Governor Spitzer's Pajama Game

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  • 01/28/2008
Fresh from his victory in the drivers’ licenses for illegal aliens campaign, Governor Spitzer is turning his attention to reforming health care in the Empire State.

Here's the lay of the land, status quo ante:

Prior to any actions, New York will spend approximately $1.9 billion in State funds on prescription drugs in 2008-09 through the Medicaid and EPIC programs. The 2008-09 Executive Budget recommends actions that would control these costs and generate $172 million in State savings.

But these "savings" come at a cost -- the cost of quality health care for low income New Yorkers. And, considering that prescription medicines represent but 4 percent of the New York State health care spend (4 cents on the NY health care dollar), it's a penny wise/pound foolish proposition. "Seven and a half cents," the famous "Pajama Game" song tells us, "doesn't mean a hell of a lot." But when it comes to prevention, life saving interventions, and chronic care, four cents does.

The sampling of ideas below all save money for Albany in the short term -- and will result in a lower quality of care for New York's Neediest and a higher taxpayer burden for expensive hospital stays and other high cost health care interventions. Governor Spitzer's plan is a perfect examples of a cost-based, "government first" paradigm --when what we really need is more cost-efficient and humane patient-centric, "people first," health care policy.

* High Cost Drugs. A Specialty Pharmacy Program will be created within Medicaid to lower the price of high cost drugs, which have increased dramatically in number and cost. Specialty drugs typically require specific handling and have a limited distribution.

Translation: Rationing.

* Clinical Drug Review Program. The Executive Budget reflects the addition of new drugs to the Clinical Drug Review Program (CDRP) to generate additional savings while continuing to ensure proper usage of certain high-risk drugs.

Translation: Rationing through questionable evidence-based medicine schemes.

* Physician Education. A program will be started to provide prescribes with unbiased clinical information about medications and to balance marketing efforts by manufacturers. This will improve patient outcomes and reduce unnecessary expenditures by providing objective information to prescribers.
* Translation: Rationing. Anyone care to wager what these "unbiased" studies will recommend? Echoes of CATIE and ALLHAT. It's the battle between 20th century practice variation and 21st century patient variation/personalized medicine.

* Pharmacy Reimbursements. Pharmacy reimbursement will be reduced from Average Wholesale Price (AWP) less 14 percent to AWP less 17 percent for brand name drugs to more closely reflect the actual wholesale price to pharmacies. This reduction will be offset by a one dollar increase in the dispensing fee for generics and brand name drugs in the PDP. In addition, co-payments for brand name drugs in the Medicaid PDP will be reduced from $3.00 to $1.00. These changes will encourage the use of lower cost and preferred products.

Translation: Bribe pharmacists to switch their customers to generic drugs -- even if that switch is from an on-patent medicine recommended by a patient's physician to an entirely different molecule. Savings first. Patients last.

What’s most peculiar is that Governor Spitzer offers only a few small initiatives to deal with the most important health care issue in New York State (and, for that matter, every state) – chronic disease. This is, perhaps, the most explicit example of sins of omission and the Gov’s focus on short term vs. long term savings. It’s an ignorant and dangerous omission. Sins of omission, the saying goes, are seldom fun. And, while this particular omission may be politically expedient – it’s also dangerous and short-sighted.

Here's a link to the full health care section of the Governor’s executive budget:


In "The Pajama Game," the union boss "Prez" sings, "With a pencil and a pen I figured it out." Governor Spitzer (who some say would like to play Prez himself some day) needs to return to the drawing board and figure out a way to put patients first -- before he prepares for his own second act.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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