The real story on Health Care Reform

Charles Krauthammer has offered tremendous insights into what is really happening with Health Care Reform. Do not miss this column as he is dead on accurate with his assessment.

At the very center of our economic near-depression is a credit bubble, a
housing collapse and a systemic failure of the entire banking system. One can
come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies,
insufficient regulation of new and exotic debt instruments, the easy money
policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then
unloading in packaged loan instruments) highly dubious mortgages, greedy
house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the
financial system does not include the absence of universal health care, let
alone of computerized medical records. Nor the absence of an industry-killing
cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could
perversely make the case that, if anything, the proliferation of overeducated,
Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque
mathematical models and debt instruments helped get us into this credit
catastrophe in the first place.

He is one of the few syndicated columnists worth reading and he too has discovered the mischief in Obama's health care plan and he knows where all this is heading.

I have always enjoyed The Hunt For Red October. Remember the scene where the admiral (played by Fred Thompson) asks Jack Ryan (Alec Baldwin, a choice Tom Clancy undoubtedly had no input on selecting) what the Russian sub commanders plan is? "The average Russian doesn't take a shit without a plan and a senior commander especially does not act rashly." Well neither does OBAMA. He has a plan. It is Tom Daschle's plan as I wrote about previously.

I am incredulous people can actually view yesterday's health care summit as an open forum on reform. Now in coming weeks when people object to the coming proposals they will be vilified as obstructionists, kulaks( you know the American 21st century version that earns more than $250K) or enemies of the revolution out of touch with the common working people. Well down here in Texas we are common people Mr President and we speak plainly without a teleprompter and I say to you now don't piss down my back and tell me its raining.

NY Times Gets It Wrong Again

The rule is perfect: in all matters of opinion our adversaries are insane. - Mark Twain

The New York Times has reported today in an article by Robert Pear that The Health Care Industry is in Talks with Senator Edward Kennedy's staff about reforming the US Healthcare System.

The article notes Senator Kennedy's staff is conducting the secret meetings behind closed doors, which is "unusual". Republicans so far have stayed away we are told, as they" felt they would be relegated to a secondary role,with no opportunity to set the agenda or choose the outside participants." Here's where it gets really good. Senator Kennedy has often held such secret stakeholder meetings in the past we are told. Then we have this gem;

"It is not clear whether such back-room negotiations are still
viable at a time when politicians are promising a new transparency and condemning the influence of lobbyists."

Not Clear? This is transparent? A sector of the economy worth 17% of GDP does not have all constituents with some skin in the game at the table while its future is decided? Maybe to the NYT. Its pretty clear to anyone with a brain what is happening here--Senator Kennedy's staff is utilizing Mark Twain's time tested rule and excluding their insane adversaries. At a time when the stock price of the NYT is below the cost of its Sunday edition is it any wonder the print media is in shambles?

The Failure That Is Canadian Healthcare

There is an incisive article in the Canadian Free Press written by Klaus Rohrich on the utter failure that is the single payer Canadian Healthcare System. Here are just a few facts;

Canada, who along with Cuba and North Korea, is one of the
world’s only three countries where private, for profit healthcare is illegal.Canada outlawed all private medical care with the passage of the Canada Health Act of 1984. Within the first decade governments were forced to control their healthcare expenses by rationing care. Rationing was achieved by limiting enrollments in medical schools, which served to reduce the number of healthcare professionals dramatically and, of course created huge shortages in the healthcare system. Twenty-five years after the enactment of the Canada Health Act, Canada’s healthcare expenditures are among the highest of all countries offering universal access to healthcare. In fact the only country out of 28 that spends more on healthcare than Canada is Iceland.

The Fraser Institute concluded that the Canadian healthcare model “is inferior to those that are in place in other countries of the OECD. It produces inferior age-adjusted access to physicians and technology, produces longer waiting times, is less successful in preventing deaths from preventable causes and costs more than almost all of the other systems that have comparable objectives.”

...access to medical specialists is so curtailed that it
routinely takes upward of two months from the time a patient is referred to a specialist before the patient is even called back with an appointment. A four to six-month wait for an appointment with a specialist is the rule, not the
exception, with some procedures, such as joint replacements, taking in excess of three years from initially being seen by a general practitioner to having the procedure completed.

While 15% of the US population currently doesn’t have health insurance, 20% of the Canadian population does not have ready access to a family doctor.

My aunt lives in the UK where it is common for employers to offer private health insurance for employees. Why you might ask? Because most consumers do not want to wait 4-6 months to see a specialist or 3 years for a knee replacement. After my uncle retired, my aunt no longer had access to private insurance and indeed did wait 3 years for her knee replacement. The pain medicines required over that 3 year wait had an impact on her heart. So many people who talk about single payer as a panacea do not want to talk about the practical impact it has on people.

Vacation

My family was on vacation earlier this month walking along the beach when we found this bale of marijuana washed up at the waters edge along the Texas coast.

This beach is maybe 5 miles from a major US Coast Guard station. We will all hear a great deal about securing our borders in the coming election. Perhaps we should keep our coastline in mind?

John Kerry To The Rescue With Reinsurance

John Kerry has written an op-ed piece in The Boston Globe outlining how re-insurance is the solution to high health plan costs and the uninsured.

Fully reforming the healthcare system will require that the federal government begin shouldering some of the burden to help alleviate costs. One percent of patients account for a quarter of healthcare costs. By the same token, 2 out of 10 patients account for more than 80 percent of all healthcare costs. . To make healthcare more affordable, there must be a better way to share the immense burden of insuring the chronically ill and seriously injured.

Part of the reason that businesses and health plans today fail to cover their workers is an aversion to risk -- a fear that they will be saddled with a sick employee whose high premiums will bankrupt them. Take a small business with just five employees, for example. If one worker has a major heart attack, the cost of care for the other four shoots up, potentially causing the company to drop health coverage entirely.

But there's a way to combat these costs. And Washington should make employers and healthcare plans an offer they can't refuse.

It's called "reinsurance." Reinsurance means that if employers agree to offer all their workers preventative care and quality coverage, then the federal government will reimburse them for a significant portion of the costs of their chronically ill employees.

It's simple: If the federal government can help small and large businesses bear the burden of cost in the most expensive cases, we'll dramatically improve the health of everyone.

John Kerry has all the answers. Brilliant! A federal re-insurance backstop for health claims over $50,000. The US Treasury(read the US Taxpayer) as the payer as the payer of last resort. And how long before the US government as the re-insurer demands lifestyle adjustments (see my post on Preventable Disease and Health Care Costs ) and puts the IRS in charge of auditing behavior which is unhealthy, or worse you are denied a lifesaving operation because the QALY ROI is insufficient according to Government rationing guidelines?

Pardon my brevity, I think I need to explore a Roth 401(k) and do more research on setting up a cyber bar in the Caribbean where my meager retirement savings may one day provide sustenance free from the coming 80% tax rate that inevitably follows intelligentsia like Mr Kerry writing bills.

The Real Story of The Uninsured in Texas

The Houston Comical treated their readers to a page one story on the uninsured in TX. Here are a few of the facts presented.

WHO ARE THE UNINSURED?

The Texas Health Institute, a nonpartisan health advocacy group, described them this way in a report that was released in January:

• They work. At least 72 percent live in households where one or more family members work full time.

• They are young. Twenty-three percent are children, and an additional 36 percent are between 18 and 34.

• They are not all poor. Forty percent of families without coverage have incomes of $40,000 a year or more.

• Geography matters. Almost half of the uninsured live in Texas' five largest urban centers, and Harris County leads the pack with about 1.1 million, according to state estimates.

• Ethnicity matters. Hispanics are three times more likely to be uninsured than whites; blacks are twice as likely.

Now the Comical neglected to include some of their very telling demographic charts on the uninsured population in this online version but if memory serves me the magnitude of the uninsured Hispanic population in Texas under age 45 is in the neighborhood of 70%.

What they did include is that in South Texas 1/3 of the Hispanic population is uninsured. i would call that figure extremely conservative as noted below.

'Mecca of uninsured'

An even greater percentage of Texans are uninsured in the Rio Grande Valley. In Hidalgo, Cameron and Webb counties, all on the border, roughly one of every three residents is uninsured.

"We are ... the mecca of uninsured in our state," says Linda Villareal, an Edinburg physician and chairwoman of the Rio Grande Valley Health Service District. "We have the fastest-growing population but the lowest in terms of socioeconomics."

Medicaid is far and away the largest insurer here. The South Texas Health System, the largest health care provider in Hidalgo County with six hospitals, reports that 51 percent of its patients in 2006 were Medicaid recipients and only 10 percent had private insurance.

"South of San Antonio, if a doctor doesn't take Medicaid he's going to lose his business," Villareal said.

The Valley also has a large population of people who earn just enough to be disqualified from Medicaid. A family of four, for example, cannot earn more than $20,650 annually to get Medicaid coverage for children older than 6.

And there are thousands who qualify for Medicaid or CHIP but are not enrolled either out of ignorance or because they find it too difficult to keep up with the programs' myriad requirements.

Some legal residents are afraid to apply for aid because they have undocumented family members.

So you have half the the uninsured in TX living in the 5 largest Metropolitan areas and 90 of the patients in deep south Texas' Hidalgo County lack private insurance although 51% have Medicaid coverage. In this area people historically go across the border for free coverage, a point that is not referenced in the article. I know this because I have seen the loss ratios on valley accounts and it has historically been highly profitable for insurers. Why pay a deductible or coinsurance when you can cross the border and get treated for free? It remains to be seen what effect the new passport requirements will have on border crossings on foot. In the 5 largest metropolitan areas of Texas people without coverage regardless of citizenship access free coverage through hospital districts often in the ER. By the way, most of the best paying jobs for unskilled or semi-skilled labor are in the 5 largest metropolitan areas

Now understand I am making no value judgement here but it should be noted that there is a safety net in place. Further, when Comical reporters begin to put out wire service stories like this one its time to call them out on general laziness for not presenting the whole picture. I was once a paperboy for the Comical in my youth and must admit the only redeeming components are the paper today are the comics, the sports page and the obituaries. They certainly do not cover items like this story.

Property taxes are already an enormous political issue in Texas so when Health Care becomes free as a basic human right for all regardless of citizenship, expect more reporting as the masses initiate pilgrimages to Mecca. Be careful what you wish for over at TPM Cafe . How are senior citizens in Texas on fixed incomes going to stomach additional property taxes to fund free or subsidized health care for non U.S. citizens? This is not time for another unfunded federal mandate.

You ain't seen nothing yet folks.

Life, Liberty, Happiness and Health Care

There is an interesting and frequently amusing debate underway at The TPM Cafe discussing Jonathan Cohn's new book Sick:The Untold Story Of America's Health Care Crisis and The People Who Pay The Price.

The discussion has devolved into what you might encounter if you happened to be a physicist who stumbled into a watering hole in Berkeley, CA or Cambridge, MA and overheard a large group of undergraduates discussing the next breakthrough in Theoretical Physics despite no obvious familiarity among most particpants with Calculus or Quantum Mechanics. But, there is the passion of youth and idealism, and fueled by relatively cheap pitchers of beer and the occasional jager-bomb the theories just flow. You notice an older participant guiding the discussion and recall your own undergraduate days when liberal arts professors like Jengs in Animal House provided the cool-aid and had no issues spewing forth theory on subjects outside their field like political reality. That is what the whole discussion reminds me of at TPM except Donald Sutherland has been cloned .

The comments are fascinating. I keep waiting for Mr Hand to show up and ask, "What's wrong with you people? Are you on Dope?" Single payer seems to be the mantra at TPM but no one is discussing the fact that 67% of the US population is either obese or overweight and preventable disease today accounts for 65-70% of our Health Care spend. So how does single-payer change behavior? Or does that come later in phase 2? Who is going to mention the elephant in the room?

Not a single person has mentioned the abject failure of a culture and an educational system which produces citizens who do not seem to comprehend the relationship between their behavior and their health much less the importance of a good education to securing employment with great benefits including Health care and disability income in the event sickness strikes. There are a lot of victims stepping out as policymakers. But I digress and find myself about to quote a great rock n roll song thats not very PC.

I guess I find the discussion somewhat comical only because my clients deal in reality, but I certainly recognize the subject of financial ruin due to sickness is very serious. Reality requires employers to do what they can right now to achieve results. The emphasis is on tactical programs like engaging members to become active participants in their own health and well being. This involves behavioral changes in diet, exercise,pharmacy compliance and disease management among others. Employers have no choice but to act or be acted upon.

Can't you smell that smell? Follow The Money

60 Minutes ran its episode today titled Under the Influence about the incestuous and corrupt influence of the Pharmaceutical Lobby and the full text and video are here.

The episode has been well covered at Pharmalot.

I have never been a big fan of 60 Minutes but have to admit they got this story right.

Prepare yourself for non-stop media coverage of all things pharmacy and PBM related through the 2008 elections. Have no delusions this attention will leap the firebreak into employer sponsored plans and be a featured part of The Healthcare Debate, as well it should. Employers should not have any illusions they fare any better via their formulary/rebate driven PBMS. Psst, they are doing it to you as well. Quick somebody find me a Physician on the Board at Express Scripts, MEDCO, or CVS CareMark.

Spring is here and 12 months from the 2008 primaries we have 60 Minutes airing a story that will be whipping Seniors into righteous indignation. It is interesting how 60 minutes waited 3.5 years after the vote to run the story though--just had to wait for the 1st candidate to promise free health care. Imagine what was talked about in retirement communities all over Florida tonight? I bet it had to do with this;

"You push this bill through that produces a windfall for the drug companies. And then a short time later, you go to work for the drug lobby at a salary of $2 million. That doesn't look good," says Kroft.

"There was nothing I could've done in my life after leaving Congress that wouldn't have had — I didn't have some impact on in 25 years in Congress … If that looks bad to you, have at it," Tauzin says. "That's the truth."

In fairness to Tauzin and former Medicare chief Tom Scully, they weren't the only public officials involved with the prescription drug bill who later went to work for the pharmaceutical industry.

Just before the vote, Tauzin cited the people who had been most helpful in getting it passed. Among them:

John McManus, the staff director of the Ways and Means subcommittee on Health. Within a few months, he left Congress and started his own lobbying firm. Among his new clients was PhRMA, Pfizer, Eli Lilly and Merck.

Linda Fishman, from the majority side of the Finance Committee, left to become a lobbyist with the drug manufacturer Amgen.

Pat Morrisey, chief of staff of the Energy and Commerce Committee, took a job lobbying for drug companies Novartis and Hoffman-La Roche.

Jeremy Allen went to Johnson and Johnson.

Kathleen Weldon went to lobby for Biogen, a Bio-tech company.

Jim Barnette left to lobby for Hoffman-La Roche.

In all, at least 15 congressional staffers, congressmen and federal officials left to go to work for the pharmaceutical industry, whose profits were increased by several billion dollars.

"I mean, they — they have unlimited resources. Unlimited," Burton says. "And when they push real hard to get something accomplished in the Congress of the United States, they can get it done."

As this story gets legs, and it will, quite a few HR/Benefits People may be answering questions about how they know with certainty they are getting the best deals on Drugs from their PBM? Prudent employers should be prepared with data for the phone call. It is time to get ahead of the snowball before it becomes an avalanche.

Pharmaceutical Trade Secrets Revealed

Despite state laws requiring disclosure of payments made by pharmaceutical companies to physicians in 5 states and the District of Columbia, very little information about who receives and in what amounts is actually revealed according to Reuters reporting on a study in The Journal of The American Medical Association. Two states, Vermont and Minnesota require disclosure to the public.

The analysis included data from January 2002 to December 2004 in Minnesota and from July 2003 to June 2004 in Vermont.

The researchers found that obtaining the payment information was not easy. In Vermont, extensive negotiation with the Office of the Attorney General was needed, while in Minnesota, manual photocopying of individual disclosure forms at the State Board of Pharmacy was required.

Missing disclosure information was common in both states.

In Vermont, 61% of payments were not released to the public because the drug companies classified them as revealing trade secrets and 75% of disclosed payments lacked information to identify the recipient.

A study by a professor at UCLA medical school found physicians only discussed costs, co-pays, re-fills, insurance and money saving alternatives 1/3 of the time with their patients. The patients only ask questions 2% of the time of their doctors on these subjects. The study notes patients need to engage their doctors with questions about the low cost alternatives and many of the patients on multiple medications for chronic conditions cannot afford to comply with their maintenance drugs.

But those trade secrets being discussed between pharmaceutical manufacturers and physicians so proprietary they result in payments never do seem to translate into conversations with patients about the available drug options 2/3 of the time. Think about that for a minute, no make it two minutes. This is precisely how formulary driven PBMS drive serious Profit.

So here in a nutshell is the trade secret revealed for the entire pharma-PBM industry for the very first time; patients do not ask about cost and doctors do not tell. There is nothing insidious this is a product of behavior which can change with the appropriate incentives. The good news is this problem is fixable for employers by plan design (going to $0 co-pay for low cost in class generics) and a cost + administrative fee PBM model that has no price spreads on generics, no rebates and an evidence based formulary. Many insured(see link to BCBS no-pay co-pay) and self-funded plans plans with a good group guy have already figured this stuff out.

This post is not intended to disparage physicians only to reveal how behavior produces the results which will create nuclear fallout by the 2008 election as the entire population of the US capable of sentient thought will know a dough-nut hole is found in Medicare not a bakery. If you think healthcare is expensive now just wait until John Edwards or Hillary Clinton make it free.