Using Savings from Drug Pricing Reform to Expand Medicare

Published in RINewsToday on June 7, 2021

Ahead of President Biden’s first address to a joint session of Congress on April 28 and as the Democratic administration considers policies to slash rising drug costs, the U.S. Government Accountability Office (GAO) released a 65-page report finding that the U.S. pays more than two to four times higher prices for a selected sample of 20 single source, brand name drugs than Australia, Canada and France. The latest GAO report, commissioned by Sen. Bernie Sanders (I-Vt.), found that Americans, suffering from blood clots, bronchitis, emphysema and Hepatitis C, were paying more for life-saving treatments than patients in these industrialized countries. 

“This important GAO study confirms what we all already know: the pharmaceutical industry is ripping off the American people,” said Sen. Sanders in a statement announcing the March 29th release of the GAO report, “Prescription Drugs: US Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada and France.”

“The time is long overdue for the United States to do what every major country on earth does: negotiate with the pharmaceutical companies to lower the outrageous price of prescription drugs. I would urge the president to put this proposal in the American Families Plan and use the savings to expand and improve Medicare for older Americans. We can no longer tolerate the American people paying, by far, the highest prices in the world for prescription drugs,” says the Vermont Senator who chairs the Senate’s Budget Committee.

U.S. Paying Outrageous Drug Prices

The GAO study found that in 2020, the U.S. paid 4.36 times more than France, 4.25 times more than Australia and 2.82 times more than Canada for the selected drugs, which represent a sample of the drugs with the highest Medicare Part D expenditures and use. The researchers noted that the publicly available data for the comparison countries were gross prices that did not reflect potential discounts. As a result, the actual differences between U.S. prices and those of the other countries were likely much larger than GAO estimates.

According to the GAO report, while France and Australia operate universal, publicly funded health systems that include prescription drug coverage, both Canada and the U.S. have a significant number of people who do not have prescription drug coverage. But even when comparing the full cash retail prices of selected drugs, the prices quoted to individuals without prescription drug coverage, GAO found that prices were two to eight times higher in the U.S. than the same drugs from pharmacies in Canada. 

For instance, GAO found that the cash price of Epclusa (28 tablets), which treats Hepatitis C, or an infection that attacks the liver, is $36,743 in the U.S. but $17,023.63 in Canada. The cash price of Harvoni (28 tablets), which also treats Hepatitis C, is $46,570.33 in the U.S. but $19,084.54 in Canada. In another example, GAO cited that the cash price of Incruse Ellipta Inhalation Powder (30 inhalations), which treats chronic obstructive pulmonary disease (COPD), or a group of lung diseases which block airflow and make it difficult to breath, is $411.33 in the U.S. but $53.31 in Canada.

Because France and Australia have universal health systems that cover prescription drugs, Australians would pay up to a $28.09 copay for a month supply of these medicines, while patients in France would pay anywhere from $0 to $34.03 for the drugs. The maximum copay that high income seniors with prescription drug coverage in Ontario, Canada would pay for the drugs is $4.67.

Robbing Peter to Pay Paul

On April 23, 48, organizations, led by Indivisible, Social Security Works and Public Citizen, called on Biden to include bold drug pricing reforms in American Families Plan to expand Medicare, and the result of a new polls supports this legislative action. 

Drug pricing reform will produce upward of $450 billion in savings over 10 years, note the organizations, urging Biden to use these savings to reinvest in Medicare. The call for adding dental, vision and hearing benefits to Medicare, lowering the Medicare eligibility age to 50 and creating an out-of-pocket cap for medical expenses.

Alongside the letter, the organizations released the findings of a new poll from Data for Progress, widespread public support across party lines for expanding and improving Medicare. The poll’s findings noted that 86% of Americans, including 82% of Republicans, support adding dental, hearing and vision benefits to Medicare. It also found that three-quarters of Democrats, a majority of independents, and nearly half of Republicans support lowering the Medicare eligibility age to 55. 

“Allowing Medicare to negotiate drug prices down saves money for the federal government, which is the largest buyer of prescription drugs in the world,” said Alex Lawson, Executive Director of Social Security Works. “We must pump those savings back into Medicare to expand eligibility and add benefits that equalize Medicare with private insurance,” he says.

“Lowering the Medicare eligibility age to 50, capping out-of-pocket costs, and expanding benefits to include dental, hearing, and vision would improve access to care for millions of Americans. Far too many Americans have lost their insurance or put off needed care due to the COVID-19 crisis,” said Eagan Kemp, Health Care Policy Advocate for Public Citizen. “The Biden Administration and Congress have a chance to deliver important progress at a crucial time,” he says.

Adds Mary Small, Legislative Director for Indivisible, “With the consequences of the COVID-19 pandemic still being felt in our communities, now is a crucial moment to expand public health care coverage and deliver savings on prescription drug prices to the American people. Lowering the Medicare eligibility age to 50 will be an essential step toward reducing the racial health inequities by increasing coverage to communities of color and low-income folks.”  She adds, “Allowing Medicare to negotiate prescription drug prices and then reinvesting those savings back into the program to expand services further strengthens our path toward universal coverage for all.” 

Last Thoughts

Garnering applause, Biden put high drug costs on his Administration’s radar screen at his recent address before Congress. “Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription prices. It won’t just help people on Medicare. It will lower prescription drug costs for everyone,” said the 46th President of the United States. “We’ve talked about it long enough. Democrats and Republicans, let’s get it done this year,” he said.

But actions speak louder than words, say Washington Insiders.  They note that Biden’s American Families Plan, did not include any proposal to slash pharmaceutical costs or lower the Medicare eligibility age. Is it possible for Biden to lower the drug prices in the United States, making the prices more comparable to other industrialized countries and to even expand Medicare, in the face of fierce opposition from Republicans, moderate Senate Democrats and pharmaceutical companies?  

According to the latest KFF Health Tracking Poll released June 3, 2021, the findings indicate that “nearly nine in 10 (88%) favor allowing the federal government to negotiate for lower prices on medications, including three-fourths (77%) of Republicans, nine in 10 independents (89%) and 96% of Democrats.” However, support dwindles “when the public hears argument made by pharmaceutical companies that it could lead to less research and development for new drugs, or that access to newer prescriptions could be limited,” say the researchers.

Will political pressure sway a divided Congress before the upcoming midterm elections to hammer out a bipartisan solution to put the brakes to the nation’s skyrocketing drug costs and to provide more American’s affordable health care through an expanded Medicare program. Its wait and see.

Whitehouse Pushes for Medicare to Pay for Person-Centered Care

Published on July 11, 2016 in Pawtucket Times

At a June hearing of the U.S. Senate Special Committee on Aging, Senator Sheldon Whitehouse calls for improving care for over 90 million Americans with advanced illnesses like Alzheimer’s disease, cancer, and heart disease. On the day of this Aging panel hearing, the Rhode Island Senator unveiled his legislative proposal, “Removing Barriers to Person-Centered Care Act,” at this panel hearing that would promote better coordination between health care providers, and place greater emphasis on the care preferences of Medicare beneficiaries with advanced illnesses.

The hearing, titled “The Right Care at the Right Time: Ensuring Person-Centered Care for Individuals with Serious Illness,” explored ways to improve the quality and availability of care and examined care models that are helping people with serious illness and their families.

Having Important Life Conversations

The June 23 hearing pulled together witnesses who called for “about the need for families and health care providers to prioritize these important life conversations, so that individuals’ wishes are known and person-centered care is prioritized,” noted U.S. Senator Susan Collins, who chairs the Senate Special Committee on Aging. In her opening statement the Maine Senator called for federal policies to “support efforts to relieve suffering, respect personal choice, provide opportunities for people to find meaning and comfort during serious illness, and – most important – remain in control of their own care.”

Advance care planning conversations to a patients’ physical, emotional, social and spiritual well-being are important in the care of a patient, says Collins. However, studies reveal that less than one-third of physicians have reported that their practice or health care system has a formal program in place to assess patients’ goals or preferences, she notes.

Collins also shared a personal story of a close friend who benefited from the person-centered care she received while she was a patient at the Gosnell Memorial Hospice House in Scarborough, Maine. “Despite her serious illness, because of hospice care her days were filled with visits from friends and families and many joyful moments, and she was surrounded by her family when she died peacefully,” she said.

“I’ve heard from Rhode Islanders about how difficult it can be for patients battling serious, advanced illnesses to get the care and respect they want,” said Whitehouse.

Whitehouse noted that “We can do better by these patients. Because so many of the rules and incentives in our health care system are tied to the payment structure, we should design payment systems that support models of coordinated care that focuses on the full person. Payment systems should reward providers for honoring patients’ own preferences for their care.

As Dr. Atul Gawande, surgeon and author of the New York Times best-selling book, “Being Mortal, mentioned in his testimony, “people with serious, potentially life-limiting illnesses face substantial and increasing suffering, particularly during the last year of life. Medical care today typically exacerbates this suffering, often without any benefit of lengthened life. We have an opportunity to change this.”

“The goal is not a good death. Instead, the goal is to have as good a life as possible all the way to the very end,” say Dr. Gawande.

In her testimony, Amy Berman, a nurse and senior program officer at the John A. Hartford Foundation, who is living with stage IV inflammatory breast cancer stand stressed the importance of palliative care, which is designed to improve the quality of life for patients with serious illness.

“Palliative care is the best friend of the seriously ill,” said Berman, “Studies have shown that when palliative care is added at the beginning of a serious illness that people feel better and live longer.”

Finally, Dr. Kate Lally, Chief of palliative care for the Providence-based Care New England Health System, Medical Director of the Integra Accountable Care Organization, and Assistant Professor of Medicine at Alpert Medical School of Brown University, urged Congress to consider legislation that would improve the quality, not just the quantity, of life of the seriously ill. “I feel blessed to do this work, and to be able to reflect with my patients on the life they have lived, their joys and regrets,” she said. “I feel I am able to share some of the most sacred moments of their life, and be at their side as they consider what is most important to them in their limited time.”

“The healthcare system as a whole, as well as Medicare and Medicaid, need to face growing expectations about how people with serious or terminal illnesses are treated,” said AARP Rhode Island State Director Kathleen Connell. “We are investing in prevention and early treatment and getting better results. Ultimately, however, people will still face serious illness and palliative care. Person-centered care is the proper prescription, and we must strive to make sure that it’s available. We need to be vigilant when it comes to supporting a healthcare environment in which patients with serious illness feel they are well informed and can remain properly in control of their options. And while families still tend to avoid these discussions in advance, when the time is right proper guidance makes a world of difference.

“People form especially strong opinions about decisions made that may prolong their existence, but add little to the quality of lives and, in fact, can prolong suffering,” Connell added. “Conversations on this phase of life are critical and we applaud Senators Collins and Whitehouse for their contribution to this dialogue.”

Legislation to Support New Models of Coordinated Care

The thrust of Whitehouse’s legislative proposal is to promote better coordination between health care providers, and place greater emphasis on the care preferences of Medicare beneficiaries with advanced illnesses.

“Too many Rhode Island Medicare patients battling difficult illnesses are struggling to get the right care at the right time,” said Whitehouse. “We need to break down the barriers between patients and the care they need. Because so many of the rules and incentives in our health care system are tied to the payment structure, we should design payment systems that support new models of coordinated care that are focused on human beings and not some rule or regulation.”

Whitehouse’s legislation would establish a pilot program administered by the Centers for Medicare and Medicaid Services (CMS) made up of twenty “advanced care collaboratives” of affiliated health care providers and community-based social service organizations. Collaboratives would receive a planning grant to assess the needs of the population of patients it would serve; to purchase or upgrade health information technology to facilitate better coordination of care between providers; and to support education and training on documenting and communicating beneficiary treatment preferences and goals.

Once planning is complete, collaboratives would enter a three-year payment agreement with Medicare to provide coordinated, high-quality care for their target patient population. Under the terms of the pilot program, CMS would waive regulations to promote innovative care for patients with advanced illness.

Waivers would be granted to allow Medicare patients to receive hospice care and curative treatment at the same time. Currently CMS’s regulations force patients to choose one or the other for their terminal illness. Patients would be able to also receive Medicare coverage in a skilled nursing home without a consecutive three-day inpatient hospital stay. Under current Medicare rules, patients are often charged for skilled nursing care after they leave an inpatient hospital stay because they were hospitalized for observation rather than admitted to the hospital.

Whitehouse’s legislative proposal would also allow Medicare patients to receive home health services without the requirement that they be homebound. Under current rules, a patient’s condition must have progressed such that there “exists a normal inability to leave home,” denying these services to those who are seriously ill but still mobile. Finally, it would also allow nurse practitioners to sign home health and hospice care plans and certify patients for the hospice benefit. Right now, only doctors can do so, even though nurse practitioners are often the ones administering home health and hospice care. This forms another barrier for patients seeking these services, especially in underserved and rural areas.

According to Tom Koutsoumpas, Co-Chair of the Coalition to Transform Advanced Care’s (C-TAC) Board of Directors, Whitehouse’s legislative proposal is “a critical step forward to achieving high-quality, coordinated care for those with advanced illness. This legislation allows for important innovations in care delivery and removes obstacles to support patients throughout the care continuum.”

Congressional Panel Looks Over Medicare

Published in Woonsocket Call on March 20, 2016

Last Wednesday’s hearing of House Ways and Means Health Subcommittee signals the panel’s interest to bring Medicare, a federal health insurance program for people age 65 and over, into the 21st century to meet the needs of its current 55.3 million beneficiaries.

At the March 16 hearing, Chairman Pat Tiberi (R-OH), stated that “Today’s seniors [are] inundated with an array of confusing deductibles, coinsurance and copayments with no protection from high health care costs unless they enroll in a private plan. Despite major improvements and innovations in the health care sector that have transformed how care is delivered, traditional Medicare has barreled through the last 50 years on the same trajectory of increased costs and little innovation.”

In addition to the structural challenges facing the program, critical parts of Medicare are expected to run out of money by 2026. In other words, the benefits Americans were promised stand to disappear if policymakers don’t act soon, says Tiberi.

Putting the Spotlight on Medicare

Tiberi’s March 16 Health Panel hearing, entitled “Preserving and Strengthening Medicare,” held in room 1100 of the Longworth House Office Building, brought together three witnesses to discuss ways to sustain the nation’s Medicare program and to keep it from going bankrupt. From both sides of the aisle and expert witnesses all agreed that the federal government’s current approach to delivering high-quality health care is not working. As a result of an outdated Medicare program and harmful Obamacare policies, today’s seniors “must navigate a disjointed program, face rising health care costs, and have fewer healthcare choices,” says the GOP panel chairman.

“Of federal entitlements, Medicare presents the most difficult challenges,” says Heritage Foundation Senior Fellow Robert Moffit, warning that the Trust Fund “faces insolvency in 2026.”

At the hearing, Moffit gave his fix for revamping Medicare that have bipartisan support and promise to shore up the ailing entitlement program. He called for the Medicare program to be simplified by combining Parts A and B – including catastrophic coverage, an out-of-pocket cap, a single deductible, and uniform coinsurance in a single plan along with bringing reforms to Medigap coverage. Also, retargeting Medicare benefits to low-income enrollees can provide assistance to lower-income enrollees. Increasing Medicare’s eligibility age to 67 (the same eligibility age for Social Security) along with encouraging innovation and cultivating competition through Premium Support can put the brakes to rising program costs.

When it comes to simplifying Medicare and incorporating catastrophic coverage, Tiberi had called the need for reform a “no-brainer.” Moffitt overwhelmingly agreed, stating, “It is a no-brainer. It is absolutely a no-brainer … [seniors] do not have protection from the most important thing that health insurance should deliver, which is that ultimate protection.”

As Moffit explained, the lack of catastrophic coverage in Medicare not only puts financial strain on the beneficiary, but it also causes a significant increase in unnecessary health care spending.

Coming Up with a Commonsense Approach

In her testimony, Katherine Baicker, Harvard University Professor of Health Economic and serves on the Medicare Payment Advisory Commission, also called for commonsense solutions, specifically focused on the need for increased competition. She heighten the role that Medicare Advantage program plays in promoting innovation, as well as providing more seniors flexibility, choice, and quality at an affordable cost.

Baicker emphasized, “A thriving and competitive Medicare Advantage program can be a vital contributor to high quality beneficiary care in a sustainable health care system.”

When Baicker was asked which Obamacare provisions Congress should work to immediately repeal in an effort to protect Medicare Advantage, she replied, “I would like to see the cap on quality bonuses removed … and removing the double bonus for quality so that you’re appropriately rewarding plans for delivering the high-quality care that beneficiaries are seeking out.”

Finally, Stuart Guterman, senior scholar in residence at
AcademyHealth, told the panel that he believes the nation’s largest purchaser of health care can do more to ratchet up quality, enhance quality and coordinate care and control costs. “Because of Medicare’s unique position, it can be an important testing ground for cost and quality innovations. Policies have been put in place that encourage such development, including the expanding the power of the Secretary of Health and Human Services to put pilot programs on a ‘fast track’ and to work with private payers and providers to establish multi-payer initiatives.”

At the conclusion of the two hour hearing, like Baicker, Tiberi stressed the importance of bolstering support for Medicare Advantage, which serves approximately one-third of seniors today. Obamacare cut billions of dollars from Medicare Advantage and redirected those resources toward a one-size-fits-all, Washington-run entitlement, he says.

Tiberi also noted, “If we continue to berate a system that has been widely successful…I don’t think that’s a really good way to try to figure out how we bester serve patients, seniors, in a more cost-effective value-added, comprehensive way.”

Watching from the Sidelines

But, one aging group expressed strong concerns about the Health Panel’s look at Medicare. In his released statement, Max Richtman, President/CEO of the Washington, D.C.-based National Committee to Preserve Social Security Medicare (NCPSSM), viewed the Health Panel hearing as “an Orwellian political exercise in which politicians say preserve when they actually mean privatize, and strengthen when they mean slash.”

“Republicans in the House envision a future in which millions of seniors will lose their guaranteed Medicare benefits in favor of a privatized CouponCare system in which they receive a government coupon to try and buy private insurance. Millions of seniors in Medicaid will lose their benefits due to block-granting to states without providing the resources to pay for it. The repeal of the Affordable Care Act will leave tens of millions without insurance and strip benefits from seniors in Medicare,” says Richtman in NCPSSM’s statement.

Furthermore, “The Republican leadership has offered no plans to improve benefits in Medicare or make reforms to reign in the skyrocketing price of drugs and healthcare costs system wide. Instead, the GOP vision for seniors in Medicare is they must just do more with less. Stagnant wages are grinding away at the middle class’s ability to save for retirement. Many employers have significantly scaled back or eliminated the traditional retirement benefits offered to their employees. As a result, current and future retirees simply cannot afford proposals to cut benefits, raise the eligibility age or privatize the program,” says in the NCPSSM statement.

Finally, the aging advocate warns that the GOP majority on the House Ways and Means Health Subcommittee majority is moving to replace the nation’s traditional Medicare program in favor of a fully privatized system, and the GOP controlled House is in the process of producing a budget that would do just that.

A Democratic or Republican President? Which political party controls the House and Senate? When the dust settles these answered questions may result in a restructuring of the Medicare program, that may either be strengthened and expanded or put on the budgetary chopping block by the new incoming President or Congress. It’s a no brainer…Sitting on the political sideline will ultimately be detrimental to your pocketbook and coverage you receive for your health care.