Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today questioned Doug Elmendorf, the director of the nonpartisan Congressional Budget Office (CBO). The CBO does not see any savings from the Obama-care plans being debated in Congress. In other words, don’t believe the rhetoric from the White House.
America needs real and lasting health reform. This issue is too important to be rushed through in a partisan fashion.
Here is the exchange between CBOs Dr. Elmendorf and Senator Kent Conrad:
Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?
Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.
Conrad: So the cost curve in your judgement is being bent, but it is being bent the wrong way. Is that correct?
Elmendorf: The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths. But it is very hard to look out over a very long term and say very accurate things about growth rates. So most health experts that we talk with focus particularly on what is happening over the next 10 or 20 years, still a pretty long time period for projections, but focus on the next 10 or 20 years and look at whether efforts are being made that are bringing costs down or pushing costs up over that period.
As we wrote in our letter to you and Senator Gregg, the creation of a new subsidy for health insurance, which is a critical part of expanding health insurance coverage in our judgement, would by itself increase the federal responsibility for health care that raises federal spending on health care. It raises the amount of activity that is growing at this unsustainable rate and to offset that there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid. Certainly reforms of that sort are included in some of the packages, and we are still analyzing the reforms in the House package. Legislation was only released as you know two days ago. But changes we have looked at so far do not represent the fundamental change on the order of magnitude that would be necessary to offset the direct increase in federal health costs from the insurance coverage proposals.
Conrad: And what about the Finance Committee package, as it stands?
Elmendorf: I can’t speak to that Mr. Chairman. We have been working with the Finance Committee and the staff for a number of months on proposals that they have been addressing. But our consultations with them have been confidential because they have not yet released the legislation, and I don’t want to speak publicly about that.
Conrad: All right. In terms of those things that are public from other plans, what are the things that are missing that in your judgement prevent a bending of the cost curve in the right way?
Elmendorf: Bending the cost curve is difficult. As we said in our letter to you, there is a widespread consensus, and you quoted some of this, that a significant share of health spending is not contributing to health. But rooting out that spending without taking away spending that is beneficial to health is not straightforward.
Again, the way I think experts would put it – the money is out there, but it is not going to walk in the government’s door by itself. And devising the legislative strategies and the regulatory changes that would generate these changes is not straight forward. But the directions that have widespread support among health analysts include changing the preferential tax treatment of health insurance. We have a subsidy for larger health insurance policies in our tax code, and that like other subsidies encourages more of that activity. Reducing that subsidy would reduce that. And on the other side, changing the way that Medicare pays providers in an effort to encourage a focus on cost effectiveness in health care and not encourage, as a fee for service system tends to, for the delivery of additional services because bills for that will be paid.
Reference: ABC News
Thursday, July 16, 2009
Obama’s New Math
President Barack Obama is planning on having his cake and eating it too. He wants the Government to offer a public option, but expecting employers to continue offering insurance to their employees. How likely is that scenario?
Less than 24 hours than the final scope of Obama-care was revealed, employers are starting to discover Obama-math.
Here’s what Obama-math looks like:
Employers would face an 8% penalty (or tax) if they don’t provide insurance to their employees. Barack Obama is counting on employers to continue providing insurance to their employees. The $1 trillion price tag on Obama-care is predicated on only 10 million Americans enrolling in the program.
A physician group in the Midwest provided this brilliant example of Obama-math during meetings in Washington, D.C. this week. They have payroll of $51 million per year, and currently pay $7 million per year in health benefits to employees. However, if this business decided to cancel the health insurance benefits for their employees and pay the 8% penalty tax they would owe only $4.1 million per year. So, they would save about $3 million a year by shifting the burden to the government.
Independent experts are predicting that as many as 150 million Americans could end up in the Government program within 24 months. If every 10 million Americans in Obama-care costs $1 trillion, what will be the real price tag of Obama-care? You can do the math.
Less than 24 hours than the final scope of Obama-care was revealed, employers are starting to discover Obama-math.
Here’s what Obama-math looks like:
Employers would face an 8% penalty (or tax) if they don’t provide insurance to their employees. Barack Obama is counting on employers to continue providing insurance to their employees. The $1 trillion price tag on Obama-care is predicated on only 10 million Americans enrolling in the program.
A physician group in the Midwest provided this brilliant example of Obama-math during meetings in Washington, D.C. this week. They have payroll of $51 million per year, and currently pay $7 million per year in health benefits to employees. However, if this business decided to cancel the health insurance benefits for their employees and pay the 8% penalty tax they would owe only $4.1 million per year. So, they would save about $3 million a year by shifting the burden to the government.
Independent experts are predicting that as many as 150 million Americans could end up in the Government program within 24 months. If every 10 million Americans in Obama-care costs $1 trillion, what will be the real price tag of Obama-care? You can do the math.
Sunday, June 28, 2009
A Public Healthcare Option
In Washington, D.C., there has been tremendous discussion of healthcare reform over the last few weeks. You’d have to be living in a hole not to realize the deep divisions that have broken out over whether the federal government can and should offer a public option.
The reality is that if the government offers a public option, most private insurers will found. The lobbying group America’s Health Insurance Plans (AHIP), the same people who brought you HMOs, PBMs and RBMs to ration care, are now running scarred. If the government offers a public option, that will basically be the only thing left in 10 years. And that’s fine. But when the CBO scored the bill, they are counting on private insurers staying in the game and they are counting on employers continuing to offer coverage.
I want to make two points:
First, whenever the Congressional Budget Office (CBO) has scored a healthcare bill, they have UNDERESTIMATED the cost by 25-100%. That means, when the CBO scores a bill at $1.4 Trillion, the real cost could be anywhere from $1.85 Trillion to $2.8 Trillion. Currently, total spending on Healthcare in the U.S. is $2.2 Trillion. So, Obama’s healthcare reform will double the total cost of healthcare. We’ve seen it with CBO scoring on CHIP and we’ve seen it with CBO scoring on Medicare reform. President Obama is trying to fudge the math down to make it more palpable Americans, but the reality is that costs will balloon like nothing this country has ever seen. Now, we’ve got 256 million Americans on health insurance already (for a cost of $2.2 Trillion). We’re going to put another 50 million Americans on health insurance for a cost of $1.4 Trillion (according to the CBO). Who does the last 50 million cost as much as the previous 256 million? President Obama campaigned on fuzzy math, but this is really fuzzy.
Second, just because the government is going to offer a public option doesn’t mean doctors are going to accept it. Depending on the study, anywhere between 20%-50% of doctors do not accept Medicare patients. Doctors don’t want anything to do with government funded healthcare. A good summary of the problem can be found in this April 2009 New York Times article “Doctors Are Opting Out of Medicare.” Just because Obama is going to offer a public option, doesn’t mean the public will be able to get healthcare.
President Obama’s plans for healthcare reform make good soundbites for the evening news, but the policy hasn’t been thought though. Instead of rushing reform through, Obama should carefully craft legislation. Rushing healthcare reform is like rushing the Patriot Act through – an emotional reaction to a situation that ends up making things worse.
The reality is that if the government offers a public option, most private insurers will found. The lobbying group America’s Health Insurance Plans (AHIP), the same people who brought you HMOs, PBMs and RBMs to ration care, are now running scarred. If the government offers a public option, that will basically be the only thing left in 10 years. And that’s fine. But when the CBO scored the bill, they are counting on private insurers staying in the game and they are counting on employers continuing to offer coverage.
I want to make two points:
First, whenever the Congressional Budget Office (CBO) has scored a healthcare bill, they have UNDERESTIMATED the cost by 25-100%. That means, when the CBO scores a bill at $1.4 Trillion, the real cost could be anywhere from $1.85 Trillion to $2.8 Trillion. Currently, total spending on Healthcare in the U.S. is $2.2 Trillion. So, Obama’s healthcare reform will double the total cost of healthcare. We’ve seen it with CBO scoring on CHIP and we’ve seen it with CBO scoring on Medicare reform. President Obama is trying to fudge the math down to make it more palpable Americans, but the reality is that costs will balloon like nothing this country has ever seen. Now, we’ve got 256 million Americans on health insurance already (for a cost of $2.2 Trillion). We’re going to put another 50 million Americans on health insurance for a cost of $1.4 Trillion (according to the CBO). Who does the last 50 million cost as much as the previous 256 million? President Obama campaigned on fuzzy math, but this is really fuzzy.
Second, just because the government is going to offer a public option doesn’t mean doctors are going to accept it. Depending on the study, anywhere between 20%-50% of doctors do not accept Medicare patients. Doctors don’t want anything to do with government funded healthcare. A good summary of the problem can be found in this April 2009 New York Times article “Doctors Are Opting Out of Medicare.” Just because Obama is going to offer a public option, doesn’t mean the public will be able to get healthcare.
President Obama’s plans for healthcare reform make good soundbites for the evening news, but the policy hasn’t been thought though. Instead of rushing reform through, Obama should carefully craft legislation. Rushing healthcare reform is like rushing the Patriot Act through – an emotional reaction to a situation that ends up making things worse.
Friday, June 5, 2009
Reforming Health Care by Anecdote
Time Magazine has a story this week called “Fixing Health Care: When Patients Don’t Know Best” by Dr. Scott Haig that should strike fear in patients everywhere. While a few doctors are appreciative that patients are taking a more active role in the healthcare, unfortunately, far too many learned physicians cling to the attitudes that the best patient is an ignorant one and “the doctor always knows best.” Dr. Scott Haig’s attitude reminds of the Joe Isuzu commercials and perhaps his article should have been called “Reforming Health Care By Anecdote: Trust Me I’m a Doctor.”
And most doctors think like Dr. Scott Haig. They think, “I’m a great doctor. I know everything that is in the best interest of this patient.” And, of course, over 100,000 patients die every year at hands of these doctors who can do no wrong. In fact, physician inflicted death due to medical and/or surgical error is the 5th leading cause of death in the United States. Do you still trust your doctor? Last year, in a survey of physicians, over 53% of doctors confessed to spending more time per week on their golf game than they do on reading medical journals. Do you still trust your doctor?
To support his assertion that patients often don’t need a MRI diagnostic test (his judgment is “good enough”) and they don’t need a second opinion, Dr. Scott Haig offers two anecdotes – both of ruptured Achilles tendons in which patients wanted MRI scans done, but he thought it was wasteful since he already "knew" the diagnosis. He’s picked probably the easiest medical diagnosis to over-simplify the argument and make concerned patients look foolish.
For every overly simplistic anecdote that Dr. Scott Haig can offer, I can give you several where the doctor botched the diagnosis because “the doctor knows best” attitude led to arrogance which caused them to miss the real diagnosis. The 49 year old male patient complaining of acute pain of the abdomen on the left side. Diagnosis: Appendicitis. And a shoot-from-the-hip doctor would have removed the asymptomatic appendix and called it a day. Thank god for second opinions. Turns out his pains weren’t acute at all (they had been intensifying for several months), but the patient mistook them for acid reflux. Correct diagnosis: duodenal cancer.
Every time I hear physicians talking about how patients should sit quietly, do as their told and be seen but not heard, I get very afraid for the patients out there. More often than not, patients do know best. When a patient asks for a second opinion, many doctors take it personally, like a deep wound to their massive egos.
Dr. Haig hints around at the issue – financial loss. Taking time to work with an engaged patient consumes too much of physicians time and reduces their turnover.
I just wish elitist doctors would one day realize that, in the long run, an active and engaged patient will ultimately consume less healthcare resources than the ignorant diabetic who doesn’t watch their diet, doesn’t take their meds and doesn’t exercise. Quibbling over a diagnostic test or second opinion (perhaps avoiding one of the 100,000 physician inflected deaths) is penny wise and pound foolish.
Reference: Dr. Scott Haig’s article in Time.
And most doctors think like Dr. Scott Haig. They think, “I’m a great doctor. I know everything that is in the best interest of this patient.” And, of course, over 100,000 patients die every year at hands of these doctors who can do no wrong. In fact, physician inflicted death due to medical and/or surgical error is the 5th leading cause of death in the United States. Do you still trust your doctor? Last year, in a survey of physicians, over 53% of doctors confessed to spending more time per week on their golf game than they do on reading medical journals. Do you still trust your doctor?
To support his assertion that patients often don’t need a MRI diagnostic test (his judgment is “good enough”) and they don’t need a second opinion, Dr. Scott Haig offers two anecdotes – both of ruptured Achilles tendons in which patients wanted MRI scans done, but he thought it was wasteful since he already "knew" the diagnosis. He’s picked probably the easiest medical diagnosis to over-simplify the argument and make concerned patients look foolish.
For every overly simplistic anecdote that Dr. Scott Haig can offer, I can give you several where the doctor botched the diagnosis because “the doctor knows best” attitude led to arrogance which caused them to miss the real diagnosis. The 49 year old male patient complaining of acute pain of the abdomen on the left side. Diagnosis: Appendicitis. And a shoot-from-the-hip doctor would have removed the asymptomatic appendix and called it a day. Thank god for second opinions. Turns out his pains weren’t acute at all (they had been intensifying for several months), but the patient mistook them for acid reflux. Correct diagnosis: duodenal cancer.
Every time I hear physicians talking about how patients should sit quietly, do as their told and be seen but not heard, I get very afraid for the patients out there. More often than not, patients do know best. When a patient asks for a second opinion, many doctors take it personally, like a deep wound to their massive egos.
Dr. Haig hints around at the issue – financial loss. Taking time to work with an engaged patient consumes too much of physicians time and reduces their turnover.
I just wish elitist doctors would one day realize that, in the long run, an active and engaged patient will ultimately consume less healthcare resources than the ignorant diabetic who doesn’t watch their diet, doesn’t take their meds and doesn’t exercise. Quibbling over a diagnostic test or second opinion (perhaps avoiding one of the 100,000 physician inflected deaths) is penny wise and pound foolish.
Reference: Dr. Scott Haig’s article in Time.
Tuesday, May 19, 2009
The FDA Has A New Commissioner
The FDA officially has a new Commissioner. The Senate quietly…very quietly…confirmed Dr. Margaret Hamburg as the new Agency head.
Dr. Hamburg was the youngest New York Health Commissioner and has had several decades of experience in public health, bio-terrorism and communicable disease prevention. Like President Obama, she is a Harvard alum and is of mixed race ancestry. She serves on the Board of Sidwell Friends, where the Obama’s send their daughters.
Hopefully, Dr. Hamburg is up to the challenge of leading such a large and complex agency. God knows the agency could use her – the FDA desperately needs consistent leadership.
Dr. Hamburg was the youngest New York Health Commissioner and has had several decades of experience in public health, bio-terrorism and communicable disease prevention. Like President Obama, she is a Harvard alum and is of mixed race ancestry. She serves on the Board of Sidwell Friends, where the Obama’s send their daughters.
Hopefully, Dr. Hamburg is up to the challenge of leading such a large and complex agency. God knows the agency could use her – the FDA desperately needs consistent leadership.
Monday, May 18, 2009
Risperdal Consta Approved for Bipolar Disorder
J&J’s Janssen has received approval from the FDA for the long-acting version of Risperdal Consta (risperidone) for the treatment of bipolar I disorder. Risperdal Consta was approved for schizophrenia in 2003.
Also benefitting from the announcement is Boston biotech Alkermes, which provides technology to make long lasting drugs.
Also benefitting from the announcement is Boston biotech Alkermes, which provides technology to make long lasting drugs.
Friday, May 15, 2009
CDC Gets New Director
President Barack Obama has appointed Dr. Thomas Frieden as the new Director of the Centers for Disease Control and Prevention (CDC). Dr. Frieden is currently serving as the Commissioner of the New York City Health Department. I don’t have actually have anything snarky to say about Dr. Frieden as he is one of the few appointments from President Obama that doesn’t have a huge cloud of suspicion over him.
President Obama sayz: "America relies on a strong public health system and the work at the Centers for Disease Control and Prevention is critical to our mission to preserve and protect the health and safety of our citizens. Dr. Frieden is an expert in preparedness and response to health emergencies, and has been at the forefront of the fight against heart disease, cancer and obesity, infectious diseases such as tuberculosis and AIDS, and in the establishment of electronic health records. Dr. Frieden has been a leader in the fight for health care reform, and his experiences confronting public health challenges in our country and abroad will be essential in this new role."
Congratulations to Dr. Frieden!
Source: President Obama’s press release
President Obama sayz: "America relies on a strong public health system and the work at the Centers for Disease Control and Prevention is critical to our mission to preserve and protect the health and safety of our citizens. Dr. Frieden is an expert in preparedness and response to health emergencies, and has been at the forefront of the fight against heart disease, cancer and obesity, infectious diseases such as tuberculosis and AIDS, and in the establishment of electronic health records. Dr. Frieden has been a leader in the fight for health care reform, and his experiences confronting public health challenges in our country and abroad will be essential in this new role."
Congratulations to Dr. Frieden!
Source: President Obama’s press release
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