Kerry suggesting tax on the insurance companies on the

[karynnj]

plans above the regional average. http://www.boston.com/news/nation/washington/articles/2009/07/21/kerry_wants_insurer_tax_to_pay_for_care/?comments=all One of the comments makes some good points - attaturk says:

"Let me get this straight subcritical wants to eliminate health insurance to help rid us of his martians - sweetlandof and 4change are afraid that people who can afford $17000 for health insurance might get a pass down from their insurance companies - What planet do you people live on - exactly how do you propose to pay for health care - subcritical would have the poor do what - visit the witchdoctor - and the other two oppose taxing the well to do - I suppose we could tax everyone - but then you'd oppose that too - You make no sense - you argue just to argue- reform requires some pain somewhere in order to get somewhere - sweetlandof has the right idea but doesn't have a starting point or refuses to bill anyone for the program- this tax would not make health insurance unaffordable for the person who can afford the $17000 policy - but it would help finance the system that makes it affordable for others."

I know that the tax break companies get when they purchase insurance for their employees adds up to a huge amount of money and was designed originally to make giving health care as a benefit attractive for companies because the worth of what they gave was greater than the cost to them. Taxing only the marginal amount above the regional average would not seem to do that - though it would make the above average plans more expensive. This likely would lead companies with above average plans to move towards the average or to pass that additional cost to employees if they opt to keep the premium plan.

Because he is using the average, not say, the 90th percentile, this will be effectively a tax increase for many in the middle class. There must not be enough money to do that - or like his 2004 proposal of rolling back the tax cuts, I think he would limit it to the top 2% (or 10%).

(slightly OT, The NYT magazine had a provocative article on deciding what care should be paid for, http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?_r=1&ref=magazine I know I've had a squeamish reaction when Obama (and here Kerry) spoke of not doing unnecessary tests etc, but it really can't be open ended.)

[TayTay]

1. I really liked that NYTimes article

it is getting to the nitty-gritty of what the health care reforms will mean. We ration health care now by cost, which is unfair, not progressive and inefficient. The inefficiency comes when people who cannot afford continuing care find themselves using a hospital emergency room and transfering much bigger costs onto a public system.

The article talks about hard choices like whether or not drugs that cost $54,000 for a dose and may result in six extra months of "life" for a terminal patient are worth it. ("Life" because the quality of the life under consideration in terms of mobility, mental agility, dependence and so forth are not factored in.) At some point in time, we have to have this debate. We are already rationing health care, how are we going to ration it in the future? Who will get it and how are we going to pay for it. This debate will be more intense the greater the public option is, btw. This is something not currently in the debate.

There was an http://www.boston.com/news/world/latinamerica/articles/2009/06/14/one_girls_hope_a_nations_dilemma/">interesting article in the Boston Globe a few weeks back about how "miracle" drugs for serious but rare ailments are marketing in developing, poor countries. I think this article should be read by everyone because the pressures brought to bear on the Costa Rican system will, in one form or another, be brought to bear on our system, even under the sacred "public option." We are not having the big debate we need to have, we are having a sideshow debate right now.

But the doctor had another piece of news. There was a drug that might halt Tania's suffering and perhaps even reverse the toll of her disease. The drug was called Cerezyme.

For Jose and his family, it was as though a hand had reached down to answer their prayers. But in that moment, something else had happened as well: The Cambridge drug company Genzyme had just found its first potential patient in Costa Rica. And now that it had found one, it would supply the drug to Tania, but at an astonishing cost - $160,000 a year, possibly for the rest of her life.

This was far more money than the Costa Rican government had ever paid for a drug, and Genzyme would not bend on the price. The country's health officials were forced to weigh the prospect of a healing gift for one girl against the needs of a nation struggling to care for millions.

Should Tania get the drug?

What unfolded in that village was a dramatic example of the hard choices often forced by the inventions and ambitions of the biotechnology industry, an increasingly important part of global healthcare and a critical growth sector for Massachusetts. Its high-priced cures are creating both great wealth and great moral dilemmas, one new drug, one new patient at a time.

SNIP

If Cerezyme was not just another drug, the Cambridge firm that manufactured it did not consider itself just another drug company. When Genzyme Corp. first introduced a bioengineered drug for Gaucher (pronounced GO-shay) disease in the 1990s, the very idea seemed almost absurd to most people in the pharmaceutical industry. It was expensive to manufacture, there were vanishingly few known patients, and it wasn't clear how you could sell enough of it to recoup research costs, never mind make a profit.

Genzyme's solution, elegant in its way, was to set a price high enough to earn a substantial profit no matter how small its pool of patients. Then the company surprised the medical world - and its investors on Wall Street - by showing that American health insurers could be persuaded to pay the six-figure price tag. And with the only effective treatment for Gaucher disease, Genzyme never needed to lower the price, even as production efficiencies raised profit margins on the drug to as much as 90 percent.

The drug started to bring in tens of millions of dollars a year, then hundreds of millions. Today this one drug, prescribed for about 5,000 patients, has transformed Genzyme and its chief executive, Henri Termeer, into one of the great success stories of biotechnology, fueling its expansion into a $16 billion company with offices and factories worldwide.

By the early 2000s, Genzyme had reached most of the known Gaucher patients in the United States, so it had begun pushing outward to new markets. Genzyme created divisions within the company to find overseas patients; it hired experts to cajole balky governments into paying for the patients' Cerezyme doses. Some of the company's successes were extraordinary: hundreds of patients in Brazil. Patients in Taiwan, Kuwait, and Bulgaria. The government of Libya's Colonel Moammar Khadafy pays for Cerezyme for a handful of patients.

As it notched these successes, the company stayed largely under the radar of public health activists who were pushing drugmakers to discount AIDS drugs and other lifesaving medications whose retail prices were financially out of reach to many governments.

[TayTay]

2. Beyond just the "public option" fight: Rural vs. urban funding

The Boston Globe had another http://www.boston.com/news/nation/washington/articles/2009/07/19/rural_urban_hospital_rift_may_imperil_healthcare_overhaul/">excellent article I heartily commend to your attention that discusses some of the battle over health care going on in the hospital. Curiously, the article does not condemn either side for fighting for their cause.

Reform pits city hospitals vs. rural

Smaller facilities seek more funds
By Susan Milligan
Globe Staff / July 19, 2009

WASHINGTON - Large, urban teaching hospitals - including hospitals that are the biggest engines in the Boston economy - are facing the possible loss of hundreds of millions of dollars under national healthcare reform as rural lawmakers on Capitol Hill wage a fight to win more federal cash for their local institutions.

Big hospitals affiliated with medical schools around the country receive heftier reimbursements for treating elderly patients covered by Medicare, part of a government policy that rewards them for maintaining things such as trauma centers and burn units, as well as for training future generations of doctors.

Rural members of Congress, however, angry at what they see as an unfair advantage to glitzier facilities in cities, are demanding a bigger share of the pie for smaller hospitals, which serve remote populations and often struggle to survive.

The intense competition is among the key political subplots in the debate over expanding healthcare coverage to more than 46 million Ameri cans with no insurance. Although Republicans have stronger representation in the nation’s heartland, it’s not simply a red state-blue state divide. Plenty of rural Democrats think the current system - which favors facilities such as Massachusetts General Hospital in Boston and Mount Sinai in New York - is unfair.

“This is a very urban bill,’’ fumed Representative Earl Pomeroy, a North Dakota Democrat on the House Ways and Means Committee, which passed the healthcare overhaul bill Friday. “Could it be improved? Could it be more rational? Of course.’’

But Representative Michael Capuano, a Somerville Democrat, said any attempt to strip a portion of Medicare money from teaching hospitals would be a deal-breaker for House members from cities. He said teaching hospitals offer more advanced medical services and should be compensated accordingly.

So, I wonder where the activists at DFA and MoveOn and DKos come down on the allocation of Medicaid funds for rural versus urban hospitals. Or is that not sexy enough to deserve notice? It is a big issue.