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A Trillion Dollars in Incompetence
By Robert M. Goldberg
Posted June 16, 2009
Bonaparte famously said to "never ascribe to malice that which can adequately be explained by incompetence."
Thus stands the Kennedy health care bill, placeholder for the hard left dream of a government takeover of the American health system. The bill is a taxpayer-supported monument to the lethal stupidity of this statist objective that will leave Americans with fewer choices, more government control over medical decisions, higher taxes, and a smaller private health insurance market (mostly union health plans paid for by taxes on the health benefits of non-union workers) that punishes efforts to reward healthy behavior.
Over ten years: 16 million more people with new insurance, 23 million forced into public plans. A trillion dollars at least. By way of comparison, from 1997 to 2006 the number of people with private health insurance grew by 5.4 million, while Medicaid and SCHIP coverage grew by 13 million for a total of 18.4 million. Total cost to the government: $40 billion. Total health care spending over that time period increased by one trillion. Meanwhile, most of the public health care coverage increase during that time -- 60 percent according to a Harvard University study -- displaced private health insurance coverage.
Could the Kennedy bill be any more inefficient at using taxpayer dollars to subsidize misshapen forms of health care coverage? Of course it could. And it is.
Yesterday President Obama told the American Medical Association that "a big part of what led General Motors and Chrysler into trouble were the huge costs they racked up providing health care for their workers -- costs that made them less profitable and less competitive with automakers around the world."
"If we do not fix our health care system America may go the way of GM -- paying more, getting less, and going broke."
Which is why Section 133 of the Kennedy bill grandfathers in every union-negotiated health plan that apes union health plans for workers and prohibits companies from transferring workers into the public "option."
Worried about the cost of retiree health benefits? No problem. "There is established in the Treasury of the United States a trust fund to be known as the Retiree Reserve Trust Fund that shall consist of such amounts as may be appropriated or credited to the Trust Fund as provided for in this subsection to enable the Secretary to carry out the program under this section. Such amounts shall remain available until expended." ("Such amounts" is Washingtonspeak for bottomless pit.) It pays for insurance benefits and 80 percent of claims from $15,000 to $90,000 for all retirees (ages 54-64). Initial cost of this "trust fund": $10 billion.
The Kennedy bill pays for $1 trillion in ineptitude in four ways.
First, it borrows. But who's counting or keeping track?
Second, it creates "Gateways" that are supposed to create groups of purchasers to reduce the cost of insurance. In fact, since insurance companies have already made it clear that they can provide guaranteed coverage without regard to the size of purchasing pools, why are such Gateways necessary? Because, as agents of the federal government, Gateways collect a tax on the insurance premiums of the young, healthy and health-conscious to subsidize the cost of insurance for those who now have no incentive to improve their health.
In fact, insurance plans that actually do a better job of controlling costs or keeping premiums low with better quality are punished under the Kennedy bill: "Any State or participating State shall assess a charge on health plans and health insurance issuer (with respect to health insurance coverage) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such State for such years."
Third, in order to subsidize the sort of health plans that broke the bank at GM, the Kennedy bill taxes the health benefits of others, particular those in self-insured corporations that are doing the most innovative things to improve quality and reduce costs.
Fourth, the Kennedy bill gives a Medical Advisory Council power to determine what new technologies and benefits can be covered and are introduced. It's the same technique Obama wants to use to curb the rate of growth in Medicare. John McCain suggested paying for his health care tax credit plan with Medicare savings. During the election, Obama said that "would mean fewer places to get care, and less freedom to choose your own doctors…. I don't think that's right."
Today, Obama would slash payments and choices to seniors -- mostly the sickest -- to help pay for GM-type health plans, retiree slush funds, and the mass relocation of middle-class Americans into a richer version of the Indian Health Service. On top of that, the Kennedy bill costs $1 trillion to "cover" 16 million new people in the process. By tossing 40 million out of private insurance no less. Not only is it not right. It's incompetent.
By Robert M. Goldberg
Posted June 16, 2009
Bonaparte famously said to "never ascribe to malice that which can adequately be explained by incompetence."
Thus stands the Kennedy health care bill, placeholder for the hard left dream of a government takeover of the American health system. The bill is a taxpayer-supported monument to the lethal stupidity of this statist objective that will leave Americans with fewer choices, more government control over medical decisions, higher taxes, and a smaller private health insurance market (mostly union health plans paid for by taxes on the health benefits of non-union workers) that punishes efforts to reward healthy behavior.
Over ten years: 16 million more people with new insurance, 23 million forced into public plans. A trillion dollars at least. By way of comparison, from 1997 to 2006 the number of people with private health insurance grew by 5.4 million, while Medicaid and SCHIP coverage grew by 13 million for a total of 18.4 million. Total cost to the government: $40 billion. Total health care spending over that time period increased by one trillion. Meanwhile, most of the public health care coverage increase during that time -- 60 percent according to a Harvard University study -- displaced private health insurance coverage.
Could the Kennedy bill be any more inefficient at using taxpayer dollars to subsidize misshapen forms of health care coverage? Of course it could. And it is.
Yesterday President Obama told the American Medical Association that "a big part of what led General Motors and Chrysler into trouble were the huge costs they racked up providing health care for their workers -- costs that made them less profitable and less competitive with automakers around the world."
"If we do not fix our health care system America may go the way of GM -- paying more, getting less, and going broke."
Which is why Section 133 of the Kennedy bill grandfathers in every union-negotiated health plan that apes union health plans for workers and prohibits companies from transferring workers into the public "option."
Worried about the cost of retiree health benefits? No problem. "There is established in the Treasury of the United States a trust fund to be known as the Retiree Reserve Trust Fund that shall consist of such amounts as may be appropriated or credited to the Trust Fund as provided for in this subsection to enable the Secretary to carry out the program under this section. Such amounts shall remain available until expended." ("Such amounts" is Washingtonspeak for bottomless pit.) It pays for insurance benefits and 80 percent of claims from $15,000 to $90,000 for all retirees (ages 54-64). Initial cost of this "trust fund": $10 billion.
The Kennedy bill pays for $1 trillion in ineptitude in four ways.
First, it borrows. But who's counting or keeping track?
Second, it creates "Gateways" that are supposed to create groups of purchasers to reduce the cost of insurance. In fact, since insurance companies have already made it clear that they can provide guaranteed coverage without regard to the size of purchasing pools, why are such Gateways necessary? Because, as agents of the federal government, Gateways collect a tax on the insurance premiums of the young, healthy and health-conscious to subsidize the cost of insurance for those who now have no incentive to improve their health.
In fact, insurance plans that actually do a better job of controlling costs or keeping premiums low with better quality are punished under the Kennedy bill: "Any State or participating State shall assess a charge on health plans and health insurance issuer (with respect to health insurance coverage) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such State for such years."
Third, in order to subsidize the sort of health plans that broke the bank at GM, the Kennedy bill taxes the health benefits of others, particular those in self-insured corporations that are doing the most innovative things to improve quality and reduce costs.
Fourth, the Kennedy bill gives a Medical Advisory Council power to determine what new technologies and benefits can be covered and are introduced. It's the same technique Obama wants to use to curb the rate of growth in Medicare. John McCain suggested paying for his health care tax credit plan with Medicare savings. During the election, Obama said that "would mean fewer places to get care, and less freedom to choose your own doctors…. I don't think that's right."
Today, Obama would slash payments and choices to seniors -- mostly the sickest -- to help pay for GM-type health plans, retiree slush funds, and the mass relocation of middle-class Americans into a richer version of the Indian Health Service. On top of that, the Kennedy bill costs $1 trillion to "cover" 16 million new people in the process. By tossing 40 million out of private insurance no less. Not only is it not right. It's incompetent.
CMPI’s Robert Goldberg Discusses Health Care Reform with PhRMA CEO Billy Tauzin
Click Here to View the Video
The Center for Medicine in the Public Interest's Dr. Robert Goldberg
Discusses Health Care Reform with PhRMA CEO Billy Tauzin
Preliminary score from CBO... $1 Trillion for 16 million additional insurance policies....
Read more here
Read more here
Fearmongering on kids’ meds remains a staple at CBS....
ADHD Meds May Hike Kids' Heart Risks
Dr. Jennifer Ashton Discusses New Research Linking Stimulant Drugs and Sudden Death
NEW YORK, June 15, 2009
(CBS) Are ADHD medications safe for children?
Research released Monday by The American Journal of Psychiatry gives more support to the claim that stimulant drugs usually prescribed for ADHD could increase the risk of sudden unexplained death in children. On The Early Show Monday, CBS News medical correspondent Dr. Jennifer Ashton what the study might mean for the 2.5 million children taking medication for the disorder.
Ashton said alternative therapies, such as chiropractic care or dietary changes, are also available for children with ADHD. She said they can be used as a replacement or compliment to their current treatment.
Yeah... Cina, also known as octopus cactus from Mexico, that is supposed to work too.
Meanwhile the FDA rode the rescue with a dose of sanity....
FDA Issues Safety Communication about an Ongoing Review of Stimulant Medications Used in Children with ADHD
June 15, 2009
There may be an association between the use of stimulant medications for attention-deficit hyperactivity disorder, known as ADHD, and sudden cardiac death in healthy children, according to a study published in the American Journal of Psychiatry. But the U.S. Food and Drug Administration says that, because of the study’s limitations, parents should not stop a child’s stimulant medication based on the study. The FDA recommends that parents should discuss concerns about the use of these medications with the prescribing health care professional.
The FDA can not conclude that the data in the study affect the overall risk-benefit profile of stimulant medications used to treat ADHD in children.
The study’s limitations include:
--a significant time lag between the dates when the deaths occurred and collection of the data;
--the difference in circumstance of death may have accounted for a difference in family or caregiver recall of information relating to medication use at the time of death;
--sudden unexplained death in a child would be more likely to trigger a post-mortem inquiry into the cause of death than death due to blunt force trauma as a result of a motor vehicle collision; and
--there was a low frequency of stimulant use reported in both the study group and the control group.
--the difference in circumstance of death may have accounted for a difference in family or caregiver recall of information relating to medication use at the time of death;
--sudden unexplained death in a child would be more likely to trigger a post-mortem inquiry into the cause of death than death due to blunt force trauma as a result of a motor vehicle collision; and
--there was a low frequency of stimulant use reported in both the study group and the control group.
The FDA and the National Institute of Mental Health provided funds for the study, authored by Madelyn S. Gould, Ph.D. of Columbia University.
“The FDA continues to review drug safety information for stimulant medications used to treat ADHD so that we can give health care professionals and families the most up-to-date drug safety information available,” said Janet Woodcock, M.D., director of the FDA’s Center for Drug Evaluation and Research.
Media Inquiries: Sandy Walsh, 301-796-4669, sandy.walsh@fda.hhs.gov
Consumer Inquiries: 888-INFO-FDA
Read more hereMedia Inquiries: Sandy Walsh, 301-796-4669, sandy.walsh@fda.hhs.gov
Consumer Inquiries: 888-INFO-FDA
According to the Pink Sheet, “When faced with unpleasant news, people often try to change the subject or even pretend the thing didn't happen. Both of those coping strategies were on display during a June 11 hearing on biologics competition by the House Energy and Commerce Committee's Health Subcommittee.”
Subcommittee Chairman Frank Pallone (D, NJ) said the panel would hold additional hearings that would include FDA and address product safety issues.
Rep. Anna Eshoo (D, CA) “wrangled with Pallone about submitting into the record a letter written by FDA's then Chief Medical Officer Frank Torti that raised serious questions about the approvability of follow-on biologics.”
"These are the ones from the previous administration?" Pallone asked. "We've asked them again in the current administration."
Does Mr. Pallone realize that the career officials who answered his questions the first time are the ones who will answer him once again? Is he hoping that politics will trump science and the FDA will give him a different answer to the same question? Obviously so.
And hurrah for Representative Eshoo for sticking to her guns. We’re big fans – especially since she graced the recent launch of the Center for Medicine in the Public Interest’s Odyssey Project -- a new initiative to ensure that support for medical innovation remains a top priority in any healthcare reform effort.
Representative Eshoo took the opportunity to speak about follow-on biologics with great intelligence, passion, and poise – three things we could use of as we debate this important topic. To view her remarks, go to www.cmpi.org and click on the video still of the woman in the stylish pink suit.
Eshoo? Gesundheit.
Subcommittee Chairman Frank Pallone (D, NJ) said the panel would hold additional hearings that would include FDA and address product safety issues.
Rep. Anna Eshoo (D, CA) “wrangled with Pallone about submitting into the record a letter written by FDA's then Chief Medical Officer Frank Torti that raised serious questions about the approvability of follow-on biologics.”
"These are the ones from the previous administration?" Pallone asked. "We've asked them again in the current administration."
Does Mr. Pallone realize that the career officials who answered his questions the first time are the ones who will answer him once again? Is he hoping that politics will trump science and the FDA will give him a different answer to the same question? Obviously so.
And hurrah for Representative Eshoo for sticking to her guns. We’re big fans – especially since she graced the recent launch of the Center for Medicine in the Public Interest’s Odyssey Project -- a new initiative to ensure that support for medical innovation remains a top priority in any healthcare reform effort.
Representative Eshoo took the opportunity to speak about follow-on biologics with great intelligence, passion, and poise – three things we could use of as we debate this important topic. To view her remarks, go to www.cmpi.org and click on the video still of the woman in the stylish pink suit.
Eshoo? Gesundheit.
The US isn’t the only country that is worried about the financial state of its health care system, as the international news this weeks shows.
First up is the UK, where the meltdown of the government seem to be getting worse and worse (tax payer paid adult movies! musical chairs ministers! disastrous EU parliament election returns!) and it is no surprise that the National Health Service has not been immune.
According to The Times, “the NHS needs another £10 billion from the taxpayer to survive in three years' time (put another way, just less than the cost of paying for the entire police service).” Despite the vitriol poured on the NHS by American opponents of single payer medicine, it remains quite popular with the British public so implying that it could collapse if the government doesn’t pay up is a neat bit of scaremongering.
Further, if you’ve followed the news on the NHS at all over the last ten years, you know that the health service is continually given more money, with precious little to show for it. Wait times have gone down somewhat but the system’s productivity went down 4.3 percent between 1997 and 2007. At the same time, in 1999, the NHS received approximately £45 billion a year, today it is £105 billion. Nonetheless, Bloomberg News put the current budget shortfall of the NHS at £15 billion.
Meanwhile, the opposition Conservatives appear poised to repeat the mistakes of Labor if they get in at the next election, which seems almost guaranteed. Despite unceasing criticisms of the spending of the present Prime Minister and the huge deficit created, the Conservative health spokesman, Andrew Lansley told Britons that his party would up the NHS budget, whatever happened with the economy in the future, and while spending on everything else would be slashed.
***
On the Continent, conflict in Berlin over the growing gap in the funding for Germany’s health care system is continuing. This January saw the introduction of a new payment scheme in which premiums are paid into a central fund by the insured along with federal money and then the cash is distributed from there to the sickness funds. But the amount of money in the fund has proved to be short of the actual expenditures on health by some €2.9 billion and the sickness funds want the state to contribute more.
Health Minister Ulla Schmidt, however, has not been very sympathetic. Earlier this week she told Financial Times Deutschland that “[s]ome have clearly lost connection to reality” and criticized their “exorbitance.” She also opined that “[i]t cannot be that everyone in the health care system always just calls for more money.” (Translations mine.)
This week also saw a decision against the private sickness funds by Germany’s top court. The private funds had sought to overturn a provision of the most recent reform which required them to offer a cheaper basic health care plan.
The Public Plan option is a poisonous apple and physicians aren’t biting.
In a statement submitted to the U.S. Senate Finance Committee, the American Medical Association soundly rejects the notion of a new public plan.
Here is an excerpt from the statement: “The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs. The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”
This announcement by the AMA comes a week following a letter President Obama sent to Senators Kennedy and Baucus in which he reaffirmed his support for the creation of a new public plan.
Lawmakers have been pledging that a new public plan would pay physicians reimbursements rates higher than that of Medicare.
Alas, physicians are not as gullible as politicians seem to think. Doctors are not going to enter into an agreement whereby they reap transitory benefits but face long-term pain.
Initially, the federal government would likely honor its promise of higher reimbursement rates. But with millions more of Americans under a government plan, budget realities would take precedence over grandiose political promises.
Initially, the federal government would likely honor its promise of higher reimbursement rates. But with millions more of Americans under a government plan, budget realities would take precedence over grandiose political promises.
Physicians know this – and that is why the AMA opposes a new public plan.
It would be nice if the AMA spoke out against greater government control over physicians on a more regular basis. But this recent announcement is more than welcome – and long overdue.
Tonight I attended a dinner sponsored by the Aspen Institute's Health Stewardship Project that brought together a group of journalists, patient advocates and policy experts to discuss comparative effectiveness and the future of innovation. (How did I get in?) It was an off the record event but I can say for the most part that despite political and policy differences there was wide agreement that efforts to measure the value of new technologies should encourage innovation, not be generated by government alone but by robust partnerships, should promote healthy and long life, be controlled and easy to use by doctors and patients and not be used to control costs (however this latter objective will be harder to achieve if more health care spending is controlled by government.
There was less said about the role and impact of biomedical innovation on health care costs and society in general but here too there was agreement that more time and effort should be spent educating policymakers and the public about what innovation is and what it delivers.
Aspen's Health Stewardship Project plays and should play an important role in making health and innovation the cornerstones of health care reform.
There was less said about the role and impact of biomedical innovation on health care costs and society in general but here too there was agreement that more time and effort should be spent educating policymakers and the public about what innovation is and what it delivers.
Aspen's Health Stewardship Project plays and should play an important role in making health and innovation the cornerstones of health care reform.
The Pink Sheet reports that, “Sen. Max Baucus, D-Mont., is now proposing that CMS or other HHS agencies could not immediately translate results of comparative effectiveness research into health care coverage policies, in CER legislation he introduced June 9.”
The "Patient-Centered Outcomes Research Act of 2009" - stipulates that HHS may use the outcomes of comparative effectiveness research in making coverage decisions "if such use is through an iterative and transparent process which meets the following requirements":
1) "Stakeholders and other individuals have the opportunity to provide informed and relevant information with respect to the [coverage] determination."
2) "Stakeholders and other individuals have the opportunity to review draft proposals of the determination and submit public comments with respect to such draft proposals."
3) "In making the determination, the [HHS] secretary considers (A) all other relevant evidence, studies, and research in addition to such comparative effectiveness research; and (B) evidence and research that demonstrates or suggests a benefit of coverage with respect to specific subpopulation of individuals, even if the evidence and finding from the comparative effectiveness research demonstrates or suggests that, on average, with respect to the general population the benefits of coverage do not exceed the harm."
The bill at strategic spots uses the language "comparative clinical effectiveness" as a means to emphasize that the research itself will not be cost focused, which Baucus noted is key to getting CER into health care reform.
How will comparative effectiveness research generate cost savings without any cost analysis? According to Senator Baucus, cost decisions will be made by patients and providers. "It is up to them. It is not up to an agency to decide."
Decisions to be made by patients and providers (and in that order). Now that's what I call "pay-as-you-go."
And amen … to the Max.
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.
