A beginner's work in progress.......
Published on May 7, 2005 By dabe In Politics
I did not write this article. I will not say who did yet, because I want people to read it with an open mind. The content, after all, is what is so important here. It's about health care in this country, or lack thereof. It's about how this nation can get royally screwed when Congress allows corporate interests to write legislation. Please read on.

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There was a brief flurry of outrage when Congress passed the 2003 Medicare bill. The news media reported on the scandalous vote in the House of Representatives: Republican leaders violated parliamentary procedure, twisted arms and perhaps engaged in bribery to persuade skeptical lawmakers to change their votes in a session literally held in the dead of night.

Later, the media reported on another scandal: it turned out that the administration had deceived Congress about the bill's likely cost.

But the real scandal is what's in the legislation. It's an object lesson in how special interests hold America's health care system hostage.

The new Medicare law subsidizes private health plans, which have repeatedly failed to deliver promised cost savings. It creates an unnecessary layer of middlemen by requiring that the drug benefit be administered by private insurers. The biggest giveaway is to Big Pharma: the law specifically prohibits Medicare from using its purchasing power to negotiate lower drug prices.

Outside the United States, almost every government bargains over drug prices. And it works: the Congressional Budget Office says that foreign drug prices are 35 to 55 percent below U.S. levels. Even within the United States, Veterans Affairs is able to negotiate discounts of 50 percent or more, far larger than those the Medicare actuary expects the elderly to receive under the new plan.

After the drug bill's passage, Jacob Hacker and Theodore Marmor of Yale University estimated that a sensible bill could have delivered twice as much coverage for the same price.

Needless to say, apologists for the law insist that the prohibition on price negotiations had nothing to do with catering to special interests - that it was a matter of principle, of preserving incentives to innovate. How can we refute this defense?

One way is to challenge claims that the pharmaceutical industry needs high prices to innovate. In her book "The Truth About the Drug Companies," Marcia Angell, the former editor in chief of The New England Journal of Medicine, shows convincingly that drug companies spend far more on marketing than they do on research - and that much of the marketing is designed to sell "me, too" drugs, which are no better than the cheaper drugs they replace. It should be possible to pay less for medicine, yet encourage more real innovation.

Another answer is to point to the haste with which key players in the drug bill's passage cashed in - making the claims that they wrote a pharma-friendly Medicare bill out of genuine concern for the public's welfare look ludicrous.

Let's look at just two examples.

Billy Tauzin, who shepherded the drug bill through when he was a member of Congress, now heads the Pharmaceutical Research and Manufacturers of America, the all-powerful industry lobby group, for an estimated $2 million a year. In his new job, he's making novel arguments against allowing Americans to buy cheaper drugs from Canada: Al Qaeda, he suggests, might use fake Viagra tablets to get anthrax into this country.

Meanwhile, Thomas Scully, the former Medicare administrator - who threatened to fire Medicare's chief actuary if he gave Congress the real numbers on the drug bill's cost - was granted a special waiver from the ethics rules. This allowed him to negotiate for a future health industry lobbying job at the very same time he was pushing the drug bill.

If all this sounds like a story of a corrupt deal created by a corrupt system, it is. And it was a very expensive deal indeed. According to the Medicare trustees, the fiscal gap over the next 75 years created by the 2003 law - not the financing gap for Medicare as a whole, just the additional gap created by legislation passed 18 months ago - will be $8.7 trillion.

That's about three times the amount President Bush proposes to save by cutting middle-class Social Security benefits.

In fact, I have a suggestion for Mr. Bush. One way to prove that he's really sincere about addressing long-run fiscal problems, that his calls for benefit cuts aren't just part of an ideological agenda, would be to put Social Security aside for a while and fix his own Medicare program. Oh, never mind.

Nonetheless, someone will eventually have to take on the health care special interests. Who might do that? ...............................

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

In a day or two, I will give the author the credit due him. He deserves a round of applause.

Comments
on May 07, 2005

Sounds like some of the editorial claptrap you'd see in the New York Times or LA Times.

The problem with people like Krugman or Dowd is that they either have a simplistic (in Dowd's case) understanding of economcis or their left wing ideology has them twist things to mean things they know are untrue (Krugman).

For example:
"Outside the United States, almost every government bargains over drug prices. And it works: the Congressional Budget Office says that foreign drug prices are 35 to 55 percent below U.S. levels. Even within the United States, Veterans Affairs is able to negotiate discounts of 50 percent or more, far larger than those the Medicare actuary expects the elderly to receive under the new plan."

First of all, this isn't really true. "Almost every"? For some reason, Western europe (old Europe) and Canada is "the rest of the world".  But let's assume it is true for a second for the sake of argument.  Which country is producing the lion's share of the medical and pharmacutical research these days?  The United States.  Is this a coincidence? No.

What happens is that Americans are subsidizing these other countries.  It's the path of least resistance.  We end up having to pay more because France and Belgium and Canada pay less.  It sucks.  But it does have a benefit -- drug companies base themselves here.  This pulls in the best and brightest from aroudn the world who want to work in the medical field.

Is it a good trade? I don't know.  But let's talk about the second reason drug costs are so high here and it's one thing I think we should get rid of:  Prescription drug marketing.

Take a look at the "costs" of a drug companie and marketing is a HUGE chunk of their budget.  But why is that?  It's because the United States, alone of industrialized countries, allows drug companies to advertise directly to consumers. That costs billions of dollars annually and it's tacked on to the price of drugs.  This is something I would like seen done away with.

But the disagreement between the Krugmans and Dowds of the world is much deeper than this and that's why these issues never get resolved: You have one side that believes that affordable healthcare is a RIGHT.  You have another side that believes that individuals are responsible for their own healthcare and that the market will determine the ultimate price, even if that means some people will go without.  I happen to belong to the latter group.  I do not believe the federal government should be in the business of providing healthcare to its citizenry. That's a responsibility for individuals and their families to take care of.  

And as long as that gulf exists, you will always have this disconnect in policy.  Providing cheap drugs to our citizens isn't a priority for Republicans. Most Republicans will tell you that the government has no business trying to regulate drug prices. That's something for the market to do on its own. 

on May 07, 2005
My condolensces to whoever wrote this. Not for their lack of the ability to write, for whoever it was definitely has a talent for impassioned writing.

What this person is sorely lacking is a grasp of economic reality.

Everyday I hear more and more about how important it is for the government to take control of healthcare coverage. I hear it from people who see how much perscription drugs, office visits and other things cost and yell, "Government, Take Care of ME!!!!"

While clamoring for the government to kiss it and make it all better, they applaud any increase in the Federal Budget for Healthcare. "They do care!" "They do care!"

But then, someone (such as this writer) notices the sinister truth... Money allocated for Healthcare actually gets paid to eeeeviiiiil Corperations.

My question to everyone of that ilk is... Where did you think the money was going to go in the first place?

Here's a dose of reality for everyone. Revenue allocated for Healthcare is going to be paid to the Healthcare industry. Money allocated for defense is going to the Defense Industry. Money allocated for the Department of Transportation is going to the Construction industry.

Money moves from point A to point B. It is childishly naive to applaud allocations for a program, then whine and cry over the fact the money then actually goes to the corperations and companies that produces the goods and services of that industry.
on May 07, 2005

Providing cheap drugs to our citizens isn't a priority for Republicans. Most Republicans will tell you that the government has no business trying to regulate drug prices. That's something for the market to do on its own.

the first sentence i'm quoting tells only half the story in that prohibiting our citizens from purchasing cheap drugs seems to be a republican objective.  if the last two sentences were true, we would be permitted to purchase drugs manufactured in, say, india where labor costs are much lower.  i wanna reap the benefits of outsourcing too.

on May 08, 2005

I would support letting people buy drugs from whatever country they choose to.

on May 08, 2005

I would support letting people buy drugs from whatever country they choose to.

if only you were running for national office. 

on May 08, 2005
I would (and do) support letting people buy drugs from any country they choose also. However I have to laugh at anyone who cries out against outsourcing... but demands outsourcing when it comes to prescription drugs.

I guess "Buy American, The Job You Save Might Be Your Own" doesn't apply to those who work in the prescription drug industry. ;~D
on May 08, 2005
I have to laugh at anyone who cries out against outsourcing... but demands outsourcing when it comes to prescription drugs.


one way to help job outsourcers appreciate the impact of their decision is to outsource our purchasing power. if you wanna even better laugh consider the basis for prohibiting the purchase of drugs from outside the us. the people of india are capable of adequately protecting the privacy of your banking and tax data...processing the results of sophisticated medical tests...but can't be trusted to compound drugs they themselves use?
on May 08, 2005
the first sentence i'm quoting tells only half the story in that prohibiting our citizens from purchasing cheap drugs seems to be a republican objective.


The emphasis here is on prohibit. That's the sham of this Medicare bill, and the shame of it. PROHIBIT. One of the most truly disgusting things that the neocons did was to make it illegal for the government to negotiate pricing for drugs with pharmaceutical companies. If that's not collusion, a la fascism, nothing is.

Republicans will tell you that the government has no business trying to regulate drug prices. That's something for the market to do on its own.


And, here's the contradiction in draginol's thought process. They've made it illegal for negotiations to take place, so the market, whatever that means, gets to fleece the people with zero interference from the government. If the market was truly allowed to regulate prices on its own, it would have not written this shameful sham of a medicare bill, and the market would truly have the liberty to influence pricing.


Take a look at the "costs" of a drug companie and marketing is a HUGE chunk of their budget. But why is that? It's because the United States, alone of industrialized countries, allows drug companies to advertise directly to consumers. That costs billions of dollars annually and it's tacked on to the price of drugs. This is something I would like seen done away with.


I cannot disagree with you here on the premise. Pharaceutical companies spend billions on marketing. But, if the government interfered with that, wouldn't that constitute a governmental interference which you so heartily seem to loathe. Can't have it both way.

Fact is, drag, you completely disregarded the point of this article in order to pontificate about marketing and some notion of how Dowd or Krugman twist things. The fact is, and what the author was emphasising is that the government's interference is slamming this country with a double whammy of a scam. First, they prohibit price negotiations, thereby resulting in higher drug prices, which have nothing to do with marketing and research, and more to do with making the stockholders richer and richer. Then, when most people can no longer afford any drugs, and it becomes too expensive for even the government to bear, the government, as the neocons envision it, would then either drop funding to support the medicare program entirely, or raise taxes. And you know how much these thugs in power right now detest raising taxes. First, the poorest of the poor get dropped. Then the heart of the program, then the program itself. Let people suffer and die. They're just poor anyway.

Oh, but wait, there is a third issue here. The cost of this medicare bill ballooned right after passage, so not only can we not afford drugs anymore, we cannot afford the program anyway.

And, the fact is, we shouldn't have to buy our American made drugs from other countries. Agreed, we should be allowed to buy them from whomever or whereever we want. But, we shouldn't be forced to buy them from cheaper countries. That's so absurd. And yup, how the hell can we trust those far eastern countries with our credit cards and life savings, but not to buy their drugs? Hypocrisy!!
This all has nothing whatsoever to do with markets setting prices. Talk about skewing the economic realities of the drug bill. But, that's what you repubs seem to do so well. Skew the facts. Sham the people. Call them stupid and starve them. The hypocrisy of all of the repubs ideology is just stunningly disgusting. And, you buy into it, just because it's republican. It's not republican. It's fascism. And, you should be ashamed for trying to rationalize it.

Kingbee, thank you for your arguments here. You do it so much nicer than I do. But, they are just as dismissive of your arguments as they are of mine. Jingo jerks.........
on May 08, 2005
And, here's another little nugget from that scam of a medicare bill. Link

"Elderly people with low incomes may lose some of their food stamps if they sign up for the new Medicare prescription drug benefit, the Bush administration said Saturday."

Their rationale is that because the elderly poor won't have to spend as much on drugs, they'll have more money for food. But, that doesn't make sense, because one of the republican's reasons for this bill was because the elderly often have to choose between drugs and food. Excuse me, but if we take away one benefit, because of another benefit, aren't they going to still be forces to choose between drugs and food? There is no sensible logic here. Just another way of decreasing the benefits to the elderly poor, who have no other means.

Yeah, that's it......... starve the stupid. I can't think of any group of people more worthy of being starved than the elderly. Can you? But hell, they're just sick and gonna die soon anyway. Let's just starve 'em so they die sooner.

Fucking hypocrisy.................
on May 09, 2005
Draginol, you got one thing right. Your guess about who may have written the above article. It was Paul Krugman Link
Unfortunately, you missed the point of this article. You may not like the writing style. That's a personal thing. But, I think that believing that the message is "simplistic" is exactly the kind of spin a rightie would put on his message.

No, it's not simplistic. Yes, you missed the point. Yes, revenue allocated for health care will be spent on the health care industry. But, the point is that a bigger and bigger percentage will be going towards the CEO's and shareholders' pockets. No, the medicare bill will do nothing to insure that more people who may be eligible get help. Draginol, your response was simplistic claptrap.
on May 09, 2005
Yes, revenue allocated for health care will be spent on the health care industry. But, the point is that a bigger and bigger percentage will be going towards the CEO's and shareholders' pockets. No, the medicare bill will do nothing to insure that more people who may be eligible get help.


Let's see how it works now... My partner and I get a call, we respond. We show up on scene, assess the patient, stabilize the patient and prepare the patient for transport to the hospital. Enroute to he hospital, I do a secondary assessment and adjust my treatment of the patient accordingly. We get to the hospital, prepare the patient for transfer, move the patient into the ER, give our report to the nurses and turn over patient care to the hospitial staff. We complete the paperwork, document the treatment, meds and equipment used and have either the patient, patient's family or the charge nurse sign the run report and other documentation.

The patient is on medicare and medicaid, so we get a copy of their card. at the end of our shift we turn our stack of paperwork in to the dispatcher, sign out and go home.

Medicare/Medicaid recieves a bill for ambulance services, meds and equipment used. Taxpayer money pays the bills. The checks are cut and sent, the ambulance service deposites the checks, and pays the bills.

The revenue that was allocated for care of patients was used for its intended purpose, my partner and I, the dispatchers, administrative staff get our paychecks, the owners and investors pocket the profits. Which person in this chain didn't deserve to be paid? If either didn't do their part, the efforts of the others would be non existant or for nothing. How is that a bad thing?
on May 09, 2005
All very well documented, Ted. But, that was not the point. You missed the fact that it is prohibitted, as in ILLEGAL for the government to negotiate prices for the drugs that are given, either directly by health care workers, or more to the point, via prescriptions. The pharm CEO's get the windfall, the taxpayers pay for the bonuses to the CEO's, the prescription coverages become top heavy from the sheer weight of it all, so the next move is that the government, our dubya administration, then eventually just cuts the program. The CEO's don't care. They just laugh all the way to the bank with the upfront money.

THAT'S THE FU KING POINT
on May 09, 2005
I'm not a fan of government "negotiated" prices. We have a form of that with peanuts, cotton and tobacco already, all it really does is make it so those who buy these commodities pay for it twice, an elevated price in the way of taxes and a reduced price in the way of retail.

Would you support a govenment program that required that someone doing your job could not make more than an arbitrarily set amount? Would you support laws requiring you to pay your babysitter or tip your server at least 20%? Price controls do nothing more than artificially shift the market. Ok, let's say the government "negotiated" a price for meds, and everyone paid a wonderfully low price. The stock for drug companies plummet and investors put their money in another industry. That industry uses the newly infused money for research and development, advertizing and modernizing their production. They become highly profitable and the press starts reporting the dastardly rise and terrible profits they are making, the government "negotiates" the price............

I can't remember the last time I heard of the government "fixing" an industry by getting involved with it. Government involvement has destroyed the family farm, and has had a hand in (but far from being the cause of) the downfall of the steel industry, the automotive industry, and our manufacturing base in general.

I have no problem with allowing people to buy their meds from whereever they want. I agree with you completely that it is rediculous for the government to say that only U.S. Companies can make safe and effective drugs (especially with the dismal track record of the FDA and the medical field lately).

If the market were allowed to prevail, prices everywhere would stabilize because of competition. Companies in America would have to compete with Canada and others, and prices would have to come down.

Who I do feel for in all this though is the American Pharmacies and distribution.

So much for "Buy American, the job you save may be your own" though. the Press has told the sheep that the pharmaceutical companies are the devil and the sheep cry out "yeah, they're Baa-ad".
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