|Selected news articles which highlight important policy issues.||
News: Weekly Archives
News for the week of 09-21-2004
"All too often", heart disease patients are treated at hospitals, only to receive poor follow-up for cholesterol and blood pressure drugs once they are discharged, leading to readmission and higher mortality rates later on.
Recently, a group of hospitals, led by Intermountain Health Care, "[reported] success in boosting the number of patients" who get life-saving medications and check-up lists upon discharge. The hospitals showed that with these "systematic medication programs" hospitals reduced the likelihood of readmission or death in discharged heart disease patients. "The study found that a strategy implemented in 1997 using checklists, reminder cards, follow-up phone calls, and educational brochures was effective in tracking whether the patients got prescriptions and in improving doctor's adherence to recommended standards of care." The program's checklist adheres to guidelines established by the American College of Cardiology and the American Heart Association.
Effective disease management programs like these have the potential to save lives and reduce costs, and policymakers should offer Medicare and Medicaid payment incentives to providers that provide better risk-adjusted outcomes than their competitors.
The debate over legalized drug importation should really be a debate over price controls – because that is what the U.S. would have if it opens its doors to universal importation from Canada and other price-controlled markets.
The reality is that price controls represent an enormous transfer of health and wealth from future generations of patients to today's consumers. The European system of price controls and parallel importation substantially slows the pace of pharmaceutical investment and R&D, leading to worse health care for hard to treat, expensive conditions, and fewer innovative new drugs coming to market. Since the U.S. accounts for the lion's share of global drug sales, price controls here would further erode access to new medicines in the U.S., Europe, and the developing world.
This is the real debate: the present versus the future, today’s cancer and Alzheimer's drugs, versus tomorrow's breakthroughs. The evidence is that, on balance, innovation saves more lives than the status quo, and it is precisely on this question that the importation debate should focus – not whether or not a lone Pfizer executive from Europe is in favor of importation.
Like most advanced countries, Canada’s population not getting any younger. As it ages, the quality of Canadian health care and health care financing will become increasingly potent – and divisive – issues.
Notably, according to the Canada-based Institute for Clinical and Evaluative Sciences (ICES), the health care treatments being demanded by elderly Canadians to ease chronic and degenerative medical conditions are becoming harder and harder to come by due to lengthy waiting lists. Patients waiting for surgical knee replacements did so for an average of 29 weeks in 2002, up from 20 in 1994. Patients waiting for hip replacements average "only" 20 weeks, up from 16 in 1994.
"The fundamental problem is that demand for these procedures continues to increase but availability remains remarkably flat", said Dr. Elizabeth Bradley, an ICES researcher. Dr. Bradley also noted that this is just "the tip of the iceberg", since growing percentages of the Canadian population are experiencing arthritis and the burgeoning costs associated with pain management drugs. Related services for arthritis patients – orthopedic surgeons, rheumatologists, physiotherapists, occupational therapists, and chiropractors – are also becoming increasingly rare.
Canadian demand is growing, but the supply of critical services is static – because prices are fixed by the government and consumption is subsidized, i.e. consumers have no incentives to ration their use of the system, and new providers have no incentives to bring new services to market. Until the incentives change (for both patients and providers), Canada’s "free" health care will grow increasingly out of reach for those who most need it.
The Informed Patient: Electronic Medical Records Are Taking Root Locally
This story gives a whole new meaning to the phrase "think globally, act locally." In New York, the Taconic Health Information Network is one of the pioneers in the race to ensure that all Americans have electronic health records that physicians can easily consult to ensure that patients are receiving the best care possible. These health records would also be completely portable, following patients regardless of employment or location of treatment.
Currently, Taconic is one of over 100 local and state groups that are using small grants from the federal government and nonprofit groups to implement their own e-health records on a regional basis. "By using a single network, regional health groups says they can reduce medical mistakes, better track patients with chronic diseases such as diabetes, zip prescriptions electronically to pharmacies, and cut costs by eliminating duplicated lab tests and x-rays.
Regional groups also believe they have an advantage over a single national system by tailoring health records to fit the health care "needs of specific geographic populations." Although creating e-health records is a daunting and expensive task, smaller alliances of providers and insurers are joining together to build the system from the bottom up. In this model, the federal government’s limited role would be to push for agreement on a "single technical standard that will let all the different medical records in the country eventually talk to each other and share data, all the while allowing access only to authorized users, to ensure privacy." Eventually, the regional systems would operate much as the Internet does, with local nodes all adhering to a common information standard without sacrificing diversity or being burdened by excessive regulation.
When the Insured Struggle to Pay for Health Care
Perhaps as many as "57 million, or one third of U.S. working age adults dealt with some kind of long-term illness, such as diabetes, heart disease or depression." Even when they have health insurance, people with chronic illnesses can be vulnerable to soaring health care costs, as rising premiums force their employers to pass more costs along to them.
However, part of the problem lies with how the U.S. structures health care. Insurance coverage by employers is fully tax deductible, while expenditures by employees are not. This robs employees of the power to shop for better values in insurance markets by seeking out insurers who offer plans tailored to their illnesses, or even to purchase supplementary insurance that would provide a safety net in addition to insurance paid for by employers.
Equalizing the tax laws so that all out of pocket health care expenditures (or at least insurance purchases) are tax deductible would help to close this gap, as would changes in federal law that would allow consumers to shop for insurance nationally, spurring much needed competition and innovation in insurance markets. Putting more responsibility, and consequently more power directly in patients hands would greatly help to alleviate the perverse incentives that simultaneously driving up premium costs for employers and prevent people from adequately insuring themselves against unforeseen health expenditures.
Low-Income Nonapplicants to Get Medicare Drug Cards
The Bush Administration has taken an important step in insuring that the newly enacted Medicare discount cards reach the people who need them most by automatically enrolling as many as 1.8 million low-income Medicare seniors into the program. Low-income seniors who use the card and its attached $600 subsidy can cut their out of pocket costs by as much as two-thirds (according to a recent study by the American Enterprise Institute). Hopefully, this move will help to raise public awareness of the program and convince seniors that it represents a real opportunity, not a risk.
Critics: Legalization Will Lead To Job Losses
The critics are probably right. Two new studies, focusing on state job losses due to drug importation, show that "[importation] would wipe out thousands of jobs in states like Massachusetts that depend on pharmaceutical and biotechnology research." One study, conducted by the Beacon Hill Institute at Suffolk University and the think tank Institute for Policy Innovation, shows that Massachusetts would lose nearly 4,000 jobs and $246.9 million by 2010.
A similar study, from the University of Michigan (and sponsored by Pfizer), shows that Michigan could expect "job losses of 20,000 to 133,000 over the next decade, corresponding with overall declines in pharmaceutical research and development of 25 to 75 percent."
Critics of these studies who accuse the pharmaceutical companies of greed and sour grapes should take a closer look at Europe – where pharmaceutical R&D and its attendant high-paying jobs have fled to the U.S. as price controls and parallel importation became increasingly prevalent there. Given the European experience, there is no reason to expect that Americans wouldn't experience a similar trend, with investment shifting to China, India and other low-cost, high-tech developing markets. (For more information on Europe’s self-inflicted wound, see Europe's Pharmaceutical 'Free Ride' Might Not Be So Free after All.)
The FDA will require all antidepressants to carry some kind of highly visible warning about the risk of increased suicidal tendencies in young people, but it has not yet decided if it will heed the advice of an FDA Advisory Committee to place a "black box" label on the drugs, the most serious step short banning the drugs outright for pediatric use or withdrawing them from the market.
The FDA's concern is that the black box may cause some physicians and parents to avoid the drugs entirely, leaving them with few effective options for treating severe pediatric depression.
Insider Challenges Drug Industry on Imports
As detailed in yesterday’s MPT Special Edition, Does Importation Save Money and Lives? Not in Europe, a Pfizer executive from Europe has taken it upon himself to speak his conscience and support the legalization of drug importation in the U.S. Currently importation, called parallel trade, is legal in Europe, where wholesalers are allowed to re-import drugs from low-cost markets like Greece, to high-cost markets like the U.K.
Still, studies have shown that the national governments in the E.U. save very little from parallel importation because the price differentials between markets are captured as profits by the wholesalers who repackage and ship drugs. While slashing profits for pharmaceutical companies may play well in certain audiences, the fact is that with reduced profits companies have fewer incentives to pursue research on new medicines.
In the long run, that means lost lives and poorer patient health; contra Dr. Rost, isn’t that a real safety issue?
U.S. drug agency alleges intercepted Canadian prescription drugs unsafe, made elsewhere
Customs agents in Miami this week intercepted "439 packages of prescription drugs ordered by Americans from the website www.CanadaRX.com." Many of the packages had suspicious or incorrect labeling, and had come from as far a field as Singapore, Japan, and New Zealand. The FDA alleged that CanadaRx had opened a division in the Bahamas to purposefully evade regulation by Canadian and American authorities.
When drugs are purchased online, some Internet pharmacies may try to substitute cheaper drugs from foreign wholesalers to increase their profit margins, raising the possibility that consumers are unknowingly paying more for inferior quality drugs. Fraud is an ever present possibility since drugs purchased abroad must often be repackaged and relabeled to meet U.S. standards; this opens a wide avenue for drug substitutions, mislabeling, or outright fraud. Until these safety concerns can be addressed, Internet sales will be accompanied by the risk of fraud or worse.
Dr. McClellan's Medicare Rx - Deft Political Hand Reshapes Health-Insurance Behemoth
Dr. Mark McClellan, former FDA Commissioner and current Administrator of the Centers for Medicare and Medicaid Services, is a quiet but persuasive reformer who is trying to nudge America's titanic federal health care programs into the 21st century, primarily by insisting that government health coverage should be cost-effective, and based on real information about what treatment works and why.
This means getting America's fragmented system to become increasingly quality based, rather than driven solely by cost-control approaches, and to increase the amount of information available to Americans about their health care options. Says Dr. McClellan, "If we learn more about when certain treatments don't work, then doctors and patients aren’t going to want to use them and we're not going to have to pay for them." As a physician and an economist, Dr. McClellan is a champion of the viewpoint that the most effective care is often also least expensive in the long run. If he can instill that culture in the government’s enormous Medicare bureaucracy, while convincing seniors to embrace competition and choice, he will manage to revolutionize American government without ever holding elected office.
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