Financing Reform: Limiting Malpractice Liability?

"In closed-door talks, Mr. Obama has been making the case that reducing malpractice lawsuits — a goal of many doctors and Republicans — can help drive down health care costs, and should be considered as part of any health care overhaul, according to lawmakers of both parties, as well as A.M.A. officials."

Funding Reform: Drug Ads Deductions No More?

Ways and Means Cmte. Chair Charles Rangel has announced that the House is considering eliminating the advertisement tax break that Pharma gets, in order to pay for health reform. This idea has been around since before BO took office, when Rahm Emmanuel warned industry leaders.

"Rangel said he and other lawmakers believe it is wrong to let drug companies
deduct their advertising costs for prescription drugs. ... Rangel said it’s
inappropriate for taxpayers to subsidize ads for pharmaceuticals because they
encourage viewers to ask for drugs they may not need."

It never occurred to me that there is a tax break for advertising. It's a a business deduction as it is an "ordinary and necessary expense paid or incurred during the taxable year in carrying on any trade or business." Huh. Makes me wish I had taken more tax classes.



Now, while I'm certainly no advocate for BigPharma, I will say the Representative's argument has me thinking about a variety of issues:



Almost all ads are for things we don't need. The others are for things we need that we can get from a variety of sources in various permutations (that are probably unnecessary or undesirable alterations anyway). In this sense it's not a very strong argument.



What pharmaceutical drugs are needed anyway? What OTC drugs are needed? What drugs of any kind are needed?



Who should decide what's needed?



The Rep's problem isn't with consumerism, i'm sure. In fact, that is supposed to be ENCOURAGED in our society (hence a crux of the health care "debate"). The problem is who pays for this consumerism. Unless, of course, the Representative is concerned with the large amounts of side effects & subsequent treatments or deaths associated with prescription drugs. While this is a more humanitarian perspective, it is still a monetary problem as well. I wonder if Rangel was concerned about the taxpayer subsidization of these ads before he started pondering the costs of health care reform? He could have been. I don't know. I'll get back to you on that one.



Also, the Representative says ads encourage patients to ASK for drugs they may not need. What's the problem with that, Mr. Thought Police? People ask for things they don't need all the time. In fairness, it could be a problem if not only are the drugs not needed, but they're dangerous, or the ads are misleading or straight up lying (which does happen). That kind of speech is not protected. Otherwise, if the ads pass First Amendment commercial speech regulation tests, the problem would lie in the granting of an unreasonable request, which really would fall to the doctors, wouldn't it. Is this a veiled jab at health care providers, and by extension, the AMA, who vehemently deny their prescribing habits are tainted by the ad efforts of BigPharma? (BTW, BigPharma spends 3-4 times as much on ads & swag for drs than it does on direct to consumer ads. i'm sure that's because they find advertising to consumers more profitable & therefore a less worthy investment.)



Rep. Rangel's argument that ads make people want to buy things they don't need could just as easily be applied to a commercial for Taco Bell. ...except his argument points to a key issue (IMO) that doesn't get as much attention as I think it should--Health issues are not standard free market issues. Rangel says people purchase DRUGS they do not need. What makes Rx drugs different from a Fiesta Burrito? I'll leave that one to you.



So there's a little rant on tax breaks for drug ads. Take it all with a grain of salt, or whatever your drug of choosing, while you still can make the choice. Believe it or not after reading this post, I'd be in favor of such a measure, if it could be implemented in a logical & justified way, rather than simply a lame attack on a very profitable industry.

don't trust the insurance companies

I had been avoiding simply posting links with little commentary here, but in the interest of posting more, here goes.....

Op Ed from Paul Krugman in NYT on the need for a public option. It's refreshing that skepticism of the motives of the insurance industry in getting on board with reform is starting to get some public attention.

Common Sense

Check out Dan Carlin's podcast, Common Sense on "Sick Politics." An excellent and spirited commentary on health care today. Thanks to B at Is it Luck for the heads up.

And think about this quote when you listen to the podcast:

"Dismantling the private market ... is not something the president
supports. He supports moving forward and filling the gap, not disrupting the
entire market," Sebelius told the House Ways and Means Committee.

BO on reform

Tuesday the President sat in on a Senate Finance Committee meeting on health reform, and afterward released a letter addressed to Baucus and Kennedy summing up his support.



Here's the gist: BO supports reduced costs, keeping the health insurance you have if you want to. These things are neither new nor surprising. The letter continues, "I agree that we should create a health insurance exchange." Saw that one coming. And BO strongly supports a public health insurance option to compete with private plans. Yep. Further the President is "open to [some Senator's] ideas on shared responsibility." What does this mean, you ask? Insurance mandates. BO was not open to such an idea for anyone other than children during the presidential primaries. I will admit I'm slightly surprised this one is coming up so soon, though i note the noncommittal "openness" which shows a flexibility to jump on board or off whenever the jumping is good. I do believe that the President supports a mandate but will bide his time until a politically safe moment.


...
I've now been sitting here staring at this screen trying to figure out the best way to analyze and sum up my feelings about the president's letter. All I can say right now is: Get ready America.

The Money/Medicine Mix Mistake

The free market at "work" in health care = increased costs.

Says Kevin Schulman of Duke U:

“These costs keep growing despite the recession, and health care is going to
shoot up as a percentage of our GDP even more. It’s just spooky.”

From AHLA newsbriefs:

The Palm Beach Post reports that the "giant companies that dominate Florida's health insurance market are stifling competition and escalating premiums," a new report by Health Care for America Now argues. The report said health insurance "premiums in Florida rose 3.6-times faster than wages from 2000 to 2007"; and two companies, "Blue Cross and Blue Shield (BCBS) of Florida and Aetna Inc., control 45 percent of the health insurance industry in the state." ... But United Healthcare spokesperson Roger Rollman charged, "The idea that UnitedHealthcare market share is driving premium costs is nonsense." Rollman contends that "the growth in premiums is mostly driven by overall health costs."

Similarly, the Houston Chronicle (5/21, Ackerman) noted that Texas health insurance premiums rose "nearly six-times faster than wages between 2000 and 2007"; and the report showed that "BCBS and United Healthcare control 68 percent of the Texas market." ... Notably, the Justice Department "considers a market 'highly concentrated' if one company holds more than a 42-percent share."

The Chronicle quotes an HCAN researcher: insurance companies’ profits between 2000 and 2007 belie their arguments [that an ageing population is the reason for increased costs]. He noted that the net incomes of the 10 largest insurance companies grew from $2.44 billion in 2000 to $12.8 billion in 2007. The Chron continues, During that time, Texas premiums have increased 87 percent, according to the report — 5.8 times faster than wages. For family health coverage, the average annual combined premium for employers and employees rose from $6,635 to $12,403.

That's bulls**t.

Okay, rant time.

Do we care about money or people? The cost of health care, the cost of treatment, the cost of an ageing population, the cost of premiums, profits, profits, profits, the market, the cost of innovations, pharmaceuticals, insurance, HMOs. This is what you hear in the news when you hear about health care. The only time people come in to the equation is when you hear "46 million uninsured." But again, look at that statement--"46 million uninsured." Not 46 million without health care, not 46 million people who are unhealthy or don't have access to preventative medicine. And even less frequently do you hear about the "underinsured," who pay their hard earned money to be "covered" yet still face huge bills and forgo medical treatments. Why? Because no matter what they're under, at least they're INSURED.

And being insured means you get the care you need right?

Well...certainly not in countries with the wrong kind of insurance--public. People in those places face long waits, and certain technologies aren't as widely available, right?

And, well...not in a place that's mandated insurance coverage for everyone either--say, Massachusetts. How long is the wait there now for a visit to the doctor? Many offices have stopped taking new patients, and the wait for an appointment can be up to a year.

So the country's discourse--and whatever possible "solution" comes of it--is based on faulty logic. Having insurance DOES NOT EQUAL having care.

I can't say I have the answers, but I can say the question needs to be rephrased.

"Cadillac Insurance" Tax

During the presidential campaign, one of the legs on which McCain's health plan platform stood was an elimination of tax breaks for employer sponsored health benefits in exchange for creating a tax credit for individuals and families who then chose to purchase insurance on the Free Market instead. The plan was that encouraging people to obtain insurance on their own instead of through their employer would create a more competitive insurance market, though McCain acknowledged this plan was effectively a tax on the wealthy.

What are those tax breaks? Briefly, the money an employer spends that is received in health benefits are not taxed as income. Further, an employer is able to contribute to those benefits with pre-tax dollars. McCain wanted to say bye-bye to that. What did now-President Obama say? No way.

Fast forward to May 2009. The plan to remove the tax breaks is still on the table. Somewhere. Some members of Congress (read: Baucus) and unnamed members of BO's administration are supportive of elimination of the employer benefit tax breaks. What will the President say now?

The obvious move for employers if this were to occur, which was part of the McCain health plan ideology, is that without the breaks, employers will cease to offer benefits, or offer less attractive (expensive) packages. This affects many many Americans as approximately 2/3 of those under 65 who are insured receive benefits from their employers, according to NYT. Of course, NYT does not differentiate on how good those benefits those are, but I suppose that doesn't matter when (1) something changes and (2) suddenly you're paying more for the same thing. No one likes that, right?

There is no talk in the NYT article about "balancing the platform," as McCain was to do with his tax credit. Why? Because the balance would be people using the public option, and that's an article of a different color, for both the NYT and this blogger. More to come........