Relevant and even prescient commentary on news, politics and the economy.

Medicare Cuts: What is the Fight About?

by Run75411

“Water For Elephants”

carrying water for elephants” is a phrase that means carrying a heavy load, much like carrying a secret that you can’t tell even someone you love wholeheartedly, just as in the end Jacob does for his wife
.
An elephant drinks 25-75 gallons of water a day far more than any man would be able to carry at any given time. http://angela-michelle.hubpages.com/hub/Water-For-Elephants “Water for Elephants” Sometimes when you get older . . . things you think on and wish on start to seem real. And then you believe them, and before you know it they’re part of your history.”

Most recently former NY Lt. Governor Betsy McGaughey in the WSJ (August 8th) commented on the ACA in “ObamaCares’s Phoney Deficit Reduction” choosing to carry water for the Republican candidates Romney and Ryan with the hope she can convince voters that President Obama’s ACA will not reduce the cost of Medicare and instead will rob the Medicare TF. By her words alone, Ms. McGaughey cannot change the numeric of Medicare expected and occurring reduced growth and costs resulting from the passage of ACA. In her, Romney and Ryan’s mines the logic of how the robbery of benefits and the Medicare is all too real even when the proof of the opposite is self-evident. The three will have to do double time if they are to provide enough water to conflate the ACA to the public if in fact they are to make them believe the illusion.

Ms. McGaughey critiques CBO Director Elmendorf’s and the JCT’s analysis (letter to House Leader John Boehner) on the impact of repealing the ACA, what it means to the country in increased costs, and then conflates the cuts to the Advantage Program and other parts of Medicare as actual cuts in benefits to Medicare recipients. The ACA states Medicare benefits cannot be reduced for Medicare recipients.

As operated by commercial insurance companies, the Advantage Program intent was to provide competition to Medicare and separate from Medicare. As Betsy believes and everyone else imagines, private commercial insurance can provide similar benefits at a lower cost and more efficiently. Except the Advantage Program did not do so and has out spent Medicare by an average of $1000 or 7% to 18% (dependent on who you read) more and in total for similar Medicare benefits.

                                        Ezra Klein , “Romney’s right: Obamacare cuts Medicare by $716 billion. Here’s how.”  
                                  Note: HMO is health maintenance organization; PPO is preferred provider organization.
   http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/14/romneys-right-obamacare-cuts-medicare-by-716-billion-heres-how/ 

                  

The very same CBO Director who wrote about the impact of repealing the ACA to House Leader John Boehner and the resulting increased costs was also a part of the CBO team which pounded the final nail into the “Hillarycare” coffin resulting in its demise in Congress. Healthcare then was 20% of the cost of what it is today. I doubt Director Elmendorf has lost any of his boldness since Clinton. So, who is right?

The best way to counter supposition and conjecture by Romney, Ryan, and Ms. McGaughey is to present detail about the cuts and to what they are related , the same as the actual cost of the Advantage program in relation to Medicare. The planned reduction in Medicare costs come from three areas, which also include the government sponsored Advantage program.

                                SOURCE: Medicare Payment Advisory Commission Report to Congress, March 2008.
                               “Medicare Advantage”; Kaiser Foundation http://www.kff.org/medicare 

30.2% of the planned reduction in Medicare costs will come from the elimination of Advantage subsidies as I stated above. The ACA also applies the same rules to the Advantage insurance programs it applies to hospitals by tying reimbursement (or fees) to quality of outcomes instead of a fee for the number of services provided.

34.8% of the reduction in cost comes from revised calculations in the reimbursement of hospitals for provided services. Hospitals not only give up the pay-for-services cost model to embrace better quality outcomes for services cost model; but, they move to electronic record keeping (which proved to be cost effective with the VA, Longman “Best Care Anywhere“), and the bundling of payments eliminating multiple billings and forcing a split of the total compensation. Knowing the increase in patients coming from the addition of the uninsured, there is also the influx of an aging baby-boomer population, which also influenced hospitals to accept the changes.

35% of the reduction result from a combination of smaller cuts in extra funds ( ~5%) given to hospitals to cover the uninsured (not needed as more people will be covered), reductions in homecare providers (~8%), fraud reduction, etc..

The $716 billion is far larger than the initial $449 billion first reported. In 2010, the CBO arrived at an estimate of savings of ~$449 billion starting from 2012 onwards and covered 6- 7 years from when the bill takes full effect in 2014 to 2019. The second estimate of savings was the result of John Boehner’s request for a review of the costs and gains realized from the repeal the ACA in its entirety. The second review covered the period from 2014 to 2022 and resulted in the $716 billion. http://www.brookings.edu/blogs/up-front/posts/2012/08/15-medicare-cuts-galston “Medicare Cuts: What is the Fight About?”


And what of other things implied?

- Healthcare spending was 17.9% of GDP in 2010 and will rise to 19.6% in 2021. Neglected and a part of the article from which this snippet of CMS information was pulled is this: Current projections also do not include potential drops in spending through health care delivery reforms, such as the accountable care organizations and medical homes being promoted by the health law.” In other words, the author projections of $ and % are being made as if the ACA did not exist. The author of this particular article is an MBA and not an economist or a doctor. Quelle Surprise?

- “Repeal also would reduce government spending, lower taxes, and undo the evisceration of Medicare; all good results.” I guess it is still unclear how Medicare is to be eviscerated under the ACA when Obama will plow the results back into Medicare, and the CMS has lengthen the TF out to 2024-2029. Comparing this to Romney wishing to end Medicare and Ryan wanting to keep the very same reductions as the ACA and take the savings for tax breaks, who is eviscerating what?

Healthcare Costs have been decreasing for years? Maybe not so long and since 2009/2010 at the earliest?

Secretary of Heath Kathy Sebelius made the comment in an article that a family of 4 paid ~$6,000 for private insurance in 2000 and ~$12,000 for similar insurance in 2009. http://www.voxxi.com/kathleen-sebelius-affordable-care-act/ “Public Needs To Get Their Facts Straight” Part of this is due to increased administrative costs and much more is a reflection of increased healthcare care costs which insurance and Medicare reflects.

Medicare has had slower growth because it has taken the necessary actions to control much of the costs associated with healthcare through pilot programs, negotiations, etc. The results of its actions are clear in the S&P Indices. The increase in enrollment of healthier patients over the last two recessions has contributed to the slow down; however, it is the ACA which started hospitals and doctors to begin to plan for full implementation and take the steps necessary to meet ACA goals for commercial insurance.

spending per enrollee slowed to 4.2% annually, as compared with 4.5% among private payers. After large increases in enrollment due to two recessions and the increasing numbers of Americans with disabilities are accounted for, growth of Medicaid spending per enrollee was relatively slow (less than 3% per… http://www.nationaljournal.com/healthcare/both-obama-and-romney-medicare-plans-fail-to-solve-the-cost-problem-20120816Medicare and Medicaid Spending Trends and the Deficit Debate”

– And the Pink Cadillac Tax? The ACA does impose a tax on plans exceeding $27,000 and typically carried by executives in the rarefied levels of management. They can always shuck it off and go to one of the insurance exchanges for a cheaper plan with no tax. There is also an excise tax on plans with premiums exceeding $10,200 for individuals or $27,500 for a family tax Other taxes include Increase Medicare tax rate by .9% and impose added tax of 3.8% on unearned income for high-income taxpayers.

So what is the Fight About? It is about whether Romney/Ryan can eliminate Medicare and repeal the ACA, and keep the same proposals President Obama put in play for Medicare but using the savings from it elsewhere (tax breaks – think SS surplus) rather than within Medicare, as both are opposed to Obama plowing the savings back into Medicare. http://www.brookings.edu/blogs/up-front/posts/2012/08/15-medicare-cuts-galston “Medicare Cuts: What is the Fight About?”

References:


Maggie Mahar Health Beat Blog

http://www.cbpp.org/cms/index.cfm?fa=view&id=3161 Federal Government Will Pick Up Nearly All Costs of Health Reform’s Medicaid Expansion

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/14/romneys-right-obamacare-cuts-medicare-by-716-billion-heres-how/ ” Romney’s right: Obamacare cuts Medicare by $716 billion. Here’s how
http://www.drugchannels.net/2011/08/cms-bright-future-for-drug-spending-in.html CMS Bright Future for Spending . . .
http://www.cms.gov/apps/docs/ACA-Update-Implementing-Medicare-Costs-Savings.pdf
Affordable Care Act Update: Implementing Medicare Cost Savings
http://www.ajhp.org/content/69/5/405.abstract Projecting future drug expenditures—2012
http://www.brookings.edu/blogs/up-front/posts/2012/08/15-medicare-cuts-galston Medicare Cuts: What Is the Fight About?
http://www.kff.org/medicare/upload/2052-11.pdf Medicare Advantage
http://factcheck.org/2012/06/romney-obama-uphold-health-care-falsehoods/ Romney, Obama Uphold Health Care Falsehoods
http://www.voxxi.com/kathleen-sebelius-affordable-care-act/ Public Needs . . .
http://www.reuters.com/article/2012/06/12/us-usa-healthcare-spending-idUSBRE85B1DI20120612 Government forecasts modest health spending growth
http://online.wsj.com/article/SB10001424052702303768104577462731719000346.html?mod=WSJ_hps_LEFTTopStories ” Steep Rise in Health Costs Projected”
http://www.nejm.org/doi/pdf/10.1056/NEJMp1204899 “Medicare and Medicaid Spending Trends and the Deficit Debate”
http://www.urban.org/UploadedPDF/412419-Containing-the-Growth-of-Spending-in-the-US-Health-System.pdf “Containing the Growth of Spending in the U.S. Health System”

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Endogenous Economic Growth and Health

Repeat after me:

H_(t+1)=E(H_t )+[G(B-φ(K))] × s_H Y

This follows the work of Mokyr (1993) and is the final construct of Bishai and Kung. 
Basically, H_t is the current health stock of the population, E is a decreasing function of health stock as an environmental contagion, G is the quality of health production technology, B is the best available health technology in the area, and φ represents the gap between the best health technology and the actual health technology and is a decreasing function of capital. 
What does this mean? Why should anyone care? 
Simple…..
Any economy is dependent on the equation Y = f(K,L,H) with Y representing GDP, K equaling capital, L-labor, and H-health of the labor force.
What it means for the average reader? Well, investment in healthcare improvement by the government creates a positive feedback cycle where better health= better economic performance, which then becomes:
more health = more income= more health, etc. 
Certainly there are also exogenous factors as demonstrated by the Preston Curve, and McKeown has documented these well, although not without criticism. But that is the subject of an entirely different post. 

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Repeal the ACA and Lower Costs for Citizens

by Run75441

Repeal the ACA and Lower Costs for Citizens…

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Chicken Little, Courtesy of “EW.Com Entertainment Weekly”

What presidential candidate Romney has vowed to repeal is showing more benefit than harm in driving down the cost of healthcare for individuals, groups, and commercial insurance. If repealed by Romney, the results could cost more than leaving it in place.

The most recent projections of the CBO and JCT reflect a decrease in the insurance cost coverage provision of the ACA over the 11-year period 2012-2022, a decrease of ~$86 billion from the initial projection of $1.252 trillion to $1.1.68 trillion. The projected decrease does not include other aspects of the ACA which in the aggregate will drive the reduction in healthcare cost further. http://www.cbo.gov/publication/43473 , July 24, 2012.

In the same report, the CBO addresses a letter from House Speaker Boehner asking about the benefits of repealing the ACA. Speaker of the House Boehner and he House Republicans have floated a bill which would repeal the ACA. In a separate CBO letter to John Boehner, the CBO estimates the repeal would reduce outlays by ~$890 billion and revenues by $1 trillion. Over the same period 2012 – 2021, the repeal would increase deficits by ~$109 billion. This estimate does not include the hidden costs of people not being insured if the ACA is repealed.

Over at Maggie Mahar’s Health Beat, Maggie touches upon the decreasing cost of healthcare Breaking The Curve of Healthcare Inflation and what the intent is of the ACA:



“- The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much they will pay out to a desperately ill patient over the course of a year –or a lifetime.”


“- insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits that are not now covered by most policies and if they hope to stay in business, they will have to find a way to ”manage” the cost of care–but they won’t be able to do it by denying needed care.”


“providers too will be under pressure. A growing number will no longer be paid ‘fees for service that rewarding them for ‘volume’ or for ‘doing more.’ Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses.”


But, what of the overall program results?

- “From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year.” It is now ~2.5%.

- “Zeke Emanuel (an oncologist and former special adviser for health policy to White House OMB director Peter Orszag) to Maggie: providers are ‘anticipating the Affordable Care Act kicking in. They can’t wait until the end of 2013: They have to act today. Everywhere I go, ‘Emanuel, added, ‘medical schools and hospitals are asking me, How can we cut our costs by 10 to 15 percent?’”


- “Rather than have Medicare set prices for lab tests and medical devices we should put all such purchases out for competitive bidding. ‘In 2011,’ he (Peter Orzag) pointed out, ‘bidding reduced Medicare spending on wheel chairs and other equipment by more than 40 percent.’”


And for the average person, what are and what were the paybacks? Exploring Maggie’s article further, this chart can be found on the US Department of Health detailing the amounts of rebates in total, by state, and by Healthcare Insurance Company. “The 80/20 Rule” http://www.healthcare.gov/law/resources/reports/mlr-rebates06212012a.html

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To take this a step further and look up your own insurance company, a pivot table at the Healthcare.gov site will allow you to look up insurance companies by state and what the average rebate is if called for from the application of the MLR. Your Insurance Company and Cost of Coverage

 How successful the MLR has been can be measured by the impact of the MLR in measuring administrative costs of insurance companies against benefits, providing rebates to citizens, and giving states the ability to review requests for insurance increases through greater access to information. There are fewer double digit increases requested, more decreases in insurance rate requested, and reversals in rates at the state level due to greater information provided to states. 2012 Progress Report: Health Reform is Opening the Insurance Market and Protecting Consumer


Early on, the ACA is having a tremendous impact on controlling and reducing costs providing better value for the money and reducing the inflationary impact of the overall healthcare industry.

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Second Verse, the Same as The First

by Run 75441


“Second Verse, the Same as The First”


The story never seems to change . . .


When you say that the high income earners, the top 20 percent, pay 90 percent of the taxes, what should they pay, 99 percent? These are the people who have enough money to invest in businesses and to create jobs.” The tax increase that Obama is proposing “falls directly on those job creators,” Senator Kyl said.” Can U.S. economy tolerate a tax increase in 2013?

The vast majority of the upper quintile in Household Taxable Income does not make >$250,000 in AGI. Yet since 2001, the Republicans would have us believe that 3% of the taxpayers are the same as 20% of the taxpayers and that quintile makes > than $250,000. It is a lie and Senator Kyl needs to retract his blathering.

What is laughable about Senator Kyl statement is the Speaker of the House repudiates his statement here:
BOB SCHIEFFER: Do you quarrel with that figure? Is that a right figure or a wrong figure?

BOEHNER: Well, it may be three percent, but it’s half of small business income. Because, obviously, the top three percent have half of the gross income for those companies that we would term small businesses. And this is why you don’t want to punish these people at a time when you have a weak economy. Boehner concedes only three percent of small businesses affected by extending tax cuts.

3% = 20%? Not likely and this is another example of the Republicans attempting to confuse the taxpayers. Even “Joe- The-Plumber” got it wrong; but then, why would a plumber have any greater knowledge then a Senator? At least there is an excuse for Joe.

So would taxing the upper 3% of the Taxable Household Incomes more hurt the economy? Not likely and it would correct the 2001/2003 skewing of taxes to this income group by President George Bush. What Bush did is without precedent in political history and is something not even Hoover attempted.

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The Same as MA Healthcare Premiums, the ACA Premiums are too Costly . . .

by Run75441

The Same as MA Healthcare Premiums, the ACA Premiums are too Costly . . .

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Chicken Little, Courtesy of “EW.Com Entertainment Weekly”


I have listened to many  stating the MA subsidies do not go far enough in alleviating the costs of healthcare for a family not covered by an Employer Subsidized Healthcare plan. Even with my pointing out the subsidies in the ACA exceed that of the MA plan, there still has been quite a bit of doubt.

Maggie Mahar at the resurrected Health Beat Blog http://www.healthbeatblog.com/2012/07/what-will-the-supreme-courts-decision-mean-for-the-november-election-part-1/ pointed to a new Kaiser Family Foundation subsidy calculator in her article as well as other informative points; “What Will the Supreme Court Decision Mean In November?” The ACA Premium Calculator is found here: Healthcare Reform Subsidy Calculator.



Using the KFF Calculator, a person can calculate what they will pay in premiums under the ACA in 2014. Further on down this post, there is a short discussion of the Mandate and a link to another KFF site to determine what the mandated penalty might be per year for an individual and a family. The last chart by “The Incidental Economist” touches upon the relative size of the Mandate in comparison to taxes historically. As a mandated penalty, Obamacare is a middle of the pack tax.

With the KFF calculator, assuming we are discussing Median Household Income, and making an addition assumption Household Median Income increases from the ~$51,000 in 2011 to ~$55,000 in 2013, this is what a family of 4 might pay in 2014:

- Income (family of 4) $55,000 (235% of Poverty)
- Policyholder Age: 45
- ESI: None Available
- Regional Cost Factor: Median
- Unsubsidized Healthcare Premium: $14,425
- Government Tax Credit: $10,110
- Out of Pocket Premium: $4,125
- 2014 Maximum Out of Pocket Expenses: $6,250

Mandate/Tax Penalty is huge? And what if an individual does not buy insurance from the state insurance exchanges; the individual would pay a Mandate Penalty in 2014 of $95/adult and $47.50 per child (or 1% of income, whichever is greater). In 2016, the mandate would be $695/adult and 50% for children (or 2.5% of income, whichever is greater). http://healthreform.kff.org/the-basics/Requirement-to-buy-coverage-flowchart.aspx “The Requirement to Buy Healthcare Coverage” For those who wish to argue Mandate versus Tax, please remember all laws are open to interpretation which does not change the initial intent of the Act passed by Congress.

ACA is the Biggest Tax Ever? It does not even come close to the tax Truman passed to cover WWII costs or even the Reagan Tax Increases of 1982. http://theincidentaleconomist.com/wordpress/obamacare-is-the-biggest-tax-increase-in-history-if-you-ignore-history/ Incidental Economist “Obamacare is the Biggest Tax Ever, If You Ignore History”


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Austin Frakt, The Incidental Economist,Obamacare is the biggest tax increase in history … if you ignore history

Maybe the sky is not falling with SCOTUS declaring the ACA is constitutional?

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"No payment — no access code — no participation — lower final grade."

by Run 75441 


“No payment — no access code — no participation — lower final grade.”


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Illustration by Jake Parker; http://www.agent44.com/
http://heyoscarwilde.com/jake-parker-oliver-twist/

Now the use of textbooks and the sharing of a new textbook can be stopped with the sale of a yearly access code to engage in discussion boards by students with instructors. The Publishing Industry with the help of one Economics Professor has found a way to stop the sharing of text books amongst students and the sales of old text books to the next incoming classes. New students will be forced to buy a new text book or buy a special code allowing them to use the book new or old. The press release describing the new invention put it in this manner:

“In the case of a used book or pirated download, the student pays for the access code,” according to the press release. “No payment — no access code — no participation — lower final grade.” Professor Patents way . ..

Grades of Students Who Pirate Would be Docked Under Prof’s Plan


Maybe it is just me, but an education which is increasingly  expensive and restrictive as the ways to shave a few dollars off of it are closed to those who only wish to achieve it  from using old text of which more times than naught are out of date after one year. The world and its knowledge turn much faster leaving students to beg for the obsolete education resources paid for by a hefty tuition.

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Healthcare reform op-ed

The current uptick in ‘medical inflation’ in private sector health industry is worth a separate post. The Standard and Poor Healthcare Economic Indices can be found here.
Lifted from a note from Run 75441 on the link I sent on healthcare reform.

Recently, Matt Stoller claimed Obama had a 61 vote majority in the Senate and enough to secure either Universal or Single Payer Healthcare. We all forget the one Senator from Aetna stand which killed any other options an Medicare for those starting at 55. President Obama did not have a filibuter proof 61 votes in the Senate for any other healthcare options muchless the ACA. The Blue Dogs (Nelson(s), Bacus, Bayh, Cantwell, Feinstein, Lincoln, Pryor, Widen, Conrad, etc) wouldn’t move for any healthcare plan unless they brought home the bacon as Nelson attempted to do for Nebraska. Just plain ordinary obstructionism to block whatever this President would attempt to do. Senator Lieberman killed anything beyond the ACA. 

Former Editor of the New England Journal of Medicine and others should be sorry if the entire ACA is struck down or dismembered as we will go another decade before a President and a Congress take up the issue again and heathcare costs (for which healthacre insurance is a reflection) will again rise faster than inflation. Because of the power of Medicare, it has been able to rein in rising healthcare costs so far at less than 3% than that of the commercial market at about 9% %. Standard and Poors Healthcare Economic Indices .


The last time healthcare reform was attempted was under Clinton and costs have increased multiple times. A failure to allow the ACA to go forward will allow the overall Healthcare Industry to again implement inflationary costs in a market which has no restraints. Certainly, I can not conjur up what SCOTUS will do. The kings in black robes will decide what is best for us as Congress lacks the will power to represent those who placed them there with the exception of ALEC, Koch(s), and Norquist.

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United Citizens and Wisconsin

by Run 75441

United Citizens and Wisconsin

Heading into the Tuesday vote Mayor Barrett with ~$4million in election funds of which 26% is drawn from out of state sources faces off with the under siege Governor Walker having ~$30 million in funds with 2/3rds coming from out of state sources. Again the Koch Bros are kicking in with a sizeable contribution of $1 million as well as the multi-billionaire owner of the Sands, Sheldon Adelson, with another sizeable sum ($1 million?). The unions and citizens of Wisconsin are hard pressed to support Barrett in a similar fashion. So much for payroll wages versus corporate profits. Tuesday election may be a bellwether for the Democrats and the November elections as the 99-percenters and labor take on corporate interests and the “1-percenters’ who are both investing heavily in Walker intending to sway the state into the Red column.

Tuesday’s recall election of Republican Gov. Scott Walker is the most expensive in Wisconsin history. More than $63.5 million has been spent by candidates and independent groups, the overwhelming majority underwritten by out-of-state sources.

The record spending total was made possible thanks to the Citizens United U.S. Supreme Court decision — which had the effect of invalidating Wisconsin’s century-old ban on independent expenditures by corporations and unions — and a state law that allows unlimited contributions to the incumbent in recall elections.” Election a national referendum on public sector unions


Having amassed a sizeable war chest directly resulting from United Citizen’s opening the donation flood gates for corporate interests and a state law allowing recalled Governor Walker unlimited contributions, Walker has a slight lead and is favored to win. While this may end the recall efforts by angered unions and others, Walker’s troubles may not be over as he faces indictment over fundraising efforts by aides and his choice for Lieutenant Governor Brett Davis. There is quite a bit of speculation how this will all play out and it is not the first time the former Milwaukee County Executive has found himself in trouble for questionable activities.

Kelly Rindfleisch said she was hired to campaign illegally for Scott Walker on taxpayer time,’ Democratic Party of Wisconsin Chair Mike Tate said Tuesday. “With his admission that Rindfleisch was hired to do what ‘she was expected to do,’ has Scott Walker now implicated himself in the criminal conspiracy that was central to his rise to political power? 


Is Scott Walker Facing Indictment And Does It Really Matter To Walker’s Wisconsin Supporters?  Forbes

John Doe Judge Grants Immunity to Walker’s Former Spokeswoman  WUWM Public Radio


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Opposition to the Mandate

So, one thing has continually troubled me throughout the health care debate, and this is the consistent polling showing opposition to the individual mandate. It’s taken me a while, but I think that I have finally figured this out.

THIS article reviewing data from the AFLAC Workforces Report shows that we are doing a terrible job in educating our public on health concerns.

six out of ten workers (62 percent) think it’s not very or not at all likely they or a family member will be diagnosed with a serious illness like cancer, and more than half (55 percent) said they were not very or not at all likely to be diagnosed with a chronic illness, such as heart disease or diabetes.

 But of course, this is not reality. This fundamental disconnect as the article notes, is more than simply problematic..

Americans may be overly optimistic when it comes to thinking they won’t ever be diagnosed with a serious illness or experience an accident. According to the American Cancer Society, Cancer Facts & Figures 2012, one in three women and one in two men will be diagnosed with cancer at some point in their lives, and the National Safety Council, Injury Facts 2011 edition, says that more than 38.9 million medically consulted injuries occur in a year. The American Heart Association, Heart Disease & Stroke Statistics 2012, show that one in six deaths in the U.S. was caused by coronary heart disease. “The fact that American workers aren’t aware of their medical risks and the potential financial impact of those risks is a very real concern that is only compounded when workers don’t take full advantage of available benefits options or adjust their savings strategies to be more prepared,” said Audrey Boone Tillman, executive vice president of Corporate Services at Aflac. “Now, more than ever, people need to understand that well-being means more than just good health—it’s being prepared for the reality of whatever life may bring and taking the necessary measures to protect themselves and their families.”

I think that this explains this. Certainly some people are fundamentally opposed to government mandates of any sort, but they would hardly constitute a plurality, let alone a majority, but pure ignorance, or a magical suspension of disbelief I think explains it. I cannot think of any other explanation.

Having watched several relatives go through illness that resulted in death, and having a chronic condition myself, I simply cannot help but wonder how people have reached this conclusion. The simple fact that they don’t understand this is likely more troublesome than a rejection of the mandate itself.

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Drug shortages and the mythical market


by Michael Halasy

Drug shortages and the mythical market


I read an interesting article by Gehrett in the January issue of JAMA.

In response to the increased utilization of generic drugs (currently about 70% of drugs used in the US), a fact which should be applauded, we have seen a frightening increase in drug shortages. In Emergency Medicine, three of them have affected me directly as they are commonly used drugs. One, metoclopramide is useful for headaches, nausea, and gastric motility. Another, etomidate, is a useful sedative that is the staple drug in RSI (Rapid Sequence Intubation) kits across the country, and used on EMS ambulances extensively. There is a reason. Etomidate has lower cardiopulmonary depression than other sedatives like diprivan aka propofol. Another drug that is in shortage is Compazine, aka prochlorperazine, which is extensively used for migraines, as well as benign vertigo. In fact, it remains one of my favorite “staple” drugs.

Per the article, in 2005, the Center for Drug Evaluation and Research only noted 62 shortages through the year. 2009 saw 157 shortages, 2010, 178. 2011 had estimates of between 200 and 300. 75% in 2010 were sterile injectables. Ya know, The medications most frequently used in hospital settings. Many of these drugs are made at one site, by only one company, which limits supply and increases the chances of disruption.

While Gehrett does note that 80% of raw materials come from foreign countries, there does not seem to be any shortage of raw materials that have been documented or noted.

The only single, commonality, is that all of the medications we have seen in shortage status are off patent, generic medications, that are harder to formulate than some others, and have a definable shelf life.
President Obama has signed legislation that will give the FDA more latitude in heading off shortages, but this problem plainly reports to a market problem. Demand exists…supply is stable, but profits are not high on these medications. This would suggest that companies are simply avoiding injectable generics, and focusing on more profitable patented medications.

Meanwhile, cancer trials have been put on hold, while companies focus on profit margins. Headache patients suffer and receive other medications that may be suboptimal for them. This situation is only worsening with time, and should be cause of concern for all Americans.

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