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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 09-08-2004

Medigap Premiums Vary Greatly Among Insurers: Retirees Pay Thousands of Dollars More Each Year Than Needed for Coverage
Wall Street Journal, 9-8-04

Weiss ratings, Inc. has found that Medigap premiums, that is the supplemental private insurance that Medicare beneficiaries can add to their Medicare coverage, vary widely across the country. Not surprisingly for anyone who follows markets, "premiums for the same level of supplemental coverage vary greatly from one insurer to another." This article implies that there is something wrong with this, i.e. because some enrollees are paying more than others for the same coverage. The article goes on to note that "the challenges that retirees and their family members now face in navigating the big pricing disparities of Medigap plans are just a small taste of what families will soon experience when it comes to picking health coverage in retirement."

Some confusion may be inevitable, but much of the angst is probably attributable to the fact that, when it comes to health care, consumers aren't used to acting like consumers, i.e. from cradle to grave employers or the government basically assign insurance coverage to them deus ex machina.

Widespread disparities in premiums would likely evaporate if there was a national market for Medigap coverage, where firms could effectively compete for market share by bundling large groups of seniors together. National markets would also encourage other companies to offer information portals for Medigap coverage the same way that some websites bundle information on home mortgages and refinancing. In short, the cure for this problem is not for the government to pick winners and losers among Medigap plans, but to provide consumers with the information and tools to make better choices themselves.

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Health Insurance Costs Keep Rising Premiums for Employer-Sponsored Plans Grew by 11.2%, Survey Finds
Washington Post, 9-10-04

Employers' health insurance premiums rose an average of 11.2% this year, the fourth annual double digit increase, although the current increase is beneath the 13.9% increase registered the previous year. Still, there are a some bright notes in the nation’s otherwise gloomy health care trends.

Large employers think that aggressive disease management plans – "the treating of long-term illnesses on an integrated, coordinated basis, rather than dealing with each problem as it arises" – would be "very effective in cutting costs."

Other experts are optimistic that health savings accounts (HSAs) will become more popular with employers and will help stem costs by giving employees financial incentives to economize on health care use.

Aetna CEO Jack Rowe observed that people increasingly "want to control health care cost increases without restricting choice" and that this trend should spur the adoption of HSAs, which maximize consumer choice. Aetna notes "that a survey of its employer-customers found that medical costs for those with consumer driven plans rose only 3.7 percent last year, compared with an 11 percent rise for employers using more conventional plans."

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Anorexia: The Most Deadly Mental Illness
Forbes, 9-10-04

Anorexia is the most deadly mental illness, more deadly even than depression, schizophrenia, or bipolar disorder. Despite its lethal nature, the disease remains very poorly understood and drug treatments for it are nearly non-existent.

For as many as 90% of anorexia sufferers, the disease is curable by helping families to intervene more effectively in their children's lives by monitoring food consumption and exercise habits. "Often, parents may have to supervise their children 24 hours a day, seven days a week, in order to make sure they eat enough – as much as 4,000 calories a day to replace lost weight – and don’t exercise too much," one expert said.

The final 10%, however, who resist this formula are likely to starve to death.

There is currently no good data on any medications for treating anorexia – but some doctors are prescribing Zyprexa, an antipsychotic drug, when other interventions fail.

Off-label use of drugs is often the only option for doctors when they face poorly understood diseases like anorexia.

More research is clearly needed, and clinical trials are currently underway testing Zyprexa directly as an anorexia treatment. But the current furor over off-label pediatric antidepressant use illuminates the dilemma facing drug manufacturers, who may be unwilling to directly research cures for diseases like anorexia due to liability concerns and the public relations nightmare involved in directly marketing drugs for pediatric patients.

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Few Enroll in Low-Cost Drug Demonstration
The New York Times, 9-11-04

Less than 7,000 people have applied to enter the Medicare trial program that will offer low-cost prescription medications to elderly patients with cancer and other serious ailments. The Bush Administration had expected a flood of applicants, and had engineered a lottery system to choose 50,000 random enrollees from the applicant pool.

The program's current deadline for applications is Sept. 30, although Medicare officials expect that the deadline will be waived. Some outside observers have criticized the application process for the program as too complex; others have said that describing the plan as a "lottery" was unwise given that seniors are loath to take chances with their health care coverage.

Another, equally likely explanation, is that the partisan atmosphere surrounding the U.S. presidential election has tainted the program in the minds of many seniors, and raised unfair suspicions of a program that offers immense savings to Medicare recipients. Still, there is plenty of time correct the misperceptions. The Administration should act quickly to publicize the program in a high-profile medium, perhaps on television, to get the word out to its target audience.

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Canada Looks for Ways to Fix Its Health Care System
The New York Times, 9-12-04

Americans are flocking to Canada to find cheaper prescription drugs. On the other hand, droves of Canadians are heading south, looking to escape the long waiting lines in Canadian hospitals and doctor's offices. Or, as one Canadian patient put it, "If you are not bleeding all over the place, you are put on the back burner, unless of course you have money or know somebody."

Canadian health care is free at the point of service – assuming you ever get to that point. Economics dictates that subsidies drive over-consumption of commodities and hence, in the case of "free" health care, create artificial scarcity. As a result of this scarcity, Canadian confidence in their system is eroding, primarily because "doctors who do preliminary diagnostic work, refer patients to specialists, and monitor the care of chronically ill people are less and less available, especially in small towns and rural areas." New doctors are more likely to work in cities, or flee to the U.S. where they can make hefty salaries. In Canada's most populous province, Ontario, the number of communities "not adequately served by family doctors" is up 36% since 2000 (from 100 to 136). The Canadian government estimates that about 15 percent of Canadians don't have a family doctor.

Canada is in the midst of a debate over reforming its health care system, and will undoubtedly thrust billions more into health care funding. Will this fix the problem? Probably not in the long run. The current crisis results from the fact that patients have no way of rationing their use of health care in the absence of prices. In this sense, the more Canadians demand "free" care, the more scarce care becomes. Americans who like the idea of "free" health care should take note that free health care comes with its own costs.

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HEALTH JOURNAL: Custom Chemo: Some Doctors Want It, But Key Panel Says Tests Aren't Ready
Wall Street Journal, 9-14-04

It would be wonderful if, someday, a newly-diagnosed cancer patient could request a relatively quick, reliable test that would help their physician determine which chemotherapy drugs would be most effective against their disease.

Scientists are well on their way to developing such a test. The test, called a chemo sensitivity and resistance assay (CSRA), "[has] the potential to revolutionize cancer treatment by testing different chemotherapy drugs directly against a sample of the tumor to identify which is the most effective." This is an important development because even the best cancer drugs may "fail to help between 30% and 60% of patients" due to individual variations in the disease. Or, as one cancer researcher remarked, "The average treatment for the average patient can’t possibly work all the time because there are no average patients."

The American Society of Clinical Oncology wants more research done on CSRAs, but doesn't think they are quite ready for clinical use. Other oncologists disagree and already use the tests to help prescribe chemo for their patients. Two CSRAs are currently used: one that measures whether a chemo drug stops a cancer cell from growing and another that checks whether a drug kills cancer cells outright. (Some oncologists think the cell death test is the more reliable assay.)

As yet, the tests are expensive and more research needs to be done to show that the benefits they provide patients are more than anecdotal. Still, they bring oncologists closer to the day when they will be able to offer cancer patients tailored treatments rather than playing a guessing game with this deadly ailment.

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Method to Turn Off Bad Genes Is Set for Tests on Human Eyes
The New York Times, 9-14-04

A handful of small studies are currently testing a new technology that aims to directly target the rogue genes that produce human disease. The trials use a new drug treatment based on RNA interference (RNAi), "a standard tool for genetic studies in the laboratory" that is moving into the real world for the first time.

Accuity Pharmaceuticals is set to test the new RNAi drug in “about half a dozen elderly people at risk of blindness” who will have the drug injected directly into the whites of their eyes. "If it works, RNAi could potentially yield a cornucopia of other drugs designed to silence errant disease-causing genes in the body, or disarm an invading virus by knocking out its genes."

Other gene silencing techniques (like gene therapy) are in various stages of testing, with mixed results. Unfortunately, what is successful in vitro often proves less successful in the complex environment of the human body. Still, RNAi could become one of the fastest medical dividends from the decoding of the human genome and a welcome boost for this fledgling science.

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