Category: Health Care Reform
These numbers from the Miliman Research Report are stunning. This situation cannot possibly be sustainable for most Americans, and I have little faith that the Affordable Care Act will reduce these costs. I want to believe that the ACA will address costs, but I simply can’t believe this. It’s also amazing that in light of these numbers, and in light of the recent blockbuster Time Magazine article, “Bitter Pill,” America seems incapable of having a rational conversation about what it really needs to do to reduce these horrendous costs.
Last year, when healthcare costs for the typical American family of four exceeded $20,000 for the first time, the Milliman Medical Index (MMI) compared the cost of a family’s healthcare to the cost of an average midsize sedan. This year, with costs exceeding $22,000 ($22,030), we note that healthcare costs for our family of four are almost as much as the cost of attending an in-state public college ($22,261) for the current academic year. The total share of this cost borne directly by the family—$9,144 in payroll deductions and out-of-pocket costs—now exceeds the cost of groceries for the MMI’s typical family of four. The out-of-pocket cost alone—$3,600 for co-pays, coinsurance, and other cost sharing—is more than the average U.S. household spends on gas in a year.
Why is it that generic drug makers sometimes delay entering the market, sometimes long after the drug patent expires? This is another tale in corporatocracy, told by Alternet:
[I]magine you’re a big-time drug company. You want to keep competitors off the market as long as possible. Your move is to basically sue the pants off the generic drugmaker for copyright infringement, setting in motion a long and tortuous legal process. And these usually end with “pay-for-delay” deals. The brand-name drug company pays the generic manufacturer a cash settlement, and the generic manufacturer agrees to delay entry into the market for a number of years. In the case before the Supreme Court, the drug company paid $30 million a year to protect its $125 million annual profit in AndroGel, a testosterone supplement.
It’s hard to see this as anything but bribery, designed to preserve a lucrative monopoly for the brand-name drug maker. In fact, this is what the Federal Trade Commission has argued for over a decade. They consider it a violation of antitrust law, arguing that the exchange of cash gives the generic manufacturer a share of future profits in the drug, specifically to prolong the monopoly. As SCOTUSBlog summarizes from the FTC’s court brief, in the regulator’s view, “Nothing in patent law … validates a system in which brand-name companies could buy off their would-be competitors.” Indeed, everyone wins with pay-for-delay but the consumer: the FTC estimates that the two dozen deals inked in 2012 alone cost drug patients $3.5 billion annually, with the brand-name and generic manufacturers splitting the ill-gotten profits.
Check out the feature article in this week’s Time Magazine. It’s called “Bitter Pill,” and it’s written by Steven Brill, a savvy insider. In addition to making me apprehensive that health insurance costs are about to spike upward due to Obamacare’s lack of any meaningful price controls on health insurance, it gives an insider’s look into the massively arbitrary pricing of health care services. In the absence of any competitive market, big hospitals (including the so-called non-profit hospitals) are freely allowed to concoct the prices they charge. They quietly maintain their made-up pricing on their non-public “chargemaster” price lists.
At Occasional Planet, Madonna Gauding takes a careful look at what Obamacare means for ordinary people and big corporations.
A generous (and seriously wrongheaded) view of Obamacare is that it was a progressive bill designed to be a steppingstone to single payer. But, in reality, it was designed to strengthen, expand, and more deeply entrench corporate control of healthcare delivery. What will happen when the ACA comes online in 2014? I think millions will decide (out of necessity) to take the IRS fine rather than go into further debt buying inadequate, high deductible insurance. The insurance companies, limited to a smaller profit margin, and not getting the numbers they want, will decide they can’t make enough money to keep their yachts afloat, and fold. Hospitals, tired of treating people in emergency rooms for free, will push for Medicare expansion, as will the general population. Slowly, in fits and starts, we will move to Medicare for all. That will be a huge improvement. But, in order for us to have humane healthcare for all, the profit taking throughout the system has to stop—the $200 a pill prescription, the $15 box of hospital tissues, the many unnecessary, but lucrative procedures that line the pockets of surgeons. The “free market” for-profit health care industry with its bloated costs is the underlying cancer of healthcare delivery in the United States.
I still don’t see any evidence that Obamacare will reduce health care premiums for ordinary Americans. These cost controls were promised as the prime reason for Obamacare back when Barack Obama first ran for president. At Huffpo, Wendell Potter explains some of the reasons that healthcare premiums continue to skyrocket. It’s a story permeated with corruption, involving the malfeasance of both Democrats and Republicans. Here’s the introduction to Potter’s article, “Why Americans Pay So Much for Health Care: Friends in High Places (Just Not Your Friends)“:
If you wonder why we spend more money on health care than any other country but have some of the worst health outcomes, you need look no further than the halls of Congress to it figure out. And you need look no further back than the recent “fiscal cliff” drama for compelling proof of how decisions are often made, not based on protecting the public’s interest and bringing costs down but on protecting the profits of pharmaceutical companies, insurance firms and other special interests that grease the palms of our elected officials.
In his article at Common Dreams, Oregon doctor Samuel Metz destroys the notion that the United States has the world’s best health care system.
Senate Minority Leader Mitch McConnell says, “We do start with the notion, however, that we have the best health care in the world.” If McConnell had diabetes, he might pause. American diabetics suffer twice as many foot amputations as diabetics in Europe because they cannot afford care to prevent foot infections from turning deadly.
House Speaker John Boehner says we have “the best health care delivery system in the world.” But there are 35 other countries in which a pregnant woman and her baby have a better chance of surviving the pregnancy. The United States leads the industrialized world in deaths preventable with timely care. There are 15 other nations providing every citizen with lifesaving treatments denied to many unfortunate Americans.
From Moyers & Company, a short story about the origins Medicare, including Ronald Reagan’s demonization of the proposed program:
At Better Medicine, Negoba points out how doctors contribute to the high cost of health care. Even though some doctors make high salaries (some specialists making extremely high salaries), the salaries are not the biggest part of the problem.
A doctor can be just as valuable as a controller of loss as a source of profit. In either case, the amount of money flow a doctor controls is easily 5-10 times the amount he or she makes in salary. Many larger systems with interests both at the office and hospital level will take losses on salary to retain a physician whose orders then net a profit in orders.
I often wonder why the Republicans chose the name “Obamacare” in their attempts to ridicule Barack Obama’s “Patient Protection and Affordable Care Act.” After all, the first half, “Obama,” merely gives credit to the person who orchestrated the passage of the legislation and “care” is a benign word, even a pleasant word. Maybe they liked it better than the “Make the Rich Pay for Poor Children’s Medical Treatment Act.” Or maybe they thought that people hate “Obama” so much that just by saying his name it will make them angry. The bottom line is that it seems to be a lot like the phrase “Yankee Doodle,” originally meant as an insult, but adopted and even embraced by the target of the taunt.
Now that the new law has mostly survived, what does it mean for real-life Americans? There are many articles, like this one, that point out some things and make a few predictions, but no one seems to know the answers to two basic questions that are on my mind. What kind of insurance will ordinary Americans be able to purchase with regard to A) Quality of Care and B) Cost of Care? I’m not convinced that the new act has meaningful price controls on premiums or that the quality of care will be well-regulated. In fact, I will predict that the insurance companies will essentially take the following position: “Sure, you can have all of those new bells and whistles demanded by the Act, but you’re going to need to pay for it.” Here are some of those bells and whistles. And then the American public will likely not be witness to the intense behind-the-scenes lobbying that will result in 20% premium increases every year. I hope not, but I’m not optimistic.
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