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Kaiser Daily Health Policy Report
Recent Releases in Health Policy
Capitol Hill Watch
Kucinich Introduces Legislation That Seeks To Lower Prescription Drug Costs by Replacing Medicare Part D
[Aug 08, 2008]
Rep. Dennis Kucinich (D-Ohio) recently introduced a bill (HR 6800) that would replace the Medicare prescription drug benefit with a new program in an effort to reduce costs, CQ HealthBeat reports. The legislation would require Medicare to negotiate directly with pharmaceutical companies for discounts on prescription drugs and eliminate copayments, premiums and deductibles for medications for beneficiaries. In addition, the bill would limit the price of prescription drugs developed through publically funded research and allow the purchase of medications from an approved list of foreign nations.
Kucinich in a statement said, "The privatized drug plan has been given a chance and, as predicted, it has failed," adding, "There is no reason for us to keep throwing money at a bad idea when we know we can save taxpayers billions of dollars and give seniors the medication they need."
According to a statement from America's Health Insurance Plans, a Harris Interactive online poll released in December 2007 found that 87% of Medicare beneficiaries were satisfied with their prescription drug plans and that 75% spent less on medications than they did before enrollment. AHIP spokesperson Robert Zirkelbach said, "The Part D program has proven to help seniors get access to the prescription drugs they need while holding down costs for beneficiaries and taxpayers" (Parnass, CQ HealthBeat, 8/7).
Veterans Groups Lobby Congress To Approve VA Budget One Year in Advance To Improve Veterans' Health Care
[Aug 08, 2008]
A coalition of veterans' groups called Stand Up For Veterans is lobbying for Congress to prepare the Department of Veterans Affairs budget one year in advance to give the agency a "more predictable funding stream" and improve health care for veterans, the Christian Science Monitor reports. According to the Monitor, the coalition believes preparing its budget in advance would shield VA from "political wrangling" that can result in funding delays that compel the agency to freeze hiring, reduce some services and lengthen waiting-room delays "to the point that some veterans simply go home."
Although VA funding has increased over the past several years, approval of the appropriations has often been delayed for months into the fiscal year for which it was designated. According to the Monitor, VA funding was approved 142 days into FY 2003, 114 days into FY 2004 and 137 days into FY 2007.
The Monitor reports that veterans groups have for years worked to make VA funding mandatory spending, rather than discretionary spending, making it "essentially automatic." However, because past efforts have failed, this year the groups are pushing for VA funding to become an "advance appropriation," under which Congress approves the budget one year ahead of time. According to the Monitor, such a procedure would minimize funding delays' effect on health care services and "lock in funding" each year.
Although "it may seem like special treatment, veterans say they deserve that," according to the Monitor. Peter Dickinson, a coordinator for Stand Up for Veterans, said, "We believe unapologetically that veterans do deserve to be taken care of first." However, advocates for taxpayers "cringe at the idea" because they believe it would limit Congress' ability to monitor federal spending.
On Saturday, presumptive Republican presidential nominee Sen. John McCain (Ariz.) will speak to a group of veterans in Las Vegas, where organizers hope McCain will pledge his support for the plan. Presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) will appear at the event by video teleconference. Comments
Joseph Violante, national legislative director for Disabled American Veterans, said, "All we're asking them to do is fund VA at the level that is needed, not at the level the government wants to spend." Steve Ellis, vice president at Taxpayers for Common Sense, said, "I don't think anyone is suggesting that we stiff our veterans, but there is a level of flexibility that you need to have in the discretionary budget" to maintain oversight. Ellis added, "You end up spending more through advance appropriations" (Lubold, Christian Science Monitor, 8/8).
National Association of Chain Drug Stores Pushing For Separate Food, Drug Regulations
[Aug 08, 2008]
The National Association of Chain Drug Stores has begun lobbying House Energy and Commerce Committee leaders' staff in opposition to stricter track-and-trace rules in the wake of the recent salmonella outbreak, CongressDaily reports. Committee Chair John Dingell (D-Mich.) recently released a revised version of the drug portion of an FDA overhaul bill on which he is working that would give the agency more authority to oversee food and drug products. According to CongressDaily, when Dingell's bill was first released in April, Reps. Steve Buyer (R-Ind.) and Jim Matheson (D-Utah) proposed adding a track-and-trace element -- a so-called "pedigree requirement" -- to the bill. Committee staff members have indicated that they will not add a pedigree requirement unless everyone involved can reach a consensus.
Although pharmaceutical distributors are "generally pleased" with the Buyer/Matheson proposal, and the brand-name and generic drug industries are "looking for changes," representatives of the pharmacy industry "have dug in their heels against it," according to CongressDaily. Lobbyists for the pharmacy industry say the Buyer/Matheson proposal does not account for the cost and complexity of track-and-trace technology. According to a June study by NACDS and the National Community Pharmacists Association, it could cost each pharmacy as much as $110,000 in the first year to implement new track-and-trace technology. Paul Kelly, vice president of government affairs for NACDS, added that the drug industry -- unlike the food industry -- already has strong regulations and licensing that ensure the products are safer. NACDS is lobbying for stronger wholesale distributor licensing standards and a requirement that FDA administer a certification program for manufacturers, distributors and pharmacies.
Kelly said, "All this talk about tracking and tracing food, we thought it was time to remind our friends that 'Hey, they're not the same'" (Edney, CongressDaily, 8/7).
Legislation Would Allow Small Businesses To Form Health Insurance Purchasing Pools
[Aug 08, 2008]
Rep. Don Cazayoux (D-La.) on Thursday promoted a bill (HR 6210) that would allow the establishment of statewide or nationwide health insurance purchasing pools for small businesses and self-employed individuals, the Baton Rouge Advocate reports.
The Small Business Health Options Program would provide small businesses with annual tax credits of as much as $1,000 per employee, or $2,000 per family, provided that the companies cover more than 60% of the cost of health insurance premiums for workers. In addition, the legislation would provide self-employed individuals with annual tax credits of as much as $1,800 per employee, or $3,600 per family (Chacko, Baton Rouge Advocate, 8/8). Under the bill, health insurers could not increase premiums in the event that small-business employees become ill or file more claims. The legislation also would establish a Web site to allow the comparison of information about various health plans (Kaiser Daily Health Policy Report, 6/11).
Cazayoux, one of the more than 45 co-sponsors of the bill, said that the legislation would reduce health insurance costs for small businesses through the expansion of risk across a large pool of employees. According to Cazayoux, small businesses on average pay 18% more than large companies for the same level of health insurance for employees. He added that small-business owners, employees and their dependents account for more than 28 million of the almost 47 million uninsured U.S. residents (Baton Rouge Advocate, 8/8).
Prescription Drugs
Drug Companies 'Quietly' Increasing Prices of Some Medications by 100% or More, USA Today Reports
[Aug 08, 2008]
Drug makers increased the average wholesale price of 26 brand-name drugs by 100% or more in a single cost adjustment last year, compared with comparable price increases for 15 drugs in 2004, according to University of Minnesota researchers, USA Today reports. In the first half of 2008, the average wholesale prices of 17 drugs have increased by at least 100%. According to USA Today, many of the prices that are "quietly" being raised are for older products used to treat rare but often serious conditions.
Alan Goldbloom, president of Children's Hospitals and Clinics in Minnesota, said, "This does drive up the price of health care," adding, "Hospitals are either eating the cost or passing it along to insurers, so you and I are paying it in increased premiums."
According to pharmacy benefits manager Express Scripts, the average wholesale prices of 1,344 brand-name drugs increased by an average of 7.4% last year. Stephen Schondelmeyer, director the PRIME Institute at the University of Minnesota, said, "There is no simple explanation" for why certain drugs experienced the larger increase. "Some companies seem to figure no one is watching so they can get away with it," Schondelmeyer said. "Drug companies say the price hikes cover the costs of keeping the drugs on the market," USA Today reports.
Sens. Amy Klobuchar (D-Minn.) and Charles Schumer (D-N.Y.) last week asked the Government Accountability Office to investigate cases of large price increases. Klobuchar earlier this year also asked the Federal Trade Commission to investigate a company that had increased the average wholesale prices of four drugs by up to 3,436% in 2006 (Appleby, USA Today, 8/8).
State Watch
Illinois Governor To Extend Maximum Age Child Can Be Covered Under Parents' Health Insurance
[Aug 08, 2008]
Illinois Gov. Rod Blagojevich (D) on Wednesday announced that he will use his amendatory veto to allow children to remain insured under their parents' health plans until they turn age 26, the AP/Chicago Tribune reports. Under the revision, parents would be allowed to keep their children on their insurance up to age 30 if the child is a veteran. The revision is part of Blagojevich's "Rewrite to Do Right" campaign, in which he plans to rewrite about 50 bills using his amendatory veto. Lawmakers still need to approve the changes (AP/Chicago Tribune, 8/6).
New York Health Care Union Seeks Legislation To Make Home Health Care Agencies Boost Worker Pay
[Aug 08, 2008]
New York's 1199 Service Employees International Union, United Healthcare Workers East President George Gresham recently said that the union does not seek funding from the state to resolve issues with home health care workers' pay but rather legislation that would require home health care agencies to raise employees' wages, the New York Times reports. The 300,000-member union is threatening to strike next month if home health care workers' wages are not increased; however, with the state's budget deficit, the union will not ask the state to foot the bill as it has in the past.
Gresham said that all 20 agencies the union is negotiating with received higher reimbursements from the state, $18 to $21 per hour, which should be used to raise home health workers' wages. He said that current wages range from $7.15 per hour, New York's minimum wage, to $9.50 per hour.
In the New York metropolitan area, 20,000 of the 33,000 unionized home health workers are working for agencies with expired contracts, according to the union. In addition, 5,000 home health workers are employed at agencies that recently unionized but the agencies have not yet signed their first contracts.
The union hopes negotiations with the largest home health agency in the state, Partners in Care, will be a model for the other agency talks. Partners in Care employs about 10,000 home health workers. "These agencies are receiving significant amounts of money that have not been paid to the workers," Gresham said, adding, "These workers are grossly underpaid by today's standards. Many of them are barely making more than the minimum wage." He said, "If we're not able to settle with these agencies, there's no other choice but to strike" (Greenhouse, New York Times, 8/7).
Blog Watch
Kaiser Daily Health Policy Report Feature Highlights Recent Blog Entries
[Aug 08, 2008]
While mainstream news coverage is still a primary source of information for the latest in policy debates and the health care marketplace, online blogs have become a significant part of the media landscape, often presenting new perspectives on policy issues and drawing attention to under-reported topics. To provide complete coverage of health policy issues, the Kaiser Daily Health Policy Report offers readers a window into the world of blogs in a roundup of health policy-related blog posts. "Blog Watch," published on Tuesdays and Fridays, tracks a wide range of blogs, providing a brief description and relevant links for highlighted posts.
The American Prospect's Ezra Klein discusses U.S. government health spending, saying that "we've managed to offload an incredible amount of spending onto government but done so in a way that ensures the government can't use its size or regulatory power to cut spending growth or produce a manageable, moral health system."
Michael Cannon from Cato@Liberty argues that the uninsured are not "free riders" in part because "it's not at all clear that when people don't buy health insurance, they are imposing costs on the rest of us."
Igor Volsky from the Center for American Progress Action Fund's Wonk Room Blog says that presumptive Republican presidential nominee Sen. John McCain's (Ariz.) health plan "would remove the employer's incentive to provide coverage and could potentially unravel the current system." Volsky disagrees with Douglas Holtz-Eakin, McCain's chief domestic policy adviser, who on Thursday said that McCain's plan would "buttress ... the traditional source of health insurance, which is employers."
Gert Westert on the Health Affairs Blog provides an overview of the Dutch health system, which many have suggested could be a model for the U.S.
The Health Care Blog's Matthew Holt writes about a presentation by Andrew Dillon, head of the United Kingdom's National Institute for Clinical Excellence, on methods the agency uses to compare cost and clinical effectiveness. Holt also expresses skepticism that a similar agency could "be established or even survive" in the U.S.
Lindsay Tucker from Health Care for All's A Healthy Blog writes that Massachusetts health reform "has been successful -- and continues to be," in response to a New York Times article about insurance coverage and chronic disease that quoted an expert saying, "the state experiments have all failed because of cost."
Bob Laszewski from Health Care Policy and Marketplace Review hosts the most recent edition of Health Wonk Review, a biweekly compendium of more than two dozen health policy, infrastructure, insurance, technology and managed care bloggers. A different participant's blog hosts each issue.
Health Populi's Jane Sarasohn-Kahn responds to a new survey by the ERISA Industry Committee and the National Association of Manufacturers that finds only 30% of employers measure the results of their wellness programs. She writes that more data is needed to discern which incentives work best for different wellness components.
Conn Carroll from the Heritage Foundation's The Foundry writes that "libertarians may have plenty of other grounds to criticize McCain on, but on health care McCain is advocating a libertarian vision." Carroll disagrees with an article from Reason that says "neither party wants change in the current system."
Insure Blog's Bob Vineyard discusses high deductibles and low annual limits in the Healthy Indiana Plan and asks, "[R]ather than creating a special plan just for the 130,000 uninsured, why not use the tax money to subsidize the purchase of health insurance plans that already exist in the marketplace? Isn't that a better use of resources?"
Joe Paduda from Managed Care Matters disagrees with blogger Catron's (here) use of statistics from a recent Lancet study that finds the U.S. has the highest rates of survival for certain cancers.
Joanne Kenen from the Century Foundation's New Health Dialogue discusses Kentucky's efforts to reduce health costs by recruiting eligible state employees and retirees into disease management programs offered by the state's Employees Health Plan.
Jacob Goldstein of the Wall Street Journal's Health Blog discusses secrecy surrounding FDA's rejection of drug applications.
Recent Releases in Health Policy
Survey Finds Most U.S. Residents Dissatisfied With Health Care
[Aug 08, 2008]
"Public Views on U.S. Health Care System Organization: A Call For New Directions," Commonwealth Fund: The survey found that 82% of U.S. residents believe the nation's health care system needs to be completely rebuilt or fundamentally changed, and nine out of 10 believe the next president should address key health care-related issues, such as improving quality of care, ensuring all U.S. residents can obtain affordable coverage and reducing the number of uninsured. In addition, the survey found that 47% of U.S. residents felt they experienced inefficient care within the past two years. A separate report outlines strategies that could reduce health care costs and improve care and efficiency. The strategies include payment reform, patient incentives, provider training, government support and implementation of health information technology (Commonwealth Fund releases, 8/7).
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