Healthcare Progress is Happening

 

There are many mysteries in the world of politics, but none greater than Democrats running on their healthcare track record. The Party that gave us ObamaCare has managed to convince many people – and the mainstream media – they are the ones who can fix the healthcare system.

This is the same Party that passed the Affordable Care Act (ACA), now known as ObamaCare. It was accurately described by former Democratic Senator Max Baucus as “a train wreck coming.” It has lived up to his prediction.

For the next four years ObamaCare failed to deliver on all of President Obama’s promises and not once was it polled at an approval rating of greater than half the country. Yet today we’re being told it is “more popular than ever.”

There are two reasons why the Democrats have been able to sell this false narrative that they can be better trusted with your healthcare. The first is that the GOP failed to successfully repeal and replace ObamaCare as they promised in the campaign of 2016. The blame for this lies on the now buried shoulders of Senator John McCain – and all of the Democratic senators. The second is the blatantly biased reporting of the mainstream media – a group of journalists who have forgotten their job is to report the news, not promote the propaganda of their favorites.

Few in the media give President Trump and the GOP credit for improving your healthcare. Fortunately, the Wall Street Journal editorial board has remained neutral in this media war with Trump and continues to promote the truth over “fake news.”

The WSJ says the Trump Administration rolled out a rule last month on health-reimbursement arrangements that would allow employers to offer workers tax-exempt dollars to buy insurance in the individual market. (The Obama Administration banned this via regulation as part of the ACA.) This benefits small firms that lack the economies of scale that make offering insurance affordable.

This will allow more individuals the tax break on health care that employer insurance receives. Currently, only employer-provided plans receive the tax break – a glaring inequity of our current tax system.

Naturally, Democrats claim any change to ObamaCare undermines the ACA. The WSJ responds, “The reflexive response from Democrats is that this is another effort to undermine the Affordable Care Act, but they need a new script. The rule will draw more young and healthy workers into the individual market, which currently skews toward the sick or those poor enough to be eligible for tax-credit subsidies. Reimbursements should make the ObamaCare exchanges more stable, which is what Democrats claim to want.”

How many will be affected by this change?

The Trump Administration expects that some 800,000 employers will provide reimbursement arrangements to more than 10 million employees. Some three million will have been buying coverage on the individual market, meaning the rule should save the government money on increasingly expensive tax credits.

The Trump Administration has done other things to improve your healthcare. These other improvements include: (Trump Improvements in ObamaCare Helping Millions)

  • Short-term, limited duration plans (STLD) – These plans are free from most ObamaCare regulations, lowering their costs by 50 – 80 percent.
  • Renewable plans – These plans allow consumers to stay on their affordable coverage for up to 36 months and lock in low rates in their plans even if they get sick.
  • Ending the Individual Mandate – President Trump has already signed the legislation that will eliminate the onerous Individual Mandate, that forced all Americans to purchase healthcare insurance or pay a tax penalty, beginning in 2019.
  • Association Health Plans – The Trump administration Labor Department has made it easier for small businesses and self-employed Americans to band together to purchase more affordable insurance through these plans. (see earlier post ObamaCare Relief for Small Business)

 

The WSJ says there is even more good news. “There may be even more relief ahead with the recent announcement that Health and Human Services rescinded a 2015 guidance for Section 1332 waivers. This is the Affordable Care Act’s waiver process for states to opt out of parts of the law. But Democrats designed the waivers to ensure that only progressive fantasies like single-payer in Vermont could win approval. The Obama crowd then restricted the statute further in regulation.”

            The Trump Administration will interpret this in more rational ways, versus Obama guidance that applied the standards down to how plans would affect subpopulations in the state. The guidance was so prescriptive that most states didn’t bother coming up with ideas. The question now is how many enterprising Governors will decide they can do better than the status quo even within the restrictions.”

 

All of this good news has been lost in the campaign because Democrats want you to believe that Republicans are out to deny you coverage for pre-existing conditions. The media has parroted this false narrative so much the American public is believing it. By the time they figure out who has been lying to them they’ll be left standing in line waiting for their single-payer healthcare.

Who Really Controls Drug Prices?

 

Everyone in America believes drug prices are too high. The real question is who is really responsible for these high prices?

President Trump ran on a platform of lowering drug prices. In his unique way of identifying with the real issues that concern Americans, Trump told Time magazine in an interview, “I’m going to bring down drug prices. I don’t like what has happened with drug prices.”

Trump has been trying to fulfill that promise with recent proposals. Two recent posts of mine have discussed this issue (Trump’s Radical Plan to Lower Medicare Drug Prices ) (A Second Opinion on Trump’s Drug Proposal). But these proposals only concern Medicare Part B drugs given in a doctor’s office. What about the vast majority of drugs we fill at our local pharmacy?

Avik Roy, writing in Forbes, says pharmaceutical companies are laying the blame on “middlemen” for the high price of drugs. They say these greedy middlemen drive up the prices to take a cut before the consumer pays at the counter. But Roy says middlemen aren’t to blame.

The process of determining the price the consumer pays at the counter is a long and complicated one when it comes to drug prices. Terms are used that are confusing and some explanation of these terms is needed:

  • List price – this is like the sticker price on a car which nobody pays.
  • Wholesale distributor – they purchase bulk quantities of drugs from manufacturers at discounts off the list price (ave. 16%). This lowers prices to the consumer.
  • Invoice price – the post-wholesale distributor price
  • Tiered formularies – developed by insurers who charge different co-pays on the cost-effectiveness of the drug.
  • Utilization management – the process of leading consumers toward lower cost but effective drugs first.

 

Here’s how this process works:

You have high cholesterol so your doctor prescribes a cholesterol-lowering drug. He can prescribe a low-cost generic drug like Atorvastatin (formerly Pfizer’s Lipitor), which costs about $250 a year, and your co-pay may be $5 or even $0. Alternatively, he could prescribe an expensive brand drug like Repatha, which costs $15,600 per year and your co-pay will probably be $30 or more. Utilization management steers you toward the cheaper drug. This lowers the net price to consumers (see below).

 

Pharmacy Benefit Managers (PBMs) are middlemen who are hired by insurers to steer you to lower cost drugs. They have taken over the task of utilization management for insurers. By keeping drug costs down they keep health insurance premiums down, which benefits consumers, and increases profits for insurers.

What about rebates?

Rebates are kickbacks to PBMs in exchange for reducing the co-pay that the insurer charges the patient for the drugs. Rebates are paid by manufacturers to encourage promotion of their higher-priced drugs.

This lowers the price to the consumer of a more expensive drug. However, it increases overall costs by encouraging the use of more expensive drugs when cheaper ones are just as good. The net impact is higher overall insurance premiums and higher healthcare costs for taxpayers. So drug manufacturers increase drug costs and healthcare insurance premiums by the use of rebates – because they increase their profits.

Co-pay Assistance

Roy says another way in which drug companies artificially drive up utilization of their costly medicines is through co-pay assistance. If the drug company making Repatha wants to promote its drug, it may fund a “co-pay assistance program” for lower-income individuals, where the consumer will pay the same co-pay as the cheaper drug Atorvastatin. This gets the individual on their more-expensive drug, which may seem good in the short-run but leads to higher overall insurance premiums and higher healthcare costs for taxpayers, again.

So the real culprits in keeping drug costs and insurance premiums higher are rebates and copay assistance programs – which are both promoted by drug manufacturers.

The Trump administration is seeking to end this game by ending PBM rebates. On July 18, 2018, the Department of Health and Human Services (HHS) submitted to the White House a proposal entitled “Removal of Safe Harbor Protection for Rebates to Plan or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection.” This proposal is intended to remove the “safe harbor” PBMs currently enjoy that protects them from federal anti-trust rules.

To be sure, PBMs add value to consumers by lowering prices through utilization management. But this value is adversely affected when the same PBMs are offered rebates and co-pay assistance programs that steer consumers to more expensive drugs. The Trump administration is looking out for consumers by proposing to remove these conflicts of interest. This change could lower overall healthcare costs for everyone.

Healthcare Technology for the Elderly

 

Healthcare technology is mostly aimed at the young and healthy who want to stay that way. With new devices from Apple and FitBit, the healthy-conscious can monitor their workouts and follow their progress.

But what about the elderly? Not so much. But that may be about to change.

Joseph F. Coughlin and Luke Yoquinto, writing in The Wall Street Journal, say “elder technology” is about to make major strides toward meeting the needs of our older population. Good thing, since the Baby Boomers are now in their sixties and seventies.

It seems that elder technology in the past has focused on function, not on form or appearance. The first wearable heart-rate detector hit the market in 1947 but weighed 85 pounds! Not exactly suitable for strapping on for a leisurely stroll. Today, elder technology is being designed not merely to be endured, but to be embraced.

More recent technology has been the Life Alert necklace and devices to detect when seniors have fallen. But these have often been referred to as “BBB – big, beige, and boring.” As a result few seniors were interested. Studies suggest only 4% of Americans who could benefit from a personal emergency-response system even own one, much less wears one.

Improvements to this situation began in 2014 with the advent of the online pharmacy PillPack, which provides personalized packets of medications to simplify compliance. Amazon recently purchased PillPack for $1 Billion. Shortly thereafter, Best Buy purchased GreatCall, the maker of elder-oriented Jitterbug phones, for $800 million.

There is little doubt that Apple will soon be coming out with a watch that focuses on elder technology including heart-rate monitoring, EKGs and fall detection. You can be sure it will be elegant, slim, and easy to use in an effort to overcome prior resistance by seniors in the past to such technology. Aesthetics and engineering will be combined to produce a product as attractive to the elderly as current designs are to the young and healthy.

As a Baby Boomer myself, I’m excited to see what new devices will soon be available to keep me healthy and living longer. It might be to monitor my blood pressure and notify me when I exceed a pre-set limit. It might be a reminder to take my medication that must be repeated in the middle of the day. Monitoring my blood sugar –without drawing my blood – would be another helpful feature.

What would you like to see in a device to make your life easier and healthier?