Studio8 - Uniting the Arts

In San Francisco, Another Kind of Public Option
By ANNE UNDERWOOD
New York Times, October 7, 2009

William Dow is a health economics professor at the University of California, Berkeley, who served with the Council of Economic Advisers under former President George W. Bush. He is studying Healthy San Francisco, the city’s effort to provide health care to the uninsured. He spoke with freelance writer Anne Underwood.

Q.
Healthy San Francisco is not a single-payer system, but it does seem to offer much more than is available to the uninsured in most U.S. cities. What were the origins of this program?

A.
It was an initiative of Mayor Gavin Newsom and the San Francisco Board of Supervisors to provide universal access to health care for the uninsured.

Q.
Has it done that?

A.
There were about 60,000 uninsured adults in the city when Healthy San Francisco came into effect in July 2007. Since then, 45,000 have signed up.

Q.
To be clear, this isn’t insurance per se.

A.
No. The city is careful not to call it health insurance. It provides access only to health care within San Francisco and only at a specified set of providers, mostly safety-net providers. If you get sick outside the city, you’re in trouble. It’s more like an insurance plan with a geographically restricted network.

Q.
Does it cover anyone who’s uninsured?

A.
It doesn’t cover children. They’re provided for under other programs. It covers uninsured adults aged 18 to 64 who don’t have access to Medicaid.

It started by covering only those under the poverty line. Then in January 2008, it expanded to those making up to 300 percent of the poverty level. Now that’s been extended to 500 percent of the poverty level, which qualifies the vast majority of uninsured individuals in the city. Five hundred percent would work out to an income of about $54,000 for an individual, or $110,000 for a family.

Q.
What about undocumented workers?

A.
Immigrants are eligible, regardless of documentation.

Q.
Do people have to apply, or are they automatically covered?

A.
They have to apply. Many get signed up when they visit a provider who’s part of the medical safety-net system of city health clinics and hospitals. One of the criticisms of the program is that it hasn’t yet focused much on reaching out to the remaining unenrolled population who may be foregoing needed care because they don’t realize the program exists.

Q.
What kind of fees do people have to pay to participate?

A.
There is a participant fee, which is like a premium. Under 100 percent of the poverty line, you pay no participant fee. The next group — 100 to 200 percent of poverty — pay $60 per quarter, or $240 a year. That’s for an individual. It’s capped, so that no family has to pay more than 5 percent of income.

In addition, there is a co-pay of $10 for general care, $20 for specialty care, $5 for prescription drugs on the formulary, or $25 for those not on the formulary. For hospital admission, you have to pay $200. It’s not huge, but for those with the lowest income, it’s not trivial, so those under the poverty line are exempted from the co-pays.

Q.
The program sounds comprehensive — it also includes lab tests, ambulance services and mental health. What’s not included?

A.
It doesn’t cover dental or vision. That’s one thing participants would like to see. But there is a real question to be asked — is Healthy San Francisco providing anything different than the San Francisco safety net provided before? The safety net was extensive.

Q.
So is this program an improvement on the former system?

A.
Prior to this, people didn’t know the cost before they went in. They would have to go in and negotiate. It was stigmatizing, and it could be daunting to navigate the system. Now Healthy San Francisco provides a “medical home” that is supposed to help enrollees navigate the system.

Q.
Are enrollees happy with the program?

A.
The Kaiser Family Foundation did a survey and found people think they’re better off than they were before. Overall, 94 percent said they were satisfied with the program, which is quite impressive. But some of those people aren’t well informed about program restrictions. For example, about one-third did not know that the program does not provide access to care outside of San Francisco.

Q.
How’s the quality of care?

A.
The providers give high quality medical care. But the typical health-care user doesn’t rate health care on adherence to evidence-based medicine or the latest medical guidelines. They have different patient satisfaction metrics. The public has a perception that safety-net providers are lower quality because they have longer queues for service and a particular demographic uses them. These aren’t facilities that have invested in soaring atriums and beautiful physical plants. So the city is pleased that a few private providers, such as Kaiser Permanente, have now agreed to join the provider network.

Q.
How expensive has this program been for the city?

A.
Early estimates were that it would cost $200 million a year once it’s fully scaled up. In 2008-2009, it cost about $125 million, of which about $90 million came from the city budget, about $20 million came from employer contributions under the new pay-or-play requirement, and the rest from a temporary Medicaid subsidy to the city. Most of the city share was re-budgeted from what the city had already been spending on safety-net care for the city’s uninsured.

Q.
We haven’t talked yet about the employer mandate.

A.
That’s one of the more controversial aspects of the San Francisco plan. It was instituted at the same time as Healthy San Francisco. It requires all employers with more than 20 employees — or 50, if they’re nonprofit — to spend a minimum amount for each employee on health care. It can be spent on health insurance policies or medical reimbursements for employees, or else employers can pay into the Healthy San Francisco program and their employees will become eligible for Healthy San Francisco.

The required spending amounts are nontrivial. Larger businesses with 100 or more employees must spend $1.85 per hour for each employee. For a full-time employee, that would be close to $4,000 per year. San Francisco firms with 20 to 99 employees pay less — $1.23 an hour per employee, or about $2,500 a year. That compares to a national average insurance premium of about $4,800 for single workers, of which employers pay about $4,000.

Q.
So why wouldn’t employers just buy health insurance for their employees?

A.
Some employers are doing that in response to the mandate. But for part-time workers, our employer-based system has never worked well, so Healthy San Francisco provides a good alternative. Other uninsured workers are in firms whose employee mix is older and sicker than average, so private insurance can be prohibitively expensive. And because eventually these employer payments typically get passed on to workers in the form of lower wages, many lower-income workers may prefer their employer to choose the lower cost Health San Francisco option instead.

Q.
You said the employer mandate is controversial.

A.
Opponents like the Golden Gate Restaurant Association said that employers would lay off workers if it went into effect.

Q.
Have they?

A.
We’ve done analyses of employment in San Francisco, and we don’t find any evidence that employment is going down due to Healthy San Francisco. The dire predictions don’t seem to be borne out. That’s consistent with the literature on minimum-wage hikes, which have not had large negative employment effects either.

Q.
So how are businesses, including restaurants, dealing with it?

A.
Some businesses will pass on costs to their employees, who will take home less in wages and more in health benefits. Local service industries like restaurants can try to pass the cost on to customers. It’s not like there’s a competing restaurant industry overseas that will undercut them. What we’re seeing is that about a quarter of restaurants are adding an average 4 percent surcharge to prices. Some are hiking prices on menus. Others add the surcharge to the bill at the end.

Q.
Is the availability of Healthy San Francisco encouraging employers to drop coverage for employees? They have to pay either way.

A.
Our research shows that less than 5 percent of employers who choose the public option are thinking of dropping existing private insurance coverage, so this has not really been a threat to private insurers. At the same time, about 20 percent of employers pay into the public option for at least some of their employees, suggesting that there is real demand in the marketplace for a public option of this type.

What’s interesting is, San Francisco has robust competition in the market for health insurance. There are great private insurance options for those with middle and high incomes. But it’s really hard for low-income residents to buy a private insurance plan with low cost-sharing that won’t bankrupt them. Private insurers just aren’t offering plans restricted to a narrow network of low-cost safety-net facilities. That points to a role for the public option.

Q.
This obviously is a different type of public option than we’re discussing on the federal level. Do you see it as an alternative?

A.
I’ve made the argument for that. The current versions of the public option in Congress are threatening to insurers. If a public option were designed to be attractive only to the lowest income individuals, it would be much less threatening to the health care industry. This could easily be accomplished by giving anyone the public option of buying into their state Medicaid program. It’s a very sensible way to craft a compromise around a public option, but it’s not gotten much traction at this point. Public-option supporters haven’t wanted to backpedal to something like this, but I fear that lower-income folks will lose out if we let the perfect be the enemy of the good.

Source: http://prescriptions.blogs.nytimes.com/ ... ic-option/

Health Care Abroad: Germany
By ANNE UNDERWOOD
New York Times, September 29, 2009

BY THE NUMBERS
Germany
Life expectancy: 80
Infant mortality: 4 per 1,000 live births
Health spending as a percentage of GDP: 10
Percentage of health spending that is private: 23
Doctors per 10,000 people: 34
Source: World Health Organization. U.S. statistics.

Uwe E. Reinhardt is a professor of health economics at Princeton University and a former president of the Association of Health Services Research. He is also a member of the Institute of Medicine of the National Academy of Sciences, a board member of the Journal of the American Medical Association and a contributor to The Times’s Economix blog. His research has compared health care in the United States to that in other countries, including his native Germany. He spoke with freelance writer Anne Underwood.

Q.
Is it true that the concept of health insurance originated in Germany in the 1880s?

A.
During the Industrial Revolution, workers who got sick didn’t earn money, so they formed what they called “friendly societies.” These were cooperatives into which workers paid monthly premiums, pooling their resources so they could continue the cash wages of workers who got sick. Those cooperatives became what are now called “sickness funds” in Germany.

Around the same time, Karl Marx and Friedrich Engels were stirring up the masses with their tracts, including “The Communist Manifesto.” To Otto von Bismarck, the so-called Iron Chancellor of Germany, it seemed that the only way to stop the growth of communism was to take the wind out of its sails by giving low-income people the things they craved — health care, education and a social safety net in general. So in 1883, he passed the Imperial Insurance Order — in German, the Reichsversicherungsverordnung, or R.V.O. — which made it mandatory that all workers up to a certain income threshold pay premiums to such sickness funds. The R.V.O. still governs German health care, although it’s had a thousand amendments in the meantime.

During World War II, Hitler exported the system to the Netherlands, Belgium and France. It’s now generally called the Bismarck Model, to distinguish it from other forms of social health insurance, such as the British National Health Service. The Bismarck model was so popular that after the war, even though it came from Hitler, these countries kept it.

Q.
So Bismarck’s system was the world’s first real insurance system?

A.
It was the first formal social health insurance system, yes — the first government-regulated system. I believe it is still the best model there is, because it blends a private health-care delivery system with universal coverage and social solidarity. The financing is simple. It’s inexpensive and equitable. Coverage is portable. You’re never uninsured in Germany. No family goes broke over health care bills.

Q.
This is based in the workplace. Does it amount to an employer mandate?

A.
Not exactly. Formally, employers pay half of the premium and workers pay the other half — although economists would argue that the premium is entirely taken out of the workers’ take-home pay. But the mandate to be insured is really on the individual. Each worker chooses a sickness fund.

In the United States, employers have a larger role. Employers pick the menu of health insurers from which employees can choose. German employees would take umbrage at that.

Q.
How large is the choice of funds?

A.
The sickness funds were originally organized by craft or company or locality. Until 1992, you had no choice. If you were a carpenter, you belonged to the carpenters’ fund. But since 1992, people have been able to choose any of some 200 sickness funds.

Q.
What if you’re unemployed?

A.
Unemployment insurance continues your premiums. If you’re poor, the community pays. If you’re retired, the pension fund pays. Children remain in the sickness fund with their parents, but the premium is paid by the federal government.

Q.
Does it achieve universal coverage?

A.
100 percent.

Q.
What about illegal immigrants, who are the subject of so much debate in this country?

A.
Once you’re in the country, you have rights to all social services.

Q.
Are the sickness funds run as for-profit businesses or nonprofit?

A.
They’re all nonprofit companies. There is a separate for-profit industry to which you can belong if your income is above 45,000 euros [about $65,000]. If you’re 33 years old and have a high income, your premium in the private plan is much lower. However, premiums increase with age. And if your income declines, you could be in dire straits. Since 1992, individuals with an income above the threshold who choose to buy private insurance cannot get back into the social insurance system unless they fall below the poverty line. This makes people hesitant to leave the social insurance system.

Q.
Is there competition between private and public plans?

A.
Yes, there is, but 90 percent of people are in the public plans. There is competition among the sickness funds, too, now that people can choose.

Q.
Many Americans are concerned that if we offer a public option, it will ultimately put private insurers out of business. What does the German experience tell us?

A.
About 10 percent of the population is in for-profit plans, but most people who are entitled to choose such a plan don’t. It’s the same in this country with Medicare. Eighty percent stay in the traditional Medicare plan rather than choosing the private Medicare Advantage. Although the American people appear unaware of it, government is the only institution they really trust deep down.

Q.
That’s not what we heard over the summer in the town halls.

A.
It’s utterly ridiculous to say they don’t trust the government. Where do Americans turn for help when they get into trouble? Do they run to the private sector? Even big bankers run to Washington. With a public plan, you would get something like Medicare. Just try taking Medicare away from the elderly. In the decades I have lived here, I have discovered this about America’s legendary rugged individualists: when the going gets rough, the rough run to the government.

Q.
Has competition between public and private plans in Germany made the system more efficient?

A.
Competition in health care typically doesn’t make things more efficient. But the German system is more efficient than the U.S. system for other reasons. In Germany, the plans do not individually negotiate prices with individual doctors and hospitals. Instead representatives of each state (or Land) sit across the table from associations of doctors and hospitals and hash out uniform fees that every plan in that state will pay. They don’t waste a huge amount of resources by having each plan negotiate separately with every hospital and doctor.

Q.
Are administrative costs lower?

A.
Much lower. I don’t have the exact figure, but it’s about half of what we spend. All billing is done electronically. You have a card, like an American Express card, that you take with you to the doctor. The physician codes in what he did for you, swipes the card, and in two weeks he gets a check. There is no haggling over bills. The patient usually pays a small co-pay. It’s 10 euros or so for the first visit in a quarter. After that, you pay nothing else for the rest of the quarter. It’s trivial.

Q.
How much government control is there?

A.
The R.V.O. regulates the sickness funds to the point that they’re essentially uniform. But German hospitals probably have less regulation on them than U.S. hospitals. In the United States, there are multiple layers of regulators each imposing restrictions. The Medicare payment system alone is forbidding with all of its regulations.

Q.
Are drug prices regulated?

A.
No. In principle, drug makers are free to price their products for the market. But the sickness funds group drugs into therapeutic groups. Patients have a choice between taking a low-cost drug for which they are fully reimbursed, or paying the difference between the low-cost drug and a higher-priced one in the same category. The system is called “reference pricing,” and it is much hated by drug manufacturers around the world — even though it’s a market system relying on the decisions of patients themselves. Isn’t that what the so-called “consumer directed health care” now being pushed in the U.S. is all about?

Of course, when patients can’t evaluate the different drugs, they tend to stick with the low-cost drugs. Apparently it happens often, because expenditures on drugs are much lower in Germany than the United States.

Q.
Are there long waits for service in Germany?

A.
No, basically none.

Q.
How does Germany do at controlling costs?

A.
They’re half as expensive as we are on a per capita basis, even though a much higher percentage of the German population is over age 65. Still, Germans lament that growth in medical spending is a problem. I say if we had problems like that, we would drink champagne.

Q.
What’s your biggest criticism of the system?

A.
Every system has its weaknesses. I think, for example, lots of care [is] given in Germany — as it is elsewhere — for which we don’t actually know the effectiveness compared to other treatments. There is overutilization of the system. Also, the German system is a bit rigid in its structure, which makes innovation in organizing health care more difficult than it is here.

Q.
Is there medical bankruptcy in Germany?

A.
That’s almost impossible. Germany’s benefit package is very broad and deep. If Germans were to go bankrupt on medical bills, it would be from purchasing drugs or services not in that broad benefit package. But I have not ever read of Germans going bankrupt over health care.

Q.
What is the most important lesson Americans should learn from the German system?

A.
The K.I.S.S. principle — which stands for “Keep It Simple, Stupid.” If you can do something in a complicated way, trust Americans to discover it — certainly in health care. I was on the phone this morning with a hospital and insurer that were suing each other because the patient had gone to a hospital that was not in the insurer’s network. The hospital was charging the insurer two to three times the negotiated rate the insurer pays for in-network hospitals. Only lawyers can love this system. And it is a safe bet that whatever President Obama and the Congress comes out with this year will be so complicated, no one but a few consultants will understand it — and many of those consultants will be the Hill staffers who wrote the reform law. By comparison, the German system is very simple. Every German knows what health care costs his or her family.

Source: http://prescriptions.blogs.nytimes.com/ ... d-germany/

Dems Taunt GOP: Where's Your Health Care Plan?
by Charles Babington
Huffington Post, October 2, 2009

Read more at: http://www.huffingtonpost.com/2009/10/0 ... 07560.html

WASHINGTON — Even as Republicans pummel President Barack Obama's health care proposals, some GOP leaders worry their party is being hurt by a Democratic counterattack: Where is your plan?
Republican leaders chose not to draft their own comprehensive bill, focusing instead on attacking Democrats' plans as too costly and bureaucratic. Some prominent Republicans now fear they are getting tagged as the "party of no," and they want the GOP to offer more solutions to the nation's health care problems.

Louisiana Gov. Bobby Jindal, a potential GOP presidential contender in 2012, said it's time for Republicans "to pivot and say, in addition to emphasizing what we oppose, here are our proposals" for health care. The two parties can agree on some important improvements, he said in an interview Thursday, but Democrats must trim their proposed costs.
Democrats, meanwhile, see a rare chance to go on the offensive in the debate, which has sometimes seemed dominated by fiery attacks on Obama's proposals.

"The Grand Old Party's coffers are empty when it comes to health care reform," Sen. Richard Durbin of Illinois, the Democrats' second-ranking Senate leader, said Thursday.

A new CBS-New York Times poll found that only 14 percent of Americans think Republicans have clearly explained their plans to change the health care system, while 76 percent do not. Obama's numbers were better, though not stellar: 37 percent yes, 55 percent no.

Aware of the criticisms, House Republican leaders have compiled lists of bills and principles that various colleagues have offered this year. Most are narrowly focused, although a 268-page bill by Rep. Tom Price, R-Ga., covers an array of health care topics.

Democrats scoff at the Republican proposals, calling them skimpy outlines that would do little if anything to make health care more affordable and efficient. The Republicans' repeated calls for health-related tax cuts, without credible spending cuts to offset them, would dramatically increase the deficit, Democrats say. They note that no major GOP proposal has been subjected to scrutiny by the nonpartisan Congressional Budget Office, which has given cost estimates for the Democratic proposals.

Speaking to union activists recently about health care, Obama taunted his Republican critics. "What's your answer?" he asked. "What's your solution?"

"You know what?" he continued. "They don't have one."

Senate Minority Leader Mitch McConnell, R-Ky., told reporters Friday that Republicans have not offered their own bill because "we're not in the majority. The majority has the responsibility to go forward."

Republicans will offer numerous amendments, including efforts to limit medical malpractice suits, when a health care bill reaches the Senate floor this month, he said.

Privately, Republican lawmakers have debated the pros and cons of offering their own comprehensive legislation in the Democratic-controlled Congress. A leader on the issue, Rep. Roy Blunt, R-Mo., said on June 17, "I guarantee you, we will bring you a bill that costs far less, far less than the Democrats' and will provide better results for the American people."

A month later, Blunt seemed to have changed his mind.

"Our bill is never going to get to the floor," he wrote in a blog, "so why confuse the focus? We clearly have principles; we could have language, but why start diverting attention from this really bad piece of work they've got to whatever we're offering right now?"

Eventually, other Republican leaders in Congress agreed with that analysis.

Several Republicans in Congress have introduced narrow bills – many calling for tax cuts – that have gone nowhere in Congress and generated scant notice. Party leaders have not associated themselves with Price's multi-pronged bill, perhaps the most ambitious of all those drafted by Republicans.

That's just fine with some conservative activists.

"We have plenty of time to work next year on sensible and targeted health reform in a bipartisan way," Weekly Standard editor William Kristol recently wrote. "But first we need to get rid of Obamacare."

With Republicans offering few detailed ideas, some Democrats have ascribed sinister motives. Rep. Alan Grayson, D-Fla., caused an uproar when he said in a House speech that Republicans want sick Americans to "die quickly."

Perhaps the most comprehensive list of GOP health proposals is in the "Republican Solutions Handbook" assembled by the House Republican Conference, although it covers only one page.

The first two items in this Republican plan would pursue long-standing conservative goals: limit medical malpractice suits filed by "overzealous trial lawyers" and devote more resources to stopping "waste, fraud and abuse" in Medicare and Medicaid.

Proposed tax cuts, meant to help Americans buy health insurance, would go to workers without employer-provided health plans and to low-income people. The GOP plan also would encourage businesses that provide health insurance to automatically enroll all employees, who could opt out if they wanted.

Blunt's official Web site lists more than 20 bills introduced by Republicans, which have virtually no chance of passage. Some touch on the same topic, such as reining in medical malpractice lawsuits.
Several call for tax cuts. One, by Rep. Edward Royce, R-Calif., would allow up to $500 of unused benefits in a health flexible spending account to be carried to the next year without tax penalties. Another would allow tax breaks on insurance premiums for long-term care.

Such bills are neither comprehensive nor offset by spending cuts or revenue increases, said Rep. Chris Van Hollen, D-Md., a member of the House Democratic leadership team.

Republicans "are afraid to put anything on the table," he said, "because the American people would see it doesn't address the problem."
Van Hollen predicted the Republicans will fail if they think they "can beat something with nothing."
___
Associated Press writer Erica Werner contributed to this report.

Source: http://www.huffingtonpost.com/2009/10/0 ... 07560.html

Health 'Opt-Out': Brilliant Maneuver or Crippling Compromise?
by RJ Eskow
Huffington Post, October 8, 2009

Democrats on the left and right are expressing interest in a new compromise that would provide a public option in the health bill but allow individual states to opt out of it. People may well be right when they say this is a deft way to pass a bill with 60 votes, but policymakers and observers should be clear about the potential downsides. It could disable the already-hamstrung public option, create new political liabilities, and be castigated by critics as the "Blue Cross of Alabama Enrichment Act of 2009."

A simple thought experiment might clarify the issues at hand: What if Medicare had been passed with this 'opt-out' provision? To make the thought experiment more appropriate to the situation at hand, we must imagine that the 1965 law creating Medicare had already been subject to the same compromises that the public option has been: that its ability to negotiate with certain suppliers and providers has been negotiated away, and that instead of being available to all older Americans, access has been restricted so that only an estimated 5% of them are expected to join.

A plausible answer is that a number of states, especially in the South, would have chosen not to participate.

What happens next in our thought experiment? Our hypothetical Medicare program, which was already likely to enroll only a few million elderly people, is now likely to enroll even less, reducing it by 20-30% or even more. That means it has even less operational efficiencies, even fewer economies of scale, and less leverage with those suppliers with whom it is permitted to bargain.

The end result would probably have been a pretty weak Medicare - one that's unable to report significant savings when compared to the private sector. Those weak results, the product of political compromise, would probably then have been used by political opponents as evidence that "government-run healthcare" doesn't work.

Now that the thought experiment's out of the way, let's consider the states that are most likely to opt out of a public option if this provision is enacted. Alabama would be high on anyone's list, and Blue Cross has 83% market share in that state. In practice, that would mean that most middle-class Alabama families would be required to purchase Blue Cross insurance or face a tax penalty under the mandate provisions of the Finance Committee bill. The bill would strengthen an already-unacceptable monopoly while increasing the financial burden on working people.

The monopolization problem isn't restricted to one locale, either. An AMA study concluded that one carrier had 70% or more of the market in 37% of areas studied. In 16% of areas one carrier had 90% or more of the market.

And those are precisely the areas where carriers will spend whatever it takes to get an "opt-out" enacted. Add in the ongoing mergers in the health industry and the study which shows that 94% of markets have a near-monopoly situation already, and you have a genuine ethical problem in any state that chooses to opt out of the public option.

(Ironically, it was Sen. Schumer who first discussed the monopoly problem - the same Sen. Schumer who is now pushing the opt-out idea.)

One solution to this ethical problem would be to waive the individual mandate for states that don't offer a public option. That would make the compromise more defensible, and would provide more incentive for insurance companies to accept full reform. But is that likely to become part of this package, especially since the CBO already estimates that 6% of Americans will remain uninsured following the enactment of a bill that we were told would achieve "universal coverage"?

Liberal supporters of this compromise are quick to suggest that few states will opt out, and that leaders in those that do will face severe punishment at the polls. They're not considering the massive amounts of money at stake, and what that will mean in terms of insurance industry campaign contributions. There will be even more money spent on advocacy ads that explain why the public option is "bad for America, bad for (your state here), and bad for you."

The usually genteel Nate Silver opts for an uncharacteristically harsh and sarcastic approach in voicing his support for this idea. "Opt me out of public option purism," he says, deriding (but not naming) the "usual suspects" for their rigidity and suggesting that "this compromise is leaps and bounds better than most of the others." But the right question is: Will it work? He says it will, and cites the behavioral economics theory that says change to the status quo is difficult because "default preferences are extremely powerful." Yet this entire debate is about major change. We're only discuss this issue because we've rejected the "default," which seems to render that argument somewhat moot. Sure, it's better to have an "opt-out" than an "opt-in," but a number of states are still likely to leave the system.

Nate then suggests that public sentiment will shift if, as seems likely, a public option is proven to reduce costs. But we're talking about changes here that make it less likely that a public option will significantly reduce cost, so we're skewing the results before we even begin the process.

To paraphrase Mao: Let a hundred flowers bloom, but don't water 99 of them.

Ezra Klein argues for the "opt-out as fair competition" model, too, adding that "It also creates a neat policy experiment." But the experiment's not so "neat," and not much of an experiment, if a series of compromises rigs the outcome. And the experimental subjects in those monopoly markets may not be happy with their test-subject status.

Will a major compromise be necessary? It's possible, and if that happens realists may decide that this idea warrants consideration. Fair enough. Nobody who follows practical politics can afford to be a "purist," to use Nate Silver's language. But let's be realistic about our compromises before we make them, and let's not leap to embrace major compromises by pretending they are less significant than they are. It's misleading to imply that a "robust public option" can co-exist with an opt-out. Should the day come when all other options fail, Democrats should make an informed decision: The opt-out is a hard blow to the public option, and potentially a crippling one. Medicare as we know it might not have survived such a compromise. When a solution sounds too good to be true - we can compromise and still get everything we want! - it probably is.

For those who agree with Sen. Sherrod Brown that "the public option is the moral compass of health reform," the stakes are even higher. If it's really a moral issue, how can states be allowed to opt out? If this is your position, the opt-out is the moral equivalent of the Missouri Compromise.

Is a 60-vote, non-reconciliation outcome in the Senate worth the loss, the cost, and the risk that an opt-out provision brings? Maybe in the end the answer will be 'yes,' but that question should only be posed after all other options have failed. In the meantime, Democrats who remember the successful fight for Medicare might best be served by the acronym WWLBJD:

What would LBJ do?

Source: http://www.huffingtonpost.com/rj-eskow/ ... 14747.html

Opt-Out Public Option Gains Steam Among Dems, But Questions Remain
by Sam Stein
Huffington Post, October 9, 2009
With Reporting By Jeff Muskus

Democratic senators were largely caught off-guard on Thursday as a compromise approach to health care reform -- emerging seemingly without warning -- began picking up praise from progressive and centrist lawmakers.

In the halls of Congress few had actually heard of or seen the proposal, which would establish a national public option for insurance coverage but grant a state government the right to exempt itself from the system. And, as such, there was a clear and sensible hesitancy to weigh in on the so-called "opt-out" approach.

But the early reviews were, nevertheless, politically promising. In a debate where proponents and opponents of expanding the government's role in providing health care insurance coverage have failed to find middle ground, the newest compromise to the public option was -- at the very least -- intriguing to all.

"It's worth looking at," Sen. Joseph Lieberman (I-Conn.), told the Huffington Post. The Connecticut Independent, who is one of the foremost skeptics of the public option within the Democratic Caucus, was echoed by an equally-forceful public option naysayer: Sen. Ben Nelson (D-Neb.) "Worth looking at," said the Nebraska Democrat.
Even the author of one of the pieces of health care reform legislation making its way through Congress said he was willing to consider the opt-out idea.

"Senator Baucus will look closely at this proposal," said an aide to the Senate Finance Committee Chairman, "as well as other proposals, and could consider supporting them as part of an overall package as long as it achieved his health care reform goals while getting 60 votes."

On the opposite side of the intra-party ideological spectrum other Democrats approached the opt-out compromise with cautious interest. Fresh off of sending a letter to Democratic leadership in which 30 senators reiterated the importance of a broad-based public option, Sen. Sherrod Brown (D-Ohio) promised to be at the table when the opt-out was discussed.

"Sen. Brown believes the HELP-passed version is one of the best vehicles for achieving affordability, continuity, and access in every area of the country," said his press secretary Meghan Dubyak, "although he will continue to participate in ongoing discussions with leadership and his Senate colleagues about the specifics of the bill."

Former DNC Chair Howard Dean was far more accommodating to the idea, telling the Huffington Post that if he were a member of the U.S. Senate he would vote for the proposal -- provided it was the only one that could get past a Republican filibuster.

"If this passes I won't say it is not reform because it is reform," he said. "If this is what it takes to get 60 votes I say go for it."

And yet, as quickly as the intrigue surrounding the opt-out grew, countervailing forces began to weigh in. Democratic leadership aides told the Huffington Post that the discussion of the compromise approach was getting much too far ahead of reality.

"From the conversations I've had in the last two hours it's not sounding like a lot of folks have even seen the thing," one of those aides emailed mid Thursday afternoon. "I think that people getting so excited about this is dangerous."

The idea of allowing states to opt-out of a national public option has been discussed as far back as last week in conversations between Sen. Chuck Schumer (D-N.Y.) and labor leader Andy Stern. Since then, the table of negotiators has expanded to include Sen. Tom Carper (D-Del.) and at least one progressive senator, according to Democratic aides. The group submitted the idea to Senate Majority Harry Reid's office on Tuesday. But as of Thursday afternoon, no official white paper existed for Senators to work off of.

All that existed, indeed, was a somewhat vague idea with a myriad of question marks. What kind of national public plan would be established? How, exactly, would states be able to opt-out? Would consumers be allowed to cross state lines for insurance? Most importantly: was this good policy?

"One problem with the opt-out idea is that Republicans may seize on it in the future and turn it into a general opt-out for states to exempt themselves from the whole bill," said Paul Starr, health care expert at Princeton University. "Remember there will be four years and two elections before the reforms go into effect. This would be the easiest step for Republicans take during that period to ensure that the whole thing would unravel. And it would unravel because states that adopted the reform would become magnets for migration by the sick from states that opted out."

Proponents of the state opt-out approach said that these details would be filled out in the days and weeks ahead. Though, in a reflection of just how nascent the discussion is, no time frame was offered as to whether or when something would be formally considered.

Source: http://www.huffingtonpost.com/2009/10/0 ... 15086.html

A Plan for Universal Coverage, Private Market Competition -- And Reduced Deficits
by Lanny Davis
Huffington Post, October 6, 2009

Re-read that headline.

I am not making this up.

A health care bill exists that would accomplish what the headline says.
Moreover, it has been verified by the Congressional Budget Office (CBO), in a letter signed in May 2008 by the office's then-Director Peter R. Orszag, who now directs President Obama's Office of Management and Budget.

It's called the Healthy Americans Act (the HAA). It has been fully vetted for years, written in legislative language, scored by the CBO, and has substantial bipartisan support.

In my previous columns, I explained the two basic, simple concepts of the HAA:

Universal coverage, attracting liberal support -- i.e., all Americans are required to purchase health insurance just like auto drivers are required to purchase car insurance.

More consumer choice and private-market competition, attracting conservative support - i.e., permitting everyone to purchase their own insurance policies in open, competitive "state exchange" marketplaces, each of which must include the Blue Cross/Blue Shield "Basic" policy, the lowest-tier option available to all federal employees and members of Congress or its functional equivalent.

Under all current Senate and House bills, more than 150 million non-elderly Americans who have employer-paid for insurance are left with no choice at all -- no access to a "public option," if there is one, since these employees would be stuck with the employer-provided insurance policy, which they lose as soon as they get laid off.

But under the HAA, all Americans would have a choice - they can stay with their employer's policy, if there is one, or they can choose another they consider better. And all would own their own policies, which travel with them wherever they go, whether employed or unemployed. Every individual American, including all poor people, would have access to their state's public exchanges, giving them the purchasing power of huge pools of customers, just like federal employees and members of Congress have, with guaranteed coverage, better rates and expanded choice (not just the health insurance the boss picks).

Private insurance companies will have to sharpen their pencils and offer better benefits and services or lose customers and even go out of business -- the power of competition and the private market applied to the insurance industry!!!

So how is it possible the HAA is deficit-neutral in the first two years and reduces deficits thereafter? Mr. Orszag wrote the following in a May 2008 CBO letter on the HAA proposal:

"Overall, our preliminary analysis indicates that [the HAA] would be roughly budget-neutral in 2014 [the first full year of operation after a two-year phase-in].

That is, our analysis suggests that your proposal would be essentially self-financing in the first year that it was fully implemented. That net result reflects large gross changes in the Federal Revenues [increased outlays minus increased savings] that would roughly offset each other."
He offered three reasons.

First, there are the increased revenues from a new payment, called "Employer Responsibility Payments." (OK, I am going to call a spade a spade: It's a new tax.) Those employers who currently are insuring their employees would be exempt from this new tax for the first two years. This is because, under the HAA, during the first two transition years, these employers must give each employee an annual salary increase equal to the cost the employer pays for the employee's health care. But all other employers who did not provide health insurance for their employees would begin immediately to pay the tax - but it is a modest one. It is not an income tax or a flat excise tax. Rather, is a progressive tax -- ranging from 3% - 26% -- based on the average national health insurance premium costs but tied to revenue generated per employee and the size of the firm. So a small firm at the lowest tier of revenues/employee would pay only 3% of the average national health insurance premium - but a large corporation at the top tier of revenues/employees would pay the top 26% of the national premium average.

Second, the federal government under the HAA would receive increased tax revenues owing to the conversion of the current $250 billion-per-year tax exemption on employee health insurance premiums to the proposal's standard deduction or tax credit. This is simple math: The exemption of $250 billion worth of income costs the federal government more because higher income-tax brackets are using it, rather than shifting these higher level of deductible premium payments to the lower standard tax deduction or credit provided for under the HAA.

Third, Uncle Sam will save from $150 billion to $200 billion by exchanging paying for Medicaid and SCHIP to allowing poor people to purchase their own private insurance programs at least as good as the Blue Cross basic federal employee/congressional plan.

However, federal and state governments would still provide any benefits currently under Medicaid/SCHIP not currently provided under such Blue Cross basic plans, so no poor person under Medicaid or SCHIP will receive anything less under the HAA. But they will be treated the same as rich people when they seek medical care - a revolutionary concept that both liberals and conservatives are embracing!

So how does the HAA produce a net surplus of revenues, and thus, reduce the federal deficit, after the first two years?

First, Uncle Sam gets more revenues under the HAA because the amount of the new health insurance "standard" deduction under the HAA would grow at the rate of the general consumer price index (CPI) price inflation, and not at the 2%+ higher medical inflation rate that increases the cost to the federal government of the current non-taxed insurance premiums paid on behalf of employees.

Second, the value of covered benefits under the minimal requirement of the Blue Cross federal employee/congressional plan would be increased only as does the rise in the per capita gross domestic product (i.e., in the Senate version scored by the CBO), rather than the higher level of health care inflation. Minimally, experts say that would slow the growth of health spending by 1 percent to 2 percent per year.

Remember, Mr. Obama said even if we reduced the inflation in health care costs by "one-tenth of 1 percent per year," that could result in trillions of dollars of savings.

Finally, additional savings for Uncle Sam and the rest of us in health care costs would come from significant structural reforms under the HAA. These include requiring insurance for wellness and chronic-disease management; requiring all insurance companies to maintain electronic medical records; and transparent state market exchanges, with customer-friendly "help" agencies in each state.

If it is too late to adopt the full HAA because none of the House or Senate committees gave it serious consideration (for reasons that utterly escape me), then the full Senate should consider the "Free Choice" amendment from Sen. Ron Wyden, Oregon Democrat.

Mr. Wyden's amendment is quite simple: It would allow the 150 million employees who are stuck with the plan offered by their employers to opt out, get a cash payment or voucher, and go shopping, knowing that, at the very least, they can purchase a federal employee/congressional-type plan.

My question to all House and Senate members and specifically, to Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi: Why not let this Free Choice amendment be debated and voted on? Everyone reading this column should ask their members of Congress that question.

This article has been cross-published at the Washington Times and at TheHill.com.

Lanny J. Davis, a Washington lawyer and former special counsel to President Clinton, served as a member of President George W. Bush's Privacy and Civil Liberties Oversight Board. He is the author of "Scandal: How 'Gotcha' Politics is Destroying America."

Source: http://www.huffingtonpost.com/lanny-dav ... 09513.html

Health Insurance Reform Must Include Public Option
by Sen. Sherrod Brown
Huffington Post, October 8, 2009

A majority of Americans support a public option. An overwhelming majority of Democrats in Congress support a public option. Doctors support a public option. Why then is the public option seen by some as the third rail of health insurance reform?

We know the disturbing facts by heart: Millions of Americans are one illness -- or one pink slip -- away from bankruptcy because of high health care costs and lack of access to affordable insurance. 30 million Americans are without health insurance. Nearly 400 Ohioans lose their insurance every day.

Middle class families pay $1,000 annually in hidden taxes to recoup the cost of care for our nation's uninsured.

When you look at the plan on its merits, the opposition makes little sense. It saves money. It will be available everywhere in the country -- providing reliable, affordable, quality health care to those in need. It injects competition into a marketplace that in most parts of the country is dominated by one or two companies.

What will happen if we hand over taxpayer-funded subsidies to the insurance industry and rely on them to cover all Americans? Insurers will demand higher and higher subsidies each year. Why wouldn't they? It's called profit maximization. After all, these are the same companies that pay their CEOs tens of millions of dollars each year while millions of Americans go without any health insurance.

A strong public option means competition for private insurance companies. It means coverage continuity in every part of the country. It means health insurance reform that ensures affordable access to coverage for every American.

I have held nearly 140 roundtables across Ohio in the last two years, and half a dozen health care town halls and events in the last two months. I have heard story after story of individuals and families who can't afford to buy insurance -- and can't afford not to. They watch their savings drain away as their health care costs soar.

The insurance industry has been in business for nearly a hundred years, and it has not managed to cover all Americans. Instead of wishing the insurance market would change, we need to change it.

That's what the public option would do.

Progress rarely comes easily. It took a united Democratic party, committed to change, to establish Social Security and Medicare -- progressive milestones that pulled seniors out of poverty and increased Americans' life expectancy. Progressive milestones that were staunchly opposed by Congressional Republicans.

The public option is the moral compass of health reform. In the last 100 years, Democrats have yet to be on the wrong side of progressive reform.

Let's not start now.

Source: http://www.huffingtonpost.com/rep-sherr ... 13949.html

Supporting a Robust Public Option
by Sen. Arlen Specter
Huffington Post, October 8, 2009

As debate continues on much needed health care reform, I urge my Senate colleagues to support a robust public option plan. It's important that the President's ideas on the public option be implemented to maintain a level playing field.

The public option will create competition in the marketplace and will help to provide affordable choices for American families. It will also allow us to greatly expand the number of Americans with health insurance, and that is an imperative.

When President Obama's call for health care reform came under right wing attack this summer, as millions saw in my well-publicized Health Care Town Hall meetings, I pushed back at the critics in order to set the record straight about the direction of health care reform.

As competing bills come up for votes in the Senate, here's the type of bill I'm for:

I'm for a bill that provides for universal coverage.

I'm for a bill which is deficit neutral.

I'm for a bill which has specific savings, such as annual examinations to have early detection of diseases.

I'm for a bill that does not deny coverage on the basis of preexisting conditions and bans annual and lifetime caps on coverage.

I'm for a bill which will bring mandatory sentences for Medicare and Medicaid fraud because it will be a deterrent as opposed to fines.

I'm for a bill which will further increase funding for the National Institutes of Health to prevent a lot of illnesses.

I'm for a bill that does not erect a massive bureaucracy between the doctor and the patient.

The bottom line is that Americans have a right to be healthy and stay healthy. As I've done throughout my career, I will continue to push for better health care for all Americans.

Source: http://www.huffingtonpost.com/sen-arlen ... 13668.html

CIGNA Employee Flips Off Mother Of Dead Girl Denied Transplant
by Rachel Weiner
Huffington Post, October 8, 2009

A CIGNA employee gave the finger -- literally -- to a woman whose daughter died after the insurance giant refused to cover her liver transplant.

Hilda and Krikor Sarkisyan went to CIGNA's Philadelphia headquarters, along with supporters from the California Nurses Association, to confront the CEO Edward Hanway over the death of her 17-year-old child.

In 2007, Nataline Sarkisyan was denied a liver transplant by the company, on the grounds that the operation was "too experimental" to be covered. Nine days later it changed its mind, in response to protests outside its office. It was too late: Nataline died hours later.

"CIGNA killed my daughter," Nataline's mother Hilda told security. "I want an apology." Sarkisyan was not able to speak to Hanway; a communications specialist talked to her instead. After their conversation, employees heckled the group from a balcony; one man gave them the finger. CIGNA called the police and had the family and their friends escorted from the building.

A CIGNA executive apologized for the incident in a letter about a month later.

"I was very disappointed to learn of the behavior of one of our employees when you were at our company's headquarters," wrote John M. Murabito, executive vice president for human resources.

"I sincerely regret this individual's offensive and inappropriate action," he continued. "Please know that he did not represent the views of our company or the views of other employees who work here. We deeply empathize with you and wish you peace and comfort in your loss."

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/3yOtKWipG-o&hl ... ram><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/3yOtKWipG-o&hl=en&fs=1&rel=0" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

"What unbelievable nerve," said Americans United For Change spokesman Jeremy Funk in a statement. "A case that should have prompted CIGNA to seriously reevaluate its policies instead led its employees to taunt and insult a grieving mother who lost her daughter. Absolutely sick. Does Congress need any more reasons to pass meaningful health insurance reform now?"

The Sarkisyan family's wrongful-death suit was thrown out of court because of a 1987 Supreme Court ruling that shields employer-paid health care plans from damages over their coverage decisions.

The Sarkisyans say the law needs to be changed to allow people to sue health insurers for these kinds of decisions.

"If you don't sue, you can't make changes," Hilda Sarkisyan said. "It's not about the money. It's about the principle. They are just going to keep denying people care if we don't stop them."

AUFC recently highlighted Nataline Sarkisyan's story in a television ad:

"What unbelievable nerve," said Americans United For Change spokesman Jeremy Funk in a statement. "A case that should have prompted CIGNA to seriously reevaluate its policies instead led its employees to taunt and insult a grieving mother who lost her daughter. Absolutely sick. Does Congress need any more reasons to pass meaningful health insurance reform now?"

The Sarkisyan family's wrongful-death suit was thrown out of court because of a 1987 Supreme Court ruling that shields employer-paid health care plans from damages over their coverage decisions.

The Sarkisyans say the law needs to be changed to allow people to sue health insurers for these kinds of decisions.

"If you don't sue, you can't make changes," Hilda Sarkisyan said. "It's not about the money. It's about the principle. They are just going to keep denying people care if we don't stop them."

AUFC recently highlighted Nataline Sarkisyan's story in a television ad:

<object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/7czJ36okQTU&hl ... ram><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/7czJ36okQTU&hl=en&fs=1&rel=0" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object>

Source: http://www.huffingtonpost.com/2009/10/0 ... 14189.html

Take the "Opt Out" Public Option--Good Policy, Politics
by Tom Matzzie
Huffington Post, October 9, 2009

In recent days a proposal has emerged in Senate discussions over health care reform legislation. The idea is an adaptation of the much-debated Public Option proposal that would create a government-backed insurance choice for consumers trying to buy coverage.

In this new proposal, called the “Opt Out,” individual states would be able to choose whether they want to participate in the Public Option or not. The method of the “Opt Out” isn’t entirely clear but it could take many forms from executive order to state legislation to ballot measures.

There is a strong case for a Public Option. From a policy perspective, the best outcomes for lowering health care costs would come from a robust, national Public Option choice. This would provide the largest insurance risk pool that allows the cost risks to be spread out among more people there by lowering the price tag for everybody involved—businesses, consumers and the government. The economics of it are clear. For American consumers sick and tired of being jerked around by their insurance company it also offers an alternative.

The genius of the “Opt Out” version is that it starts from the point of universality. This is not an “Opt In” it is an “Opt Out.” Every state would start IN the Public Option. If Democrats can agree to the “Opt Out” it is a de facto victory for supporters of the Public Option but it also includes a safety valve for conservative Democrats worried about the plan’s success. Conservative Democrats could claim they won the opportunity for their state to set their own course if they want. Win, win.

The downside is that the states who most need a Public Option might be the most likely to opt out—some of our poorest and least healthy states are in the Deep South controlled by conservative Republicans who have sworn against the Public Option. But I think that is a bigger risk if the plan was an opt in instead of an opt out. Taking away health care choices isn’t something politicians like to do once they’re in place. SCHIP, Medicare and the Veterans’ Administration hospitals are as popular in more Republicans states as they are in more Democratic states.

Progressives should see in the “Opt Out” an opportunity to win their policy proposal and create a political bulwark of public support behind the Public Option. Politically, Republicans should be quaking in their boots over the idea of an “Opt Out” or even an “Opt In.” State-by-state political and legislative fights to stay in the Public Option would give
Democrats a rallying cry and mobilization tool. If these fights took the form of ballot measures there would even be Election Day opportunities for health care fights. Progressives would have a soft-money vehicle to mobilize voters most supportive of health care reform, namely progressive votes who make up the Democratic base. Republicans would be better off politically accepting a straight-up Public Option than having an “Opt Out.”

Such crass political calculations aren’t the reason to accept or reject any policy idea. But imagining a political framework to support a policy is what has made some big policy wins sustainable. When Social Security was enacted, President Franklin Roosevelt pushed for the payroll tax that pays for it knowing that it would create a sense of entitlement among the public that politicians couldn’t take back.

There is some precedent to this “Opt Out.” Until the early 1980s local governments, such as counties, had the right of opting out of Social Security and establishing their own retirement plan. This option had been provided when the Social Security Act was passed in the thirties. Today thousands of counties have opted to stay in Social Security while only one in Galveston, Texas has stayed out. Galveston exists as some sort of bizarre libertarian footnote but Social Security is everywhere.

The “Opt Out Public Option” is a great idea—Democrats, and their feisty progressive base, shouldn’t miss this opportunity to take a big step forward. Too often progressives metaphorically suffer from Anhedonia—a psychological condition described as the inability to experience pleasure. Democratic consensus around an “Opt Out Public Option” would be a victory. Embrace it and feel good about it.

Source: http://www.huffingtonpost.com/tom-matzz ... 15273.html

October 9, 2009

NARRATOR: One year ago, right about now, The economy keeled over, like an overstuffed sow.

First Bush, then Barack had to fix things at once. We had to shape up those banks and their high wire stunts.

But banks bought up banks, gladly too big to fail And sent millions to Congress so their views would prevail.

Now bonuses are back and phony finances abound, But all must be well, there's a market rebound.

Executives to bankers have wallets quite blubbery... And, oh by the way, it's a jobless recovery

BILL MOYERS: You know from the news that early next week the Senate Finance Committee is expected to vote on its version of health care reform. And therein lies another story of money and politics.

Polls show the overwhelming majority of Americans favor a non-profit alternative -- like Medicare -- that would give the private health insurance industry some competition. But if so many Americans and the President himself want that public option, how come we're not getting one?

Because, the medicine has been poisoned from day one, in part because of that same revolving door that Congresswoman Kaptur and Simon Johnson were just talking about. Movers and shakers rotate between government and the lucrative private sector at a speed so dizzying they forget who they're working for.

SEN. MAX BAUCUS: Our plan does not include a public option.

BILL MOYERS: Take a close look at that woman sitting behind Montana Senator Max Baucus. He's the Democrat who's the Chairman of the Finance Committee. Liz Fowler is her name. And now get this. She used to work for WellPoint, the largest health insurer in the country. She was Vice President of Public Policy. And now she's working for the very committee with the most power to give her old company and the entire industry exactly what they want: higher profits, and no competition from alternative non-profit coverage that could lower costs and premiums.

I'm not making this up. Here's another little eye-opener. The woman who was Baucus' top health advisor before he hired Liz Fowler? Her name is Michelle Easton. Why did she leave the Committee? To go to work -- where else? -- at a firm representing the same company Liz Fowler worked for WellPoint. As a lobbyist.

It's the old Washington shell game. Lobbyist out, lobbyist in. And it's why they always win.

They've been plowing this ground for years, but with the broad legislative agenda of the Obama White House, it's more fertile than ever. The health insurance industry alone has six lobbyists for every member of Congress, and more than 500 of them are former congressional staff members.

Just to be certain Congress sticks with the program, they've been showering megabucks all over Capitol Hill. From the beginning, they wanted to make sure that the bill that comes out of the Finance Committee next week puts for-profit health insurance companies first, by forcing the uninsured to buy medical policies from them. Money not only talks, it writes the prescriptions.

In just the last few months, the health care industry has spent 380 million dollars on lobbying, advertising and campaign contributions. And a million and a half of it went to -- don't hold your breath -- Finance Committee Chairman Baucus, who said he saw "a lot to like" in two proposed public options but voted "no."

SEN. MAX BAUCUS: My job is to put together a bill that gets 60 votes. Now I can count and no one has been able to show me how we can count up to 60 votes with a public option in the bill.

BILL MOYERS: Of course not. They can't get 60 votes. Not when the people who want a public alternative can't possibly scrape up the millions of dollars Baucus has received from the health sector during his political career.

Over the last two decades, the current members of the Senate Finance Committee - you're looking at them -- have collected nearly 50 million dollars from the health sector. A long-term investment that's now paying off like a busted slot machine.

Not that we should be surprised. A century ago, muckraking journalists reported that large corporations and other wealthy interests virtually owned the Senate, using bribery, fraud, and sometimes blackmail to get their way. Jokes were made about the Senator from Union Pacific or the Senator from Standard Oil.

This fellow in particular was out to break their grip. His name was David Graham Phillips, and one day in 1906, readers of COSMOPOLITAN MAGAZINE opened its March issue to discover the first of nine articles by Phillips titled "The Treason of the Senate."

He wrote: "Treason is a strong word, but not too strong, rather too weak, to characterize the situation in which the Senate is the eager, resourceful, indefatigable agent of interests as hostile to the American people as any invading army could be..."

The public outrage provoked by Phillips and other muckrakers contributed to the passage of the Constitutional amendment providing for the direct election of Senators, who until then were elected by easily bought-off state legislators.

Of course, like water seeking its own level, big money finds its way around every obstacle, and was soon up to its old tricks, filling the pockets of friendly politicians. Today none dare call it treason. So how about calling it what it is: a friendly takeover of government. A leveraged buyout of democracy.

Outrageous? You bet. But don't just get mad. Get busy.

Source: http://www.pbs.org/moyers/journal/10092009/watch2.html

Alex Lange Denied Health Care Coverage: "Your Baby Is Too Fat"
Huffington Post, October 12, 2009

Four-month-old Alex Lange is described as a "happy, adorable, big baby." Yet he can't get health insurance.

Rocky Mountain Health Plans refuses to cover little Alex because he's too large. Denver's NBC11News.com reports:

Because of his size, Baby Alex was turned down for health insurance, his height and weight put him in the 99th percentile according to CDC guidelines.

Kelli [his mother] says it's ridiculous, "It's frustrating, it's very frustrating."

Dr. Speedie at Rocky Mountain Health Plans says all babies are evaluated for insurance the same way. "In children it's based on a combination of height and weight."

The health insurance reform legislation moving through Congress would end this practice of denying coverage based on "pre-existing conditions" -- in Alex's case, "obesity."

The Denver Post has more:

"I could understand if we could control what he's eating. But he's 4 months old. He's breast-feeding. We can't put him on the Atkins diet or on a treadmill," joked his frustrated father, Bernie Lange, a part-time news anchor at KKCO-TV in Grand Junction. "There is just something absurd about denying an infant."

Bernie and Kelli Lange tried to get insurance for their growing family with Rocky Mountain Health Plans when their current insurer raised their rates 40 percent after Alex was born. They filled out the paperwork and awaited approval, figuring their family is young and healthy. But the broker who was helping them find new insurance called Thursday with news that shocked them.

"'Your baby is too fat,' she told me," Bernie said.

UDPATE: Bernie, Kelli, and baby Alex will all appear on MSNBC's Ed Show on Monday evening.

Source: http://www.huffingtonpost.com/2009/10/1 ... 17337.html

Insurance Industry Declares Open War on Reform: They Promise to Raise Their Rates If Reform Passes
by Mike Lux
Huffington Post, October 12, 2009

The insurance industry inadvertently gave health reformers the best argument we ever could have had to pass a public option and the strongest possible regulations on insurers. Declaring that rates will go up dramatically if reform passes, insurers launched a full-scale open assault on the idea of any reform at all yesterday, except I guess a reform plan especially tailored to them and their profitability. What they left out of their little study is that they are the ones who decide when rates go up because the biggest companies have very little competition in most of the markets they are in. There is no federal rate regulation, there is no anti-trust enforcement in insurance (they are specifically exempted from it in the McCarran-Ferguson Act), and unless there is a public option, there will be little competition. They will be the ones who decide if the rates go up, and they have just guaranteed they would raise those rates if we don't stop them from doing it.

It's sort of like the sheriff in Blazing Saddles holding the gun to his own head, and saying "back off or I'll shoot." The insurance industry is saying that if they don't like what's in the bill, they will just decide to arbitrarily raise the rates. But we can stop those rates from going up by checking the insurers' power. That's why a public option, real competition for an arrogant out-of-control, way-too-powerful industry, is so essential. Without it, we are left to their whims, and anytime, for my reason, they will just jack up their rates. If their stocks go down, if they just want more profits, if some regulation they don't like is passed, they will just raise their rates. With a strong, robust, nationwide public option, we can force insurers to the table, and give them real competition.

Personally, I think we ought to repeal McCarran-Ferguson and impose tough rate regulation as well. That would really open up competition and guarantee lower prices. But at the very minimum, we have to have a strong national public option. The insurance industry has just reminded us as to why that is. Thanks for the help in making our case, friends.

By the way, it's not just me who thinks this. Voters do not support being forced to buy health insurance unless there is a public option -- at that point, as the polling clearly documents, voters are fine with an insurance mandate. As long as there is real competition with a public option, voters are fine with being asked to buy insurance. Sometimes I think regular voters are smarter than the politicians they elect to govern them.

Source: http://www.huffingtonpost.com/mike-lux/ ... 17760.html

Baucus: There May Be 60 Votes For "Less Pure" Public Option
by Sam Stein
Huffington Post, October 19, 2009

Senator Max Baucus (D-Mont.) insisted on Monday that a public option for insurance coverage was very much "alive" as he and two other Democratic senators merged together disparate health care bills. But in what will surely be a disappointment for progressives, the Montana Democrat hinted strongly that the provision would be watered down.

"This issue is alive and we are looking at it to see what makes the most sense," the senator declared on a conference call with reporters. "The major overall goal here though is to get health care reform that passes the Senate, gets 60 votes, and I just don't know if there is 60 votes for the most pure kinds of the public option. There may be 60 votes for the less pure kinds."

The less pure kinds, Baucus explained, were co-ops, a public plan triggered by economic conditions and an insurance structure that allowed states to opt in or out of a public option. He seemed to find the last option the most intriguing.

"It is new and it is interesting," said Baucus. "Senators are trying to think it through, its effect, what it will do? We don't know yet."

The conference call, hosted by the group Families USA, was one of Bacucus' most extensive public conversations since the committee he chairs passed health care legislation by a 14-9 vote. Currently he and Sens. Chris Dodd (D-Conn.) and Harry Reid (D-Nev.) are in the process of melding together his Senate Finance Committee bill with one produced by the Health, Education, Labor and Pensions (HELP) Committee.

Baucus brushed off complaints from his Republican colleagues that Democratic leadership was forming health care reform in non-transparent, closed-door meetings with the White House. As for the much-criticized private industry study that alleged his bill raise heath care premiums, the Montana Democrat said it "was something slapped together at the end, and almost an embarrassment it was so poorly put together."

"It was one-sided," he added, dispensing with his usual laid-back demeanor. "It was wrong and frankly when the report came out... it galvanized... a lot of feelings in the Senate against the insurance industry. It was a last minute tactic that just didn't make any sense."

Source: http://www.huffingtonpost.com/2009/10/1 ... 26197.html

Lessons from Letterman in Health Reform
by Robert Riech
Huffington Post, October 19, 2009

Last January, as I understand it, the White House promised Big Pharma, big insurance, and the American Medical Association the moral equivalent of what Joel Halderman allegedly demanded of David Letterman: hush money. The groups agreed to stay silent or even be supportive of healthcare reform, as long as they were paid off.

But now that it's time to collect, the bill is larger than the White House expected, and it's going to fall like an avalanche on middle class Americans in coming years. That could mean an ugly 2012 election (read Sarah Palin).

So the President has to do what Letterman did: Refuse to pay.

Big Pharma is on the road to getting its deal: not only 25 to 30 million more paying customers, but also a continued ban on Medicare using its bargaining clout to reduce drug prices, a bar on genetic drug manufacturers introducing similar biologic drugs until the originals have been on the market at least twelve years, and no public insurance option to negotiate low drug prices. (Big Pharma did agree to $80 billion of cost cuts over the next ten years, to be sure, but its hush money payoffs far exceeded that sum.)

Big insurance is well on the way to getting what it wants: 25 to 30 million more paying customers (many of them young and healthy), a requirement that almost all businesses "pay or play," and no competition from a public option.

Doctors (that is, the American Medical Association) are on the way to getting what they want: Instead of a temporary patch on scheduled decreases in Medicare reimbursements to them, a permanent fix that would change the reimbursement formula altogether and reward them $240 billion over the next ten years.

But when they all get paid off, who will do the paying? Middle-class

Americans who are already in a financial squeeze -- whose wages are lower, adjusted for inflation, than they were thirty years ago, and whose jobs are disappearing. They'll face still higher premiums, co-payments, and deductibles; and they'll pay higher drug prices, Medicare premiums, and taxes to cover the rest.

That's because these payoffs make it next to impossible to contain the wildly escalating costs of health care. And 25 to 30 million additional Americans will be covered.

The only thing in the emerging bills that's related to cost containment is a proposed excise tax on so-called "Cadillac" insurance plans, priced over a certain threshold amount (the threshold is now up for grabs). But because the costs of health care are likely to rise faster than inflation, whatever the threshold, the middle class will get socked again. So Obama has to forcefully weigh in with Nancy Pelosi and Harry Reid as the two try to cobble together passable bills for each chamber -- demanding real cost containment.

The three big means of containing costs: (1) A true public option (better yet, one that allows anyone now holding private insurance to opt into; (2) authority for Medicare to negotiate low drug prices; and (3) lower Medicare reimbursement rates to doctors (in other words, no "doctor fix").

In addition, the so-called "medical exchanges" in the emerging bills (as well as the public option, which hopefully will be included) should give preference to pre-paid heathcare plans, like Kaiser Permanente, whose doctors are on salary and have every incentive to keep people healthy rather than charge for more services and tests.

But if Obama doesn't weigh in forcefully and say "no" to the hush money for Big Pharma, big insurance, and the AMA, America's middle class will get walloped. And if the walloping starts before 2012, Sarah Palin or some other right wing-nut populist will wallop Obama. And after she or he wallops Obama, America will get walloped even worse.

Source: http://www.huffingtonpost.com/robert-re ... 25557.html

Healthcare bills lack protections against treatment denials, experts say ...
Measures pending in Congress push insurers to keep down costs and cover all regardless of health. That leaves the firms with a big cost-containment tool: refusing requests to cover treatments.
by Lisa Girion
Los Angeles Times, October 19, 2009

Despite growing frustration with the way health insurers deny medical treatments, major healthcare bills pending in Congress would give patients little new power to challenge those sometimes life-and-death decisions.

"Right now, the deck is stacked against patients," said Bryan Liang, director of the Institute of Health Law Studies at California Western Law School in San Diego. "Healthcare reform is not going to change the ball game."

Yet a patient's ability to fight insurers' coverage decisions could be more important than ever because Congress, in promoting cost containment and price competition, may actually add to the pressure on insurers to deny requests for treatment.

By requiring insurers to cover everyone, regardless of pre-existing conditions, healthcare reform will make it more difficult for insurers to control their costs, or "bend the cost curve," by avoiding sick people.

That leaves insurers with the other big cost-containment tool: turning down requests to cover treatments.

"There are going to be a lot of denials," said insurance industry analyst Robert Laszewski, a former health insurance executive. "I am not setting insurance companies up to be villains. But we are telling them to bend the cost curve. How else are they going to bend the cost curve?"

Experts said the legislation under consideration does not significantly enhance patient protections against insurers refusing to cover requests for treatment. Most people currently have no right to challenge health insurers' treatment decisions by suing them for damages.

Patient advocates point to the continuing struggle of Hilda and Grigor Sarkisyan, whose daughter Nataline died in 2007 when insurance giant Cigna Corp. refused to cover a liver transplant.

The parents' wrongful-death suit against Cigna over the transplant denial was thrown out this year by a federal judge, who cited a 1987 U.S. Supreme Court decision involving the Employee Retirement Income Security Act. That ruling said ERISA bars suits for damages over health benefit decisions.

The ruling affects 132 million people who get insurance through employers.

The Sarkisyans traveled to Washington a couple of months ago to try to persuade members of Congress to undo the ERISA ruling and allow people with job-based coverage to sue for damages.

The healthcare reform bill pending in the House would extend that right to anyone who buys coverage through one of the health insurance exchanges it envisions. That could include small businesses.

But the legislation does not remove the barrier to such suits by people in the employment-based insurance market.

Insurers and employers strongly support the ban. They say any increase in litigation would drive up costs and could force some employers to drop health benefits.

But some members of Congress said the Sarkisyans' case illustrates why change is needed. They said patients would be better protected if insurers feared the possibility of a lawsuit over their treatment coverage decisions.

Rep. Brad Sherman (D-Sherman Oaks) said the ERISA ruling had created an "unbalanced set of incentives" for insurance companies.

"If they fail to fund an operation and then it turns out the operation would not have been useful and wasn't necessary, the patient lives and they save money," he said. "But if they fail to fund an operation and it turns out the patient dies, their liability is extremely limited."

Rep. Adam B. Schiff (D-Burbank), who met with the Sarkisyans in Washington, said it was not clear that Congress intended ERISA to bar damage suits against health insurers.

"They are the only industry in the nation that has that kind of immunity from potentially very wrongful conduct," he said. "It is a real problem."

Still, Schiff said there were not enough votes to overcome industry support for the ERISA ruling.

But a government-sponsored health insurance option could be an antidote, he said.

The so-called public option, though controversial, was not included in the bill approved by the Senate Finance Committee last week. But it is still under consideration in the House, where Speaker Nancy Pelosi (D-San Francisco) favors it.

The idea is that private insurers would be forced to compete with the public option on price and service, which includes the ease with which patients can get needed treatment paid for.

"Companies would be that much more scrupulous to ensure they provide the care necessary, because if you establish the reputation for denying care, there are not many buyers wanting your plan," Schiff said.

Another pair of liver transplants illustrate how that might work.

UCLA doctors told Ephram Nehme, a San Fernando Valley produce market owner, that he could die waiting for a liver in California and encouraged him to go to Indiana, where waits were much shorter. But Nehme's insurer, Anthem Blue Cross of California, refused to pay for an out-of-state operation.

Fearing for his life, Nehme paid $205,000 out of his own pocket for the 2007 operation at Clarian Transplant Center in Indianapolis.

But if Nehme, now 61, had been on Medicare, the public insurance plan for people 65 and older, his Indiana transplant would have been covered.

That's what happened last year to Glen Ossiander, a retired Pacific Palisades artist. Like Nehme, Ossiander was being treated for hepatitis at UCLA. Like Nehme, he needed a transplant. And, like Nehme, he faced a long wait. And, like Nehme, he moved temporarily to Indianapolis where he underwent the transplant operation within two weeks at Clarian.

That's where the similarities end. Ossiander's operation was covered, without a hitch -- mostly by Medicare but also by his Medicare supplemental insurance provider, Anthem Blue Cross.

Ossiander, 68, who knew his hepatitis might eventually require a transplant, said he was relieved when he turned 65 because he knew it would be covered.

"As soon as I got onto Medicare, the hospital and everybody said, 'You really don't have anything to worry about now,' " he said. "You are on Medicare."

Sen. John D. Rockefeller IV (D-W.Va.) said he planned to fight for a public option as the debate moves to the full Senate because insurers have "failed to meet their obligations to the American people."

"We've seen all the insurance industry tricks -- hiding rules in fine print, cutting people off when they get sick, and refusing to pay for necessary treatment because of pre-existing conditions," he said in a statement. "This is why I am fighting for a public option -- we need an insurance option out there that puts people first, not profits. We need a real public option, one that competes with private insurance companies to keep them honest and accountable."

Source: http://www.latimes.com/business/la-fi-p ... full.story

The Real Lesson from Health Care Reform
by William A. Smith
Huffington Post, October 14, 2009

In my decade-plus of working in Washington on policy matters, I've followed more bills than I care to remember. But this time around, the healthcare reform debate strikes me as different. Maybe it is what it says about what we as a people value...or don't. With the Senate Finance Committee having finally voted out a bill that seems the source of consternation for many, a fundamental lesson is emerging from the entire spectacle that warrants our attention.

The lesson is not that this has been a messy process that needs fixing. Indeed, it is supposed to be a long and messy process. Profound change in representative democracies is a test of fortitude and always comes by way of gradualism. The Founders intended it to be so and for better or worse - my own sense is for the better - the structures and institutions that were set into place more than two centuries ago and have matured since, help ensure that, to use Madison's phrasing, we are not "decreeing to the same citizens, the hemlock on one day, and statues on the next."

No, the big lesson is that this same system stymies our ability to advance additional notions of rights that lie outside of our founding documents. No truer an example can be found than that of healthcare. What has become abundantly clear is that Americans just still do not buy into the notion that healthcare is a right. Plain and simple. When citizens and elected officials alike vocally oppose a so-called public option, the underlying premise is that this remains an affair for the marketplace, not the realm of politics.

The problem, of course, is that we already have a public option. It is when people show up at the emergency room and receive care regardless of their ability to pay. At some level, this example underscores the moral dimension of this debate to the core. It would be immoral to deny someone care who shows up at an emergency room with serious health issues and our society recognizes and compels that care in many, many instances. This is a moral judgment in practice, but whose articulation in our nation's debate seems non-existent. Yet, it is entirely relevant because after all, moral judgments and frameworks are the natural pathway to securing rights.

We had a moment at the end of the summer where the Administration began to use moral language to muster support for its efforts. It disappeared into the ether without notice and again, the discussion shifted to money. However, if we are to actually win and secure healthcare for all, it is precisely the moral argument that needs to be front and center.

Let me give you an example. How in the world was it decided that the guarantee of coverage for all would be the "public option." What a silly and technical term to describe what is, in its essence, a moral vision for how our society ought to approach healthcare. It put the debate on the typical grounds of the scope of federal powers in our limited scheme of government and to that extent, provided the embers for yet another firestorm between small government conservatives and liberals who see a more expansive role for government. Did we learn nothing from this same framing of the debate during the Clinton years?

We will never know if a deliberate and consistent moral framing may have won the day, but imagine if the guarantee of coverage was called "the moral society option" or some such term that communicated an entirely different message. Imagine the hypermoralistic social conservatives having to engage that discussion. That is the real nexis of the debate but we lost it entirely.

This is the lesson of healthcare reform in 2009; we have to communicate a morally persuasive argument that sways the public and our representatives and we have yet to do so. Lest one jump to the conclusion that the simple solution would be a campaign trumpeting "healthcare as a human rights" mantra, that too is wrongheaded.

I have often counseled my liberal friends to read the conservative scholar Mary Ann Glendon's brilliant work, Rights Talk. Glendon's great insight is that we have become so sloppy in tossing about rights-based language that it increasingly rings hollow and fails to carry with it the inherently moral message that is at the roots of the conception of rights itself. More sloppy "rights talk" merely serves to further impoverish our rights-based discourse and further alienates the need for all Americans to have a heartfelt belief that it is a special type of discussion. In other words, the magic is gone from the word and we, ourselves, are in many ways to blame.

So, I think she has the diagnosis nailed down - uncomfortable as it may be for many of us. But what is the way forward? Here is where I return to the lament about the lack of consistent and penetrating moral framework to our domestic discussion about healthcare. Moral language is the bridge back to securing rights and reviving the special sense in the American consciousness that the term ought to inspire. They are not mutually exchangeable terms or frames of reference. Further, morals lead to rights, not the reverse. Positing rights language without first successfully providing the moral argument perhaps serves short term advocacy goals, but in the end, creates a hollow shell that is ultimately difficult to defend. And here is where we find ourselves.

In the present, it has become clear that whatever results from these many months of debate on healthcare will be wholly insufficient to attain universal access for all. The lesson we take forward must be that concerted efforts must be made to frame securing universal healthcare coverage as moral issue for a moral society. Perhaps then, the next law will have a better chance of securing and codifying the "right" to healthcare for our posterity.

Source: http://www.huffingtonpost.com/william-a ... 20590.html

GOP Launches Strategy to Trip Up Health Bill
By David M. Drucker
Roll Call, October 19, 2009

Senate Republicans, acknowledging they lack the votes to block a health care reform bill outright, have implemented a comprehensive political strategy to delay, define and derail.

With Democratic leaders and White House officials holed up in Senate Majority Leader Harry Reid’s (D-Nev.) office negotiating a final bill, Republicans are demanding a deceleration of the process and moving to define whatever plan that emerges as a combination of Medicare cuts, tax increases, higher insurance premiums and rising overall costs.

“Where they’re headed is inconsistent with the American people, so I’m not sure it’s as much about us as it is about making sure that the American people express their deep concerns over this,” Sen. Richard Burr (R-N.C.) said last week. “Certainly they’ve got the votes, but they’re going to have to hold every one of them in the United States Senate to make it through this.”

Senate Democrats are rejecting Republicans’ demands to slow things down, charging that the GOP isn’t interested in working with the majority to craft a bipartisan health care bill. Rather, Reid said repeatedly last week, the Republicans’ primary goal is to sink reform in order to undercut President Barack Obama.

Negotiations on a final Senate bill are set to resume today with Reid, Finance Chairman Max Baucus (D-Mont.), Sen. Chris Dodd (D-Conn.) and senior White House officials. Republicans have not been invited to participate in the talks, although Reid said Thursday that he has reached out to a few GOP Senators and is likely to consult moderate Sen. Olympia Snowe (Maine). Snowe was the lone Republican last week to support the Senate Finance Committee’s version of a health care overhaul.

“There are challenges that lie before us because the Republicans are going to insist that we do it alone,” Reid told reporters.

Unable to mount a filibuster on their own and calculating that Democrats are on track to send a health care bill to Obama by year’s end, Senate Republicans figure the only way to stop or reshape the measure is to give the public enough time to figure out what’s in it and what they don’t like about it.

Doing that is going to take some time, and the process of amending bills during a floor debate — which can include demanding a 60-vote threshold for all amendments — could provide the minority ample opportunity to slow things down. Republicans could also benefit from some built-in delays, including the fact that Democratic leaders have said they’d like to wait for a Congressional Budget Office cost estimate on the bill before beginning debate.

This process could repeat itself when the chamber prepares to consider the final House-Senate conference report. Earlier in the year, Republicans were hoping that Democratic divisions would do to Obama’s health care agenda what the GOP can’t, but they no longer expect moderate Democrats to stand in the way of passage — even one that includes a public insurance option.

“The votes are the reality, so the only way you win this thing if you’re in our camp is if the American people are completely on your side,” a senior Republican Senate aide said. “To have a positive outcome and get back to doing what we think is good for our health care system, we need to have the American people understand this thing.”

And just in case that isn’t enough, Republican leaders last week began playing the process card, accusing the Democrats of backroom dealing and rushing to pass a bill before the public can figure out what’s really going on. Senate Minority Leader Mitch McConnell (R-Ky.) is demanding the final package be posted on the Internet for “a minimum” of 72 hours prior to being introduced on the floor.

“Right down here in the Majority Leader’s conference room they’ll be writing the real bill,” McConnell told reporters last week, adding: “Once it’s on the floor, what is a reasonable amount of time to spend in the United States Senate debating one of the most important issues we could ever have before us?”

McConnell said Republicans are going to “insist” on several weeks of debate and argued an issue like health care — equivalent to 20 percent of the national economy — deserves more than the four weeks accorded the most recent farm bill and at least as much time as the seven weeks given the No Child Left Behind education reform effort and the eight weeks given to an energy bill earlier this decade.

The Republicans also plan to use the time between now and a final floor vote to deliver a narrowly focused message via a series of floor speeches, press conferences and media appearances. And even though GOP Members will discuss their counterproposals for health care reform, criticism of the Democratic bill will be the priority.

Obama has said he will not sign a health care bill that costs more than $1 trillion over 10 years and adds to the federal deficit. But even if the final Senate bill meets these requirements, as the $829 billion Finance package does, Republicans are prepared to pounce. The final measure will be some combination of the Finance package and competing legislation approved by the Health, Education, Labor and Pensions Committee.

The GOP will argue that no bill that relies on tax or fee increases can be considered deficit-neutral. Additionally, they will push to enlist the opposition of the all-important seniors vote — seniors are reliable voters, particularly in midterm election years — by continuing to flog the Medicare cuts that Republicans believe will be a part of any final bill.

Republicans also intend to try to personalize the issue, charging that the Democratic health care agenda will raise insurance premiums on individuals and families, while failing to lower the overall amount of money that the U.S. spends on health care.

The GOP made those arguments last week about the Finance package, even though the nonpartisan CBO predicted the bill would reduce the deficit, even as it extends coverage to millions of uninsured Americans. However, the bill is deficit-neutral in part because it raises revenue from taxes and fees on the medical industry and gold-plated health care insurance plans.

“I don’t know how you can characterize anything as reform that raises premiums, raises health care costs, raises taxes and cuts Medicare for seniors,” Senate Republican Policy Committee Chairman John Thune (S.D.) said.

Correction: Oct. 19, 2009
The article incorrectly stated that the health care reform bill approved by the Senate Finance Committee would lower the cost curve of the U.S. health care system. According to Finance Committee testimony by Congressional Budget Office Director Douglas Elmendorf, while the Finance bill is projected to lower the federal deficit by $81 billion over the first 10 years, it remains unclear whether the bill would reduce health care expenditures during that time frame.

Source: http://www.rollcall.com/issues/55_42/ne ... tml?page=1

Show 391: "More Is Less" 10/9/09

Show site with link to Audio of this must-listen one hour radio program: http://www.thisamericanlife.org/Radio_E ... sched=1320

An hour explaining the American health care system, specifically, why it is that costs keep rising. One story looks at the doctors, one at the patients and one at the insurance industry.

Prologue.
Former Bush Administration official David Frum explains a very surprising fact about Bush's economic failure, as it relates to health care. Frum is a regular contributor to the radio show Marketplace. (5 minutes)

Act One. Dartmouth Atlas Shrugged.

Are doctors to blame for the rising costs? NPR Science Correspondent Alix Spiegel reports on the shocking results of studies about varied health care spending. Hear more health care stories this week from Alix at npr.org. (18 minutes)

Act Two. Every CAT Scan has Nine Lives.

Or is the problem the patients? Producer Lisa Pollak reports. (12 1/2 minutes)

Act Three. Who Would Win in a Fight Between a Polar Bear and an Insurance Company?

Or maybe the insurance companies are to blame? Producer Sarah Koenig reports. (12 1/2 minutes )

Act Four. Now What?

Host Ira Glass talks with Susan Dentzer, editor of the journal Health Affairs, about what current health reform proposals do to fix the rising costs of healthcare...And points at a surprising, kind of heartening phenomenon happening within the current debate. (6 minutes)

Song: "Doctor My Eyes," The Jackson Five

AND ...

Show 392: "Someone Else's Money" 10/16/09

Link to show page with Audio of this additional one hour program:
http://www.thisamericanlife.org/Radio_E ... sched=1321

This week, we bring you a deeper look inside the health insurance industry. The dark side of prescription drug coupons. A story about Pet Health Insurance, which is in its infancy, and how it is changing human behaviors—for example, if you have the pet health insurance, you bring your pet to the vet more often, and the vet makes more money and...well, you can see the parallels. And insurance company jargon, frighteningly decoded.

In Netherlands, Insurers Compete Over Quality of Care

In the first of a series on health care abroad, Ray Suarez looks at how the Netherlands achieved a massive health care overhaul four years ago.

JIM LEHRER: Next tonight, our global health unit begins a series of reports on the ways other countries are delivering health care. Ray Suarez has the first of two stories on the Netherlands, where the government recently shook up health care.

RAY SUAREZ: Every September, Queen Beatrix of the Netherlands travels in a gilded coach from her palace to the Dutch parliament a few blocks away. The streets of the capital are packed with her subjects, dressed to honor the country's royal House of Orange.

By world standards, the Dutch are wealthy and healthy, but the country's changing. With each year, it's home to more Dutch elderly and more young immigrants from the developing world.

The queen opened a parliament once again wrestling over health care, still trying to contain costs after a massive overhaul designed four years ago.

Abraham Klink is the Dutch minister of health.

DR. ABRAHAM KLINK, minister of health, Netherlands: Health care had to be accessible and affordable to everyone, but on the other hand, there had to be competition. What we did the last years is to make -- to create an infrastructure in which the insurance companies can make a difference and make a difference on the side of quality and the side of prices.

RAY SUAREZ: What the Netherlands did is require everyone to buy health insurance and hand over what was a system of public-private health care coverage to private insurance companies.

When the Netherlands redesigned its national health care system in 2006, there were three main goals: continue universal coverage, unleash competition between private insurers, and keep down costs for the long run.

Every citizen is required to buy a basic package that typically costs about $160 a month. The insurance companies are required to offer the same prices to all customers, regardless of age or medical history. Low-income residents have their premiums subsidized. Health care shoppers can choose to pay more for coverage, for things like dentistry, cosmetic surgery, or physiotherapy.

RINA NOPPEN: You always can choose for a basic health care, and one star, two star, three stars, four stars. If you choose for four stars, everything is...

RAY SUAREZ: Covered?

RINA NOPPEN: Everything's covered.

Roger Van Boxtel CEO, Menzis

There can be no discrimination if you're ill or old or young. We have to accept everybody. And I think that is one of the big differences with the United States. We have a level playing field, and we have to compete.

No discrimination

RAY SUAREZ: The government challenged the insurance business. The thinking goes, since they can no longer compete on price, the companies will have to fight to keep customers based on the quality of care. Roger van Boxtel is CEO for Menzis, one of the Netherlands' biggest insurers.

ROGER VAN BOXTEL: There can be no discrimination if you're ill or old or young. We have to accept everybody. And I think that is one of the big differences with the United States. We have a level playing field, and we have to compete. We have to do our best to have good prevention programs, to innovate, and to buy health care with the providers, the GPs, the hospitals, the physical therapists. We make contracts with them every year, and we're seeking for the highest quality and the most efficient price.

RAY SUAREZ: In fact, Menzis now offers a ranking on top hospitals and doctors for its customers, which is exactly what the government was hoping for.

DR. ABRAHAM KLINK: I see so many people who want to know that, if they have to go to the hospitals, for example, for heart diseases or heart failure, they want to know what quality is. And only those people, which are in the inner crowd of the hospitals or the policy making, they know what the quality differences are. And what I want them to know, all the people, I mean, is what hospital is the best and which general practitioner is best.

RAY SUAREZ: Since expensive-to-treat patients can't be turned away by insurance companies, what if one company ends up with way more diabetics, cancer patients, Alzheimer's suffers? The government runs what's called a "risk equalization fund," which reimburses insurance companies for each high-risk patient it takes on.

Anne-Marie Bigby is one such patient. In May, Bigby was diagnosed with breast cancer. She had recently switched her insurance to the cheapest basic coverage package. Still, she says, her treatments have been fully paid for and began as soon as she discovered a problem.

ANNE MARIE BIGBY: The total span of when I discovered the lump, went to my G.P. on Monday. I was in here on Thursday. And within, I think, 7 to 10 days from that, I was receiving my first chemo.

Barry Van Driel

We were extremely worried about money and our finances in the United States, and that created a lot of stress. I don't have that concern anymore. There are other concerns, but not that.

Americans seek refuge abroad

RAY SUAREZ: So far, Bigby is pleased with her coverage, but if for some reason she decides to switch companies, no insurance companies could turn her down or charge her extra for her illness.
Coverage for expensive therapies is so attractive, it's lured some to take up residence in the Netherlands. Five-year-old Tilo van Driel's parents moved from the United States. Tilo has autism.

Like most with the disorder, Tilo has trouble communicating with others. His ongoing, lifelong therapies are extremely expensive. Here, at the autism center in the Hague, Tilo is taught to better react to his environment.

DORRIT ONTROP, Centrum Autisme: It's best to have a very intensive program for these children. Most of the time, they get, like, an hour or two hours in a week treatment at the center, but we also focus on teaching parents how they can practice skills with their children, so they can do that in daily life.

RAY SUAREZ: Tilo's parents, Barry and Fiona, moved to the Netherlands so they could afford Tilo's care. Barry is Dutch; Fiona is American. The couple was living in the United States when they began to suspect Tilo was autistic.

BARRY VAN DRIEL: We didn't feel we had a choice. We felt we had our backs against the wall financially. We felt that we did have some money in savings, but not very much, and we felt that we were one treatment away from being bankrupt there.

We were extremely worried about money and our finances in the United States, and that created a lot of stress. I don't have that concern anymore. There are other concerns, but not that.

RAY SUAREZ: Because they have dual citizenship, the family qualified for coverage. Not only are Tilo's intensive therapies covered, the family also gets support at home and cash for babysitters.

FIONA PASSANTINO: We basically have this personal budget, which would cover up to 8 hours a week of somebody coming into the house and helping us out with day-to-day things, getting him dressed, getting him, you know, on the potty, helping watch him while we take care of business and so on, and then we can go out, and we can go out for overnights, and that's all covered by the government, essentially.

Dr. Else Borst, Dutch Cancer Federation

From the patient's point of view, you're always in a hurry. If there is a new treatment for breast cancer, you want it tomorrow for all breast cancer patients in this country, and not within half a year.

New system breeds bureaucracy

RAY SUAREZ: The architect of Netherlands' new health care system, former Health Minister Dr. Elsa Borst, says she's pleased with the way the new system has unfolded, but she has some concerns. She's now head of the Dutch Cancer Patients Federation.

Borst worries about whether Dutch patients are quickly getting the latest cancer drugs. New treatments have to be approved by the government not only as good medicine, but as cost-effective treatment.

DR. ELSE BORST: It's just that there is such a lot of big bureaucracy always, because drugs only are reimbursed in our new health care insurance system when they have been proved to be effective and also cost-effective.

And, well, there are some people looking at that and they take their time. And from the patient's point of view, you're always in a hurry. If there is a new treatment for breast cancer, you want it tomorrow for all breast cancer patients in this country, and not within half a year.

RAY SUAREZ: Even with universal coverage, the Netherlands spends less than half what the United States spends per person on health care. While spending half the money, the Netherlands gets better results. The Dutch have longer life expectancy and lower infant mortality. The average Dutch citizen spends about 7 percent of income on health care, and they seem satisfied with the system. The annual Euro Health Consumer Index puts the Netherlands in first place in a survey of patient satisfaction across Europe.

JIM LEHRER: Ray's next report looks at efforts to contain health care costs in the Netherlands. There's also a comparison of health care systems in five countries -- the Netherlands, but also Japan, Canada, Mexico, and the United States -- on our Web site, newshour.pbs.org.

Source: http://www.pbs.org/newshour/bb/health/j ... 10-06.html

Going Out of Business?
FactCheck.Org, October 7, 2009

A new ad goes too far when it says Medicare will be "bankrupt" in eight years.

Summary
A new health care ad from a conservative group claims that "Medicare will be bankrupt in eight years." That gives a false impression. The program does have huge financial problems, but there’s no reason to think it’s going out of business as the word "bankrupt" implies. And the issue isn’t new:

A government report the ad refers to says the trust fund for one part of Medicare – hospital insurance – won’t have enough money to pay all benefits in 2017. Medicare’s physician and drug benefits will "remain adequately financed," says the report.

Government projections have found that the hospital insurance trust fund would face a shortfall "almost from its inception," according to the Congressional Research Service. But in many cases politicians have found ways to extend it. In 1970, for instance, the trust fund was expected to be insolvent in 1972.

The ad also claims that "some want to pay for health care reform with $500 billion dollars in Medicare spending cuts." Actually, the House health care bill, to which this refers, proposes a net cut in spending of $219 billion over 10 years.

Analysis

The conservative group Americans for Prosperity has released a new 60-second ad through its Patients First project. The ad, which features a family doctor, Dr. Amy Siems, talking to viewers, recycles a few misleading talking points against health care legislation in Congress, but includes a new claim that is quite startling. Dr. Siems says that "Medicare will be bankrupt in eight years."

<embed src="http://blip.tv/play/hIUWgaWvNAI" type="application/x-shockwave-flash" width="480" height="390" allowscriptaccess="always" allowfullscreen="true"></embed>

Bankrupt? Within a Decade?

Yikes. Quite a scary claim to make about a program that encompasses 16 percent of the federal budget and benefits 45 million Americans. But the word "bankrupt" is far too strong to accurately describe Medicare’s problems.

The AFP/Patients First ad points to a government report as the source of its claim, and that report does say Medicare’s "[p]rojected long run program costs are not sustainable," and that its problems are even more severe than those of Social Security. The report says further that the trust fund for one part of Medicare – hospital insurance – is projected to be insolvent in 2017, and calls that "an urgent concern." But that’s not the same thing as being "bankrupt," and it only applies to one of four distinct parts of the overall Medicare program. As the Social Security Administration explains:
Hospital insurance (Part A) pays for inpatient hospital services, skilled nursing facility care and hospice care.

Medical insurance (Part B) covers physician services and medical supplies not paid for by Part A.

Medicare Advantage (Part C) is an option to receive benefits through a private insurance company.

Part D is Medicare’s prescription drug coverage.

The ad refers to the Social Security and Medicare Boards of Trustees 2009 Annual Report, which indeed makes some dire predictions for Medicare Part A, the segment that’s in danger of running out of money. Part A relies primarily on payroll taxes and its trust fund, or reserves, to pay for benefits. Parts B and D, meanwhile, funded by general revenues and monthly premiums, "are both projected to remain adequately financed into the indefinite future," according to the report. (The trust fund for those segments, though, "will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.")

Funds for Part A will only be able to pay 81 percent of the projected spending in 2017, and less each year after that, according to the trustees’ estimates:

Trustees Report: The projected date of HI [Hospital Insurance]Trust Fund exhaustion is 2017, two years earlier than in last year’s report, when dedicated revenues would be sufficient to pay 81 percent of HI costs. Projected HI dedicated revenues fall short of outlays by rapidly increasing margins in all future years.

The report goes on to say that the HI trust fund "could be brought into actuarial balance over the next 75 years" by either significantly increasing the payroll tax which funds it, cutting spending by half, or a combination of those measures. "Larger changes would be required to make the program solvent beyond the 75-year horizon," the report says.

But warnings of depleting the HI trust fund aren’t new. In a 2008 report, the Congressional Research Service wrote that "almost from its inception, the HI trust fund has faced a projected shortfall. The insolvency date has been postponed a number of times, primarily due to legislative changes which had the effect of restraining growth in program spending." Indeed, a 1983 report from the Senate’s Special Committee on Aging forecasted that:

Senate Special Committee on Aging, 1983 report: Balances in the HI trust fund are projected to be exhausted during 1987. Though the HI balance was a substantial $18.7 billion at the end of 1981, borrowing by the old-age and survivors insurance trust fund (OASI) reduced the HI balance to $8.3 billion at the end of 1982. … This already low balance is projected to decline slowly through 1986 and rapidly in ensuing years, as outlays exceed income by a widening margin.

And that is hardly the only year in which a government report projected shortfalls just around the corner, as this table, re-created from a CRS report, makes clear:

We don’t mean to say that the projections about the future of the HI trust fund shouldn’t be taken seriously, or that Medicare in general isn’t facing long-term funding issues. But it’s not going to be “bankrupt in eight years.”

The Obama administration has commented on the trustees report several times. Health and Human Services Secretary Kathleen Sebelius called it “a wake up call for everyone who is concerned about Medicare and the health of our economy,” adding that “it’s yet another sign that we can’t wait for real, comprehensive health reform.” And the administration has put forth proposals that it says will extend the life of the trust fund by several years.

We can’t predict whether the Obama administration and Congress will find a way to save the HI trust fund yet again, but judging from the political past, it seems likely.

At the point where the hospital insurance trust fund is expected to run dry in 2017, the current payroll tax is estimated to cover only 81 percent of the projected outlays (compared to 88 percent this year), and less each year after that. In the past, scheduled depletions have been offset by a combination of increased taxes and other funding, as well as decreased payouts. The original HI tax rate was 0.35 percent in 1966 and increased steadily over the next three decades. It is now 1.45 percent on all covered earnings, and both the employee and the employer pay it. Hospitals, meanwhile, accept Medicare payments that are about 68 percent of what private insurance pays, according to the Lewin Group, and in July, hospitals agreed to cutting $155 billion in Medicare and Medicaid over 10 years, primarily through adjusting annual payment increases.
Other Claims

We’ve examined ads from Patients First and its parent group, Americans for Prosperity, before, and they’ve put forth the same straw man argument: that Congress wants a Canadian- or British-style health care system. As we’ve pointed out in several articles, that’s not what the legislation in Congress would set up. As evidence, the back-up for this ad includes a column in the Tucson Citizen that repeats falsehoods we’ve already debunked about the stimulus bill, which was passed in February.

The group’s support also includes several articles about patients in Canada waiting for specialist appointments, MRIs and even surgeries. It’s Dr. Siems’ opinion that this amounts to a “system that has already failed.” Others would disagree, such as a Canadian scientist quoted in a 2007 article that’s among the group’s back-up: " ‘Canada is not a medical utopia, as some would have you believe, or a disaster, as others claim,’ said Jack Tu, a senior scientist at the Toronto-based Institute for Clinical Evaluative Sciences and co-author of a recent study on waiting times. ‘Most people get care in a reasonable amount of time. What you hear about are the horror stories.’ "

But a debate on whether or not the system has “failed” north of our border is irrelevant. The health care legislation in Congress doesn’t amount to “forcing Americans” into such a system, anyway.

The doctor in the ad also says that "some want to pay for health care reform with $500 billion in Medicare spending cuts.” But that’s more than double the net amount the House legislation proposes to save from Medicare. It’s true that the House health care bill calls for getting $500 billion in savings out of Medicare, but its substantial increases in Medicare spending reduce the net amount cut from the program to $219 billion over 10 years, according to the Congressional Budget Office.

– by Justin Bank and Lori Robertson
Sources
“Financing Medicare: An Issue Brief.” The Kaiser Family Foundation. Jan 2008.
Medicare, SSA Publication No. 05-10043. Social Security Administration. Sep 2009.
Status of the Social Security and Medicare Programs. A Summary of the 2009 Annual Reports. Social Security and Medicare Boards of Trustees. 2009.
“Prospects for Medicare’s Hospital Insurance Trust Fund.” Special Committee on Aging, United States Senate. Mar 1983.
O’Sullivan, Jennifer. “Medicare: History of Part A Trust Fund Insolvency Projections.” Congressional Research Service. 28 Mar 2008.
Department of Health and Human Services. Sebelius Statement on New Medicare Trustees’ Report, news release. 12 May 2009.
WhiteHouse.gov. Paying for Health Care Reform, Medicare fact sheet. Accessed 7 Oct 2008.
Congressional Budget Office. Letter to Rep. Charles B. Rangel. 17 Jul 2009.
Davis, Henry L. “Is universal health care worth waiting for?” Buffalo News. 29 Jul 2007.

Source: http://newstrust.net/stories/279260/toolbar

The Lie Machine
by Tim Dickinson
Rolling Stone, September 23, 2009

GOP operatives are running a secret campaign to kill health care reform, and it's based on Karl Rove's old playbook

Read Tim Dickinson's full story in the new issue of Rolling Stone, on stands now.

On the first day of August, a mob of 200 right-wing Texans stormed the parking lot of a Randalls grocery store in southwest Austin. They were united in a single goal: Disrupt the "office hours" that Rep. Lloyd Doggett, the district's congressman, had scheduled for his constituents. The protesters targeted Doggett for his role in crafting the House's bill to reform health care, brandishing signs that read "No Government Health Care" and "No Government Counselor in My Home!!!" But their anger seemed to encompass a universe of conservative fears: higher taxes, illegal immigration, socialism. The threat of violence was thinly veiled: One agitator held aloft a tombstone with the name Doggett. Screaming, "Just say no!" the mob chased Doggett through the parking lot to an aide's car — roaring with approval as he fled the scene.

Conservatives were quick to insist that the near-riot — the first of many town-hall mobs that would dominate the headlines in August — was completely spontaneous. The protesters didn't show up "because of some organized group," Rick Scott, the head of Conservatives for Patients' Rights, told reporters. "They're mad about the stimulus bill, the bailout, the economy. Now they see that their health care is about to be taken over by the government."

In fact, Scott's own group had played an integral role in mobilizing the protesters. According to internal documents obtained by Rolling Stone, Conservatives for Patients' Rights had been working closely for weeks as a "coalition partner" with three other right-wing groups in a plot to unleash irate mobs at town-hall meetings just like Doggett's. Far from representing a spontaneous upwelling of populist rage, the protests were tightly orchestrated from the top down by corporate-funded front groups as well as top lobbyists for the health care industry. Call it the return of the Karl Rove playbook: The effort to mobilize the angriest fringe of the Republican base was guided by a conservative dream team that included the same GOP henchmen who Swift-boated John Kerry in 2004, smeared John McCain in 2000, wrote the script for Republican obstructionism on global warming, and harpooned the health care reform effort led by Hillary Clinton in 1993.

"The insurance industry is up to the same dirty tricks, using the same devious PR practices it has used for many years, to kill reform," says Wendell Potter, who stepped down last year as chief of corporate communications for health insurance giant CIGNA. "I'm certain that people showing up at these town halls feel that they're there on their own — but they don't realize they're being incited, ultimately, by the insurance industry and the other special interests."

Behind the scenes, top Republicans — including House Minority Whip Eric Cantor, Minority Leader John Boehner and the chairman of the GOP's Senate steering committee, Jim DeMint — worked hand-in-glove with the organizers of the town brawls. Their goal was not only to block health care reform but to bankrupt President Obama's political capital before he could move on to other key items on his agenda, including curbing climate change and expanding labor rights. As DeMint told an August teleconference of nearly 20,000 town-hall activists, "If we can stop him on this, the administration won't be able to go on to cap and trade, card check and the other things they want to do."

WRITING THE SCRIPT

The campaign to mobilize the town-hall mobs began with a script written by the right's foremost fearmonger, Frank Luntz. Luntz rose to fame in 1994 as pollster for Newt Gingrich's Contract With America, and crafted the Republican playbook on global warming. In a May memo, Luntz outlined a battle plan for conservatives to block what he branded the "Washington takeover" of health care — the most terrifying buzz words conjured up in his polls and focus groups.

The logic of the language is simple, Luntz writes: "Takeovers are like coups — they both lead to dictators and a loss of freedom." For a third of all Americans, he adds, the top worry about health care reform is "being denied a procedure or medication because a Washington bureaucrat says no." Luntz concludes by telling Republicans how best to play the fear card. "It is essential that 'deny' and 'denial' enter the conservative lexicon immediately," he writes, "because it is at the core of what scares Americans most about a government takeover of health care."

Distributed widely to Republicans on Capitol Hill, the memo framed the right-wing attack on health care reform. What Luntz describes as "the best anti-Democrat message" is by now familiar to everyone in America: "No Washington bureaucrat should stand between your family and your doctor... The Democrats want to put Washington politicians in charge of your health care."

For the archenemies of Obamacare, however, Luntz's anti-Washington script didn't go nearly far enough. To amp up the panic, they decided to spin the "takeover" fear to its most extreme conclusion: Washington bureaucrats plan to institute "death panels" that would deny life-sustaining care to the elderly. That portion of the script was drafted by Betsy McCaughey, the former lieutenant governor of New York, who insists that her expertise as a constitutional historian enables her to decipher the 1,017 pages of legalese that comprise the House health care bill.

McCaughey first unveiled her "findings" on July 16th, during an appearance on the radio show of former GOP presidential candidate Fred Thompson. "I have just finished reading the House bill," McCaughey declared. "I hope that people listening will protect their parents from what's intended under this bill." Citing page 425 of HR 3200 — a section that outlines the same kind of optional, end-of-life counseling that Republicans have voted for in the past — McCaughey uncorked a terrifying lie. "Congress," she said, "would make it mandatory — absolutely require that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner." The Obama plan, she added, is financed by "shortening your mother or father's life."

McCaughey has run this con before. During the debate over Clinton's health care overhaul in the early 1990s, McCaughey — then an academic at the right-wing Manhattan Institute — wrote an article for The New Republic called "No Exit," in which she claimed that Hillarycare would prevent even wealthy Americans from "going outside the system to purchase basic health coverage you think is better." Even though the bill plainly stated that "nothing in this Act" would prohibit consumers from purchasing additional care, McCaughey's claim was echoed endlessly in the press, with each repetition pounding a stake further into the heart of the reform effort.

McCaughey's lies were later debunked in a 1995 post-mortem in The Atlantic, and The New Republic recanted the piece in 2006. But what has not been reported until now is that McCaughey's writing was influenced by Philip Morris, the world's largest tobacco company, as part of a secret campaign to scuttle Clinton's health care reform. (The measure would have been funded by a huge increase in tobacco taxes.) In an internal company memo from March 1994, the tobacco giant detailed its strategy to derail Hillarycare through an alliance with conservative think tanks, front groups and media outlets. Integral to the company's strategy, the memo observed, was an effort to "work on the development of favorable pieces" with "friendly contacts in the media." The memo, prepared by a Philip Morris executive, mentions only one author by name:

"Worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part exposé in The New Republic on what the Clinton plan means to you. The first part detailed specifics of the plan."

McCaughey did not respond to Rolling Stone's request for an interview.

ASSEMBLING THE TEAM

Armed with the script prepared by McCaughey and Luntz, a tight coalition of deep-pocketed groups took the lead in mobilizing the town-hall protests. The two primary groups — Americans for Prosperity and FreedomWorks — actually grew out of the 2003 breakup of an outfit called Citizens for a Sound Economy that had been integral in the fight against Hillarycare. Indeed, the same "Tobacco Strategy" memo in which Philip Morris boasts of shaping McCaughey's writings also reveals that the tobacco giant paid Citizens for a Sound Economy to engineer a "grassroots" revolt against health care reform by staging demonstrations in the home districts of key congressmen. "The goal," states the memo, "is to show the Clinton plan as a government-run health care system replete with higher taxes... rationing of care and extensive bureaucracies."

Americans for Prosperity, which has taken the lead in the current fight against reform, is a front group for oil billionaires David and Charles Koch, co-owners of the world's largest private oil and gas conglomerate. The Kochs, who provide much of AFP's budget, have a strange affinity for mock uprisings: Matt Schlapp, one of the original "Brooks Brothers rioters" — the GOP activists who disrupted the Bush-Gore recount in Miami-Dade County — served as Koch's director of federal affairs until earlier this year, orchestrating the firm's political efforts in Washington, and still works closely with the company as a consultant.

To head Americans for Prosperity, the brothers tapped Tim Phillips, one of the Republican Party's most notorious dirty tricksters. Phillips served as a strategic consultant to George W. Bush in 2000 and reputedly took part in the smear campaign in South Carolina that portrayed John McCain's adopted daughter as his mulatto love child. That same year, Phillips was linked to a nearly identical smear campaign in Virginia that portrayed the primary opponent of Rep. Eric Cantor — a Jew — as the "only Christian in the contest." Under Phillips, AFP became a driving force behind the Tea Party protests against Obama's economic stimulus plan, and the group organized the Austin mob that attacked Rep. Doggett. Boosted by the mobilizing effort, AFP now boasts 700,000 members and chapters in 24 states.

The second group behind the town-hall mobs is FreedomWorks, headed by former House Majority Leader Dick Armey. An ideological crusader against the safety net, Armey denounces Medicare as a form of "tyranny" and backed George Bush's attempt to privatize Social Security. At a 2004 event promoting the benefits of private accounts for "regular folks," Bush appeared onstage with a "single mom" from Iowa — who, upon closer examination, turned out to be the Iowa director of FreedomWorks.The stated goal of the group, which has received funding from the archconservative Scaife family and corporations like MetLife, is to become "a grassroots juggernaut capable of going toe-to-toe with the unions, extreme enviros and the MoveOn.org's of the world." Armey, however, unabashedly compares FreedomWorks to a lynch mob. "We used to use the old saying in the West, that you got outta town just one step ahead of the hangman," he says, explaining why George Bush's budget-busting policies didn't inspire the same outrage among his 400,000 followers. "That's pretty much what happened with Bush. And poor old President Obama walked into town, y'know, just at high noon."

After FreedomWorks orchestrated the original Tea Party protests last April, it ostensibly handed over the reins of the movement to a third group, called the Tea Party Patriots. But internal correspondence from the group's private listserv obtained by Rolling Stone makes clear that FreedomWorks is still calling the shots. In June, after activists on the list began advocating to change a Tea Party logo, a top official from FreedomWorks stepped in and shut down the discussion. "I talked to everyone here," wrote Brendan Steinhauser, director of federal and state campaigns for FreedomWorks, "and there was consensus that we will keep the logo."

The Tea Party Patriots listserv also disseminated the playbook used to instruct the town-hall mobs in the tactics of disruption. Titled "Rocking the Town Halls — Best Practices," the guide was written by a Connecticut tea partier named Bob MacGuffie, who outlined how fewer than three dozen activists could effectively silence a U.S. congressman. "The goal is to rattle him," the memo states. "Yell out and challenge the Rep's statements... have someone else follow-up with a shout-out. Set the tone for the hall as clearly informal and free-wheeling. It will also embolden others who agree with us to call out." In a listserv posting on June 13th, an organizer with the Tea Party chapter in New Haven brought the memo to the attention of Jenny Beth Martin, the national coordinator of Tea Party Patriots. "Hey folks!" the organizer wrote, attaching a copy of MacGuffie's memo. "We here in CT have developed a strategy for holding our elected officials accountable. We show up en mass at the 'town hall' meetings they have!"

Martin immediately knew she'd struck gold. "Showing up en mass at town hall meetings is very good strategy," she replied. "We want to make sure they feel the heat about these government-run health care bills that will be coming out of committees soon." Within three weeks, a July 7th e-mail from Martin reveals, the group had appointed a "Nationwide Town Hall Coordinator" to oversee the protests. The goal was straight from the Luntz script: to use the town halls "to inform American Taxpayers of what the implications are if government bureaucrats take over our health care."

The fourth group behind the town-hall protests, Conservatives for Patients' Rights, has direct connections to the health care industry. Its founder, Rick Scott, is the former CEO of Columbia/HCA, the world's largest hospital conglomerate. Scott was ousted from the company after it was caught overbilling taxpayers for Medicare treatment; it eventually pleaded guilty to criminal fraud and paid a record $1.7 billion in penalties. Scott now runs a chain of urgent-care clinics that serve uninsured Americans fearful of being bankrupted by hospital emergency-room visits. "He is one of those people who's gotten very, very, very rich off of sick people," says Potter, the former CIGNA executive. "He doesn't want that cash cow to go away — so that's why you're seeing all his money there."

Indeed, Scott has bankrolled Conservatives for Patients' Rights with more than $5 million of his own fortune. "We have invested a lot of time, energy and resources into educating Americans over the past several months about the dangers of government-run health care," he boasted in August. "And I think we're seeing some of the fruits of that campaign." To block reform, Scott has also hired CRC Public Relations, the firm that orchestrated the Swift Boat Veterans for Truth campaign against John Kerry in 2004. CRC enjoys high-ranking connections to the right-wing establishment, with a client list including the RNC, the National Republican Senatorial and Congressional Committees, the Federalist Society, the Parents Television Council and the Christian Coalition.

[Excerpt From Issue 1088 — October 1, 2009]

Source: http://newstrust.net/stories/289765/toolbar

"Don't Get Sick": The Truth About GOP Health Plans?
by Art Levine (from The Washington Monthly)
Huffington Post, October 5, 2009

Republicans reacted wtih outrage last week after Rep. Alan Grayson (D-FL) offered a blistering attack on the nearly-invisible Republican healthcare proposals: "The Republican health care plan is this: Don't get sick, and if you do get sick, die quickly."

Unfortunately, the White House isn't doing all it can to push the public option. Indeed, The Hill reported Friday, the White House staff and the President didn't make any phone calls to Senate Finance Committee members before last week's vote on health reform to press for that provision. The upshot is that the odds have increased that only reform-lite may pass, although there's still a strong grass-roots effort, including by union members, to push for the public option.

But SEIU's Andy Stern and other progressive leaders have noted that Grayson, despite his hyperbolic rhetoric about "die quickly" and a "Holocaust," was correct about the impact of inaction on health reform: 44,000 people die each year because they lack health insurance. Indeed, Stern said at an Atlantic Magazine-sponsored conference last week:

"[Republicans] have no healthcare plan and they are letting people continue to suffer," he said. "That is an issue and they should be held accountable."

Yet during the President's healthcare speech before Congress last month, many Republicans were shown holding up copies of their 37 House bills to counter the well-deserved notion that they're the "Party of No," dedicated to obstructionism.

But even some Republican proponents of their own legislation quietly concede that the Republican leadership hasn't seriously pushed its own alternative healthcare plan. One Republican staffer, when asked about the Republican over-emphasis on attacking Democratic plans, told me for a new In These Times article, "I don't disagree...There hasn't been enough attention to the ideas in [our] plan."

So what's the real story about Republican health plans?

Republicans have actually offered various bills, almost all emphasizing combinations of tax incentives, individual subsidies and vouchers that supposedly give individuals more control over their healthcare and promote portability of insurance, but they haven't united behind a single bill or set of core principles.

It's been well over 100 days since House Republican leader John Boehner and other House GOP leaders promised to introduce their own legislation.

The upshot of all the various plans, however, remains basically as Grayson described it: "Certainly from what I've seen of the 37 bills, the lesson is still 'Don't get sick,'" says Dr. Lesley Russell, a Fellow at the Center for American Progress who specializes in health policy. Indeed, as Think Progress summed up the view of progressive experts:

A close look at the GOP's so-called "principles" shows that they would break-up employer-based coverage, endanger the coverage of Americans with pre-existing conditions, and drive-up health care spending.

On top of that, several of the basic ideas in the various bills have been around for over a decade and could have been introduced in the Bush administration, if the GOP cared to do so. As one Center for American Progress memo noted, according to the Wall Street Journal:

Eight of the ideas have already been incorporated into Democratic legislation; five lie outside the jurisdiction of the relevant committees; and five have been around for more than a decade, so Republicans could have enacted them when they were in power.

In fact, as Russell found, despite complaining that Democrats have ignored their ideas only five provisions from the 37 bills were even offered by Republicans as amendments in any of the three House committees considering the Democrats' health bills.

Even if they're not serious about pushing for their own health reform agenda, American Progress's Wonk Room has highlighted their ostensible goals (as opposed to a possible hidden agenda of simply enriching health insurers):

These [GOP] alternatives claim to expand access by giving Americans a tax credit to purchase health care coverage outside of the employer-based system and control health care spending by capping awards for malpractice claims, and eliminating "waste, fraud, and abuse" from the system.

But perhaps one reason they haven't been pushed forward is that they could easily draw fire and raise alarms for potentially destroying employer-based care and wiping out Medicaid coverage for mothers and children.

Critics say they essentially force many workers and Medicaid recipients to fend for themselves with relatively modest tax grants that apparently don't cover even half the cost of premiums, nor effectively ban insurers' restrictions on pre-existing conditions.

My In These Times article looks at some of the risky or draconian provisions in major GOP House and Senate health bills, drawing on the research of experts at the Center.for American Progress, the Center for Budget and Policy Priorities and advocacy groups. What's particularly striking in some of the bills is how much they take dead aim at the fragile government safety net for the poor and aged -- as well as undermine employer-based health plans.

Take the purportedly well-meaning, sweeping ideas in the so-called "Patients' Choice Act," introduced by physician Sen. Tom Coburn (R-WI), among others.

It's especially troubling to critics that it would requires about 45 million non-disabled mothers and children to leave Medicaid and enroll in private insurance. "Our plan transforms Medicaid!" one Republican staffer told me.

Indeed, it does, but not in ways likely to appeal either to Medicaid recipients -- or those who care about public health and the needs of the poor. As the Center for Budget and Policy Priorities (CBPP) warned:

Plan Would Jeopardize Needed Care for Tens of Millions of Medicaid Beneficiaries
The bill's failure to make coverage affordable for many low-income people is especially serious because the bill would also eliminate Medicaid coverage for low-income children, parents, and seniors, pushing tens of millions of vulnerable people into the private insurance market. Low-income Medicaid beneficiaries tend to be in poorer health and are more likely to have chronic illnesses than people enrolled in private insurance; if forced to purchase coverage on their own, many likely would find the premiums unaffordable.
In addition, low-income seniors who are eligible for both Medicaid and Medicare would face substantially higher costs, because under the bill as drafted, Medicaid would no longer pay their Medicare premiums and cost-sharing.

On top of that, unlike those enrolled in employer-plans, patients in Medicaid auto-enrolled in private health insurance exchanges apparently couldn't return to Medicaid if they wanted to: they'd have to choose between private insurance companies in the exchanges and other companies outside the exchanges.

As their prescriptions and doctors' visits dry up during the inevitable snafus of waiting to transfer to coverage by for-profit private insurers, they'll graciously be offered "counselling" on their choices.
From the Republican perspective, this plan--which has already been rejected when offered as an amendment in the Senate health, education and labor committee -- isn't a Dickensian effort to rob impoverished mothers and children of affordable, accessible healthcare. Its announced goal is not just to put Medicaid on a sound fiscal path, but to "take the Medicaid stamp off their foreheads," as one staffer describes it, and allow recipients access to a broader range of care since as many as 65% of physicians don't participate in Medicaid.

The miracle of the free market would then be set into motion -- although this plan doesn't limit cost-sharing for the ex-Medicaid recipients or set meaningful minimum benefit standards tailored to the needs of low-income families and children.

But can't they just remain with their clinics and doctors in Medicaid? "They're not allowed to stay [in Medicaid]," a Republican staffer points out, excepting the disabled and the aged in long-term care. So much for the much-vaunted freedom in health care promoted by Republicans.

Senator Coburn and his co-sponsors, though, had a far sunnier view of their legislation when they introduced it in May:

Earlier today, U.S. Senators Tom Coburn, M.D. (R-OK) and Richard Burr (R-NC) and U.S. Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA) introduced health care reform legislation that delivers on the shared principles of promoting universal access to quality, affordable health care, and does so without adding billions of dollars in new debt or taxes.

"The Patients' Choice Act of 2009," transforms health care in America by strengthening the relationship between the patient and the doctor; using choice and competition rather than rationing and restrictions to contain costs; and ensuring universal, affordable health care for all Americans. "The Patients' Choice Act" promotes innovative, State-based solutions, along with fundamental reforms in the tax code, to give every American, regardless of employment status, age, or health condition, the ability and the resources to purchase health insurance.

The CBPP's January Angeles has a far darker assessment:

Plan Fails to Create a Viable Alternative for People Losing Employer Coverage

Of particular concern, many of the people who would lose employer-based coverage would likely be unable to find affordable, comprehensive coverage on their own. The bill fails to address the significant shortcomings of the existing individual health insurance market that make it difficult for individuals who are older or have various medical conditions to obtain coverage...

Conclusion

The Patients' Choice Act is deeply flawed. It would likely cause many people who now are insured -- including millions of workers who are in below-average health and currently are covered through their employer, as well as millions of poor children and parents -- to lose their current coverage. In many cases, these people would end up uninsured, paying substantially more for insurance than they now do, or purchasing insurance that provides inadequate coverage and has high cost-sharing. The bill also would sharply increase costs for many low-income elderly individuals...

In other words, as Rep. Grayson said, it amounts to..."Don't get sick."

Source: http://www.huffingtonpost.com/art-levin ... 10580.html

A Little-Discussed Issue that Puts "Care" Back in Health Care Reform
By Kate Kelly
Huffington Post, October 20, 2009

"In all this discussion about health care reform, we never hear about health care. It's always about insurance," say many people who talk to me about what's going on in Congress.

Good point. The focus of most discussions has been on health insurance, because with the American system, care improves if you can pay for it. Those who arrive in emergency rooms because they are very sick will be cared for, but it would have been better for them, and for the tax-paying public, if they had access to care when preventive health measures could have been implemented, thereby reducing emergencies.

The health care reform bill under discussion is multi-faceted, and many of the provisions will directly affect our care. One of these has to do with future medications, a topic that is receiving very little coverage in the general press. Yet legislation concerning the changes for the drug approval process on a special type of medicine (biologic medicines) could provide huge savings--a major need with health care reform.

(If you want to be sure "care" remains part of the health care reform bill, I hope you'll read through this post to the end. Then write or call your Congressional representatives. It is vital that citizens weigh in on this issue.)

New Medicines that Offer Better Care--and Some Cures

Beginning in the 1980s, a new type of medication began being approved for use, and these medications now appear to be the way of the future. Known as biotechnology products, these medicines are made using living organisms. Biotechnology medicines have revolutionized health care with effective, targeted therapies that battle some of the most costly and complex diseases such as cancer, Parkinson's, Alzheimer's, and rheumatoid arthritis.

As of 2008, more than 300 biologics have been approved by the FDA and 633 are in development (including more than 250 new treatments for cancer). By 2012 about half the drugs approved by the FDA are expected to be biologics.

Right now biologic medicines are very expensive, ranging from $14,000 to $300,000 per year.

How Drugs are Currently Approved

To understand what is being discussed regarding biologics, it is important to remember that traditional medicines follow a specific route to the marketplace.

Traditional drugs (such as anything from prescription antibiotics to over-the-counter aspirin) apply for FDA approval under the Food Drug & Cosmetic Act. The Hatch-Waxman Act was enacted in 1984 and permits generic manufacturers to get copies of medicines to market after the original manufacturer has enjoyed five years of market exclusivity to earn back the company's investment in research and development. Instead of proving safety and effectiveness, a generic manufacturer need show only that its copy is bioequivalent to a certain medication and the FDA then relies on its own previous determination that the original company's product is safe and effective when approving the copy. The generic manufacturer must also respect the brand manufacturers' patents.

Because of the smaller amount of data required on a generic drug, and the absence of clinical studies, consumers today can buy generic medicines at about 70-80 percent off the price of the original drug.
When the first biologic drug was approved in 1982 (it was recombinant insulin developed by Genentech, then licensed to Eli Lilly), it was through a chance of history regulated as a drug under the Food, Drug and Cosmetic Act. (This applies to most of the hormones and so they are called biologics drugs.) However, most biologics are licensed under the Public Health Service Act (PHSA) rather than the Food, Drug and Cosmetic Act.

The FD&C Act requires clinical studies, but under the PHSA, sponsors of biologics are not required to conduct clinical studies but they must demonstrate that their biologics are safe, pure, and effective. This makes sense when one considers products like flu vaccines, when there is no time to conduct full clinical studies and affirmatively demonstrate efficacy. Even without these studies manufacturing time can be a limitation on availability as we are witnessing with the current effort to create enough vaccine for the H1N1 (swine) flu.

Because Hatch Waxman, the generic drug law, only amended the FD&C Act, and not the PHS Act, there is currently no abbreviated regulatory pathway to market for competitors to those biologics under the PHSA. As a result, the FDA currently requires that all biologics subject to the PHSA go through the same complete development and approval process as any other new biologic medicines, and this keeps costs high.

(Because biologic medicines are made from living organisms and lack definitive specifications and so cannot be shown to have been replicated exactly, they are not referred to as generics; they are being called follow-on biologics or biosimilars.)

Elan Rubinstein, a California-based pharmaceutical consultant, points out that non-biologic drugs--traditional drugs--can be manufactured by different sponsors as identical structures even if in different factories, but that is not yet clear that this will be true with biologics. The manufacturing process requires microorganisms, purification, and sometimes modification of the molecule, which complicates the copying process.

To clarify, a small molecule traditional medicine like Zyrtec can be reliably duplicated but it has not yet been fully agreed that biologic medicines like Avastin (cancer) or Remicade (arthritis) can be copied in such a way by a different sponsor such that the "biosimilar" drug or the follow-on biologic can be used interchangeably with the original biologic drug.

However, as noted above, innovators do make manufacturing changes to their own products, with FDA's permission, so clearly it is possible to make such products safely in different ways, in different facilities if one has the right knowledge or does the right tests. These need not include clinical studies (which the innovators do not do, the majority of times that they make such changes using so-called comparability approaches).

Rubinstein notes that if biologics are not identical, then the FDA may restrict marketing claims of interchangeability meaning that only doctors, and not pharmacists, can substitute a biosimilar for its reference innovator biologic, and vice versa.

Yet the opportunity to create follow-on biologics or biosimilars would help consumers and the government, since so many Medicare patients receive these drugs. Estimates are that in the first decade in the marketplace, biosimilars could save patients and our health care system as much as $71 billion.

Why We Have the System We Have for Medications
And What is Being Discussed in the Reform Bill

The current approval system was created for several reasons:

1. The U.S. wanted a way to assure citizens of safety of the medicines that are available. (We are only a little more than one hundred years beyond the time when traveling medicine men marketing patent medicines that promised to cure everything.)

2. In American business, we believe in rewarding innovation. If a company has invested many years in developing a medication, their right to market it exclusively for a period of years is intended to let them earn back their research money and profit from creating a successful medication. The patent process permits for competition when a patent expires. (The market exclusivity that extends over and above patents, currently only applies to small molecule drugs and no other industry.)

3. Once the medication has been on the market for a time, the generic medicine can be produced, and drug costs for consumers are greatly reduced.

4. This system provides added incentive for new research and development. Pharmaceutical companies know that they need to be creating the "next new thing" because they will at some point lose whatever their current "cash cow" drug is.

So what's the issue under discussion re: health reform?

Congress is trying to iron out legislation that enables biologic medications that are intended to "copy" a previously approved biologic to get to market, in the same manner as generic drugs now compete with brand drugs when patents expire. If complete development is required on all biologics, this may mean that follow-on biologic may be almost as expensive to develop as a new biologic. Without head to head competition in the market place (akin to the generic substitution that we see today for traditional drugs) the cost to the consumer may not come down, and some biologics may have indefinite monopolies.

Conflicting Interests

Matthew Gardner, CEO of BayBio, an independent trade association for the life science industry, favors the 12-year market exclusivity (the period during which a competing biosimilar would be blocked from reaching the market) currently in several of the various reform bills under consideration by Congress. He points out that even in the production process, these medications are more difficult to replicate than are traditional drugs, and that makes the entire process more costly.

Yet the 12-year exclusivity period means that consumers will not have more affordable options on these new medications any time soon.
Several organizations, the Universities Allied for Essential Medicines (UAEM), the American Medical Student Association (AMSA), and the consumer groups Essential Action and Knowledge Ecology International, put out a news release (9-28-09) stating that the current legislation that specifies 12 years of market exclusivity for biologics vs. the five-year exclusivity for traditional drugs will all but block the creation of biosimilars by creating such a long delay from original to copy.

The groups' news release cites a 2009 PhRMA report that indicates that development costs for biologics ($1.2 billion) vs. conventional drugs ($1.318 billion). Their viewpoint is expressed in this tongue-in-cheek video: http://affordablemedsnow.org/

The well-respected New England Journal of Medicine also published a commentary October 14 that expressed that 12 years was too long. http://healthcarereform.nejm.org/?p=2070&query=home

Representative Henry Waxman and Senator Charles Schumer have both introduced alternatives (H.R. 1427/S. 726) that would address the problems by providing for five years of exclusivity.

There Needs to Be Incentive for Innovation

Michael Jacobs, principal and national clinical practice leader, of Buck Consulting, a global employee benefits and human resource consulting firm, sums up the conflict: "Of course I want the lowest possible price on the medications our clients are covering for their employees, but I also want innovation. Right now there are about one million people out on disability with diagnoses of Chronic Fatigue Syndrome. This type of thing is very costly for companies, so I want legislation that will encourage innovation for pharmaceutical companies because I want medications that will help these people feel better and get back to work. It's a difficult balance."

Drug development can take decades and be very costly. Lupus is a disease suffered by about 1.5 million Americans. A new biologic medicine is expected to be approved in November, but this is the first new drug for this illness in 50 years. The amount of money invested by various companies on research and development over this long time is almost incalculable.

An additional voice on this issue comes from those who represent "orphan diseases." These are illnesses that are rare enough that they are considered a "small" market for drug companies. Any person with one of these rare diseases is very concerned that drug companies remain motivated to introduce new drugs, as that lets them live with the hope of a cure. The other issue has to do with interchangeability.
Bob Campbell, who is communications manager for the Alpha-1 Association, is also a sufferer of Alpha-1 (Alpha-1 Antitrypsin Deficiency). This is a disease that exhibits itself as severe lung and/or liver problems, and results from the alpha protein not being able to be processed by the liver.

Bob went for many years with what seemed to be severe asthma that seemed to progress to emphysema and chronic obstructive pulmonary disease. Then nine years ago, he was prescribed a biologic medicine called Prolastin, highly purified blood plasma. The medication has greatly slowed the progress of Campbell's condition. He maintains a 40-50 percent function of his lungs--not great but good enough to make life worth living.

"Fewer than 200,000 people have Alpha-1, and my drug is very expensive," says Campbell. "After living for most of my life with a lung disease that was getting progressively worse, I worry about switching. What if the copy doesn't work as well?"

"The Alpha-1 community favors competition so that drugs are more affordable, but if we're taking something that works, it is frightening to think of having to switch to something else because of cost," adds Campbell. His organization is advocating for special review of biosimilars by an expert advisory panel, as they feel medical generalists should not be making the decisions about what else is effective for Alpha-1 (and other rare diseases).

While Campbell's concern is worthy of note, one has to think that the FDA review panel on follow-on biologics will be as careful as the original reviewing panel, and they will understand that they need to consider interchangeability.

We May Have Heard This Before

Pharmacist Douglas Miller, professor of pharmacy practice at Wayne State University in Detroit, Michigan puts this conflict in perspective: "This discussion is not dissimilar to the one that occurred in the late 1970s and early '80s about creating generic medicines. In 1962 the Kefauver Harris Amendment provided that all drugs had to go through the same lengthy approval process---new drugs as well as generic. The 1984 Hatch-Waxman amendment that provided a shortcut for generics was enacted only after great controversy."

Miller predicts that the solution may lie in the FDA developing a multi-tiered approval system for follow-on biologics. The first review would involve establishing the similarity of an original and a copy of a drug, and then the FDA could rule on each application separately as so whether or not more testing is needed.

As with any type of new invention, one has to think that the process will become easier and the costs will drop over time. (Think of what has happened with computer technologies and the extraordinary decreases in price.) While the pharmaceutical companies are currently facing steep costs in developing these new medications, history shows us that with new processes and more people working in the field, companies will likely find ways to bring costs down, making these long exclusivity periods all the more unnecessary.

Right now the reform bills that include provisions on biologics allow for a 12-year exclusivity, with the possibility of amending a medication and getting a new patent, which could extend the exclusivity indefinitely.
When the full Congress undertakes this discussion, they could look at a compromise measure that would provide for five years of market exclusivity after the approval of the original drug. This would match what is provided for traditional drugs and might serve to balance between financial incentives for innovation with consumer needs for prices to drop to make new medications more easily affordable.
Even if new legislation covers the follow-on biologics, it will take time to get any new follow-on biologics to the marketplace. Depending on the details in the new legislation, the FDA may need to draft guidelines for an approval process, and applicants will still have to wait until a product's patent expires or the market exclusivity period expires before marketing a "biosimilar."

So if Congress enacts legislation that provides authority to the FDA to review and approve biosimilars, and that allows sponsors to bring these medicines to the marketplace, what savings might consumers expect?
"In Europe, they are experiencing a 20-25 percent drop in prices with the biosimilars, and I would think that is rough estimate of what we would get here," notes Peter Pitts, president of the Center for Medicine in the Public Interest. "Ultimately we want the FDA to create a process that provides patients with the highest possible quality medicine at the lowest possible cost."

So what do you think? Take a stand (five-year exclusivity? 12-year exclusivity? 12 years but with absolutely no extensions? A compromise of 7 or 8 years to balance the two current time periods being considered?), and write to your representatives in Congress. Public opinion matters, and this issue may be decided soon.

For more on biologic drugs and how they are made, see the NY Times slide show on the subject: "Growing Biologic Drugs, from Vial to Vat."
http://www.nytimes.com/ref/business/200 ... APHIC.html#

Source: http://www.huffingtonpost.com/kate-kell ... 27192.html