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From Bob Herbert’s recent NY Times Column

“The U.S. has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.”

Since McCain has sewed up the Republican nomination there have been several articles including this one from Fortune Magazine touting his health plan as being “the best.” The question is for whom?

“Say you’re earning $100,000 a year and your company provides about $9,000 toward your $12,000 family premium, which is about average. Today you’re taxed only on the $100,000. Under McCain’s plan, you’d also pay on the $9,000. That could mean an extra $3,000 or so in federal taxes alone. To compensate for the extra levy, McCain would provide a $2,500 federal tax rebate for individuals and $5,000 per family, meaning a family would simply subtract $5,000 from its tax bill, the equivalent of a big cash payment.”

The plan assumes that employers will voluntarily refund to employees all the funds previously used to support their health insurance program–you will recall of course that only about half the employers offer such programs. Assumptions are nonsense in a plan that mandates nothing. I doubt that employers feel that the $9,000 is the “employees” money as so glibly noted below.

“Employers would no longer be able to buy more health care with $9,000 of their employee’s money than the workers could buy on their own. The raison d’être for corporate health benefits would vanish. Employers have another compelling reason to pass the ball to the employee: While wages are rising around 3% a year, their health-care costs are growing at three times that rate. “I predict that most companies would stop paying for health care in three to four years,” says Robert Laszewski, a consultant who works with corporate benefits managers. Hence, an employer that pays $9,000 for your benefits would simply pack an extra $9,000 a year into your paycheck. (Why? Because in a competitive labor market, companies would have to hand over that cash to employees or risk losing them.) So you’d have $6,000 after tax, plus the $5,000 family credit, to buy insurance. That’s $11,000 in new cash that employees can set aside for health care.” (ed note: Is that so?)

The dynamics of the plan is almost all smoke and mirrors. It’s doubtful that employers will simply hand over their current insurance costs to the employee–consider also that half of employers don’t pay this anyway. For the employer this is found money.

For the insurance and health industry the benefit of McCain’s plan comes from the continuation of today’s wasteful multiple company duplications; the continuation of their costly salary incentives (check out this); the ability to stratify risk; and the continuation and expansion of the already failed free market in health concept. It’s highly conceivable, perhaps inevitable, that such a plan will result in more uninsured and adversely affect health care outcomes.

It’s an unfortunate fact that “free markets” fail in health care. As recently demonstrated in the mortgage crisis, when money is involved regulation is essential. This is especially true, in health care. In the health care industry the free market doesn’t work because of the decades long patent monopolies which result in higher costs across the board; because there is no negotiation of costs; because consumers are not fully knowledgeable about choices and outcomes; and because consumers have the idea that higher cost=higher quality. Lastly and perhaps most importantly they cannot work when there is a life or death urgency to decisions (one cannot objectively weigh options and pricing in the ambulance on the way to the hospital).

McCain advocates charging less for the young and more for the elderly and/or sick, which is a long standing tradition in the private health insurance system. However, such policies force more people to go uninsured. A similar insurance industry philosophy forced the institution of Medicare in the 60’s when the insurance was not offered to and/ or priced out of the reach of the elderly.

A better approach would be to require insurers to cover the entire population and have everyone (industry, consumers and government) share the risk and costs. This requires the maturity to understand that all of us will have illnesses and accidents at some time in our lives and that health care must, in any case, be available if we value life–which we say we do. It’s worked in virtually all other industrialized countries and they have benefited from lower costs and for the most part better outcomes.

It’s time to act on our values and have a system instead of continuing the current chaos. Let’s develop something that is efficient and assures access. The total cost will not exceed what we now pay (about 2 trillion dollars) but getting the money to the system will require innovative funding strategies. Is it time for a value-added tax dedicated to health coverage?

There is little to be said about this except it’s an increasing problem.

“But critics say the company’s development costs were minimal, because the early work on the treatment was done by the National Institutes of Health, which gave Genzyme a contract to manufacture it. And analysts estimate the current cost of manufacturing the drug to be only about 10 percent of its price.”

We get to pay for drugs twice. First paying for the basic research and later when companies simulate blackmail (“your money or your life”) in their pricing. As noted previously the Dole-Bayh legislation, from the 1980’s, which facilitated the movement of government funded developments into the private sphere requires reasonable pricing of advances. Needless to say this part of the legislation has never been invoked.

The only rational for such pricing is to gouge patients, their families and insurers. For those who advocate a McCain like health insurance scheme, imagine the cost of insurance for those with such illnesses. The benchmark of the free market health industry is how much money you make and make not how much suffering is alleviated.

We’ve turned the concept of healthCARE on it’s head.

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Perhaps this recent American Medical Association study on pain medication reveals a truism about health care costs. Price sensitivity is one of the factors free market people cite as essential to control costs in medicine. Yet in this study comparing high and low price placebos patients felt better, had better pain control, with the more expensive placebo.

Does this mean that when seeking treatment alternatives patients low price has a negative connotation? If true, this adds another factor to the failure of free markets in health care.

The other factors are

1. Lack of complete knowledge and understanding of the medical situation and treatment alternatives

2. Emergent nature of many medical problems

3. A marketing system that doesn’t disclose pricing information

4. Patent monopolies that control drug distribution and technology for a generation.

Bush’s trip to Africa was of interest not only for the places he visited but for those he didn’t.

Egypt’s totalitarian regime would not of course be appropriate to emphasize on a trip that highlighted democratic initiatives–Egypt receives over 2 billion dollar a year in military and non-military aid. Somalia, of course speaks for itself. A failed country, it was the recipient of all manner of aid from us because we thought for a while that it’s location was strategically important. An expensive assessment since it appears to be of little military significance. Kenya was the recipient of many billions in aid and was the base and cornerstone of the U.S. AID establishment in East Africa. Lot of good that has done as we’ve tolerated and used it’s corrupt government for the past 40 years. Uganda has lost it luster with the participation of it’s military in the plundering of the Congo. You do remember the Congo, or was it Zaire?! Etc. Etc.

Meanwhile Tanzania, a country receiving little aid from the U.S. since independence because of it’s socialist bias, has become the poster boy for the U.S. aid program. Given the track record Tanzania might want to consider the consequences.

This AIDS program is a lifetime commitment. Once we start supplying medications it’s unethical to stop. The U.S. program distributes branded relatively high priced medications exclusively. No other program, the UN and other nations, is so profligate. These drugs cost several times more than generics, meaning that the money available for drugs will be sufficient to treat several times fewer patients.

While on a visit to Tanzania recently, we visited a hospital that explained that half their HIV patients were receiving the “free” medications and other care provided by our program. We were quite impressed with the progress. They also indicated that while the U.S. program frowns on prevention education regarding condoms. The hospital, a mission facility, provides the education and condoms anyway.

During the visit Bush noted:

Regarding Malaria “The disease keeps sick workers home, school yards quiet, communities in mourning” “The suffering and every death caused by malaria is unacceptable”

“It is unacceptable to people here in Africa, who see their families devastated and economies crippled. This is unacceptable to people in the United States who believe every human life has value, and that the power to save lives comes with the moral ob libation to use it.”

Meanwhile at home Bush vetoes health care for children; opposes any real national health scheme that assures access to medical care; cuts Medicaid and Medicare funding; refuses to negotiate with drug companies to decrease the cost to our consumers. Here, our morbidity and mortality statistics lag behind those of other industrialize countries; health expenses are the leading contributer to bankruptcy; and our health expenditures are 100-150% higher than anywhere else in the world. Is this not unacceptable as well?

The hypocrisy, the hypocrisy.

Noted this patent suit article this morning. We need more of this as long as manufacturers charge confiscatory amounts for their drugs.

Referenced in the article is the fact that Glivec (Gleevec in the U.S.), a great drug for Chronic Myelogenous Leukemia and a few other relatively rare malignancies is available in generic form in India at 1/10th to price elsewhere. Novartis charges in the range of $2600/month for this medication. For the record the drug is excellent and was developed largely with government research funds. When taken private by the drug company only a few very small clinical trials were necessary to prove it’s efficacy. The pricing is ridiculous considering the previous extensive government funding, the short clinical trials and the life and death nature of it’s use.

You could travel to India several times a year, if necessary, to obtain this medication, and still save money. Shame on us!

What’s a health nut to do? Another supplement bites the dust.

Bush’s trip to Africa was of interest not only for the places he visited but for those he didn’t.

Egypt’s totalitarian regime would not of course be appropriate to emphasize on a trip that highlighted democratic initiatives–Egypt receives over 2 billion dollar a year in military and non-military aid. Somalia, of course speaks for itself. A failed country, it was the recipient of all manner of aid from us because we thought for a while that it’s location was strategically important. An expensive assessment since it appears to be of little military significance. Kenya was the recipient of many billions in aid and was the base and cornerstone of the U.S. AID establishment in East Africa. Lot of good that has done as we’ve tolerated and used it’s corrupt government for the past 40 years. Uganda has lost it luster with the participation of it’s military in the plundering of the Congo. You do remember the Congo, or was it Zaire?! Etc. Etc.

Meanwhile Tanzania, a country receiving little aid from the U.S. since independence because of it’s socialist bias, has become the poster boy for the U.S. aid program. Given the track record Tanzania might want to consider the consequences.

This AIDS program is a lifetime commitment. Once we start supplying medications it’s unethical to stop. The U.S. program distributes branded relatively high priced medications exclusively. No other program, the UN and other nations, is so profligate. These drugs cost several times more than generics, meaning that the money available for drugs will be sufficient to treat several times fewer patients.

While on a visit to Tanzania recently, we visited a hospital that explained that half their HIV patients were receiving the “free” medications and other care provided by our program. We were quite impressed with the progress. They also indicated that while the U.S. program frowns on prevention education regarding condoms. The hospital, a mission facility, provides the education and condoms anyway.

Meanwhile at home Bush vetoes health care for children; opposes any real national health scheme that assures access to medical care; cuts Medicaid and Medicare funding; refuses to negotiate with drug companies to decrease the cost to our consumers. Here, health expenses are the leading contributer to bankruptcy and our health expenditures are 100-150% higher than anywhere else in the world.

The hypocrisy, the hypocrisy.

It’s should have been apparent to us that a healthy lifestyle doesn’t decrease health care costs but simply defers them. An interesting study from the Netherlands confirms this intuitive conclusion.

“It costs more to care for healthy people who live years longer, according to a Dutch study that counters the common perception that preventing obesity would save governments millions of dollars.”

“Lung cancer is a cheap disease to treat because people don’t survive very long,” van Baal said. “But if they are old enough to get Alzheimer’s one day, they may survive longer and cost more.”

Don’t worry, however, we’re working hard to make lung cancer treatment more expensive as we introduce prohibitively expensive agents into the treatment mix of the disease. These new agents by the way have had a minimal effect on longevity in these patients. Still, it’s nice to live longer.

In order to save money in our health care non system, it’s apparent that the only strategy that will work to cut costs is a systematic approach that fosters efficiency and cost containment.

It’s pathetic that we have hundreds of billions available to bail out big business during a down turn; hundreds of billions to go to a war started on false pretenses; Hundreds of billions to outsource the war to private enterprise and facilitate the wealth of political supporters.

And pay for it by cutting funding to Medicaid and Medicare. We clearly need regime change.

” Educators nationwide are protesting a Bush administration move to curtail hundreds of millions of dollars in Medicaid funding for disabled students that could force some schools already in budget straits to trim health services or cut back instructional programs.”

Health insurance with financial limits appears to be the norm in the U.S. What better way to protect insurers’ profits.

“Those who need organ transplants or who have hemophilia, Gaucher disease or other costly chronic illnesses can easily rack up medical bills that blow through the lifetime benefits cap of $1 million or more that is a standard part of many insurance policies”.

A million dollars in health care over a lifetime sounds like a lot. Right?

Yet in this day of drugs costing over $50,000/year, all too frequently people with chronic illness, some not so chronic, find themselves over the limit. Then what?

If you are fortunate enough (medicynical irony) to suffer from end stage renal disease or are over age 65 there are provisions for you to qualify for unlimited lifetime coverage from Medicare at reasonable cost. Those who exceed their insurance’s limit and are too young or who do not have the “correct” problem find themselves trying to qualify for disability with its associated Medicare coverage or to prove indigency and qualify for Medicaid. The recurrent theme here is to shift the cost from the private insurer to a public program. This in a country that has problems with “socialized medicine.”

In the U.S.’s so-called health care system it is an accident of fate, having the right disease or being old enough that assures health coverage rather than policy or rationality. Quite a system.