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Stones & Bones: health care / volume 11 number 3, March 2009 DOSE OF REALITY .The first skirmish in the Health Care Reform War is underway. The Democrats in Congress opened the first serious barrage in January by introducing in the House and Senate the Medicare Prescription Drug Savings and Choice Act of 2009 (HR 684). This bill negates the Bush administration’s Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, that prevents Medicare from negotiating drug prices with pharmaceutical companies (and also prevents all Americans from buying drugs overseas). By and large, that was a bad bill that cost the taxpayers and Medicare beneficiaries big bucks, but was a wonderful gift to the pharmaceutical and health insurance industries, allowing them to increase their profits at the expense of the public. I am hoping that President Obama and the Democrat-controlled Congress will get behind the serious reform proposed by HR 676 introduced in the last session of Congress by Rep. John Conyers (D-MI) with many other sponsors. Titled “United States National Health Insurance Act” (or the Expanded and Improved Medicare for All Act), this bill calls for a total overhaul of the system by taking health care out of the marketplace. This is an essential step because the last few decades have proven that health care is not a suitable marketplace commodity. Until we establish a system that treats health care as the primary objective rather than as a vehicle for making profit, we will be unable to bring the cost of health care down to a reasonable level. A reasonable level would be something like 12 percent of the GNP, rather than the 16 to 18 percent we are now spending. Translated into dollars, that means an annual expenditure of about $600 billion to $800 billion less than what we now have. Notice that this is roughly the cost of the current stimulus package now being put in effect. The point is that proper health care reform will save money, not cost money. But the early signs are that the Democrats in Congress and President Obama are not willing to make a frontal attack on health care reform. Instead, they are going at it piecemeal, and the Medicare Prescription Drug Savings and Choice Act of 2009 is the first major step. The bill sets up a government-operated program that can negotiate drug prices for Medicare beneficiaries in competition with the private for-profit insurance industry, which operates more than forty Medicare D prescription drug plans. A similar bill passed the House last year, and former president George Bush threatened to veto it if it had passed the Senate also. (One way to judge the worth of a bill is to look at who opposes it, and this is a fine example.) If put into law, the new bill has the potential to save the American taxpayer a whopping $40 billion annually, and perhaps more. The pharmaceutical and health insurance industries of course oppose this bill because it will reduce these industries’ profits by perhaps $40 billion per year. Numerous articles critical of the bill are appearing on the internet, emanating from right-wing think tanks such as the Heritage Foundation and the National Center for Policy Analysis. These articles contain not very convincing arguments for why the public, through its government, should not be negotiating drug prices. The public and government should stay out of it, they say, because Medicare D private insurers are already doing a great job of negotiating down drug prices. However, saying that is so does not make it so. A recent study of drug prices by FamiliesUSA (PDF) compares the cost of drugs obtained through the Medicare D for-profit insurers with those obtained by the government-operated Veterans Administration, which does have the power to negotiate with the pharmaceutical companies. Looking at the drugs most commonly used by seniors, the study found that for half of the drugs the lowest Medicare D prescription drug plan price was at least one and a half times the lowest VA price. For a quarter of the drugs the Medicare prescription drug price was at least twice as much as the VA price, and for 15 percent of the drugs it was more than four times as much. Overall, the VA manages to buy prescription drugs for little more than half of what the for-profit insurers pay. Those savings get passed on to us, the taxpayers. Obviously, this is one place where government is able to do a far better job than private industry. The proof is in the pudding, and no amount of verbiage can change that. The progress of this bill through Congress will be worth watching, as it is bound to be a partisan battle, and the outcome will indicate how much other health care reform we can expect from the current administration. If the Republican minority manages to gut or defeat this bill, as that minority surely will try to do, we can probably forget about much of anything else worthwhile happening to reform health care in the near future. | ||
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