The Public Option: It’s Not About Politics; It’s About the Economics of Reform

Last week, I argued that the insurance industry had declared war on President Obama’s plans for healthcare reform because industry leaders sensed—or knew– that support for a federal public insurance option was building. A week earlier,  I told an audience at a San Francisco screening of Money-Driven Medicine that I thought the odds were at least 60/40 in favor of a national public plan. They were surprised that I was so optimistic, and this was a very liberal audience in San Francisco.

At the time, most progressive pundits had declared the public plan moribund. Reading the political tea leaves, listening to “informed Congressional aides,” parsing the administration’s statements, they were convinced that the public plan was, as the Buffalo News put it “the rotting corpse of health care reform.” Why was I still hopeful? Because I continued to believe that, without Medicare E (for everyone) health care reform won’t be affordable.

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“I’m sorry but we cannot print the data.”

Have  you ever received this message when you tried to post a comment on HealthBeat?

It  happens to me too.

I finally realized that this happens when too much time elapses between the time I started writing the comment and when I try to post it. (Since I often respond to many of your comment in one long comment, I may spend a half hour writing it.)

The solution is simple. Just "copy" your comment, then close HealthBeat.

Open  a new HealthBeat, scroll down to the comments section, paste in, your comment, and send it.  It will be accepted.

I'm sorry for any inconvenience, but this is  just how typepad works .

A Letter from Canada

Below, a letter from a Canadian disputing some of the propaganda that we hear about health care in Canada. (Thanks to HealthBeat reader Lisa Lindell for putting me in touch with Vera Goodman) This is the first in what I hope will be a regular series featuring letters from patients, doctors, nurses and others describing how health care works in their countries.

Since I believe that the best reporting combines stories and statistics, I’ll add some stats, as I have here, in brackets.

The next letter will be from a doctor in Norway who has practiced medicine—and been a patient—both here in the U.S. and in his home country.

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Why is Health Care So Expensive in Rural Louisiana?

Most discussions of regional variations in healthcare focus on the nation’s cities. Below, a first-of-its-kind map from a post on the Daily Yonder titled “The Uneven Cost of Rural Health Care.”


Daily Yonder/Dartmouth Health Atlas

This
map shows the difference in per capita Medicare costs among 1,845 rural
hospital service areas. Green areas have costs below the national
average. Brown areas are above the national average. For a larger
version of the map, click here.

The map and the post are based on data collected by researchers at the Dartmouth Medical School. Doctors and economists there take a sample of Medicare costs from some 1,843  hospital service areas where a majority of the  people are  living in rural or exurban zip codes.

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Mining for Gold in Prescribing Records

Drug companies spent $5.0 billion on marketing prescription drugs directly to consumers last year and, as I have written in the past,  these ads have paid off. Studies have found that every dollar spent on DTC ads generates up to four dollars in additional sales of new drugs that are often only marginally better than far cheaper, generic versions or older drugs.

But as companies cut advertising budgets and introduce drugs that command smaller markets, there are signs that the days of $100 million-plus DTC ad campaigns might be over. A recent report by TNS Media, (a company that tracks media ads) found that DTC drug advertising was down 8% last year. Another survey of pharmaceutical industry marketers found that 58% of them plan to decrease DTC advertising this year, up from 28% in 2008.

One reason for the slowdown, according to the TNS report, is that companies are introducing fewer blockbuster drugs; the newest entries are approved for narrower uses with fewer potential patients and weaker sales projections. The report doesn’t mention that consumers also appear to be fed up with incessant advertising for erectile dysfunction, sleep problems and overactive bladder, and might be tuning out many of these mass-market missives. Drug companies also are facing keener oversight from policy makers who question the educational benefit of some DTC advertising and are examining their roll in increasing health care costs.

So where do drug companies go next to market their drugs? It turns out that many companies are refocusing their marketing efforts on an old, familiar target—physicians and their prescription pads.

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Maggie On Lou Dobb’s last night—the Doctor’s “Fix, ” and the Boy in the Balloon

I appeared on Lou Dobbs last night, debating Douglas Holtz-Eakin, a former director of the Congressional Budget Office, and a fellow at the Manhattan Institute. You’ll find the video here.  It actually turned out to be fun. (My children tell me that the segment was very funny. Then again, they are my children.)

Here I would like to expand on just one point that came up at the beginning of the show regarding the so-called “doctor’s fix.” Yesterday and today, newspapers have been filled with the news: in an effort to assure that physicians support health care reform, they claim that Democrats have promised to nix a plan to cut the fees that Medicare pays doctors by 21%. The cuts were scheduled for this January.  Over a ten-year period this “doctor’s fix” will cost $247 billion, the opponents of healthcare reform charge.

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Why are Health Insurers Launching An 11th Hour Attack on Health Care Reform?

They are running scared.

And why are they so scared?

Because they know that the public sector option is still alive. And here I’m not talking about the possibility that some states will offer public plans: Most state plans would be too puny to challenge the strongmen of the health care industry. I’m talking about  a federal public plan–Medicare E (Medicare for everyone) a public option for patients under 65,  run by the federal government.  The scent of real competition is what has insurers on the run.

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Should The Swine-Flu Vaccine Be Mandated For Health Care Workers?

Mandatory vaccination programs are seldom without controversy. Since the early 1900’s when public health workers went door-to-door inoculating people against smallpox and authorities blocked unvaccinated children from attending school, these widespread campaigns have been met with court challenges and public opposition. The underlying issue has always been that mandates threaten medical liberty—the freedom for individuals to choose which medical interventions they want and which they don’t want. But when it comes to vaccines and infectious disease, in the eyes of the law, protecting public health often trumps individual choice.

It was predictable then, that these same tensions would surface when New York State and some large hospital systems in other areas made H1N1 vaccines mandatory for health care workers. In New York, health care workers like nurses, aides, emergency room clerks, food service workers, etc. are all required to get both the seasonal and the swine flu vaccines by Nov. 30, or risk losing their jobs. The idea is that without being vaccinated, these workers pose a threat of infection to vulnerable patients, and also, in the event of a widespread outbreak, they are more likely to get sick and be unable to work when needed most.

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Occasionally, A Health Care Story Leaves Me Speechless (Well, Almost)

As long-time HealthBeat readers know, I have some reservations about hospitals plunging huge sums into plush hotel-like amenities—spas, gourmet food, marble lobbies, mahogany-paneled doctors’ lounges  . . ..  See “Who Will Pay for the Waterfalls?”

I tend to think that hospitals should plow any extra money into programs that will protect patients: infection control, electronic medical records that would prevent medication mix-ups, and so on.

But patients can’t see these improvements. And in competitive urban and suburban markets (where, typically, too many hospitals are vying for well-insured patients) hospital CEOs know that the cosmetic improvements appeal to upscale, well-insured patients.

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October 27: Money-Driven Medicine National “Watch-In” Begins With Screening at the U.S. Capitol—Watch the Film At Home—Free Streaming Video Online

Money-Driven Medicine, the film produced by Academy-Award winning filmmaker, Alex Gibney (Taxi to the Dark Side; Enron: The Smartest Guys in the Room), directed by Andy Fredericks, and based on my book (Money-Driven Medicine: The Real Reason Health Care Costs So Much) , will be screened at the U.S. Capitol in Washington DC on October 27.

Alex Gibney and I will be doing a Q&A after the screening, moderated by the Washington Post’s Ceci Connolly.

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