I am now part of a Washing ton Post panel of health care analysts. Each Monday, the Post sends us a question, and asks us to comment. This week, the question focused on “the pharmaceutical industry’s offer to has put $80 billion on the table to reduce the cost of health-care reform over the next decade. What is your reaction to the offer and the impact it will have on the debate?”
Below, my reply:                          

The announcement that drug-makers will offer 50% discounts  to Medicare beneficiaries who fall into  the Medicare Part D doughnut hole is excellent news for seniors. Drug-makers will help to bridge the gap in coverage that forces roughly 15% of seniors stop buying medications when their annual prescription drug bill reaches $2700. 

But this is, as the president said, “a first step.”  Pharma is going to have to do more.

Look at it this way: this year, prescription drug sales in the U.S. will total $252 billion.Meanwhile, if sales continue to rise—and drug-makers continue to hike prices, spending on drugs is expected to double between 2014 and 2018.  By 2019, Pharma hopes to rake in over $500 billion in U.S. sales.

In that context, giving up $80 billion over ten years is not a huge sacrifice. Pretend that the $80 billion is spread out evenly, $8 billion a year. This means that in 2019, instead of showing revenues of $500 billion, the industry would have to make do with $492 billion. But unless GDP doubles, we cannot afford to spend $492 billion on drugs in 2019.

Why does Pharma charge U.S patients sky-high prices? Because it can. No one is pushing back. In other countries governments negotiate to protect dying patients from being gouged.

Meanwhile, Pharma is spending twice as much on marketing and advertising as it does on research. Perhaps it should re-think that spending—and pricing. Either that, or prepare to negotiate. Together, Medicare and a public sector insurer should be able to make drugs as affordable here as they are in France.

Over at Huffington Post, HealthBeat reader Jim Jaffe asks “Which Side Are Docs On?”

“The quest for evidence-based medicine, embedded in already-enacted economic stimulus legislation, gives reformers a tool to recruit doctors. New research would define optimal care, which often is different – and less expensive – than what doctors are doing today. How to turn these findings into practice is a key question.

“Doctors can reject it, attempt to stick to their old habits, resist efforts to impose it on them and rally their patients against rules imposed by faceless bean-counting bureaucrats. That worked when they successfully resisted and rejected managed care a decade ago.”

But, Jaffe points out, “Things have changed since then. The cost problem is seen as more acute. There's a growing realization that there's substantial overconsumption. And opposing protocols set by reputable scientists would be much tougher than pushing back on insurance companies that had meager public support.”

To read the whole post, got to : http://www.huffingtonpost.com/jim-jaffe/which-side-are-docs-on_b_218563.html

When legislators talk about the importance of striving for “bi-partisan” legislation, they are usually arguing for legislation that fairly represents the goals and interests of the vast majority of Americans.

But today, only 21 percent of all Americans identify themselves as Republicans. . Sixty-three percent approve of the job that  President Obama is doing.  Given the state of the economy, this is an extraordinarily high number. 

Moreover, a New York Times/CBS poll published Saturday reveals that an overwhelming majority of independents as well as Democrats agree with the president about the need for a public-sector insurance option.  The question was remarkably clear: “Would you favor or oppose the government's offering everyone a government administered health insurance plan like Medicare that would compete with private insurance plans?" Seventy-two percent of respondents favored the public option, including 87 percent of Democrats, 73 percent of independents, and 50 percent of Republicans.

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“Health Care Reform in Trouble”: that was the headline above Ezra Klein’s post on his excellent Washington Post blog yesterday.   Klein then linked readers to Jon Cohn post on TNR’s The Treatment : “This CBO Projection Should Worry You,” There, Cohn referred to reports that the Congressional Budget Office was projecting that  the Senate Finance Plan for reform would cost $1.6 trillion over 10 years—about $600 billion more than the Committee had projected.  Cohn, usually an optimist, sounded worried, very worried: “Universal coverage will rise or fall based on the money. And right now, I worry, falling seems all too plausible.”

Late yesterday,  Klein broke more bad news.  In response to the CBO estimates, the Senate Finance committee has scaled back its rough draft of a plan for healthcare reform: “Specifically, subsidies have dropped from 400 percent of the poverty line to 300 percent. Medicaid eligibility has been tightened to 133 percent of poverty for children and pregnant women and 100 percent of poverty for parents and childless adults. The plans being offered in the exchange have seen their actuarial values sharply lowered.  . . . Sen. Kent Conrad's co-op idea is up for discussion. There's no public plan mentioned anywhere in the document.”

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I cannot recall an occasion when I have praised New York Times’ columnist David Brooks. And I’m not quite ready to start today.

But I would draw your attention to yesterday’s column.  In some ways Brooks understands Obama’s strategy for passing health care reform better than many more liberal pundits. 

Brooks describes the first-step as “table-setting: You will spend the first several months of your administration talking grandly about the need for reform. You will invite all interested parties to the table . . . You will talk about things that no sentient person could possibly disagree with — about the need for better information technology and for more preventive care . . . you are getting everybody talking. You are building relationships.”  Obama did this very well.

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For an excellent, detailed and in-depth response to the critics of the Dartmouth research who have suddenly emerged from the woodwork, (after more than twenty years and more than 100 peer-reviewed publications supporting the work done by Jack Wennberg, Elliott Fisher and others) see Amitabh Chandra’s piece on the Health Affairs Blog.

Chandra is now a Professor of Public Policy at the Harvard Kennedy School of Government and was formerly a Professor of Economics at Dartmouth College.

President Barack Obama is stepping forward to take ownership of healthcare reform.  Today, in a speech to the American Medical Association, he pulled no punches, emphasizing that while we spend far more than other developed countries, the “quality of our care is often lower.”

In effect the president was telling the AMA: “The U.S. does not have the best healthcare in the world.”

But we do have the most expensive care. Spiraling healthcare bills are “a threat to our economy,” the president declared. “To say it as plainly as I can, health care reform is the single most important thing we can do for America’s long-term fiscal health. That is a fact.” If we don’t rein in runaway health care inflation, he warned, we will be looking at “lower take-home pay, shuttered businesses, and a lower standard of living for all Americans.”

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This morning, Dr. Atul Gawande spoke to student graduating from the University of Chicago’s Pritzker School of Medicine, calling on them to join in the “battle for the soul of medicine.”  Unlike many who say “we  must do something,” he offered some very specific examples of how doctors can “resist the tendency to see patients as a revenue stream.”

      Below, excerpts from his address:

. . . I want to tell you the story of a friend I lost to lung cancer this year. Jerry Sternin was a professor of nutrition at Tufts University, and with his wife, Monique, he’d spent much of his career trying to reduce hunger and starvation in the world. He was for awhile the director of a Save the Children program to reduce malnutrition in poor Vietnamese villages. The usual methods involved bringing in outside experts to analyze the situation followed by food and agriculture techniques from elsewhere.

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Health Wonk Review, a round-up of some of the very best health-care blogging, was posted today on Managed Care Matters. There, host Joe Paduda has done an outstanding job of  pointing to the diversity of opinion in the blogosphere. He opens with a letter from Senator  Dorgan, Chairman of the Senate Democratic Policy Committee (DPC), addressed to HWR’s readers. (The Review has been getting attention from policy-makers in Washington.)
Click here and enjoy.