Healthcare going forward

[KaraBulut]

The amount of the charge can be quite relevant for the uninsured – assuming they intend to pay the bill.

At some point, billing uninsured people for more than the typical cost for treatments starts to look like speculative invoicing.

Or trying for everything they're worth from the get-go.

In context of the price, the overhead of a physician office is irrelevant. Medicare and commercial managed care contracts drive the actual reimbursement. The full price (aka the "charge master price") is entirely fiction. Two things happen with the "charge master price"- it's only paid by the ultra-weathy (e.g. international patients from Saudia Arabia or patients who opt for concierge medicine) or it's written off.

That's the catch to the whole US system that makes it defy the laws of an Adam Smith market-based economy: the US healthcare system is built around not-for-profit organizations. The way that it works is that the facility charges an incredibly inflated price. If the patient has insurance, the difference between the charge master price and the contractual price is written off as a loss. If the patient is unable to pay, the charge master price is written off as charity.

For example, I recently saw an invoice for a $80,000 procedure at a US hospital. This included charges for things like an IV started by a nurse ($250), an EKG ($350), a lab test ($150), etc. Medicare would pay about $10,000 for the procedure and it would not pay for any of the itemized charges- there's a flat fee that is expected to over all of the procedure (called "bundled prospective reimbursement" in Medicare terms). Similarly, a commercial insurance would pay about $14,000 for the procedure. Only an insured patient would be expected to pay the $80,000 bill.

So what does the hospital do with the difference? For the Medicare patient, they would write off $70,000. For the commercial insurance patient, they would write off $66,000. For the uninsured patient, they would write off $80,000 as bad debt/charity care and this would help them meet their "charity care" quota that the IRS requires.

The whole system is built around a fictitious pricing model and the nature of illness distorts what would be normal market forces. Think about this: if you are having a heart attack, you're not going to call around to all the hospitals in your vicinity looking for a deal; you're going to go to the nearest hospital emergency room and you're never going to consider the cost. If you're an insured patient, the chances are that you will never see a bill from the hospital. Only after the insurance company pays will you get a statement showing your residual responsibility: you'll never see that $80,000 bill. You'll only get a statement at the end of the process saying "You owe $1,000 now that your insurance has paid".

The ACA was supposed to lay a cornerstone for reform of this functional system and its unrealistic pricing models. It was also supposed to eliminate the key claim of not-for-profit hospitals: that prices are inflated to cover the uninsured (i.e. borrowing from insurance Peter to pay for uninsured Paul). Now that the ACA is going to possibly be repealed, we're back to square one with a large population of uninsured patients seeking unreimbursed charity care and hospitals once again getting increased reimbursements from Medicare to cover the cost of the uninsured which will ultimately increase the deficit and will shorten the period of solvency for the Medicare Trust Fund.

 

[CoolBlue71]

Adding to this discussion is this report…


Cory Booker Joins Senate Republicans to Kill Measure to Import Cheaper Medicine From Canada

By Zaid Jilani
Thursday, January 12, 2017 | http://theintercept.com/2017/01/12/...per-medicine-from-canada/?comments=1#comments

The Senate voted down the amendment 52-46, with two senators not voting. Unusually, the vote was not purely along party lines: 13 Republicans joined Sanders and a majority of Democrats in supporting the amendment, while 13 Democrats and a majority of Republicans opposed it.

One of those Democrats was New Jersey’s Cory Booker, who is considered a rising star in the party and a possible 2020 presidential contender.

 

[MakeDigitalLove]

If Cory Booker does run, he's not getting my vote.

 

[KaraBulut]

Adding to this discussion is this report…
Cory Booker Joins Senate Republicans to Kill Measure to Import Cheaper Medicine From Canada

If Cory Booker does run, he's not getting my vote.

The Democrats who voted against the measure said that they did so because there were no quality and patient protections in the measure. That is true but those things are seldom detailed in an amendment.

I'm sure it's just a coincidence that several major pharmaceutical companies like Johnson & Johnson are headquartered in New Jersey.

If you're not happy with his vote, tell him so.

 

[MakeDigitalLove]

Yea I read their explanation for it, it is something that I am not totally buying. Thanks for the link.

 

[Benvolio]

The US subsidizes global drug research and development. http://www.wsj.com/articles/why-the-u-s-pays-more-than-other-countries-for-drugs-1448939481
Price controls will limit research, development and access to new drugs and many existing ones.

 

[KaraBulut]

^^^And that fits into the current discussion how?

 

[Kabluey]

^^^And that fits into the current discussion how?

It's a nonsensical passage he repeats whenever healthcare is discussed.
Funnily enough he can never explain why marketing spending and profits are both greater than R&D spending in the USA.

It's part of the blame shifting tactics that keep being reintroduced to confuse the debate for low-information voters for the benefit of those who are responsible for structural problems (in this case overcharging healthcare and medicine suppliers).

 

[eastofeden]

The Democrats who voted against the measure said that they did so because there were no quality and patient protections in the measure. That is true but those things are seldom detailed in an amendment.

I'm sure it's just a coincidence that several major pharmaceutical companies like Johnson & Johnson are headquartered in New Jersey.

If you're not happy with his vote, tell him so.

The problem with Booker and all politicians is that $$$$$ controls everything...so if he doesn't play...they will use their resources to replace him....with a Republican.

They all have a balancing act so what I do is watch how they balance the special interests and the people...the overall picture and how skilled they are at dancing on the tightrope. I think especially today with the climate and Trump it is important to remember the big picture when dealing with the daily grind and keeping a healthy balance...

I learned long ago that letting them know is essential...and to keep their feet to the fire...but remember what they are dealing with was not by their design and having volunteered for California Chief Supreme Court Justice Rose Bird's campaign ...I know what corporations and their money (BIG OIL in that case) and disinformation can do to an excellent candidate who won't dance on the ropes...they are GONE....unless they live in a state where the population and special interests are small....but then they are for sale or rent to different sharks....

..and since Mr Roberts Supreme Court decided unlimited $$$$ campaign donations was a good idea....we are screwed...as are the people who represent us....

Now I will let Booker know I am not happy myself even though he isn't my Senator...I write or call mine quite frequently....but I wanted to say that first because I want to keep as many Democrats as possible in Congress.

 

[Benvolio]

^^^And that fits into the current discussion how?

People here have been criticizing the Congress for not voting to import cheaper, i.e. price controlled, drugs from Canada. The effect is to force US companies to charge lower prices. Ultimstely, it will reduce the incentive and funds for research and development, globaly. As the linked article says, the US susidizes research globally.

 

[KaraBulut]

It's a nonsensical passage he repeats whenever healthcare is discussed.

B-I-N-G-O

So, back to topic. It is interesting that the governors are pressuring Congress behind the scenes to slow the process down.

But Trump’s push comes as at least five of the 16 Republican governors of states that took federal money to expand Medicaid are advocating to keep it or warning GOP leaders of disastrous consequences if the law is repealed without a replacement that keeps millions of people covered. They include Govs. Charlie Baker of Massachusetts, Rick Snyderof Michigan, John Kasichof Ohio, Asa Hutchinson of Arkansas and Brian Sandovalof Nevada.

Here's a glimpse into the rhetoric:

Editorials are already dissecting Paul Ryan's obfuscation about the issue and claims that there's a replacement plan:
Here are the lies Paul Ryan told about Obamacare during his town hall meeting

 

[Benvolio]

People here have been criticizing the Congress for not voting to import cheaper, i.e. price controlled, drugs from Canada. The effect is to force US companies to charge lower prices. Ultimstely, it will reduce the incentive and funds for research and development, globaly. As the linked article says, the US susidizes research globally.

It is an important part of the reason Republicans resist price controls and price controlled imports.

 

[KaraBulut]

People here have been criticizing the Congress for not voting to import cheaper, i.e. price controlled, drugs from Canada. The effect is to force US companies to charge lower prices. Ultimstely, it will reduce the incentive and funds for research and development, globaly. As the linked article says, the US susidizes research globally.

Well, that's a more cogent argument.

The push to import drugs from Canada is to benefit consumers. The pricing of drugs in the US driven by the wholesale cost- the price at which manufacturers sell to the wholesale providers. If those wholesale drug prices are lower in every country other than the US, that's probably a sign that it's not the cost of the drugs that are driving the price. And it doesn't explain why drugs that were $100 in 2007 increased to $600 after an investor hedge fund bought them.

It's an argument that you used before and we explained to you that US drug companies spend far more on marketing drugs than on R&D.

 

[Benvolio]

Well, that's a more cogent argument.

The push to import drugs from Canada is to benefit consumers. The pricing of drugs in the US driven by the wholesale cost- the price at which manufacturers sell to the wholesale providers. If those wholesale drug prices are lower in every country other than the US, that's probably a sign that it's not the cost of the drugs that are driving the price. And it doesn't explain why drugs that were $100 in 2007 increased to $600 after an investor hedge fund bought them.

It's an argument that you used before and we explained to you that US drug companies spend far more on marketing drugs than on R&D.

New drugs have patent monopoly for a limited period of time after it is approved for sale. At the end of the patent period other companies can manufacture and sell it as a generic drug, without having to pay any part of the research expense or regulatory approval. Therefore the company must recover its research and development within that limited period between approval and the expiration of the patent. So yes, it is critical to market it sggressively during the patent period and that requires marketing expense, which also must be recovered. Yes, they want to make a profit, but new research is paid from profit from older drugs.
Liberals cannot understand any of this. Boo hoo drug companies want profits. Boo hoo drug companies advertise. Liberals always want the golden eggs but they hate that goose.

 

[KaraBulut]

^^A patent covers exclusive use for 20 years. There are also other options under FDA regulations that expand the time period:

• Orphan Drug Exclusivity (ODE) – 7 years
• New Chemical Entity Exclusivity (NCE) – 5 years
• Generating Antibiotic Incentives Now (GAIN) Exclusivity– 5 years added to certain exclusivities
• New Clinical Investigation Exclusivity – 3 years
• Pediatric Exclusivity (PED) – 6 months added to existing Patents/Exclusivity
• Patent Challenge (PC) – 180 days (this exclusivity is for ANDAs only)

The US grants patents to recoup their development costs, not to allow companies to charge the US public prices that are exponentially more than the rest of the world. If they were actually recouping R&D costs, they would be charging those same R&D costs to everyone globally.


And see- this is how we know when someone is losing an argument badly- they try to dismiss the argument with an ad hominem - like claiming that "conservatives always..." or "liberals don't...".

Being conservative or liberal isn't a pejorative like you believe it to be. Being an ideologue or someone who can't look at other viewpoints in weighing arguments is however an issue.

One of the things that I find incredibly frustrating about US politics at the current time is the dearth of creativity and fact-based frameworks to ideas that are being proposed. Paul Ryan has a conservative viewpoint but his ideas in the past have at least been rational and based upon sound economic research. One of the reasons that he's bumbling so badly when asked about the ACA repeal is that he knows he's lying and he knows that the repeal is going to increase the deficit. In the past, before he became Speaker, he would have balked at anything that was not budget neutral. Now that he's under pressure from the Republican donor base, he's having to do things that he knows are not in the best interest of the American people and probably not in the best interest of his Republican House members. And all because 0.9% of the American public - people who have billions of dollars - don't want to pay taxes to help finance healthcare for millions of Americans.

 

[kallipolis]

Paul Ryan has a conservative viewpoint but his ideas in the past have at least been rational and based upon sound economic research. One of the reasons that he's bumbling so badly when asked about the ACA repeal is that he knows he's lying and he knows that the repeal is going to increase the deficit. In the past, before he became Speaker, he would have balked at anything that was not budget neutral. Now that he's under pressure from the Republican donor base, he's having to do things that he knows are not in the best interest of the American people and probably not in the best interest of his Republican House members. And all because 0.9% of the American public - people who have billions of dollars - don't want to pay taxes to help finance healthcare for millions of Americans.

Worth repeating, for these words are indicative of the views of several American conservatives known to me who are shocked that Americans are forced to pay such high prices for pharmaceutical products, available in other developed countries at a much lower price.

 

[Benvolio]

^^A patent covers exclusive use for 20 years. There are also other options under FDA regulations that expand the time period:

• Orphan Drug Exclusivity (ODE) – 7 years
• New Chemical Entity Exclusivity (NCE) – 5 years
• Generating Antibiotic Incentives Now (GAIN) Exclusivity– 5 years added to certain exclusivities
• New Clinical Investigation Exclusivity – 3 years
• Pediatric Exclusivity (PED) – 6 months added to existing Patents/Exclusivity
• Patent Challenge (PC) – 180 days (this exclusivity is for ANDAs only)

The US grants patents to recoup their development costs, not to allow companies to charge the US public prices that are exponentially more than the rest of the world. If they were actually recouping R&D costs, they would be charging those same R&D costs to everyone globally.


And see- this is how we know when someone is losing an argument badly- they try to dismiss the argument with an ad hominem - like claiming that "conservatives always..." or "liberals don't...".

Being conservative or liberal isn't a pejorative like you believe it to be. Being an ideologue or someone who can't look at other viewpoints in weighing arguments is however an issue.

One of the things that I find incredibly frustrating about US politics at the current time is the dearth of creativity and fact-based frameworks to ideas that are being proposed. Paul Ryan has a conservative viewpoint but his ideas in the past have at least been rational and based upon sound economic research. One of the reasons that he's bumbling so badly when asked about the ACA repeal is that he knows he's lying and he knows that the repeal is going to increase the deficit. In the past, before he became Speaker, he would have balked at anything that was not budget neutral. Now that he's under pressure from the Republican donor base, he's having to do things that he knows are not in the best interest of the American people and probably not in the best interest of his Republican House members. And all because 0.9% of the American public - people who have billions of dollars - don't want to pay taxes to help finance healthcare for millions of Americans.

Obviously they would charge more in other countries if they could. But most companies, such as Canada have some system of price controls, often by negotiation. They are not willingly charging more in the US and less in other countries.

 

[Benvolio]

Obviously they would charge more in other countries if they could. But most companies, such as Canada have some system of price controls, often by negotiation. They are not willingly charging more in the US and less in other countries.

That should read most countries such as Canada have some form of price controls, often by negotiation.

 

[KaraBulut]

That should read most countries such as Canada have some form of price controls, often by negotiation.

That is true. The idea behind these price negotiations is to reduce the cost but still maintain profitability for the manufacturer and producer. No one is served if the pharmaceutical companies aren't viable. These negotiations also remove the need to run expensive TV ads and print ads.

On a related note, in the big negotiations around the ACA, the industry lobbying group Phrma- did agree to $90 billion in pricing concessions in exchange for blocks on importation of drugs from Canada and continued agreement that Medicare and Medicaid would not negotiate for lowered prices. Only the Veterans Administration negotiates for volume discounts. Source

So, we've seen that the Republicans want to repeal the ACA but keep the bans on Canadian imports. Let's see what happens with the Medicare D and Medicaid pricing negotiations are permitted and whether the ACA pricing concessions are also repealed. (Hint: don't hold your breath that patients will benefit in this regard, either).

 

[gsdx]

As the linked article says, the US susidizes research globally.

I assume the article to which you are referring is the one in #146. If so, where exactly did the article say this? The article, in fact, referred to gasoline and Big Macs. The video about the drugs, however, said no such thing about world-wide US subsidies.