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Campaigns, Honesty and the Future of Medicare

August 17, 2016
10:20 am

It’s like a bad rerun, but one with real consequences.  Every two years, some political candidates and the interest groups that support them decide the best way to boost their share of the 65-and-older vote is to scare these seniors into believing that the candidate on the other side is going to place their Medicare program in grave danger.  This tactic is obviously successful or candidates wouldn’t keep doing it, but its effectiveness doesn’t make it right.

There is no reasonable disagreement that the Medicare status quo is not sustainable.  The Medicare Board of Trustees, in its most recent actuarial projection, said the program will become insolvent in 2028.  We need to discuss solutions to strengthen Medicare.  Campaigns are traditionally the platform through which new ideas can be submitted for public debate and consideration.  That’s not happening, though, when opportunistic groups portray any reform ideas as a weapon that will obliterate grandma’s healthcare.

This is happening already in the 2016 campaign.  In New Hampshire, for example, Senator Kelly Ayotte (R-NH) is being falsely accused by a national labor union of advocating reforms that will cost seniors thousands of dollars.  This isn’t true, and an op-ed I wrote on the subject was published today in the Manchester Union Leader.  I’m sharing it with you below.

Those of us who realize the need for sensible, essential Medicare reform need to speak out against these exercises in political misinformation.  The stakes are high and we need to fight their version of Mediscare horror fiction with the facts.   Here is the text of the Union Leader op-ed:

One of the most tried and true campaign strategies, utilized for decades now, is to scare senior citizens to the polls by convincing them that their Medicare and Social Security are being threatened. Politicians and their allies keep doing this, regardless of the tactic’s moral and ethical implications, because it works. Medicare is such an important lifeline to seniors, they naturally respond if they think they’re about to lose it, or if they believe their care will start costing them more money.

New Hampshire voters are the current targets for Medicare scare tactics. The American Federation of State, County and Municipal Employees labor union (AFSCME) has been airing television ads showing a woman caring for an elderly relative and saying that Sen. Kelly Ayotte wants to turn Medicare into a “voucher program, costing us thousands.” It’s a well-produced piece of television that would give any Medicare beneficiary or caregiver, not armed with facts, reason for concern.

Here’s the problem. This ad specifically, and most of those in its genre, rely on gross distortions and, in many cases, outright untruths to frighten the bejeebers out of its target audience. And people and organizations dedicated to building a stronger Medicare program deplore campaign propaganda like this because it makes it all the more difficult to take action to save a program that has a very short solvency timeframe.

New Hampshire voters should be clear on one thing. Nobody in Congress has proposed changes to Medicare that will cost them thousands of dollars. In fact, just the opposite is true. The nonpartisan Congressional Budget Office has said that the reforms advocated by Sen. Ayotte, and others from both parties, would actually save most seniors money on their Medicare out-of-pocket costs.

When groups like AFSCME use scary terms like “voucher program,” they are actually referring to giving seniors greater power of consumer choice to have the kind of health coverage that meets their specific needs. This works well, for example, in the Medicare Part D prescription drug program, in which seniors choose from among various plans with different premium costs and coverage levels. A recent national survey showed the Part D program enjoying an 88 percent approval rating among its enrollees. And the Medicare Advantage program, which has seen a significant rise in beneficiary participation, also allows seniors a choice of plans that are competing to offer the best value.

Consumer choice is not as ominous a phrase, however, as voucher program.

The larger problem here lies in the fact that campaigns set the stage for future policy making. To advocate no changes to Medicare is tantamount to supporting its demise. Medicare’s actuaries reported this year that the program will become financially insolvent in 2030. AFSCME and others that want to punish proponents of Medicare reforms are essentially saying they’re fine with future generations, and even today’s middle-aged workers, being out of luck when they reach 65 and expect Medicare coverage.

New Hampshire voters, and all of us in this country, for that matter, deserve more honesty and more responsibility in the way campaign rhetoric is carried out. We need a forthright, candid national discussion on the future of Medicare without falsely accusing Kelly Ayotte and others of wanting to bankrupt someone’s grandmother. Even if it has historically worked to scare seniors to the polls, it has never been the right thing to do.

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.

The Amazing, Classy, Winning (and Completely Ridiculous) $300 Billion Proposal

February 19, 2016
1:12 pm

It’s a notion we’ve heard a fair amount during the presidential campaign, this idea that Medicare should ‘negotiate’ prescription drug prices.  (There’s a very good reason I put ‘negotiate’ in quotes.  We’ll get to that in a moment.)  The concept reached all new levels of visibility in recent days when the leader in the polls on the Republican side told MSNBC’s “Morning Joe” program, “We don’t negotiate.  We don’t negotiate….If we negotiated the price of drugs, Joe, we’d save $300 billion a year.”

I’m not going to devote this post to litigating the $300 billion boast.  The Washington Post has already done that by giving it “Four Pinocchios” on its lack-of-truthfulness scale.  It is, of course, a mathematical impossibility to save $300 billion annually from a Medicare Part D prescription drug program that spends less than $80 billion per year.  A candidate making that claim has ventured into loaves-and-fishes territory.

But that particular absurdity notwithstanding, let’s discuss the proposal coming from the current presidential race leaders in both parties that the heavy hand of the federal government should be involved in drug pricing.  There are some myths attached to this idea that, in any reasonable debate, shouldn’t be shunted aside.

Myth #1 – In the Medicare program today, there are no negotiations to reduce drug prices.

This, of course, is patently untrue.  Prices in the Medicare Part D program are determined through a negotiation process involving private health plans and pharmacy benefit management (PBM) companies.  PBMs handle millions of individual pharmaceutical transactions yearly and have the bargaining power to achieve reasonable and realistic pricing.

The proof here is in the proverbial pudding.  Average monthly premiums for enrollees in the Part D program have, according to the Centers for Medicare and Medicaid Services, remained stable at an affordable level for the past five years.

Myth #2 – Federal government involvement in Medicare drug pricing is a pro-consumer idea.

Proponents of federally-dictated drug pricing make it seem all so simple, that if the government takes over drug price negotiations then Medicare prices will drop to the level of the Veterans Administration.  They don’t, however, explain the tradeoffs that come with this kind of policy change.  When you arbitrarily lower prices, you invariably restrict accessibility.  In the VA, for example, nearly one-fifth of the 200 most commonly prescribed drugs are not on its national formulary.  As noted in a paper by the Center for Medicine in the Public Interest, the vast majority of drugs not made available to VA patients are accessible within Medicare Part D prescription drug plans.

This is why the Congressional Budget Office has traditionally been reluctant to ascribe any real savings to the concept of federal price negotiations within Medicare, because of the unlikelihood that lawmakers will tell their senior citizen constituents that many of the drugs on which they depend will no longer be available to them.

And let’s not forget that artificial price controls on pharmaceuticals have an inevitable impact on research and development of new therapies, an unacceptable outcome when devastating (and costly) chronic illnesses like diabetes and heart disease are affecting millions.

Myth #3 – We need hard-nosed federal negotiators sitting at the table with pharmaceutical company executives to push down prices.

The mental image of two sides bickering over numbers from their respective sides of a table is a fallacy.  The reason I put ‘negotiate’ in quotation marks is because there really is no such thing.  The federal government establishes pricing levels and drugmakers must agree to meet those prices in order to be in the Medicare Part D formulary.  This has two effects – (1) the aforementioned restricted access to therapies and (2) the end of competition in the Part D program.  Today, plans compete with each other to provide greater value to enrollees.  With a single federally-set pricing level, the benefits of consumer choice and competition are lost.

The good news here is that there are ways to address healthcare costs while, instead of hurting patients and consumers, actually elevating care quality and bolstering innovation.  The Healthcare Leadership Council unveiled a series of proposals this week to accomplish those goals and I’ll be discussing these in more details in a series of forthcoming posts. Watch this space.