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A Decade of Proving Critics Wrong

July 27, 2016
4:31 pm

As it was enacted into law in 2003, the Medicare prescription drug benefit, which would come to be known as Medicare Part D, had no shortage of critics.  A New York Times story cited fears that the program’s private sector-based structure would leave “the elderly exposed to a future of soaring drug costs.”

Others said that insurers would never agree to create drug-only plans and that the marketplace would be bereft of options for seniors.  And then there were the persistent critics who argued that offering seniors a broad range of competitive plan choices, instead of a one-size-fits-all government-run approach, would only confuse and frustrate them.

Now, ten years after Medicare Part D was fully implemented, those arguments have long been put to rest.  Our Medicare Today coalition conducts an annual nationwide survey of seniors to ascertain how well the prescription drug program is working for them.  The results, as has been the case every year, show that this remains an enormously popular program that is changing lives for the better by making prescription medications affordable and accessible.

Here’s what we learned from this year’s Morning Consult survey of approximately 2,000 seniors:

  • 88 percent are satisfied with the Medicare Part D coverage
  • 80 percent say their plan is a good value
  • 92 percent report their plan is convenient to use
  • 84 percent say it is important for them to have a variety of plans from which to choose (the ‘competition will cause confusion’ argument never did hold water and was, quite frankly, demeaning to seniors)

And, as to the concerns expressed over a decade ago regarding ‘soaring’ costs, Medicare Part D’s structure in which plans compete on the basis of value has resulted in average monthly premiums staying relatively stable at just over $30 for several years now.

Unfortunately, years after the original criticisms of Part D have long been vanquished by the program’s indisputable successes, there are still efforts to scramble its existing structure and give the federal government a significantly greater role in pricing and drug accessibility.  We can only hope that policymakers take note of these polling numbers and realize it would make little sense to fundamentally change a program that is not only popular but fulfilling its intended mission.

An Innovation-Centric Approach to Pricing and Accessibility

July 07, 2016
12:44 pm

“Policy should not lose sight of the fact that new treatments represent miracles to many patients, and should encourage more, not less innovation.”

With those words in her op-ed in the Wall Street Journal, Susan DeVore, president and CEO of Premier, Inc. and chair of the Healthcare Leadership Council, gets right to the heart – or what should be the heart – of the national debate over pharmaceutical pricing.  With so many new lifesaving therapies in various stages of development and clinical testing, how do we make these medicines accessible to patients and consumers while encouraging even more beneficial innovation?

Ms. DeVore answers that question with one word – competition.  As she accurately points out, new breakthrough drugs like the cure for Hepatitis C often enter the marketplace with extremely high prices, but those costs drop considerably when competing products are made available.  Thus, one important answer to the drug pricing issue is to speed the process by which new drugs and medical technologies are approved for the market.  The Healthcare Leadership Council has made several recommendations in this area.

The answer is most certainly not to be found in the form of government price controls.  As Ms. DeVore writes, “The reality is that government negotiation will translate into price controls.  I have limited faith in the government’s ability to set pricing better than the market, or keep pace with innovation.  Their solution will invariably set prices too low, creating a chill on research and discovery as talent and capital leaves the sector to seek a better return elsewhere.”

The Premier CEO is absolutely right.  We can do better than a pharmaceutical pricing debate that, up to now, has been largely binary – either price controls or not.  We need to discuss mechanisms and policies that will bring more innovative products to the market and, in so doing, strengthen accessibility and affordability.

The Trustees Report and the Need for Action

June 22, 2016
4:56 pm

On a day in which the House Republicans are announcing their alternative health reform plan, House Democrats are staging a sit-in over gun laws, and the presumptive presidential nominees are firing insults at each other, it’s understandable if the annual issuance of the Medicare Board of Trustees report gets a little lost in the mix.

It’s a report quite worthy of attention, though, because its pages contain more than one call to action.

First, the trustees are now projecting that the Medicare program will reach insolvency in 2028, two years earlier than last year’s estimate.  This is not an insignificant change.  Think of the time required to enact comprehensive health reform, from the Nixon Administration’s efforts in the early 70s to the Affordable Care Act signing in 2010, or the decades spent trying to bring a prescription drug benefit to Medicare.   Twelve years may seem like a considerable amount of time to make Medicare financially sustainable and reliable for future generations but, in legislative terms, it’s not long at all.

We need serious discussions on how to modernize and strengthen Medicare.  The successes of the Medicare Advantage and Medicare Part D prescription drug programs provide sound examples lawmakers can use in shaping the future.  Those programs have utilized consumer choice and competition as drivers to provide high-quality care at reasonable costs.  And, in fact, the Congressional Budget Office has concluded that bringing those choice-and-competition qualities to Medicare as a whole would reduce program spending and beneficiary out-of-pocket costs.

The Medicare Trustees report sends a clear signal that this discussion shouldn’t wait.

Another important aspect of the trustees report concerns the Independent Payment Advisory Board (IPAB).  Many expected projected spending levels in this year’s report to trigger IPAB into action.  That wasn’t the case, although that threshold is expected to be reached next year.  Congress shouldn’t wait until then to make this bad idea go away for good.

Over 500 organizations representing patients, healthcare providers and employers have written to Congress already, pointing out that a mechanism which shifts power from elected representatives to unelected appointees would do significant damage to Medicare beneficiaries and the healthcare system as a whole.  By making harsh, arbitrary cuts to Medicare payments to healthcare goods and services instead of focusing on bringing greater value to the program, quality and access would be adversely affected.

No, the Medicare trustees didn’t flip the switch to activate IPAB this year, but it’s an imminent problem and it needs to be addressed sooner rather than later.

Utilizing Technology to Propel Precision Medicine Forward

April 04, 2016
11:18 am

As we’ve seen, there has been a steadily increasing level of discussion and enthusiasm surrounding precision medicine.  The Healthcare Leadership Council (HLC) has remained engaged in this conversation, given the expertise and involvement of its members.  HLC hosted a briefing on Capitol Hill last April on the subject, in which Bio-Reference Laboratories, New York-Presbyterian Hospital/Columbia University Medical Center and Mayo Clinic detailed the benefits that have already been realized, and the potential that has yet to be reached.  They each shared stories of how targeted therapy transformed the lives of patients in ways that conventional medicine could not.  Although the cost of sequencing will continue to benefit and see increased usage from price declines, early genetic testing has allowed for immediate diagnosis and treatment, bypassing the costly trial and error approach.  Our member experts all agreed that one organization alone cannot succeed in integrating genome based knowledge into personalized care.

Last year the Precision Medicine Initiative (PMI) was announced by the National Institute of Health (NIH).  This year the White House hosted a PMI Summit, in which President Obama both participated and partnered with the NIH in an educational tweet chat that answered questions from the public regarding the initiative.  During this chat, NIH Director Francis Collins cited a paradox, “Only by studying populations at scale can you really understand individual differences.”  The PMI Cohort Program is currently working towards collecting one million or more participants that reflect the diversity of our country.

Precision medicine is an area that would directly benefit from the ability to collect, store and share data electronically.  In order to see real success, harmonization of data privacy laws is a necessary next step.  Diverse state privacy regulations regarding patient information accompany HIPAA laws, adding to the complexity of sharing data in a way that would improve the quality of patient care.  Federal rules for research subjects intersect with additional privacy policies that are also burdensome to the healthcare system.  The ability to utilize any data gathered from partnering facilities is an important function, and dialogue between the federal government and states is needed to ensure this is feasible across the country.  This is a field of health policy we have discussed fully in the Healthcare Leadership Council’s recently-released “VIable Options: Six Steps to Transform Healthcare Now” policy recommendations. The U.S. is on the cusp of a new era in healthcare, and the flow of health data is a crucial part of it.

Medicare Embraces the ‘Ounce of Prevention’ Philosophy

March 23, 2016
5:20 pm

We’ve long maintained that Medicare can be a stronger program, both in terms of protecting the health of its beneficiaries and in improved cost-efficiency, if it did a better job emphasizing prevention, diagnosis and early treatment, emulating many of the lessons being demonstrated every day in the private sector.

To the credit of HHS Secretary Sylvia Burwell, the Medicare program is now moving in this direction in a very significant way.

Today, Secretary Burwell announced that the Obama Administration will propose new rules this summer that would have Medicare provide coverage for diabetes prevention programs.  She cited a YMCA program that has enabled participants to cut their body weight by an average five percent, thus reducing the propensity for diabetes, a disease with extremely high incidence rates among the elderly.  Early interventions can prevent the need for more expensive healthcare services to treat diabetes symptoms, thus reducing Medicare expenditures.

HLC has long argued that Medicare should pay for services such as health coaching, aiding beneficiaries in practicing better dietary and exercise habits, as well as new technological innovations to help those with diabetes and prediabetes better monitor their health conditions.  We, in fact, sponsored a briefing for congressional staffers on the subject last year.

Secretary Burwell’s announcement today heralded an important new direction for the Medicare program.  In her words, the federal government is transitioning from “treating the sick to preventing the illness.”   We applaud her actions.