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Obamacare’s Faltering for One Simple Reason: Profit

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Jon Schwarz reports at The Intercept:

There have been dozens if not hundreds of news articles about Aetna leaving the Affordable Health Care Act’s online marketplaces in eleven states, and whether this signals serious problems for Obamacare down the road.

But none of them have truly explained that what’s happening with Aetna is the consequence of a flaw built into Obamacare from the start: It permits insurance companies to make a profit on the basic healthcare package Americans are now legally required to purchase.

This makes Obamacare fundamentally different from essentially all systems of universal healthcare on earth. (There is one tiny exception, the Netherlands, but of the four insurance companies that cover 90 percent of Dutch citizens, just one is for profit.)

Why does this matter? The answer is complicated but extremely important if Obamacare is going to avoid collapsing.

Insurance companies like Aetna complain that fewer young people than anticipated are buying insurance on the exchanges. The Obama administration was aiming at over 38 percent of the exchange pool being between 18 and 35 years old, but right now that number is just 28 percent. That means insurers have to pay more in health costs for customers who are older and sicker than anticipated, making those insurers more likely to abandon the exchanges. So a big swath of the U.S. now has just one insurance company offering Obamacare plans, and one county in Arizona has none.

The failure of young people to sign up in expected numbers is connected to the weakness of the Obamacare mandate. The amount that people who don’t buy health insurance must pay in penalties started off very low, and while it’s increased, it’s still usually significantly less than the cost of even the cheapest plan on exchanges.

By contrast, in other countries with private health insurance, the government response is ferocious if you don’t buy the basic package. Switzerland will seize your wages to pay for the necessary insurance. If you get sick in Japan without buying insurance you have to come up with all your back premiums before your insurer will pay your medical bills.

It is, of course, technically feasible to set up something similar in the U.S. But it will never be politically feasible. That’s because there would, rightfully, be an intense political backlash if the government started garnishing our paychecks and sending the money to Aetna, whose CEO made $28 millionlast year.

In Healing America, probably the best book ever written about how different countries provide universal healthcare, T.R. Reid explains that . . .

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Written by LeisureGuy

27 August 2016 at 2:06 pm

How Veterans Are Losing the War at Home: Making America Pain-Free for Plutocrats and Big Pharma, But Not Vets

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Ann Jones writes at

A friend of mine, a Vietnam vet, told me about a veteran of the Iraq War who, when some civilian said, “Thank you for your service,” replied: “I didn’t serve, I was used.” That got me thinking about the many ways today’s veterans are used, conned, and exploited by big gamers right here at home.

Near the end of his invaluable book cataloguing the long, slow disaster ofAmerica’s War for the Greater Middle East, historian Andrew Bacevich writes:

Some individuals and institutions actually benefit from an armed conflict that drags on and on. Those benefits are immediate and tangible. They come in the form of profits, jobs, and campaign contributions.  For the military-industrial complex and its beneficiaries, perpetual war is not necessarily bad news.

Bacevich is certainly right about war profiteers, but I believe we haven’t yet fully wrapped our minds around what that truly means. This is what we have yet to take in: today, the U.S. is the most unequal country in the developed world, and the wealth of the plutocrats on top is now so great that, when they invest it in politics, it’s likely that no elected government can stop them or the lucrative wars and “free markets” they exploit.

Among the prime movers in our corporatized politics are undoubtedly the two billionaire Koch brothers, Charles and David, and their cozy network of secret donors.  It’s hard to grasp how rich they really are: they rank fifth (David) and sixth (Charles) on Business Insider’s list of the 50 richest people in the world, but if you pool their wealth they become by far the single richest “individual” on the planet. And they have pals. For decades now they’ve hosted top-secret gatherings of their richest collaborators that sometimes also feature dignitaries like Clarence Thomas or the late Antonin Scalia, two of the Supreme Court Justices who gave them the Citizens United decision,suffocating American democracy in plutocratic dollars.  That select donor group had reportedly planned to spend at least $889 million on this year’s elections and related political projects, but recent reports note a scaling back and redirection of resources.

While the contest between Trump and Clinton fills the media, the big money is evidently going to be aimed at selected states and municipalities to aid right-wing governors, Senate candidates, congressional representatives, and in some cities, ominously enough, school board candidates. The Koch brothers need not openly support the embarrassing Trump, for they’ve already proved that, by controlling Congress, they can significantly control the president, as they have already done in the Obama era.

Yet for all their influence, the Koch name means nothing, pollsters report, to more than half of the U.S. population. In fact, the brothers Koch largely stayed under the radar until recent years when their roles as polluters, campaigners against the environment, and funders of a new politics came into view. Thanks to Robert Greenwald’s film Koch Brothers Exposed and Jane Mayer’s book Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, we now know a lot more about them, but not enough.

They’ve always been ready to profit off America’s wars. Despite their extreme neo-libertarian goal of demonizing and demolishing government, they reportedly didn’t hesitate to pocket about $170 million as contractors for George W. Bush’s wars.  They sold fuel (oil is their principal business) to the Defense Department, and after they bought Georgia Pacific, maker of paper products, they supplied that military essential: toilet paper.

But that was small potatoes compared to what happened when soldiers came home from the wars and fell victim to the profiteering of corporate America. Dig in to the scams exploiting veterans, and once again you’ll run into the Koch brothers.

Pain Relief: With Thanks from Big Pharma

It’s no secret that the VA wasn’t ready for the endless, explosive post-9/11 wars.  Its hospitals were already full of old vets from earlier wars when suddenly there arrived young men and women with wounds, both physical and mental, the doctors had never seen before.  The VA enlarged its hospitals, recruited new staff, and tried to catch up, but it’s been running behind ever since.

It’s no wonder veterans’ organizations keep after it (as well they should), demanding more funding and better service. But they have to be careful what they focus on. If they leave it at that and overlook what’s really going on — often in plain sight, however disguised in patriotic verbiage — they can wind up being marched down a road they didn’t choose that leads to a place they don’t want to be.

Even before the post-9/11 vets came home, a phalanx of drug-making corporations led by Purdue Pharma had already gone to work on the VA.  These Big Pharma corporations (many of which buy equipment from Koch Membrane Systems) had developed new pain medications — opioid narcoticslike OxyContin (Purdue), Vicodin, Percocet, Opana (Endo Pharmaceuticals), Duragesic, and Nucynta (Janssen, a subsidiary of Johnson & Johnson) — and they spotted a prospective marketplace.  Early in 2001, Purdue developed a plan to spend hundreds of thousands of dollars targeting the VA.  By the end of that year, this country was at war, and Big Pharma was looking at a gold mine.

They recruited doctors, set them up in private “Pain Foundations,” and paid them handsomely to give lectures and interviews, write studies and textbooks, teach classes in medical schools, and testify before Congress on the importance of providing our veterans with powerful painkillers.  In 2002, the Food and Drug Administration considered restricting the use of opioids, fearing they might be addictive. They were talked out of it by experts like Dr. Rollin Gallagher of the American Academy of Pain Medicine and board member of the American Pain Foundation, both largely funded by the drug companies. He spoke against restricting OxyContin.

By 2008, congressional legislation had been written — the Veterans’ Mental Health and Other Care Improvement Act — directing the VA to develop a plan to evaluate all patients for pain. When the VA objected to Congress dictating its medical procedures, Big Pharma launched a “Freedom from Pain” media blitz, enlisting veterans’ organizations to campaign for the bill and get it passed.

Those painkillers were also dispatched to the war zones where our troops were physically breaking down under the weight of the equipment they carried. By 2010, a third of the Army’s soldiers were on prescription medications — and nearly half of them, 76,500, were on prescription opioids — which proved to be highly addictive, despite the assurance of experts like Rollin Gallagher. In 2007, for instance, “The American Veterans and Service Members Survival Guide,” distributed by the American Pain Foundation and edited by Gallagher, offered this assurance: “[W]hen used for medical purposes and under the guidance of a skilled health-care provider, the risk of addiction from opioid pain medication is very low.”

By that time, here at home, soldiers and vets were dying at astonishing rates from accidental or deliberate overdoses. . .

Continue reading.

Written by LeisureGuy

26 August 2016 at 10:05 am

Drug companies spend millions to keep charging high prices

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Of course, drug companies must charge high prices to cover their lobbying expenses. David Lazarus writes in the LA Times:

Pharmaceutical heavyweight Mylan, the latest poster child for drug-industry greed, finally stuck up for itself Thursday. It argued that “the system,” not avarice, was to blame for the company jacking up the price of EpiPens, a common (and life-saving) allergy remedy, by over 400%.

“Look, no one’s more frustrated than me,” Mylan Chief Executive Heather Bresch declared on CNBC.

Actually, millions of people — those with chronic medical conditions or other illnesses — are more frustrated than her. [And, I’ll point out, if the high price is so damn frustrating to her, she has the power as CEO to lower the price. Probably didn’t occur to her. – LG]

Despite Mylan’s offer Thursday of discount coupons for some EpiPen users, the only system at work here is a cash-fat industry routinely preying on sick people. It’s a system that the drug industry will do whatever’s necessary to protect.

Of roughly $250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount — about $70 million — has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.

Contributions aimed at killing the initiative are on track to be the most raised involving a single ballot measure since 2001, the earliest year for which online data are available, according to MapLight, a nonpartisan organization that tracks money in politics.

The Drug Price Relief Act would make prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pay no more than what’s paid for the same drugs by the U.S. Department of Veterans Affairs. It would, in other words, protect state taxpayers from being ripped off.

Industry donations to crush the Drug Price Relief Act “will top $100 million by the election, I’m quite certain of it,” said Michael Weinstein, president of the AIDS Healthcare Foundation and a leading backer of the state measure, also known as Proposition 61. “They see this as the apocalypse for their business model.”

The drug industry already has succeeded in eviscerating Senate Bill 1010, legislation in Sacramento that would have required pharmaceutical companies to detail the costs of producing medicine and explain any price increases. The bill’s author, state Sen. Ed Hernandez (D-West Covina), pulled it from consideration last week after industry lobbyists succeeded in watering it down with business-friendly provisions.

Mylan’s money-grubbing approach to EpiPens is only the latest example of a drug company mercilessly putting the squeeze on patients.

EpiPens are a decades-old way of delivering epinephrine, a hormone that counters the potentially fatal effects of severe allergic reactions to things such as bee stings and peanuts. There’s about a dollar’s worth of epinephrine in each EpiPen, to which Mylan acquired the rights in 2007 and proceeded to steadily impose double-digit price hikes.

But don’t forget Gilead Sciences charging $1,000 a pill for its hepatitis C drug Sovaldi. Or Turing Pharmaceuticals, which purchased rights to a well-established parasite drug used by AIDS and cancer patients and promptly raised the price by 5,000%.

A recent Reuters investigation found that prices for four of the nation’s top 10 drugs have more than doubled since 2011, with the remaining six jumping in price by at least 50%.

“It’s like being held hostage,” Weinstein told me. “The public’s hatred of this industry is an incredible thing. They create life-saving drugs, but, because of their greed, people can’t afford them. What good is a life-saving drug if you can’t get it?” . . .

Continue reading.

Written by LeisureGuy

26 August 2016 at 9:44 am

The For-Profit World Moves Into an Elder Care Program

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Bad news for elders in those programs, I would say. While things may start well, the drive to increase profits will inevitably lead to staff reductions and reductions in quality of service, a progression seen repeatedly when private corporations take over government functions (prisons, hospitals, nursing homes, hospice care, and the like). Sarah Varney reports in the NY Times:

Inside a senior center here, nestled along a bustling commercial strip, Vivian Malveaux scans her bingo card for a winning number. Her 81-year-old eyes are warm, lively and occasionally set adrift by the dementia plundering her mind.

Dozens of elderly men and women — some in wheelchairs, others whose hands tremble involuntarily — gather excitedly around the game tables. After bingo, there is more entertainment and activities: Yahtzee, tile-painting, beading.

But this is no linoleum-floored community center reeking of bleach. Instead, it’s one of eight vanguard centers owned by InnovAge, a company based in Denver with ambitious plans. With the support of private equity money, InnovAge aims to aggressively expand a little-known Medicare program that will pay to keep older and disabled Americans out of nursing homes.

Until recently, only nonprofits were allowed to run programs like these. But a year ago, the government flipped the switch, opening the program to for-profit companies as well, ending one of the last remaining holdouts to commercialism in health care. The hope is that the profit motive will expand the services faster.

Hanging over all the promise, though, is the question of whether for-profit companies are well-suited to this line of work, long the province of nonprofit do-gooders. Critics point out that the business of caring for poor and frail people is marred with abuse. Already, new ideas for lowering the cost of the program have started circulating. In Silicon Valley, for example, some eager entrepreneurs are pushing plans that call for a higher reliance on video calls instead of in-face doctor visits.

The business appeal is simple: A baby boom-propelled surge in government health care spending is coming. Medicare enrollment is expected to grow by 30 million people in the next two decades, and many of those people are potential future clients. Adding to the allure are hefty profit margins for programs like these — as high as 15 percent, compared with an average of 2 percent among nursing homes — and geographic monopolies that are all but guaranteed by state Medicaid agencies to ensure the solvency of providers.

The goal of the program, known as PACE, or the Program of All-Inclusive Care for the Elderly, is to help frail, older Americans live longer and more happily in their own homes, by providing comprehensive medical care and intensive social support. It also promises to save Medicare and Medicaid millions of dollars by keeping those people out of nursing homes.

For decades, though, the program has failed to catch on, with only 40,000 people enrolled as of January of this year.

“PACE is still a secret in the minds of the public,” Andy Slavitt, Medicare’s acting administrator, said at the National PACE Association meeting in April. The challenge, he said, was to make PACE “a clear part of the solution.”

Several private equity firms, venture capitalists and Silicon Valley entrepreneurs have jumped into the niche. F-Prime Capital Partners, a former Fidelity Biosciences group, provided seed funding for a PACE-related start-up, as have well-regarded angel investors like Amir Dan Rubin, the former Stanford Health Care president, and Michael Zubkoff, a Dartmouth health care economist.

And no company has moved with more tenacity than InnovAge. Last year, the company overcame protests from watchdog groups to convert from a nonprofit organization to a for-profit business in Colorado. And in May, InnovAge received $196 million in backing — the largest investment in a PACE business since the rule change was made — from Welsh, Carson, Anderson & Stowe, a private equity firm with $10 billion in assets under management. . .

Continue reading.

Venture capitalists invest for one reason: profit. And they want big profits. It will be interesting to see how the elderly fare.

Written by LeisureGuy

20 August 2016 at 9:46 am

Poor and uninsured in Texas

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Ricardo Nuila reports in the New Yorker:

Geronimo Oregón was wheeled out of the intensive-care unit at Houston’s Ben Taub Hospital on April 17, 2016, his body wired with electrodes and his mother at his side. He had arrived in the emergency room six days earlier, complaining of confusion, stomach pain, and shortness of breath. Physicians had drained nearly half a gallon of fluid from around his right lung, corrected his sodium imbalance (a cause of his confusion), and relieved the worst of his pain. Now Oregón was being transferred to the step-down unit, a kind of limbo between the I.C.U. and the general ward. His new room had a vacuum pump on the wall. When the suction was on, a bright yellow fluid drained out of a tube in his nose and into a clear cannister. Every part of his body—his belly, his face, his eyes—was the same vivid shade. He had jaundice, the result of old red blood cells leaking into his tissues rather than being cleared from his body as waste. In medicine, this is known as a stigmata, a physical mark of illness. Oregón was dying of liver failure. A calculation made using his blood work showed that, unless he received a liver transplant, he had only an eighteen per cent chance of surviving the next ninety days.

I have been an internist at Ben Taub for the past six years. In that time, I have rarely seen patients who lack health insurance, like Oregón, make it to the transplant list. The hospital is part of Harris Health, a county-funded network that provides care for the indigent, but as with most safety nets it does not cover organ transplantation, which can cost hundreds of thousands of dollars. This may be why, when I took over Oregón’s care, I fixated on the tube in his nose. Rather than prolonging his life with invasive equipment, shouldn’t my colleagues and I gear our treatment toward helping him die comfortably? Normally, we would have recommended against resuscitation efforts, such as shocking his heart if it stopped or connecting him to a ventilator. But when we explained this to Oregón and his mother, Emma, she put a stop to the conversation. Her son, she pointed out, was only thirty-six years old—much too young to die. The medical team decided that addressing Oregón’s breathlessness would be a top priority, even if it meant performing more procedures.
Then a medical student noticed something in Oregón’s history that the rest of us had missed: he used to have Medicaid, but it was taken away. The second part of the revelation was not so surprising. Texas is perhaps the worst state in the union to live in as someone who is poor and terminally ill—a direct result of the political bickering surrounding the Patient Protection and Affordable Care Act, also known as Obamacare. In its original form, the legislation would have helped Oregón. It was designed to insure that all Americans—particularly those who worked but did not have employer-sponsored health care—received basic coverage. As part of this goal, the law mandated that states extend Medicaid to any adult under the age of sixty-five who earned as much as a hundred and thirty-eight per cent of the federal poverty level (F.P.L.). Oregón made only six hundred dollars a month, or sixty-one per cent of the F.P.L. at the time, working as a gas-station attendant. But after the U.S. Supreme Court struck the mandate down, in 2012, some states—including mine—chose to reject the Medicaid expansion and the federal dollars that came with it. Texas now has the strictest Medicaid qualifications in the country. According to a 2015 report from the Kaiser Family Foundation, for an adult in a family of three to receive coverage, his household income must be less than four thousand dollars per year, just nineteen per cent of the F.P.L. In most cases, childless adults, no matter how little they earn, cannot receive coverage at all.
My colleagues and I had assumed, from experience, that Texas would not fund a transplant for Oregón. But the first part of the medical student’s discovery—that he had ever had coverage to begin with—gave us hope. How, we wondered, did Oregón qualify for Medicaid in the first place? Could he again?

Oregón was born in Mexico City, raised in the state of Michoacán, and brought to Houston illegally when he was nine. His father had largely abandoned the family years earlier, leaving Emma to make ends meet by working night jobs. The money was enough at first, but then, when Oregón was thirteen, he began having seizures in school. Emma took him to Ben Taub, where he was diagnosed with epilepsy. Medication brought his convulsions under control, but he never returned to school. His father, believing that Oregón would receive better treatment in Mexico, demanded that he be sent to live with his grandparents in Michoacán. Emma eventually relented out of fear of her ex-husband, who had been abusive toward her in the past. Back in Mexico, Oregón’s grandparents put him to work tending their livestock. He didn’t return home to Houston until the age of twenty, this time as a legal U.S. resident. He had only a sixth-grade education, but he was bilingual; he joined the Job Corps, a federal career-training program, and found employment immediately.

Oregón worked low-paying jobs—as a dishwasher, a cook, and at the gas station—for most of his adult life, always making enough to pay his portion of the rent that he shared with his mother. He received affordable medical care, including treatment for his epilepsy, through Harris Health. In December of 2010, Oregón’s primary-care doctor detected early signs of liver damage—the beginning of a condition called cirrhosis—in his blood work, diagnosing it as a result of hepatitis C infection. . .

Continue reading.

Written by LeisureGuy

18 August 2016 at 3:23 pm

Why Is Aetna Pulling Out of Nice, Profitable Pennsylvania?

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Kevin Drum points out that Aetna’s withdrawing from the Obamacare health exchanges is almost certainly a vengeful act because their merger with Humana was approved. Drum posts:

Last night I linked to a letter from Aetna to the Department of Justice explaining what they would do if their merger with Humana wasn’t approved. The answer, basically, was that they’d pull out of a bunch of Obamacare exchanges. As insurance pro Richard Mayhew puts it:

TLDR: Nice exchanges there, be a pity if anything happened.

But Mayhew points out something else. Aetna claims that they’re not really threatening the Obama administration. They’re losing money! If the merger isn’t approved, they really have no choice but to pull back from the exchanges. It’s sad, but what are you gonna do?

And yet—in 2015 they made $13.6 million in the individual market in Pennsylvania. That’s a very healthy 19 percent of premium revenue. But one of the states they’re pulling back from is…Pennsylvania. Nice, profitable, Democratic-leaning Pennsylvania. It’s very peculiar, isn’t it?

Written by LeisureGuy

18 August 2016 at 8:59 am

Behind the Supreme Court’s Abortion Decision, More Than a Decade of Privately Funded Research

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Nina Martin reports in ProPublica:

Back in January, as the Supreme Court was preparing for its most important abortion case in a generation, some four dozen social scientists submitted a brief explaining why they believed key portions of Texas law HB2 should be struck down. The brief was a 58-page compendium of research on everything from the relative dangers of abortion vs. childbirth to the correlation between abortion barriers and postpartum depression. “In this politically charged area, it is particularly important that assertions about health and safety are evaluated using reliable scientific evidence,” the researchers declared.

Six months later, the material they submitted clearly helped shape Justice Stephen Breyer’s majority opinion in Whole Woman’s Health v. Hellerstedt, which found critical elements of HB2 unconstitutional. Less noticed, the decision also handed a resounding victory to private donors who’ve spent more than a decade quietly pouring at least $200 million into the scientists’ work, creating an influential abortion-research complex that has left abortion opponents in the dust.

The research initiative dates back at least to the early 2000s and became more urgent after the high court suggested in 2007 that in cases of “medical and scientific uncertainty,” legislatures could have “wide discretion” to pass laws restricting abortion. Since then, a primary objective of abortion rights supporters has been to establish a high level of medical certainty — both about the safety of the procedure and about what happens when a woman’s reproductive options are drastically curtailed or eliminated.

There’s little or no publicly funded research on this controversial topic in the U.S., so for years basic information was lacking — from how often patients have complications to what happens to women who want abortions but can’t obtain them.

Into this breach stepped the Susan Thompson Buffett Foundation, named for the late wife of one of the richest men in the world. Established in the 1960s, the philanthropic behemoth (it ranked fourth among family foundations in 2014 in terms of giving) is known for its focus on abortion access, training and more recently, prevention. It’s also known for its secrecy, often appearing under grant acknowledgements only as “an anonymous donor.”

The Buffett Foundation helped financethe development of the abortion drug RU–486 back in the 1990s. From 2001 to 2014, it contributed more than $1.5 billion to abortion causes, including at least $427 million to Planned Parenthood worldwide and $168 million to the National Abortion Federation — a track record that led one foe to call Warren Buffett the “sugar daddy of the entire pro-abortion movement.” In the past 15 years, it has also made research a core part of its strategic efforts, funding such organizations as the Guttmacher Institute, a policy think tank and advocacy group that tracks demographic and legislative trends ($40 million), and Gynuity Health Projects, which focuses on medication abortion ($29 million), as well as work by academics abroad. Other foundations supporting research on a smaller scale have included the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, the John Merck Fund, and the Educational Foundation of America. (Hewlett is also a funder of ProPublica.)

Buffett’s main academic partner (receiving at least $88 million from 2001 to 2014) has been the University of California, San Francisco, a medical research institution with a strong reproductive-health infrastructure. . .

Continue reading.

Written by LeisureGuy

15 July 2016 at 8:28 am

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