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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 04-13-2007

Mass. Health plan finds cost is too high for 20% of people
USA Today, 4-13-07

Editor's Notes:

A year after former Republican Governor Mitt Romney and the Massachusetts' legislature passed a plan mandating individual insurance coverage in the Bay State, the final details of the plan are emerging.

The lynch pin of the state mandate, according to the law, is that residents must have coverage if it is "affordable". While trumpeting the plan as universal coverage, state regulators announced this week that as many as 1 out of 5 uninsured residents will be exempted from the mandate.

In an answer that pleased many of the state's patient advocates, the board overseeing the first–in–the–nation effort to require everyone to carry insurance exempted up to 20% of the state's estimated 328,000 uninsured adults from penalties if they do not purchase coverage.

For that 20%, the board determined that even the lowest–cost insurance plans made available through the law enacted one year ago may not be affordable.

The insurance plans, approved in March, range in monthly cost from $122 to more than $800, with the lowest premiums paid by young adults and the highest by those over 55. The least costly premium for those in middle age is about $175 a month.

Those not exempted by the new rules are required by the law to have coverage by July 1 or lose a tax exemption worth about $200 per person.

...

In a unanimous vote, the Commonwealth Health Insurance Connector Authority extended free care to those earning up to 150% of the federal poverty level, about $15,315 for individuals or $20,535 for couples. It lowered monthly premiums for residents who earn up to twice that much—and therefore qualify for state–subsidized coverage.

It also determined affordability for most of the state's other residents on a sliding scale, based on income and family size, generally saying affordability means spending at least 5% but no more than 10% of income on premiums. The board did not consider other costs, such as annual deductibles, in the affordability standard.

Increasing the subsidies to low–income residents will add an additional $13 million in cost to the program this year, bringing the total to an estimated $483 million.

The decision will be watched closely as other states also work on plans that aim to reduce the number of uninsured

Ironically, state approved plans would be even more affordable if the regulators allowed residents to purchase policies without expensive state mandates on what services or providers insurers must cover—for instance, for infertility treatments or chiropractors. But the Mass. plan was passed without addressing the issue of state regulations that drive up the cost of health insurance.

Also, since the tax penalty for not buying insurance is very low—$200—many of the uninsured will still find it cheaper to go without insurance than buy it. It will take some time to evaluate this ambitious experiment, but the odds are that more than 20% of the uninsured will still be uninsured a year from now.

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AOL Founder Hopes to Build New Giant Among a Bevy of Health Care Web Sites
The New York Times, 4-16-07

Editor's Notes:

This week, Revolution Health Group, the health care project launched by Steve Case, founder of America Online, debuted its flagship Web site, RevolutionHealth.com.

Stephen M. Case wants to be America's doctor, courtesy of the Web. This week he plans to unveil his new company's Web site for consumers, RevolutionHealth.com, which has built a growing audience since a test version went online in January.

The site, to be officially introduced on Thursday, is part of Mr. Case's Revolution Health Group, a company he has bankrolled with a group of others who—like him—are famous for what they used to do for a living, including Carleton S. Fiorina and Colin L. Powell.

Revolution Health's other medical ventures include a stake in the growing RediClinic chain of retail health clinics operating in some Wal-Marts, Walgreen's and other stores around the country.

Mr. Case, the America Online founder who oversaw an ill-fated merger with Time Warner before he left in 2003, set up Revolution Health two years later. He says the time is ripe for a dominant health care brand—one that could be as powerful as Starbucks in latte or Nike in fitness. So far he has devoted more than $100 million of his money toward that goal with the RevolutionHealth.com Web site.

"There is a big opportunity to create the most trusted brand in health," Mr. Case said in a phone interview late last week. It is such a potentially big opportunity, in fact, that one of RevolutionHealth.com's main challenges could be making itself visible in a market increasingly crowded with competitors elbowing for the consumer-patient's attention.

The biggest in the pack by far is WebMD Health, a stock market favorite of late, which has more than 40 million unique users a month visiting its network of consumer sites, including the flagship, WebMD.com. Other leaders, as measured by Web traffic, include NIH.gov, from the National Institutes of Health; Yahoo Health; Mayoclinic.com; and About.com Health, which is owned by The New York Times Company.

As the Times notes, RevolutionHealth is entering a crowded market, but there is still plenty of room for innovative companies to help consumers manage their own health care. Concierge medicine—helping consumers find the best health care options at the best prices—is the wave of the future. The only question is which company will catch the wave and ride it to commercial success.

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Drug safety bill would limit direct-to-consumer-ads; industry claims free speech violation
Associated Press, 4-17-07

Editor's Notes:

Congress is considering legislation that may sharply limit the ability of pharmaceutical companies to offer direct to consumer advertising on new drugs.

Pharmaceutical companies could be prohibited from advertising new drugs directly to consumers for the first two years they are on the market under a bill moving through the U.S. Congress this week.

The goal, supporters say, is to ensure medicines are safe before allowing industry to promote them to consumers in the hopes they will request prescriptions from doctors.

While the Food and Drug Administration already screens a small portion of ads voluntarily submitted by drug companies, consumer advocates favor much tougher regulation, arguing that the studies companies use to test the safety of new drugs are not always large enough to spot dangerous side effects.

"We don't know, and we won't know, how truly safe a drug is until it's been used in millions of people," said Consumer Reports analyst Bill Vaughan. "The real testing of these drugs takes place after a pill hits the market and that's why the advertising needs to be regulated."

For its part, the drug industry says pharmaceutical ads are an important tool for patients, giving them information about diseases and treatment options.

"Banning this information even for just a couple of years is not in the best interest of patients and physicians who every day make important health care decisions," said Ken Johnson, Vice President for the Pharmaceutical Research and Manufacturers of America.

Congress is making a classic error: considering the risks of using new drugs without considering the benefits that those medicines have for patients.

By limiting how new drugs are marketed, Congress will also the slow the dissemination of valuable information that can help improve patient care without necessarily making anyone any safer.

It is true that very rare side effects from some drugs may not be discovered until millions of patients take them. But slowing the take up rate for new drugs won't alter that reality.

We are also, as Dr. Scott Gottlieb writes below , on the verge of unlocking the science of how subtle differences between patients can put them at risk for side effects or increase the likelihood that they will respond to some drugs better than others. Congress should fund better drug science at the FDAnot put the brakes on how companies tout new medicines.

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Project FDA.

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