Category Archives: Health Care

The health of our citizens

A Return to Prominence

A Return to Prominence

Make America Great Again was a slick slogan and not altogether unwarranted. To make things better it is important to understand the areas where we once led the world, but have lost that position.

Shortly after WW II we were the only viable Super Power politically, economically and militarily. Our standard of living was unsurpassed. The rest of the world looked to us for both leadership and as an example of what is possible.

Today we rank 15th in terms of standard of living behind all of the Scandinavian countries, most of Western Europe, Australia and New Zealand. While our economy, in terms of GDP, has risen by 100% in the last 20 years, the average middle class family incomes have only risen by less than 10%. Over the past 20 years the cost of both healthcare and advanced education has risen at 2 ½ times the rate of overall inflation. Our per capita healthcare cost is by far the highest in the world and averages 2 ½ times the average for the EU countries. Our per capita healthcare costs exceed $11,000 per year. At the same time our quality of healthcare is ranked only 37th by the WHO. The healthcare is the single largest industry in our economy currently standing in excess of $ 3.5 trillion. Our infrastructure, especially as it relates to transportation, has substantially deteriorated. Our debt to GDP ratio stood at 35% in 1970 and it currently stands at 136%. Our spending is out of control. While this is only a sample of areas where we have lost prominence, but they are important issues that deserve attention and affirmative action to repair.

What needs doing, you ask? I can tell you what doesn’t work. Finger pointing and blaming the “other” side. My observation that the extremes on both sides of the political divide are in control of the narrative. Unfortunately, they seem to be attracting more folks that in the past confedered themselves to be open minded and more moderate. Polarization is increasing and it does not serve our country well. Many persons tend to blame both the media and our elected officials for what is wrong and they are definitely co-dependent. However, I ask what are we, as individuals, doing to make a difference. I witness republicans pointing fingers at the democrats saying that their liberal, socialist agenda is ruining the country. I witness democrats saying that our problems are a result of short-term profit-oriented agenda espoused by republicans. I ask, how is this working for us?

What I am suggesting is that the solution can start with each of us. It’s a simple behavioral change that is most difficult to implement. It begins by not playing the “blame game”. If we can achieve that then the next step will be to look for common ground. We will always have issues that are beyond compromise and on those we simply agree to disagree. I am certain that there are items on education, healthcare, middle class incomes, budgeting and infrastructure where common ground is possible. It only takes a few to be examples for others. Become an example and spread the word.

Our career politicians will not make the needed changes as it would threaten their political longevity. The only other way to make the changes that the majority of voters want is through the Constitutional Amendment process. Our founders saw this as a way for the will of the people make changes as times warranted it. After the initial 10 (AKA the bill of rights) we have made 17 additional changes. Now is the time for one that makes comprehensive improvements. The first item would be term limits (you can understand why your elected representative will not favor this change). The most recent polls indicate that over 2/3rds of voters’ favor term limits for members of congress. A recent poll in Idaho came in at 84%. Once this occurs it will be making future elected politicians more accountable to the will of the people.

Including too many provisions in a potential Amendment would make it more difficult to survive the approval process, but I would include the following provisions: Elected representatives to have the same healthcare coverage as the general population and add on amendments to proposed legislation (that have nothing to do with the intent of the bill) are no longer allowed. All of these have tremendous support of the voters and none would ever pass Congress.

RX Ricing

RX Pricing

 In several prior posts, I have compared what we pay in our country for prescription drugs to other countries. With the advent of such Apps as Good RX and Single Care I have been confused. Why is there such a wide range of prices for the same item? My suspicion is that “cash” payers are paying a price that is more related to the actual cost and some pharmacies only quote the price is paying with insurance. If true, doe this mean that the Insurance providers are paying far too much? If so, what impact does this have on insurance premiums and the overall cost of healthcare in the US?

 

In the process of researching this subject I found the following article. It is rather long, but worth the read,

 Medication pricing: So this is how it works

Publish date: February 1, 2018 By  Dinah Miller, MD

In my last column, I looked at the tremendous variation in prices among pharmacies for two psychotropic medications, aripiprazole and modafinil. The cash price variation could be as much as 45 times more from one pharmacy to the next, which I found to be both outrageous and incomprehensible.

To learn more about pharmaceutical pricing, I contacted Doug Hirsch, the cofounder of GoodRx, a firm based in Santa Monica, Calif., that offers deep discounts on some medications. The company sends discount cards to physicians’ offices – call me if you need some, I have many boxes of GoodRx cards – and has a website (www.GoodRx.com) and an app. It advertises that it is about transparency, and if you’ve ever tried the company’s site or app, the service it offers is remarkable and simple to use.

tab1962/Thinkstock

You plug in the medication you’re interested in, include the dose and quantity you’d like, and add your ZIP code, then a list of pharmacies with the GoodRx discounted prices is generated for easy comparison shopping. It tells you how far each pharmacy is from your current location and provides the discount codes; the phone, fax, and hours of operation for the pharmacy; and a link to a map with driving directions. And if driving to multiple pharmacies to get the best price on multiple medications seems too difficult, in what is just short of miraculous technology, the app allows people to enter in all their medications and shows the comparative prices for the bundle. In short, GoodRx is to medication pricing what Trivago is to hotel rates. The technology is impressive, and it’s worth noting that the founders of GoodRx previously worked in top positions at Facebook.

I approached Mr. Hirsch with two simple questions. The company offers “up to 90% discount” on the cash price of medications through its app, website, or discount card – all of which can be gotten for free. I wanted to know 1) Who pays for this difference in the medication cost, and 2) How does the company, with 95 employees, make any money? Mr. Hirsch was gracious enough (and patient enough!) to spend the next hour walking me through the steps of medication pricing. It was a lively conversation, so let me share with you what I have learned.

Medications are made by a pharmaceutical company or, for generics, there may be many manufacturers. The medications are sent to a pharmaceutical distributor, such as McKesson, and it, in turn, sells and delivers the products to pharmacy chains, as well as to smaller, independent pharmacies. The pharmacies pay an acquisition cost for medications then set a price for these medications that are considerably – or even astronomically – higher than the acquisition price. This is the cash retail price, or in medicine, what is called the Usual & Customary (U&C) cost of the medication. The price may be neither usual, customary, nor reasonable, and it’s not the price the pharmacy expects to recoup on sales.

Every major insurance company contracts with a pharmacy benefits manager (for example, Caremark, Express Scripts, and Optum) to negotiate the cost of medications with each major pharmacy chain. Physicians are familiar with PBMs, who intercede by requiring preauthorization procedures for certain medications or by instituting stepwise, fail-first, requirements before they will allow pharmacy benefits toward the purchase of medications. When the PBMs negotiate with the pharmacies, they will negotiate for a discount off the pharmacy’s U&C charge for medication, perhaps a discount as much as 75% or 80%. Mr. Hirsch noted, “The discount is not negotiated on a per-medication basis but as an across-the-board average, so for one medication, the insurance price may be 2% discount from the U&C cost, and on another medicine it may be 95%. There is a dramatic variation, more than you’d ever expect.”

GoodRx gathers prices from many places, including partnerships with a number of PBMs. In addition to providing discounted prices for insured customers, the PBMs also include in their negotiations a slightly less-discounted price for cash-paying patients who present with a GoodRx card or coupon. You might be surprised to learn that discounted prices can often be less than the typical patient copay. For patients with a high deductible, for medications that are not covered at all, or for times when the copay is higher than the cost of the medication, it will often be less expensive for patients to use a GoodRx discount instead of their insurance. And whether patients uses either their insurance or a GoodRx discount, part of the cost of the prescription includes an administrative fee that goes to the PBM. When GoodRx cards are used, the PBM pays GoodRx part of that fee. I hope you are still with me, because this is the part of the conversation where I started telling Mr. Hirsch that I was getting a headache.

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You paid how much for that medicine?

I went back to the enormous cost discrepancy that I had discovered a couple of years ago with Provigil (modafinil). Thirty pills cost just under $35 at Costco, while all other pharmacies were charging close to $1,000. Mr. Hirsch explained, “From what I’ve been told, Costco bases their prices on their acquisition costs and then raises them a certain percent. It’s one way to provide a fair price, but that doesn’t mean they always have the lowest price. They are also the only major pharmacy that lists their drug prices on their website.”

I wanted to know what was in it for the PBMs. Why would Express Scripts be motivated to negotiate a discount in price for cash-paying customers outside of the insurance networks, and how did partnering with GoodRx benefit them? The answer, in part, lies with the fact that the website and app allow patients to comparison shop and go to pharmacies with lower prices. If patients use their insurance, the insurance company is paying less; if they don’t use their insurance because they learned the cash cost is less, then the cost burden has shifted from the insurance company entirely to the patient.

What’s in it for the pharmacies? Why would they be willing to accept less money from a patient bearing a discount card? Mr. Hirsch explained, “Pharmacies want to honor their contracts with PBMs, and the U&C prices are set high to enable negotiation so that they still make some profit. Most people couldn’t afford to pay the high U&C, but they can’t lower them for individual cash-pay customers because that would violate their agreements with PBMs, and Medicare and Medicaid, which is a felony. With the GoodRx price, they still make a profit, and people in drugstores buy other items as well.

Dr. Dinah Miller

“I can’t emphasize enough that the pharmacies are very happy to work with us,” Mr. Hirsch went on to say. “They get more patients, and in certain areas, a prescription that costs over $15 may never be picked up. Many pharmacies are frustrated; they want a fair price where they can make a profit, and every year, 200 million prescription orders are left at pharmacies, and the medicines are never picked up. Nonadherence to medication comes at an enormous cost in this country – roughly $300 billion in medical expenses. I started this company because I was trying to figure out a problem with my own medication. We want medications to be affordable.”

GoodRx has 95 employees, and I was still left wondering how they generate income. Mr. Hirsch pinned it down to three sources: the portion of the administration fees the PBMs pay GoodRx, a small amount of advertising, and finally, GoodRx provides technology for the PBMs and charges for this service.

“We started asking how we could gather prices in this bizarre marketplace and address the pricing inefficiencies,” Mr. Hirsch said, “and now I get emails every day expressing gratitude.”

Dr. Miller is coauthor with Annette Hanson, MD, of “Committed: The Battle Over Involuntary Psychiatric Care” (Baltimore: Johns Hopkins University Press, 2016).

COVID-19 compared to the H1N1 Virus

COVID-19 compared to the H1N1 Virus

There has been considerable discussion about comparing the current virus to the 1918 Influenza pandemic. There also has been a lot of misinformation. In 1918 the Spanish flu terminated the lives of an estimated 35 million folks. Despite the name, the H1N1 virus started in Kansas. At the time, no one knew how it was transmitted, and there were no NPIs (Non-Pharmaceutical Interventions) in place. Items like social distancing, closing establishments based on group settings, contact tracing, and other measures were not even considered. Our ability to provide testing and track the sources of the virus was extremely limited. About 35% of all people living at the time contracted the virus, and the mortality rate was estimated at 2%. If our current NPI, testing, and tracking procedures been in place at the time, there is no doubt that the number of cases would have been just a small fraction of what occurred.

We really do not know the actual mortality rate of COVID19. The reported rate in the U.S. is 6%, but that is not accurate. The best estimate based on countries that have done a better job on testing is that it is about 2% or about the same as the Spanish Flu. This is about twenty times the mortality rate of the common flu at .09% (a bit under one in a thousand will die from the flu.)

What is alarming is that, as of May 2020, the USA has 4.5% of the world’s population but almost 29% of the COVID19 related deaths. We can learn a lot from studying both the countries that are doing a better job as well as those few that are doing worse.