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Unsubstantiated Drug Price Increases

The ICER (Institute for Clinical and Economic Review)

Is an independent and non-partisan research organization. Its purpose is to evaluate the clinical and economic value of prescription drugs, medical tests, and health care and health care delivery innovations. ICER conducts rigorous analyses of all clinical data with key stakeholders to include patients, doctors, life science companies, private insurers, and the government and translate the evidence into policy decisions that lead to a more effective, efficient, and just health care system.

As explained by their site information, ICER is known as the nation’s independent watchdog on drug pricing. It’s drug assessment reports include a full analysis of how well each new drug works and the resulting “clinical value, quality of life, benefit to the health-care system and society” used to establish a price. Using the drug assessment report, a “value-based price benchmark” is established  reflecting how each drug should be priced addressing all four factors. Reports also evaluate the potential short-term budget impact of new drugs to alert policymakers to situations when short-term costs may strain health system budgets and lead to restrictions on patient access. Ensuring objectivity in its work, all ICER reports are produced with funding from non-profit foundations and other sources that are free of conflicts of interest from the life science industry or insurers.

What I have seen in the past is the ICER establishing pricing for new drugs taking into consideration these factors; “the patient’s quality of life, and the resulting benefits to the health-care system, and society.” This is the first time I am seeing the ICER looking at price increases and determining whether the value delivered substantiates a price increase. By the numbers: Here are the drugs (and manufacturers) highlighted in a recent ICER’s report, with the increase in net spending attributable to each drug’s price increase, and citing the increases could not be justified by the value delivered.

The figures reflect the dollars Americans spent on drug copays and other out-of-pocket costs in addition to the higher amounts people paid through health insurance premiums and taxes.

Past the leap is an explanation on how the ICER reached its conclusions for the nine drugs and the limitations to this findings.

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Resurrected Protester

This is news: Jane Fonda Arrested While Protesting in D.C.

Not particularly a news outlet (Hollywood Reporter – Ryan Parker reporting) I would read but, they have it out front and center in reporting on Ms. Fonda protesting about “the industries that are destroying our planet for profit.”

“I will be on the Capitol every Friday, rain or shine, inspired and emboldened by the incredible movement our youth have created. I can no longer stand by and let our elected officials ignore – and even worse – empower – the industries that are destroying our planet for profit. We can not continue to stand for this,”

It is not the first time Ms. Fonda has been taken into custody. She did protest the Vietnam war and taken into custody. Today Ms. Fonda was arrested with 15 other people for protesting in front of The White House. The protest focused on the lack of action by this administration, big business, and the overall nation on the overall inaction to climate change. Claiming to be “emboldened by the incredible movement our youth have created,” She has moved to Washington to be near the epicenter of the fight for climate change.

Maybe others will follow . . .

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Trump’s Attack on Seniors and Medicare

It is a given, Trump’s new executive order  is calling for “market-based” pricing or whatever the market will bear pricing to replace Medicare set pricing. Trump sees a conflict between Medicare and the market. Well he is right; but, his solution ll only aggravate the problem of costs.  It will drive up costs for everyone in Medicare, destroy traditional Medicare as healthcare for the elderly, steer more people into costly commercial healthcare, reduce Medicare funds at a faster pace, and allow the already profitable healthcare industry to increase profits well beyond what it is today.

But, but are Medicare Advantage Plans ripping people and Medicare off? “Yes they are” a for-profit industry is profiteering by taking advantage of a system of healthcare for which they wanted to be a part. As Trump signed the EO, it is stunning to watch a bunch of seniors up on the stage clapping as el jefe was showing off his executive order allowing commercial healthcare to further pickpocket them, exploit healthcare, and destroy Medicare. All smiles there . . .

Medicare Advantage programs are managed differently than Fee for Service traditional Medicare. Besides providing a series of services not found in regular Medicare, the MA plans instituted a different form of physician/hospital payment called Capitation. Capitation Payments are theoretically used by managed care organizations to control health care costs. The VA is a good example of this type of managing costs. A capitation payment model  controls the use of health care resources by putting the physician at a financial risk if too many services are provided to patients or if quality decreases as witnessed by return patients for the same disorder or illness. To ensure patients do not receive suboptimal care through under-utilization of health care services, MAOs measure the rates of resource utilization in physician practices. These utilization reports are then made available to CMS to measure health care quality, utilization, costs, etc.. They are also linked to financial rewards such as withheld fees and bonuses.

Past the leap, I explain how the capitation model can be gamed by Advantage plans.

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Second Whistle Blower Emerges

2nd whistleblower comes forward after speaking with IG: Attorney

The appearance of a second whistleblower will muddy the waters for Herr Trump claiming the first whistleblower got his conversation all wrong.

The existence of a second whistleblower — particularly one who can speak directly about events involving the president related to conversations involving Ukraine — could undercut Trump’s repeated insistence that the original complaint, released on Sept. 26, was “totally inaccurate.”

Attorney Mark Zaid is also representing the 2nd whistleblower. It is said this whistleblower has first hand knowledge of some of the allegations made by the first whistle blower. The 2nd whistleblower has made what is called a “protected disclosure” and can not be retaliated against as the person is now protected by law.

Attorney Zaid tells ABC News’ Chief Anchor George Stephanopoulos the second person — also described as an intelligence official — has first-hand knowledge of some of the allegations outlined in the original complaint and has been interviewed by the head of the intelligence community’s internal watchdog office, Michael Atkinson.

The House and IG investigation is moving forward with what the Trump administration has criticized as 2nd-hand information by the first whistleblower and also the recently disclosed first-hand knowledge of what was said during the phone call by a 2nd whistleblower. The corners are being rounded on Herr Trump with little chance of escape from the accusations. It will be interesting to see how McConnell and Republicans handle the total package of disclosures by whistleblowers. Will they provide cover for a malfeasant president? McConnell already said he would block the impeachment once it gets to the Senate.

And Trump tweets “Keep them Coming.”

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Trump’s Executive Order, Backdoor Privatization of Medicare – Updated

Trump’s Executive Order is Backdoor Privatization of Medicare,” Social Security Works, Nancy Altman, October 3, 2019

Thursday and I had to search around for someone who is an expert on Medicare Advantage Plans and Original Medicare. Nancy is one of those experts. Friday and Andrew Sprung has his commentary Trump’s Bid To Destroy Medicare up on xpostfactoid blog.

Commercial Healthcare Insurance has been become more and more expensive over the years with copays increasing, deductibles increasing, and premiums going up. Todays commercial healthcare insurance costs a single person ~$7200 and a family ~$20,000 with the single person paying 18% of the premium and a family paying 31% of the premium. Approximately 36 million people make less than $25,000 annually (retail workers, personal care attendants, warehouse workers and others as well). In a crude calculation, xpostfactoid: “The past ten years of healthcare cost increase relative to wage increase might cost a full-time average wage earner with family coverage $3,000-$4,000 this year in added costs and decreased wages, or, say, 6-8% of income.”

Today’s Employer sponsored Healthcare Insurance is unsustainable. The same holds true for Medicare Advantage plans due to the Commercial healthcare Insurance offering it as well. There are few controls which can be applied on the commercial side of the healthcare industry which is why there is a big push for true single payer healthcare of which Medicare and Medicaid are. If you wish more detail on how commercial healthcare insurance has exploded in cost, my earlier post Health Benefits for 2019: Premiums Inch Higher, Employers Respond To Federal Policy offers more detail pictorially and in verbiage.

As I have written other times, Medicare and Medicaid have been instrumental in reducing excessive U.S. healthcare costs. Medicare and Medicaid set the prices paid to providers with provider input and commercial healthcare insurance uses those prices to set their payouts. Medicare hospital rates are an approximate half of those paid on average by commercial healthcare insurance. Rates paid to physicians average about 78% of commercial insurance rates. In high-demand specialties and in regions with fewer providers; commercial healthcare insurers often pay four, five and six times Medicare rates. If you remember from Kocher and Berwick’s article, they proposed setting commercial Healthcare (while it still exited in the interim) payouts at 120% of Medicare rates.

This action by Trump and Republicans is a huge giveaway to the commercial healthcare insurance sector and the healthcare industry. Right now Medicare Advantage uses Medicare rates. If they can beat Medicare Rates, they keep the difference. If they can not meet the rates, the consumer pays the difference. What Trump has done is reverse the format. Medicare Advantage Negotiated Rates will be used to set Medicare Fee For Service rates to providers.

Past the leap is the President of Social “Security Works” Nancy Altman’s statement on Trump’s Executive Order talking about Trump’s lies.

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Health Benefits for 2019: Premiums Inch Higher, Employers Respond To Federal Policy

The argument has been, if people like their private and company sponsored insurance plans they can keep them; but can they afford to do so?

In a recent LA Times and KFF survey, 40 percent of respondents said they had difficulty affording health insurance or health care or had problems paying medical bills. An approximate one-half of respondents said they or a family member skipped or postponed getting health care or prescriptions in the past twelve months due to cost concerns. Those with higher deductibles were more likely to report problems with affordability and were likely to say their insurance worsened over the past five years as compared to people with lower deductibles. Over the last decade, deductibles have increased 162% (see chart below).

The annual Kaiser Family Foundation Employer Health Benefits Survey: In 2019 the average annual premium for single coverage rose 4 percent to $7,188, and the average annual premium for family coverage rose 5 percent to $20,576. On average, covered employees contributed 18 percent of the cost for single coverage and 30 percent of the cost for family coverage with variation across firms. Of the 9,000 firms the survey was sent to, 4,395 firms answered this question of whether they offer healthcare insurance for a response rate of 58 percent.

Fifty-seven percent of firms offered health benefits to at least some of their workers. Smaller firm employees faced a higher risk of affordability especially during recessions. Fifteen percent of all covered workers including the 35 percent of covered workers in small firms are in plans with a worker contribution of more than half of the premium for family coverage (2019). In firms with a high percentage of low-wage workers, the average worker’s share for family coverage was 41%. This is many ways to say the same thing, the cost of healthcare is increasing and private company plans may no longer have a lessening capability to pay for healthcare.

Employer-sponsored health insurance is the largest source of coverage in the United States, covering about 153 million nonelderly people. I am sure many people would like to keep the private healthcare insurance and pay less for premiums than what they are.

Premium and Deductible Increase Charts and key thoughts after the leap

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“House Democrats’ Drug Price Strategy versus a Cost Strategy”

The House Democrats just released their drug pricing plan (summary) on the 19th. I read through it rather quickly and I found it to be interesting and having targets which could work. Rather than jump right into this, let’s talk about purchasing a bit and then what I believe would be better.

In a purchasing negotiation there are two typical ways used to negotiate a price to your company. The first strategy is to tell a supplier you have done a market study, another supplier can offer a better price, and  all things are equal between him and the other supplier. The supplier has a choice of beating the new price or offering something else of value to the customer which will negate the difference and can not be acquired from the other supplier (whip-sawing a supplier is unethical and many do it).

The second strategy requires more work and requires you to understand the cost of materials, the process and its cost, and the overhead involved. It does establish a base in which a buyer can use to negotiate with “all” suppliers. With the former strategy, you are guessing whether you have a good price because you do not know the cost of manufacture. Purchasing has to be a bit more than just a clerk.

The House plan intends to negotiate on pricing using other countries (Australia, Canada, France, Germany, Japan, and the United Kingdom) pricing to measure against for the same drug. The legislation establishes an upper limit for the price as no more than 1.2 times of the volume-weighted average of the price of the six countries reached in their negotiation. Australia, Japan, and United Kingdom use a cost-based method of pricing a drug.

Here is a brief explanation of the House plan:

Year 1 and each successive year, the Health and Human Services (HHS) secretary would identify up to 250 brand name drugs appearing to lack pricing competition and having the greatest cost to Medicare and the US healthcare system. The data would be collected from Medicare, Medicaid, and healthcare insurance to determine aggregate cost based upon price and volume of sales.

The total of 250 items picked with:

  • the top 125 drugs in Medicare Part B responsible for a full 96% of Part B spending,
  • and 125 drugs responsible for 45 percent of the spending in Part D.

As show in the chart. “More” to be read after the leap.

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“Trump’s Call With the Ukrainian President”

The White House released this document on Wednesday, September 25, 2019. It details a July call between President Trump and President Zelensky of the Ukraine. About midway through it, there is a warning of the contents not being a “verbatim transcript.” I have taken some time to include the notes (red) which are found at the end of the post and have notated the particular passages to which the notes are detailing. If you need direction other than the notation at the end of the sentences, I can do so. I did not want to alter this more than what I did in adding the word “note.”

It is a surprising transcript showing Trump’s boldness.

The President: Congratulations on a great victory. We all watched from the United States and you did a terrific job. The way you came from behind, somebody who wasn’t given much of a chance, and you ended up winning easily. It’s a fantastic achievement. Congratulations.

President Zelenskyy: You are absolutely right Mr. President. We did win big and we worked hard for this. We worked a lot but I would like to confess to you that I had an opportunity to learn from you. We used quite a few of your skills and knowledge and were able to use it as an example for our elections and yes it is true that these were unique elections. We were in a unique situation that we were able to achieve a unique success. I’m able to tell you the following; the first time, you called me to congratulate me when I won my presidential election, and the second time you are now calling me when my party won the parliamentary election. I think I should run more often so you can call me more often and we can talk over the phone more often.

The President: [laughter] That’s a very good idea. I think your country is very happy about that.

President Zelenskyy: Well yes, to tell you the truth, we are trying to work hard because we wanted to drain the swamp here in our country. We brought in many many new people. Not the old politicians, not the typical politicians, because we want to have a new format and a new type of government. You are a great teacher for us and in that.

More of the transcript after the leap plus the notes concerning intent and meaning.

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Birds . . .

Not a Human, but a Dance, Atlantic Daily, Ed Yong, September 19, 2019

I do not know about you when you receive a magazine you subscribe to; but when I get mine, I read it from cover to cover. I also send a copy to one who is incarcerated to read and it makes the rounds amongst the inmates. Since I chased prisoners in the service, it is not unusual for me to look after some of them.

Me: This bird has more rhythm than I do. Not a Human, but a Dancer

Among the video’s 6.2 million viewers was Aniruddh Patel and he was was blown away by what he saw. A neuroscientist, Patel had recently published a paper asking why the near – universal trait among human of dancing was seemingly absent in other animals. Some species will jump excitedly to music; but, they are not in time with the music and lack rhythm.

Me: Recently on the show (my wife was watching) “Dancing With the Stars,” Nancy Wilson was asked if she had rhythm and could dance by her partner Her reply was; “I am Black” or of course I do fool. Some people are more equal than others. This definitely plays against my natural skill set as I must admit I lack rhythm and am also envious.

Some animals can be trained to perform dancelike actions such as in canine freestyle, but they do not do so naturally. Some birds will make fancy courtship “dances;” but “they’re not listening to another bird laying down a complex beat,” says Patel, at Tufts University. True dancing is a spontaneous rhythmic movement to external music. Our closest companions, dogs and cats, can not do such. Neither do our closest relatives, monkeys and other primates.

Patel reasoned dancing requires strong connections between brain regions involved in hearing and movement and such mental hardware would only exist in vocal learners or in animals capable of imitating the sounds they hear. That elite club excludes dogs, cats, and other primates, but includes elephants, dolphins, songbirds, and parrots.

Patel: “When someone sent me a video of Snowball, I was primed to jump on it.”

In 2008, he tested Snowball’s ability to keep time with versions of “Everybody” that had been slowed down or sped up. In almost every case, the parrot successfully banged his head and lifted his feet in time. Much like human children, he often went offbeat, but his performance was consistent enough to satisfy Patel.

Snowball was going through his own dance- dance revolution when another team led by Adena Schulz kept exposing him to new music, and learned that he likes Pink, Lady Gaga, Queen, and Bruno Mars.

Patel: “Dancing in human cultures isn’t a purely arbitrary invention,” Instead, he suggests that it arises when animals have a particular quintet of mental skills and predilections which Snowball the parrot exhibits also.

The Quiet Disappearance of Birds in North America, The Atlantic, Science, Ed Yong, September 19, 2019

If the pigeons disappeared from your local park, would you notice? What if the neighborhood finch stopped coming to the feeder? The starling no longer perched on the power line?

According to a new report, birds are disappearing and in large numbers. The total North American avian population has decreased by an approximate 29 percent over the past half century. There are 3 billion fewer birds today than when there were in 1970.

It is not a case of rare birds getting rarer either as the hardest hit species include every day birds such as swallows, sparrows, and starlings. 90 percent of the losses have come from 12 bird families. With the decreased numbers birds, we lose the function they bring to nature such as insect eaters controlling their numbers, plant pollination, those early morning songs, and more.

Researchers plan to investigate what is causing the drop; but, the condition of their habitat such as pollution and the reductions of it due to encroachment of the grasslands and wetlands by humans will probably play a big role. There are also the more mundane (and often preventable) threats, like running into windows and being killed by cats.

I can see the pollution part of it in my own neighborhood where grass clippings and leaves besides fertilizer residue are blown into the subdivision streets and washed down the drains leading to the wetlands surrounding us. And when I explain why they should not do such, they get indignant about it with the old “this is my land.” Except when your actions cause harm to the environment, the water supply, and the people around you; your ownership of the land and your actions are not exempt when you cause harm to others. It is called community.

“It is as if all birds are canaries and the entire world their coal mine.”

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Three Mile Island to Close

Eighty year old retired salesman John Garver the morning of March 28, 1979 remembers the acrid odor permeating Harrisburg as he walked out of a restaurant in Pennsylvania’s capital city.

“We had this smell in the air, wondering what it was. Well it didn’t take us long to find out … that the accident started.”

Fourteen miles away, the “accident” was unfolding in Unit 2 at the Three Mile Island Nuclear Power Plant, triggering panic, confusion, and within days an evacuation order.

The partial meltdown sparked national protests, prompted increased safety standards for the nuclear power industry, and largely stymied the industry’s momentum for decades until recent alarm over climate change has made some begin to embrace expanding carbon-free nuclear power.

Today, the remaining reactor (Unit 1) will generate its last kilowatt of energy and close. Three Mile Island was not a victim of the anti-nuclear movement; but rather, it lost out to simple economics. Even though the plant is licensed to operate until 2034, Exelon Generation is ceasing operations after the state of Pennsylvania earlier this year refused to throw the company a financial lifeline to keep it open.

The plant’s four cooling towers will remain a part of the landscape for now as foreboding concrete tombstones seemingly out of place in the bucolic Susquehanna Valley of central Pennsylvania and a reminder of what happened March 28, 1979.

Taking a Second Look

Senator Cory Booker; “Right now, nuclear is more than 50% of our non-carbon causing energy. People who think we can get there without nuclear being part of the blend just aren’t looking at the facts.”

Economic factors such as cheap natural gas and increasingly affordable renewable sources are slowly driving nuclear power out of business. Additionally, diminished demand has also hurt profitability in addition to rising operational costs. The closure of the Three Mile Island facility will leave 97 commercial reactors at 59 plants, scattered across 30 states, remaining in operation.

According to U.S. Energy Information Administration, the Watts Bar Unit 2 in Tennessee was the last nuclear power plant to come on line in 2010. Two more reactors are under construction in Georgia (Nuclear Regulatory Commission [NRC]). No more are planned as of yet.

Pro-industry group, World Nuclear Association: “Public confidence in nuclear energy in the US declined following the Three Mile Island accident. It was a major cause of the decline in nuclear construction through the 1980s and 1990s.”

Harrisburg resident and Chair of the Three Mile Island Alert organization Eric Epstein: “If there is a good thing that happened because of TMI, it had ignited a fierce debate on the viability of nuclear power being safe, reliable, economical, etc.”

It still remains to be seen if more reactors will be built to supplement US energy needs.

Three Mile Island closes: meltdown changed nuclear energy in America,” USA Today, Ledyard King, September 20, 2019

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