April 23, 2012
8:23 am
In a Forbes commentary, Eli Lilly and Company CEO John Lechleiter underscores the need for new medicines and medical technologies to provide better healthcare to our aging society. While U.S. healthcare innovators have an unmatched history of success in saving and improving lives – testing more potential new medicines each year than the rest of the world combined – the challenges posed by illnesses like diabetes, osteoporosis and neurodegenerative diseases threaten millions of people throughout the world. And, unless successfully addressed, they will place unprecedented stress on our healthcare system.
In his Forbes op-ed, Lechleiter outlines four vital components that must be in place in order to have a vibrant, successful “innovation ecosystem” to tackle these illnesses. They include:
- Intellectual property protection to enable scientists and investors to stay in the business of innovation.
- Open access to healthcare markets, a component that is threatened by new public policies like the creation of the Independent Payment Advisory Board (IPAB), which could slash Medicare spending and limit seniors’ access to healthcare innovations.
- Free-market pricing, which hinges on the avoidance of real or de facto government price controls on medical innovators.
- A regulatory system that is “timely, predictable, consistent, transparent and scientifically rigorous.”
The agenda Lechleiter has outlined should be at the forefront of Washington, DC health policy discussion. As he put it, entirely correctly, “Our policymakers must do everything they can to….ensure that the dreams and discoveries of today turn into the lifesaving treatments of tomorrow.”
April 10, 2012
10:10 am
Today, I saw an argument in support of the Independent Payment Advisory Board (IPAB) – the 15-member board of political appointees with unprecedented power to reduce Medicare expenditures – that was so off the mark one would think it came from some sort of fringe website. In fact, it was found on CBS News’s Marketwatch site.
CBS provided webspace for a consulting actuary to argue that there is really no difference between IPAB and private insurers. IPAB will, he said, “assess whether certain procedures will be denied reimbursement, either due to ineffectiveness or excessive costs,” the same as private health insurers. IPAB members may be unelected, but, he argues, private insurance claims adjusters aren’t elected either.
“It’s just a reality that any insurance program, whether commercial or governmental, will deny some claims, states this CBS News-hosted editorial.
We won’t even get into some of the obvious differences between IPAB and private coverage, such as the fact that employers can take their business to different insurers. Or the fact that private insurers have appeals mechanisms, whereas IPAB decisions aren’t even subject to judicial review.
But that’s not even the biggest problem with this pro-IPAB argument. IPAB isn’t structured to cut costs by denied payment for ineffective procedures. It’s not about that at all.
As the Congressional Budget Office has made quite clear, the law creating IPAB explicitly forbids the board from rationing care, changing Medicare benefits or increasing beneficiary cost-sharing. According to CBO, the board will, for all practical purposes, be limited to cutting healthcare provider payments to meet its cost-cutting targets.
That’s not distinguishing one treatment or therapy from another based on cost and effectiveness. That’s simply paying physicians less to treat Medicare patients. And, in so doing, IPAB threatens to widen the payment level gap between Medicare and, you got it, private insurers. It will result in care for Medicare beneficiaries that is less accessible, not more cost-effective.
There is a legitimate debate to be had over whether IPAB is a wise public policy choice. To have that debate, though, we need to be on the same platform in terms of understanding what this board will actually do.
March 30, 2012
2:16 pm
While the U.S. Supreme Court was hearing oral arguments this week on the constitutionality of the individual mandate provisions of the Affordable Care Act, another serious concern about the mandate didn’t involve constitutional issues and stayed relatively unnoticed.
Is the individual mandate sufficient to achieve its intended goal, to bring healthy Americans into the health insurance pool? In answering this question, the stakes are high. If millions of currently uninsured Americans choose to remain without coverage, and simply pay the noncompliance penalty instead, serious questions are raised as to whether other insurance reforms can take effect – most importantly, eliminating pre-existing conditions as a barrier to coverage – without destabilizing the marketplace.
This is a legitimate worry. In 2014, a person who chooses to remain uninsured would be penalized $95 or one percent of adjusted taxable income, whichever is greater. And even when the penalty is fully implemented in 2016, the penalty will be the greater amount of $695 or 2.5 percent of adjusted taxable income. These penalties will still be less than the cost of purchasing health coverage.
As University of Illinois law professor Richard L. Kaplan put it, accurately, “(A) person might choose not to buy health insurance, opting to wait until something medically unfortunate happens. Insurance companies will not be able to refuse her at that point, a situation that might imperil the private insurance market.”
Even if the Court upholds the constitutionality of the individual mandate, lawmakers can’t complacently assume that it will be strong enough to move uninsured citizens into the insurance marketplace. It would be worth studying the efficacy of other incentive programs, such as those used by the Medicare Part D prescription drug program. Part D has utilized both limited enrollment windows as well as higher costs for those who delay enrollment.
The goal of incentivizing Americans to acquire health insurance is a good and necessary one. It’s necessary, though, to keep in mind that the constitutionality of the individual mandate may be the most visible issue, but it’s far from the only one.
March 22, 2012
8:42 am
There is broad agreement that one of the keys to achieving a sustainable, cost-effective healthcare system is to emphasize wellness and disease prevention. After all, with 75 cents of every healthcare dollar going toward the treatment of chronic disease, it’s essential that we curb the escalation of preventable illnesses in order to contain healthcare spending. The question is, though, whether there is a cohesive game plan for doing so.
The Healthcare Leadership Council and the Congressional Wellness Caucus are hosting a briefing this Friday, March 23 on the innovative actions hospitals and health systems are taking to strengthen patient and community wellness. Our speakers will include Baylor Health Care System CEO Joel Allison, Dr. Michael Roizen of the Cleveland Clinic, and Dr. Donald Hensrud of the Mayo Clinic. Under Allison’s leadership, Baylor has been recognized as one of the top facilities in the country when it comes to medical research and innovative approaches to care. Roizen is the author of books on wellness that have hit the top of the New York Times bestseller charts. Hensrud is an author and recognized expert on nutrition, diabetes, and wellness.
The briefing is being held from 12:00pm-1:30pm in the Capitol Visitors Center, room SVC 203-02. For more information, contact Teresa de Vries at 202-449-3436 or tdevries@hlc.org.
And for more information on the latest and most effective approaches to disease prevention in the private sector, take a look at the examples contained in the HLC Wellness Compendium.
March 19, 2012
9:35 am
In this morning’s editorial, “This Cost-Cutting Reform Deserves a Chance,” the Washington Post paints opposition to the Independent Payment Advisory Board as largely political, or parochial, in nature. Republicans, the Post argues, want to sink one of President Obama’s initiatives before it can get off the ground, while some Democrats take issue with a non-elected board carrying out responsibilities that belong to Congress.
In making these points, the Post editorial goes off the rails early by focusing too heavily on inside-the-Beltway political banter. In fact, opposition to IPAB extends well beyond conventional White House-v-GOP partisan skirmishing. As of today, over 400 patient, healthcare, employer, veteran and disability organizations from all 50 states have signed a letter to Congress urging an immediate repeal of IPAB.
That kind of strong grassroots sentiment transcends partisan gamesmanship.
That’s not to say the Post editorial is entirely offbase. Actually, the opinion piece is right on the mark in saying that the Medicare status quo cannot stand and that Washington politicians have been negligent in not pursuing substantive change to address the program’s serious financial problems.
The newspaper is dead wrong, though, in asserting that IPAB represents a workable solution to this problem. The editorial pulls out what have become, by now familiar canards – that IPAB will be made up of healthcare experts, that the law creating it specifically forbids any kind of healthcare rationing. The simple fact is, though, that IPAB’s structure, in which changes must be made immediately in order to get program spending below an arbitrary level, will limit the board’s realistic options to cutting payments for healthcare services.
In some policy circles, chopping Medicare reimbursement levels is referred to as bringing greater efficiency to the program. In the real world, though, it means fewer physicians seeing Medicare patients and less beneficiary access to new healthcare innovations. The law may say that IPAB can’t recommend rationing, but reduced access to care is an inevitable result.
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