In the Spotlight
Britain's National Health Service Embraces a New Faith in Market Incentives
Benedict Irvine, 9-9-04
America is undergoing a tumultuous presidential election in which much ink – and much angst – is being spilt on reforming your health care system, the most expensive in the developed world. That expense is driving some policymakers to look with envy towards Europe, and our nationalized health care plans with their rigid cost containment systems.
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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.
ACE Inhibitors Protect the Heart with Dual Action
Wall Street Journal, 9-1-04
Researchers have discovered that ACE (angiotensin converting enzyme) inhibitors not only reduce blood pressure, but also improve the health of artery walls in patients who take them. Scientists have long suspected that the drug's health benefits couldn't be entirely explained by the effects of lowered blood pressure; they have gone on to discover that ACE inhibitors slow the rate of apoptosis, or programmed cell death, in the blood vessel linings of patients with heart disease.
This is critical because as the linings of arteries (called endothelial cells) decay, they become more vulnerable to plaque formation and thus to cardiovascular problems. This study supports the thesis that the growing number of treatments for heart disease – from statins to ACE inhibitors and other drugs just coming on market – not only offer patients more options, but broadens our understanding of this deadly ailment, the leading cause of death in America.
HMO To Unveil Plan For Elderly Poor; Colorado Access To Key On Increased Medicare Payments
Rocky Mountain News, 9-1-04
One of the provisions of the Medicare Modernization Act of 2003 increased premium payments for HMOs in an attempt to encourage them to enroll low-income elderly patients who may have costly prior health problems.
At least in Colorado, the plan seems to be having its intended effect. Colorado Access has created "Colorado's first health plan for elderly people with incomes at or below the poverty level." Increased payments are giving HMO's like Colorado Access the financial incentives to find cost-effective ways to treat these patients, and to improve the health of low-income seniors. The Colorado plan includes "a network of 2,000 providers and no co-pays, premiums, or deductibles", and also provides "free annual check-ups, free eyeglasses, $500 worth of dental care and a hearing benefit" for enrolled seniors.
Creating competition between public and private providers, and holding them both accountable for results is one of the goals of Medicare reform advocates. Colorado Access has taken a good first step in that direction.
Reassessing a Popular Cholesterol Drug: Big Zocor Doses Fail to Offer Benefit to High-Risk Patients; Insights on Statins Emerge
Wall Street Journal, 8-31-04
There are several statins on market today – but a growing body of research is showing that, as far as patients are concerned, all statins are not created equal. A new study of Merck's statin drug Zocor has failed to show a benefit for patients at high risk for heart attacks and other adverse cardiovascular events, even when prescribed at high dosages (80 milligrams).
This finding comes on the heels of an earlier study showing that a rival statin drug, Pfizer's Lipitor, showed a benefit for high-risk patients (reducing both LDL cholesterol and the risk of serious heart problems) when given at high doses (also 80 mg). Cardiologists had expected similar findings for the other statin drug but, even though they both reduced LDL cholesterol levels, Zocor "had no difference in heart attacks, death from heart attacks, strokes, or hospital readmissions for heart problems" versus placebo.
Zocor will not doubt remain an effective treatment for the majority of patients at moderate risk for cardiovascular problems. However, while critics lambaste the industry for producing too many "me-too" drugs that have marginal benefits for patients, research is showing that, even in the same class of medications, compounds can have very different effects for different groups of patients.
How to Kill Cancer So It Doesn't Grow Back Quest Seems as Elusive as Hercules's Second Labor
Washington Post, 8-30-04
Stem cells are the undifferentiated cells from which all other cells in the human body are derived. While some researchers are rushing to learn how to use adult or embryonic stem cells to cure degenerative diseases like Lou Gehrig's disease or Alzheimer's, other scientists are discovering the even lethal cancers have their origins in stem cells.
Scientists have found evidence that the recurrence of cancer after radiation or chemotherapy treatment that wipes out the majority of cancer cells in a patient's body is due to a small number of "[cancer stem cells] that acts as the source of the malignancy, leaving the cancer able to rise again and again." Scientists have found these cells in a variety of cancers, including leukemia and brain cancers. Finding new treatments that specifically target cancer stem cells may mean the difference between a brief remission of the disease and a true cure.
To date, one researcher has found a "molecular switch" that seems to be unique to leukemia stem cells and has begun testing drugs that target these cells but leave normal blood stem cells untouched. Hopefully, in the future, scientists will be able to develop tests to specifically identify all cancer stem cells and use them as biomarkers for quickly testing the effectiveness of cancer treatments.
Canadian sites look overseas for drug supply; To combat shortages, online pharmacies used by U.S. consumers are seeking new sources. Safety could be an issue.
Los Angeles Times, 8-30-04
Canadian pharmacies selling drugs online to U.S. consumers are finding domestic supplies stretched thin by rising demand and are "increasingly selling U.S. consumers drugs that originate through pharmacies in England, Fiji, Israel, and Chile." Of course, not all national regulatory agencies meet the high standards of the FDA, raising the possibility that the U.S. drug supply could become more vulnerable to counterfeit or diluted drugs imported from countries with more lax regulations than are found in the U.S. or Canada.
More mundane questions also come to mind: "How exactly are Canadian companies deciding which companies to include? How can a U.S. consumer decipher one country's safety environment and compare it to another? Whom do people contact if they have a problem with the medication? Also, what if the labels aren't in English." All good questions without, at least for the time being, good answers. Until we have answers, perhaps we should focus on finding other solutions.
Record Level of Americans Not Insured on Health
The New York Times, 8-27-04
Much has been made of the latest increase in the number of Americans who lack health insurance (45 million as of 2003, an increase of 1.4 million from the year before). Still, about 12 million of those people were "members of families with annual incomes of $50,000 or more, including 6 million in families that made at least $75,000 a year", families that could presumably at least afford a high-deductible policy if they chose to.
More affordable policies would flourish if there was a market for them. That market should grow now that health savings accounts (HSAs) are now available in principle to over 200 million Americans. These accounts, which allow Americans to accumulate tax-free savings for routine medical expenses in conjunction with a high-deductible insurance policy, are the future of American health care. They should become popular as more employers offer them to their employees and consumers become more comfortable with treating health care the same way they treat other routine expenses. Government can accelerate this trend by letting consumers purchase insurance from any provider across the country, and empowering small businesses and other civic organizations to act as intermediaries to bargain for better rates on behalf of their members. What looks like a crisis now, is really a tremendous opportunity in disguise. Policymakers should act boldly to seize it.
Drug Makers Sued on Pricing; Fourteen pharmacies accuse the companies of charging more for medicines in the U.S.
Los Angeles Times, 8-27-04
Some American pharmacies are losing business to their cross-border competitors as a result of foreign price controls on prescription drugs. Consequently, they are striking back using America's favorite method for resolving acrimonious political disputes: litigation.
A group of California pharmacies has sued "more than a dozen drug manufacturers for conspiring to keep U.S. prices well above those same drugs in Canada and other countries." Interestingly, these countries all have price controls on prescription drugs, so the pharmacies' suit amounts to a complaint that drug manufacturers aren't unilaterally imposing price controls on themselves in the U.S.
But if lower prices are de facto better, why stop there? Why not use the courts to impose price controls on the pharmacies themselves? That would make prescription drugs even cheaper, and give U.S. pharmacies an even greater advantage over their rivals in Canada and Mexico. After all, what's good for the goose is good for the gander.
Glaxo grants 3rd AIDS drug license in South Africa.
Reuters News, 8-27-04
Glaxo has granted a South African generic drug manufacturer a license "to manufacture, import, and sell antiretrovirals containing [Glaxo's] two patented products zidovudine, also known as AZT, and lamivudine." The firm, Feza Pharmaceuticals, plans to import the drugs for now, but hopes to manufacture them locally once it gains clearance from South African regulators.
Licensing generic versions of AIDS drugs is one way that large pharma firms can both help developing nations afford valuable medications and still recoup a fraction of their investment costs.
Power to the patient
Scott W. Atlas, MD, Washington Times, 9-8-04
Dr. Atlas has grasped the crux of America’s health care woes: "The main problem is our third-party payer system. The absence of direct payment from patient to doctor for most medical expenses has shielded Americans from considerations of cost. It has imparted the illusion 'someone else is paying' and foster the idea patients are entitled to all medical care, regardless of cost. That is a costly illusion. It is also the heart of our problem." In other words, health care reform depends on returning health care insurance to a true insurance policy for catastrophic events, rather than a free pass for most forms of routine health care that patients can and should pay for themselves.
Clinton Got Quick Care, Unlike Canadian Heart Patients
Michael Cannon, Cato Daily Commentary, 9-8-04
Cannon, director of health policy studies at the Cato institute, points out that the speed with which President Clinton received heart-bypass surgery at Columbia Presbyterian Hospital during his recent bout with heart disease would be unthinkable for many patients in Canada’s national system – a system that many U.S. policymakers view with unabashed envy.
Consumer Driven Healthcare: Lessons from Switzerland
Regina E. Herzlinger, The Journal of the American Medical Association, 9-8-04
Regina Herzlinger, professor at Harvard Business School and a senior fellow at the Manhattan Institute, has reviewed the Swiss health care system, and finds that "Switzerland's consumer-driven health care system achieves universal insurance and high quality of care at significantly lower costs than the employer-based US system and without the constrained resources that can characterize government-controlled systems." She also finds some flaws in the system (too many constraints on physicians and hospitals, and too little information on provider quality) but believes that it holds valuable lessons for implementing consumer driven health care in the U.S.
America's Failing Health
Paul Krugman, The New York Times, 8-27-04
Paul Krugman praises the health care programs of other advanced countries, without noting that they all face similar cost trends to the U.S., or, in some cases, even more ominous trends considering their more rapidly ageing populations. He also implies that the U.S. does worse than all its advanced peers on health indicators "by any measure of health care success you care to name" – which is a blatant falsehood.
The fact is that, among the OECD nations, each nation can point to some notable health care successes, and must admit to some failures. For instance Britain, which has a national health insurance system, has the worst cancer mortality rates among its advanced peers. Canada's system, which Krugman praises as all wine and roses, sends its middle class and upper class patients into the U.S. for services like heart bypass surgery, so they can skip the lengthy waiting lines for surgery that Canada’s system creates. Poor patients, of course, must make do with the "access" that Canada’s national health care system offers them.
Krugman should take a fresh look at European health care systems – where policymakers are moving market incentives back into national health care programs because of mounting concerns about cost, access to quality care, and patient frustration with limited choices. Contra Krugman, global trends are largely towards consumer-driven, market-based health care, not the Canadian cost containment first-and-last model.
Vaccination Success Rate and Reaction Profile With Diluted and Undiluted Smallpox Vaccine
Sandra M. Yoder, MT, Patricia L. Winokur, MD, Thomas R. Talbot, MD, MPH, Jack T. Stapleton, MD, Michael T. Rock, PhD, Teresa Germanson, PhD, MPH, Kathryn M. Edwards, MD, James E. Crowe, Jr, MD, Rebecca C. Brady, MD, David I. Bernstein, MD,
The Journal of the American Medical Association , September 2004
The stockpile of vaccines to treat patients in the event of a bioterror attack is currently quite limited. However, this study finds that the standard vaccine treatment for smallpox, the Aventis Pasteur smallpox vaccine (APSV), is still effective even at diluted doses; however, "reactogenicity was not reduced with dilution of the vaccine and, as with other smallpox vaccines, may impair daily activities." In other words, the diluted vaccine is effective, but it also still causes the adverse effects associated with an undiluted dose.
This is a welcome finding – since it multiplies the number of effective doses at our disposal in the event of an attack – but it is disquieting to think that we are still dependent on a smallpox vaccine that was developed 50 years ago using now-antiquated technology.
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