
yet delivers lower-quality care. But savings from waste tend to be hard to
achieve. Even with the Affordable Care Act in place, federal health spending
will eat up almost twice as much of this nation’s economic product in 2037 as it
does today, according to the budget office.
While it is reasonable for politicians to shy away
from rationing — especially when voters believe no expense should be spared to
save a human life — if the experience of other countries serves as precedent,
they will probably get there sooner or later. In Britain, the National Institute
for Health and Clinical Excellence determines what therapies will be covered by
the National Health Service. It generally recommends against paying for a
therapy that costs more than $31,000 to $47,000 for each year of life gained,
adjusted for quality.
Putting a value on life, as it were, is controversial.
The National Institute in Britain has denied or limited coverage of expensive
drugs for ailments like pancreatic
cancer, macular
degeneration and Alzheimer’s.
But in a world of limited budgets, such decisions must be made.
Similar systems exist in many countries, including
Australia and New Zealand, where the government decided not to pay for a
universal vaccine against pneumococcal disease until its price fell to 25,000
New Zealand dollars (about $20,000) per quality-adjusted life year.
Though this concept may sound foreign, Washington has
been putting
a price on life since the administration of Ronald Reagan — who determined
that regulations should pass through a strict cost-benefit analysis, with values
placed on factors like life and health. The Environmental Protection Agency
values a life at about $9 million today. In 2009, the Transportation Department
used a price tag of about $6 million. If safety improvements on a road were
projected to cost more than the value of the lives expected to be saved by the
improvement, the project would be deemed too expensive.
This approach has been contentious. And it has had an
impact on Americans’ health. In 1991 an appeals court reversed the E.P.A.’s
decision to ban asbestos on the ground that it was too costly. The E.P.A., it
argued, “would have this court believe that Congress, when it enacted its
requirement that the E.P.A. consider the economic impacts of its regulations,
thought that spending $200 million to $300 million to save approximately seven
lives (approximately $30 million to $40 million per life) over 13 years is
reasonable.” The court disagreed.
Medicare could well be forced, one day, to make
similar evaluations.
This article has been revised to reflect the following
correction:
Correction: August 23, 2012
The Economic Scene column on Wednesday, about finding a fairer way to ration
health care in the United States, misstated the results of a government study on
health care expenditures. The study, by the Department of Health and Human
Services’ Agency for Healthcare Research and Quality, found that 89 percent of
health care expenditures were accounted for by the 30 percent of Americans who
use health care most heavily, not by the wealthiest 30 percent.
Older adults are understandably anxious about the
political sniping over the future financing of Medicare.
That is precisely the intention of the presidential campaigns.
Yet the cross-fire over who will cut Medicare by how
much sidesteps a critical issue about the future of our medical care: If we must
ration our care to hold down costs in the future, how can we do it in a fair,
efficient and transparent way?
Mitt Romney’s campaign was brazenly misleading in its
charge that the president’s health plan would cut medical services to older
adults by reducing Medicare spending by $716 billion. The president’s savings
will come mostly from smaller payments to managed care companies, which provide
the same services as Medicare at a higher cost, and from slower growth in
reimbursement rates to health care providers.
But the response of President Obama’s campaign also
aimed to stoke voters’ fears. It stressed — rightly — that the plan to curb
Medicare costs proposed last year by Representative Paul D. Ryan, Mr. Romney’s
vice-presidential running mate, would add thousands of dollars to older
Americans’ out-of-pocket expenditures. Yet it ignored Mr. Ryan’s recent efforts
to soften the plan.
Both campaigns claim they are out to protect future
health care. Yet the sniping hides the real issue. Protecting federal health
programs over the long term, as the population ages and medical costs keep
rising faster than economic growth, will require curbing the programs’ spending.
And we haven’t quite figured out how to do that.
The federal government’s spending on health care
consumes 4.8 percent of the nation’s economic production and is expected to eat
up 9.2 percent in 25 years, according to estimates
from the Congressional Budget Office. A vast majority of economists
agree that restoring a sustainable budget will mean either cuts in Medicare
and Medicaid
or a tax increase on the middle class.
Decisions will have to be made about what services are
not worth the cost. Yet so far, our political leaders have failed to acknowledge
this to voters, offering instead an illusion that we can resolve the matter
without any pain.
Recall the political firestorm in 2009 when the
Preventive Services Task Force recommended that women start regular screening
for breast
cancer at age 50 rather than 40. “This is how rationing begins,” said
Representative Marsha Blackburn, a Tennessee Republican. “This is when you
start getting a bureaucrat between you and your physician.”
The task force is an independent panel of experts
financed by the Department of Health and Human Services. Doctors and private
insurers usually follow its recommendations. Still, in 2010 — after Mr. Obama’s
health reform legislation passed Congress — the department said that insurers
should ignore its latest findings and instead go back to its recommendation from
2002: that women start screening at 40.
Does it make sense that older adults in their last
year of life consume more than a
quarter of Medicare’s expenditures, costing more than six times as much as
other beneficiaries? Are there limits to what Medicare should spend on a therapy
prolonging someone’s life by a month or two?
It’s a tough political call. In light of the
difficulties, our political leaders have preferred to punt on the issue, hoping
it doesn’t have to be decided on their watch. Instead, when they talk about
health care, they call rationing by some other name.
Rationing is inevitable in a world with finite
resources. We do it in this country, too, and it is still one of the least fair
and most inefficient rationing systems in the world. You get care if you have
the money to pay for it; if not, you probably won’t.
The 30 percent of the population who are the heaviest
users of health care account for nearly 89 percent of health care expenditures,
according to a government
study. But high-income Americans are more likely to see a doctor when they
are sick,
according to a study by the Organization for Economic Cooperation and
Development. And the disparity between rich and poor is much higher than in
other developed countries.
Meanwhile, tens of millions of Americans — those whose
employers don’t provide health
insurance, who are too poor to pay for it themselves and yet are too rich to
use Medicaid — get the least health care of all.
A study of hospital emergency rooms
in Wisconsin found that victims of severe traffic accidents without health
insurance got 20 percent less care. Hospitals spent $3,300 more on average for
each victim who was insured. They kept the insured 9.2 days, on average, and the
uninsured just 6.4 days. Unsurprisingly, the uninsured were 40 percent more
likely to die from their injuries.
Every health care proposal from the right and the left
includes some form of implicit rationing device. Mr. Ryan’s plan, on the
Republican side, would keep spending on Medicare under 4.75 percent of the
nation’s output until 2050 by giving older adults born after 1958 a dollop of
money to buy their own insurance, forcing many to choose cheaper plans or fewer
procedures.
The president’s health
care reform encourages rationing, too, by levying a tax on “Cadillac”
insurance plans, and in turn pushing employers to seek cheaper options and lower
costs. It creates an advisory board to cut costs from Medicare if spending rises
above a set rate. And it finances an institute to evaluate which therapies are
most clinically effective. Careful to avoid political blowback, the president’s
plan forbids Medicare to base its reimbursement decisions on the institute’s
findings.
But neither initiative seems likely to solve our
health care financing squeeze over the long term. The cuts proposed by Mr. Ryan
— shifting the risk of health care inflation onto the shoulders of older adults
— are certainly drastic. They also seem politically unfeasible. Under Mr. Ryan’s
most recent proposals, in 2030 Medicare would spend $2,200
less in today’s money on each new enrollee than under the most likely
outcome envisioned by the Congressional Budget Office based on current policies.
By 2050, it would pay $8,000 less. Voters seem
to think that might be too drastic a cut.
The president’s plan was more about offering health
insurance to all, to end our Dickensian system of rationing by income, than
long-term cost control. Savings mandated by the Affordable Care Act over the
next 10 years will be difficult to maintain beyond that.
It puts a lot of faith on eliminating waste, with
potentially large savings. David Cutler, a health economist at Harvard, argues
that a third of our health care dollars go to therapies that do not improve our
health. A lot of that waste could be slashed simply by no longer paying
providers a fee for each service, whether we need it or not, and paying them
instead to keep us healthy.
Going after waste seems sensible in a health
care system that costs more than almost any other in the developed world,
yet delivers lower-quality care. But savings from waste tend to be hard to
achieve. Even with the Affordable Care Act in place, federal health spending
will eat up almost twice as much of this nation’s economic product in 2037 as it
does today, according to the budget office.
While it is reasonable for politicians to shy away
from rationing — especially when voters believe no expense should be spared to
save a human life — if the experience of other countries serves as precedent,
they will probably get there sooner or later. In Britain, the National Institute
for Health and Clinical Excellence determines what therapies will be covered by
the National Health Service. It generally recommends against paying for a
therapy that costs more than $31,000 to $47,000 for each year of life gained,
adjusted for quality.
Putting a value on life, as it were, is controversial.
The National Institute in Britain has denied or limited coverage of expensive
drugs for ailments like pancreatic
cancer, macular
degeneration and Alzheimer’s.
But in a world of limited budgets, such decisions must be made.
Similar systems exist in many countries, including
Australia and New Zealand, where the government decided not to pay for a
universal vaccine against pneumococcal disease until its price fell to 25,000
New Zealand dollars (about $20,000) per quality-adjusted life year.
Though this concept may sound foreign, Washington has
been putting
a price on life since the administration of Ronald Reagan — who determined
that regulations should pass through a strict cost-benefit analysis, with values
placed on factors like life and health. The Environmental Protection Agency
values a life at about $9 million today. In 2009, the Transportation Department
used a price tag of about $6 million. If safety improvements on a road were
projected to cost more than the value of the lives expected to be saved by the
improvement, the project would be deemed too expensive.
This approach has been contentious. And it has had an
impact on Americans’ health. In 1991 an appeals court reversed the E.P.A.’s
decision to ban asbestos on the ground that it was too costly. The E.P.A., it
argued, “would have this court believe that Congress, when it enacted its
requirement that the E.P.A. consider the economic impacts of its regulations,
thought that spending $200 million to $300 million to save approximately seven
lives (approximately $30 million to $40 million per life) over 13 years is
reasonable.” The court disagreed.
Medicare could well be forced, one day, to make
similar evaluations.
This article has been revised to reflect the following
correction:
Correction: August 23, 2012
The Economic Scene column on Wednesday, about finding a fairer way to ration
health care in the United States, misstated the results of a government study on
health care expenditures. The study, by the Department of Health and Human
Services’ Agency for Healthcare Research and Quality, found that 89 percent of
health care expenditures were accounted for by the 30 percent of Americans who
use health care most heavily, not by the wealthiest 30 percent.
Correction: August 23, 2012
The second article . . . she discovered was . . .
Shortchanging
Cancer Patients
Also from the New York Times was written by:
By EZEKIEL J. EMANUEL
Published:
August 6, 2011
RIGHT now cancer care is being rationed in the United States.
Probably to their great disappointment, President Obama’s critics cannot blame this rationing on death panels or health care reform. Rather, it is caused by a severe shortage of important cancer drugs.
Of the 34 generic cancer drugs on the market, as of this month, 14 were in short supply. They include drugs that are the mainstay of treatment regimens used to cure leukemia, lymphoma and testicular cancer. As Dr. Michael Link, the president of the American Society of Clinical Oncology, recently told me, “If you are a pediatric oncologist, you know how to cure 70 to 80 percent of patients. But without these drugs you are out of business.”
This shortage is even inhibiting research studies that can lead to higher cure rates: enrollment of patients in many clinical trials has been delayed or stopped because the drugs that are in short supply make up the standard regimens to which new treatments are added or compared.
The sad fact is, there are plenty of newer brand-name cancer drugs that do not cure anyone, but just extend life for a few months, at costs of up to $90,000 per patient. Only the older but curative cancer drugs — drugs that can cost as little as $3 per dose — have become unavailable. Most of these drugs have no substitutes, but, crazy as it seems, in some cases these shortages are forcing doctors to use brand-name drugs at more than 100 times the cost.
Only about 10 percent of the shortages can be attributed to a lack of raw materials and essential ingredients to manufacture the drugs. Most shortages appear instead to be the consequence of corporate decisions to cease production, or interruptions in production caused by money or quality problems, which manufacturers do not appear to be in a rush to fix.
If the laws of supply and demand were working properly, a drug shortage would cause a price rise that would induce other manufacturers to fill the gap. But such laws do not really apply to cancer drugs.
The underlying reason for this is that cancer patients do not buy chemotherapy drugs from their local pharmacies the way they buy asthma inhalers or insulin. Instead, it is their oncologists who buy the drugs, administer them and then bill Medicare and insurance companies for the costs.
Historically, this “buy and bill” system was quite lucrative; drug companies charged Medicare and insurance companies inflated, essentially made-up “average wholesale prices.” The Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed by President George W. Bush, put an end to this arrangement. It required Medicare to pay the physicians who prescribed the drugs based on a drug’s actual average selling price, plus 6 percent for handling. And indirectly — because of the time it takes drug companies to compile actual sales data and the government to revise the average selling price — it restricted the price from increasing by more than 6 percent every six months.
The act had an unintended consequence. In the first two or three years after a cancer drug goes generic, its price can drop by as much as 90 percent as manufacturers compete for market share. But if a shortage develops, the drug’s price should be able to increase again to attract more manufacturers. Because the 2003 act effectively limits drug price increases, it prevents this from happening. The low profit margins mean that manufacturers face a hard choice: lose money producing a lifesaving drug or switch limited production capacity to a more lucrative drug.
The result is clear: in 2004 there were 58 new drug shortages, but by 2010 the number had steadily increased to 211. (These numbers include noncancer drugs as well. )
Unfortunately, there is no quick fix, because all solutions require legislation. A bill introduced in February by Senator Amy Klobuchar, Democrat of Minnesota, and Senator Bob Casey, Democrat of Pennsylvania, would require generic manufacturers to notify the Food and Drug Administration if they expected a supply problem or planned to stop manufacturing a drug. But the F.D.A. isn’t able to force manufacturers to produce a drug, and learning about impending shortages with little authority to alleviate them is of limited benefit. Indeed, early warning could exacerbate the problem: the moment oncologists or cancer centers hear there is going to be a shortage of a critical drug, their response could well be to start hoarding.
You don’t have to be a cynical capitalist to see that the long-term solution is to make the production of generic cancer drugs more profitable. Most of Europe, where brand-name drugs are cheaper than in the United States, while generics are slightly more expensive, has no shortage of these cancer drugs.
One solution would be to amend the 2003 act to increase the amount Medicare pays for generic cancer drugs to the average selling price plus, say, 30 percent, after the drugs have been generic for three years. This would encourage the initial rapid price drop that makes generics affordable, but would allow for an increase in price and profits to attract more generic producers and the fixing of any manufacturing problems that subsequently arose.
Increasing the price for generic oncology drugs would have a negligible impact on overall health care costs. Total spending on generic injectable cancer drugs was $400 million last year — just 2 percent of cancer drug costs, and less than 0.5 percent of the total cost of cancer care. If we are worried about costs, we could follow Europe and pay for the higher prices by lowering what Medicare pays for the brand-name drugs that extend life by only a few months.
A more radical approach would be to take Medicare out of the generic cancer drug business entirely. Once a drug becomes generic, Medicare should stop paying, and it should be covered by a private pharmacy plan.
That way prices can better reflect the market, and market incentives can work to prevent shortages.
Scare-mongering about death panels and health care reform has diverted attention from real issues in our health care system. Shortages in curative cancer treatments are completely unacceptable. We need to stop the political demagoguery and fix the real rationing problem.
Probably to their great disappointment, President Obama’s critics cannot blame this rationing on death panels or health care reform. Rather, it is caused by a severe shortage of important cancer drugs.
Of the 34 generic cancer drugs on the market, as of this month, 14 were in short supply. They include drugs that are the mainstay of treatment regimens used to cure leukemia, lymphoma and testicular cancer. As Dr. Michael Link, the president of the American Society of Clinical Oncology, recently told me, “If you are a pediatric oncologist, you know how to cure 70 to 80 percent of patients. But without these drugs you are out of business.”
This shortage is even inhibiting research studies that can lead to higher cure rates: enrollment of patients in many clinical trials has been delayed or stopped because the drugs that are in short supply make up the standard regimens to which new treatments are added or compared.
The sad fact is, there are plenty of newer brand-name cancer drugs that do not cure anyone, but just extend life for a few months, at costs of up to $90,000 per patient. Only the older but curative cancer drugs — drugs that can cost as little as $3 per dose — have become unavailable. Most of these drugs have no substitutes, but, crazy as it seems, in some cases these shortages are forcing doctors to use brand-name drugs at more than 100 times the cost.
Only about 10 percent of the shortages can be attributed to a lack of raw materials and essential ingredients to manufacture the drugs. Most shortages appear instead to be the consequence of corporate decisions to cease production, or interruptions in production caused by money or quality problems, which manufacturers do not appear to be in a rush to fix.
If the laws of supply and demand were working properly, a drug shortage would cause a price rise that would induce other manufacturers to fill the gap. But such laws do not really apply to cancer drugs.
The underlying reason for this is that cancer patients do not buy chemotherapy drugs from their local pharmacies the way they buy asthma inhalers or insulin. Instead, it is their oncologists who buy the drugs, administer them and then bill Medicare and insurance companies for the costs.
Historically, this “buy and bill” system was quite lucrative; drug companies charged Medicare and insurance companies inflated, essentially made-up “average wholesale prices.” The Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed by President George W. Bush, put an end to this arrangement. It required Medicare to pay the physicians who prescribed the drugs based on a drug’s actual average selling price, plus 6 percent for handling. And indirectly — because of the time it takes drug companies to compile actual sales data and the government to revise the average selling price — it restricted the price from increasing by more than 6 percent every six months.
The act had an unintended consequence. In the first two or three years after a cancer drug goes generic, its price can drop by as much as 90 percent as manufacturers compete for market share. But if a shortage develops, the drug’s price should be able to increase again to attract more manufacturers. Because the 2003 act effectively limits drug price increases, it prevents this from happening. The low profit margins mean that manufacturers face a hard choice: lose money producing a lifesaving drug or switch limited production capacity to a more lucrative drug.
The result is clear: in 2004 there were 58 new drug shortages, but by 2010 the number had steadily increased to 211. (These numbers include noncancer drugs as well. )
Unfortunately, there is no quick fix, because all solutions require legislation. A bill introduced in February by Senator Amy Klobuchar, Democrat of Minnesota, and Senator Bob Casey, Democrat of Pennsylvania, would require generic manufacturers to notify the Food and Drug Administration if they expected a supply problem or planned to stop manufacturing a drug. But the F.D.A. isn’t able to force manufacturers to produce a drug, and learning about impending shortages with little authority to alleviate them is of limited benefit. Indeed, early warning could exacerbate the problem: the moment oncologists or cancer centers hear there is going to be a shortage of a critical drug, their response could well be to start hoarding.
You don’t have to be a cynical capitalist to see that the long-term solution is to make the production of generic cancer drugs more profitable. Most of Europe, where brand-name drugs are cheaper than in the United States, while generics are slightly more expensive, has no shortage of these cancer drugs.
One solution would be to amend the 2003 act to increase the amount Medicare pays for generic cancer drugs to the average selling price plus, say, 30 percent, after the drugs have been generic for three years. This would encourage the initial rapid price drop that makes generics affordable, but would allow for an increase in price and profits to attract more generic producers and the fixing of any manufacturing problems that subsequently arose.
Increasing the price for generic oncology drugs would have a negligible impact on overall health care costs. Total spending on generic injectable cancer drugs was $400 million last year — just 2 percent of cancer drug costs, and less than 0.5 percent of the total cost of cancer care. If we are worried about costs, we could follow Europe and pay for the higher prices by lowering what Medicare pays for the brand-name drugs that extend life by only a few months.
A more radical approach would be to take Medicare out of the generic cancer drug business entirely. Once a drug becomes generic, Medicare should stop paying, and it should be covered by a private pharmacy plan.
That way prices can better reflect the market, and market incentives can work to prevent shortages.
Scare-mongering about death panels and health care reform has diverted attention from real issues in our health care system. Shortages in curative cancer treatments are completely unacceptable. We need to stop the political demagoguery and fix the real rationing problem.
In
addition to these two articles,
Floyd wanted our readers to become familiar
with
what Wikipedia had available on this topic;
Healthcare
rationing in the United States
From Wikipedia,
the free encyclopedia
Access to state Medicaid programs is restricted by income and asset limits via a means-test, and to other federal and state eligibility regulations. Health maintenance organizations (HMOs) that commonly cover the bulk of the population, restrict access to treatment via financial and clinical access limits.[4]
The Patient Protection and Affordable Care Act passed in March 2010 will prohibit insurers from limiting coverage to people with preexisting conditions beginning in 2014, which will alleviate this type of rationing.
Some in the media and academia have advocated rationing of care to limit the overall costs in the U.S. Medicare and Medicaid programs, arguing that a proper rationing mechanism is more equitable and cost-effective.[5][6][7] The Congressional Budget Office (CBO) has argued that healthcare costs are the primary driver of government spending over the long-term.[8]
Types of
rationing
[edit] Rationing by
Insurance companies
In an e-mail to Obama supporters, David Axelrod wrote: "Reform will stop 'rationing' - not increase it.... It’s a myth that reform will mean a 'government takeover' of health care or lead to 'rationing.' To the contrary, reform will forbid many forms of rationing that are currently being used by insurance companies."[11]
A 2008 study by researchers at the Urban Institute found that health spending for uninsured non-elderly Americans is only about 43% of health spending for similar, privately insured Americans. These data imply rationing by price and ability to pay.[12]
Fareed Zakaria wrote that only 38% of small businesses provide health insurance for their employees during 2009, versus 61% in 1993, due to rising costs.[13]
An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period. It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.[14]
Private and public insurers all have their own drug formularies through which they set coverage limitations which may include referral to the insurance company for a decision as to whether the company will or will not approve its share of the costs. American formularies make generalized coverage decisions by class with cheaper drugs in classes at one end of the scale and expensive drugs with more conditions for referral and possible denial at the other.[15] Not all drugs may be in the formulary of every company and consumers are advised to check the formulary before deciding to buy insurance.[16]
The phenomena known as medical bankruptcy is unheard of in countries with universal health care in which medical copays are low. In the United States however, research shows that many bankruptcies have a strong medical component and that many of those who go bankrupt for a medical reason did have medical insurance. Medical insurance in the United States prior to the Affordable Care Act allowed annual caps or lifetime caps on coverage and, due to the high cost of care in the United States, it was not uncommon for the insured to suffer bankruptcy due to breaching these limits.
[edit] Rationing by price
Rationing by price means accepting that there is no triage according to need. Thus in the private sector it is accepted that some people get expensive surgeries such as liver transplants or non life threatening ones such as cosmetic surgery, when others fail to get cheaper and much more cost effective care such as prenatal care, which could save the lives of many fetuses and newborn children. Some places, like Oregon for example, do explicitly ration Medicaid resources using medical priorities.[18]
Polling has discovered that Americans are much more likely than Europeans or Canadians to forgo necessary health care (e.g. not seeking a prescribed medicine) on the grounds of cost.
[edit] Rationing by
pharmaceutical companies
[edit] Rationing through
government control
Princeton Professor Uwe Reinhardt wrote that both public and private healthcare programs can ration, rebutting the concept that governments alone impose rationing: "Many critics of the current health reform efforts would have us believe that only governments ration things.... On the other hand, these same people believe that when, for similar reasons, a private health insurer refuses to pay for a particular procedure or has a price-tiered formulary for drugs – e.g., asking the insured to pay a 35 percent coinsurance rate on highly expensive biologic specialty drugs that effectively put that drug out of the patient’s reach — the insurer is not rationing health care. Instead, the insurer is merely allowing “consumers” (formerly “patients”) to use their discretion on how to use their own money. The insurers are said to be managing prudently and efficiently, forcing patients to trade off the benefits of health care against their other budget priorities."[20]
During 2009, former Alaska Governor Sarah Palin wrote against rationing by government entities, referring to what she interpreted as such an entity in current reform legislation as a "death panel" and "downright evil." Defenders of the plan indicated that the proposed legislation H.R. 3200 would allow Medicare for the first time to cover patient-doctor consultations about end-of-life planning, including discussions about drawing up a living will or planning hospice treatment. Patients could seek out such advice on their own, but would not be required to. The provision would limit Medicare coverage to one consultation every five years.[21] However, Palin also had supported such end of life counseling and advance directives from patients during 2008.[22]
Ezra Klein described in the Washington Post how polls indicate senior citizens are increasingly resistant to healthcare reform, due to concerns about cuts to the existing Medicare program that may be required to fund it. This is creating an unusual and potent political alliance, with Republicans arguing to protect the existing Medicare program, despite its position as one of the major entitlement programs they historically have opposed.[23] The CBO scoring of the proposed America's Affordable Health Choices Act of 2009 (also called HR3200) includes $219 billion in savings over 10 years, some of which would come from Medicare changes.[24]
[edit] Arguments for
enhancing rationing processes
"Rationing
health care means getting value for the billions we are spending by setting
limits on which treatments should be paid for from the public purse. If we
ration we won’t be writing blank checks to pharmaceutical companies for their
patented drugs, nor paying for whatever procedures doctors choose to recommend.
When public funds subsidize health care or provide it directly, it is crazy not
to try to get value for money. The debate over health care reform in the United
States should start from the premise that some form of health care rationing is
both inescapable and desirable. Then we can ask, What is the best way to do
it?"
[edit] Rationing based
on economic value added
[edit] Rationing using
comparative effectiveness research
Medicare spending
per person varied significantly across states in 2006
Several treatment alternatives
may be available for a given medical condition, with significantly different
costs yet no statistical difference in outcome. Such scenarios offer the
opportunity to maintain or improve the quality of care, while significantly
reducing costs, through comparative effectiveness research. Writing in the New
York Times, David Leonhardt described how the cost of treating
the most common form of early-stage, slow-growing prostate cancer
ranges from an average of $2,400 (watchful waiting to see if the condition
deteriorates) to as high as $100,000 (radiation beam therapy):[26]
Some doctors
swear by one treatment, others by another. But no one really knows which is
best. Rigorous research has been scant. Above all, no serious study has found
that the high-technology treatments do better at keeping men healthy and alive.
Most die of something else before prostate cancer becomes a problem.
According to economist Peter
A. Diamond and research cited by the Congressional Budget Office (CBO), the
cost of healthcare per person in the U.S. also varies significantly by
geography and medical center, with little or no statistical difference in
outcome.[27]
Although the Mayo
Clinic scores above the other two [in terms of quality of outcome], its cost
per beneficiary for Medicare clients in the last six months of life ($26,330)
is nearly half that at the UCLA Medical Center ($50,522) and significantly
lower than the cost at Massachusetts General Hospital ($40,181)...The American
taxpayer is financing these large differences in costs, but we have little
evidence of what benefit we receive in exchange.
Comparative effectiveness
research has shown that significant cost reductions are possible. Office of Management and Budget
(OMB) Director Peter Orszag stated: "Nearly thirty percent of
Medicare's costs could be saved without negatively affecting health outcomes if
spending in high- and medium-cost areas could be reduced to the level of
low-cost areas."[28]President Obama has provided more than $1 billion in the 2009 stimulus package to jump-start Comparative Effectiveness Research (CER) and to finance a federal CER advisory council to implement that idea. Economist Martin Feldstein wrote in the Wall Street Journal that "Comparative effectiveness could become the vehicle for deciding whether each method of treatment provides enough of an improvement in health care to justify its cost."[29]
[edit] Rationing as part
of fiscal discipline
Arizona recently modified its Medicaid coverage rules because of a budget problem which included denying care for expensive treatments such as organ transplants to Medicaid recipients, including those who had previously been promised funding.[30] MSNBC's Keith Olbermann and others have dubbed Governor Jan Brewer and the state legislatures as a real life death panel because many of those poor people who are now being denied funding will lose their lives or have a worsened outlook as a result of this political decision.
[edit] Old-age-based
health care rationing
[edit] Consequences of not controlling healthcare costs
Medicare and Medicaid
Spending as % GDP
The Congressional Budget Office reported in
June 2008 that:[8]
"Future
growth in spending per beneficiary for Medicare and Medicaid—the federal
government’s major health care programs—will be the most important determinant
of long-term trends in federal spending. Changing those programs in ways that
reduce the growth of costs—which will be difficult, in part because of the
complexity of health policy choices—is ultimately the nation’s central
long-term challenge in setting federal fiscal policy...total federal Medicare
and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in
2050 and 19 percent in 2082—which, as a share of the economy, is roughly
equivalent to the total amount that the federal government spends today. The
bulk of that projected increase in health care spending reflects higher costs
per beneficiary rather than an increase in the number of beneficiaries
associated with an aging population."
In other words, all other federal
spending categories (e.g., Social Security, Defense, Education, and
Transportation) would require borrowing to be funded, which is not feasible.President Obama stated in May 2009: "But we know that our families, our economy, and our nation itself will not succeed in the 21st century if we continue to be held down by the weight of rapidly rising health care costs and a broken health care system...Our businesses will not be able to compete; our families will not be able to save or spend; our budgets will remain unsustainable unless we get health care costs under control."[36]
Consequences of
Controlling healthcare access
" Some live and many die "
Those that vote, get to Decide . . .
Do we want to ensure
that healthcare is available To “ALL”, Regardless, of one’s ability 2 Pay2 Survive .
. . Or
not ?
Floyd
& I believe, that we should afford everyone with
equal access to healthcare . . . to Live, In dignity,
equal access to healthcare . . . to Live, In dignity,
from
all infirmities within our reach.
Floyd
cannot vote to change policy . . .
But, you & I can . . .
Where do you Stand ?
until you decide . . .
many still die
until you decide . . .
many still die
“We are all responsible for our
wake and any influence it causes!”
So Please,
"Leave a wake behind you,
that you would want others to leave for you."
Post Script:
Everyone does not have access to the internet,
so Floyd & I ask that you share this information
with others . . .
But don't forget to give credit to this post to:
EDUARDO PORTER
EZEKIEL J. EMANUEL
Wikipedia
Til’ we chat again,
Floyd & Joe
Floyd & Joe
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