HEALTH CARE

HEALTH CARE: WHERE ARE WE HEADED?

A Forum Presented by

The Winchester Council on Aging

Jenks Senior Center

109 Skillings Road

Winchester, MA 01890

We recognize that the national health care system is in crisis. The signs? HMO's limiting health care, medical practices and hospitals closing down, doctors refusing to see Medicare and Medicaid-covered patients, skyrocketing costs for both services and medications. Nationally, some 40 million citizens are without health care insurance. Many citizens seem confused and uninformed about the myriad of programs offered and unclear about what is covered and what is not.

The goal of the Health Care Forum is to provide a platform, which will help Winchester residents and those from adjoining communities to understand and conceptualize health care issues as they affect the cost of, and access to, medical care, home care and long-term care. The Winchester COA believes that an informed public can become the best advocates for influencing constructive changes in the health care delivery system through consumer groups and elected representatives.

FORUM PROGRAM

Session 1: Saturday, January 25, 2003 - Is Medical Care A Right?

Keynote Speaker: Arnold S. Relman, M.D., Faculty, Harvard Medical School

Editor-in Chief Emeritus, New England Journal of Medicine,

Panelists: Dale Lodge, President and CEO, Winchester Hospital

Harris A. Berman, M.D., CEO, Tufts Health Plan

Session 2: Saturday, February 8, 2003 - Single Payer System: Affordable Health Care for All?

Keynote Speaker: David U. Himmelstein, M.D., Faculty, Harvard Medical School

Director, Physicians for a National Health Plan

Panelists: Mitchell T. Rabkin, M.D., CEO Emeritus, Beth Israel Deaconess Medical Center

Charles Welch, M.D., President, Mass Medical Society (invited)

Session 3: Saturday, March 15, 2003 - Long Term Care in Massachusetts:

Problems, Causes, and Solutions

Keynote Speaker: Alan Sager, Ph.D., Faculty, Boston University School of Public Health

Panelists: Mary Ann Outwater, RN, Director, Assisted Living Development

Covenant Health Systems

Al Norman, Executive Director, Mass Home Care

Session 4: Saturday, May 3, 2003 - Financing Health Care & Eliminating Fraud

Keynote Speaker - Financing: Health Care - Michael S. Dukakis, J.D., Faculty, Northeastern University

Former Governor, Commonwealth of Massachusetts

Keynote Speaker - Fraud: Malcolm K. Sparrow, Ph.D., Faculty, Kennedy School of Government

Author: License to Steal: How Fraud Bleeds America's Health Care System

Session 5: Saturday, May 31, 2003 - Prescription Drugs: Why So Costly?

Keynote Speaker: Marcia Angell, M.D., Senior Lecturer, Harvard Medical School

Former Editor-in Chief, New England Journal of Medicine

Panelists: Frederick J. Vinick, Ph.D., Senior V.P. Drug Discovery, Genzyme Corporation

Nicole DeVita, R.Ph., MHP, Director of Pharmacy, Partners Community HealthCare

Session 6: Saturday, June 21, 2003 - Health Care: Where Are We Headed?

A Town Forum

Town of Winchester Moderator: John J. Sullivan, J.D.

Alan Macdonald, J.D., Executive Director, Massachusetts Business Roundtable

State Senator Susan Fargo, MPA, Fifth Middlesex, Member, The Joint Committee on Health Care

Is Medical Care A Right?

Session 1

Keynote Speaker: Arnold S. Relman, M.D., Faculty, Harvard Medical School

Editor-in Chief Emeritus, New England Journal of Medicine,

Panelists: Dale Lodge, President and CEO, Winchester Hospital

Harris A. Berman, M.D., CEO, Tufts Health Plan

Presentation Summary

There are two points of view on this question. The first is that health care is a commodity, which is to be purchased. If individuals can not afford it either through insurance or personal funds then they have no right to it. The possible exception to this might be a trauma such as a plane accident, natural disaster etc. when emergency services are needed.

The second point of view is that health care is a right and society has a responsibility to provide it. Our keynoter, Dr. Relman, articulated, that the Declaration of Independence acknowledges the unalienable right of life, liberty and the pursuit of happiness. He maintained that in order to pursue these rights adequate health is a necessity. Therefore, health care should be a right.

All of our panelists agreed that health care should be a right. They disagreed, however, about whether this right could be realistically achieved for everyone.

Dr. Relman outlined why we are in a health care crisis. The panelists agreed with his presentation of the problem. They did not agree with him about how this problem could be solved.

The following is how the problem was defined. The health care system has two components, a funding system and a health care delivery system. Funding is provided in several ways. The government, through its various programs, covers 85 million citizens. Private insurances, mainly through employers, cover 155 million people while 41 million have no insurance coverage.

The delivery system is composed of hospitals, professional caregivers, prescription drugs, ambulatory care services, education and research, public health services, and in recent years a group of investor owned businesses. These businesses include case management and disease management companies, financial and data management groups, insurance managers, and consulting companies. They have sprung up to help the system deal with multiple payers. This latter group has contributed greatly to the administrative costs of hospitals and providers.

Within these two components of the health care system, the following problems have evolved. There is limited access to health care (41 million are not covered). Not all care is equitable. There are limited choices. Care is fragmented and delivered with haste and hassle. Costs are forever escalating. New drugs, new technology, and increased usage account for some of the escalating costs. High business overhead to deal with multiple payers may well be taking

approximately 25% of the healthcare dollar. Errors, duplication, inefficiency and fraud are also major contributors to increasing costs. The result is that 15% of the gross national product goes to

health care. Health care costs are increasing 10% a year, and $l.4 trillion is spent nationally on health care. This is unsustainable.

There are several policy options on the national scene to deal with this. They are as follows:

1. Adoption of an incremental approach which is to try to fix the problem, over the years, by correcting a piece of the system at a time.

2. Reliance on the free market and consumerism to handle the problem. The belief is that health care is a market which will function best under price competition.

3. The third option is to go to a single payer system, insure universal coverage and also reform the health care delivery system as you reform its financing.

Our keynoter Dr. Relman supported this last policy option. His feeling is that we need a single payer system, and a progressive health care tax that would support this. The tax should go into a trust so the monies could not be used for other purposes. He feels there is enough money now in the health care system ($1.4 trillion a year) so that if it is reallocated appropriately, universal coverage is possible along with adequate health care for all. He feels that a single payer system alone will not solve our problems but that we have to revamp the way in which we deliver care. Incentives for providers need to be aimed at providing good patient care not just earning high incomes.

The other panelists had rebuttals to Dr. Relman’s solution. They are summarized as follows:

1. Dr. Relman’s suggestion is simplistic. This is a complex situation which will not lend itself to simple solutions. We may get something we don’t want.

2. We can not count on government to handle this. When they need money, they will “ratchet” down the system and take the funds.

3. This country is not like the many other advanced and non-advanced countries which have universal health care because they believe society should provide health care. Americans do not see health care as a societal responsibility and if it requires more taxation, they don’t want it. We have little concern for the 41 million who don’t have coverage unless, of course, we become one of them.

4. Under a single payer system, we would have to figure out what is medically necessary care and what is a lifestyle requirement. Are tummy tucks, and Viagra necessary? We are a demanding society and if we expect every health need to be paid for out of health insurance it will cause problems. Where will the boundaries be placed on what is provided? Where does this health care right end?

At the conclusion of the program, a clarification was made. Universal health care means every one is covered for basic health care. It can be accomplished in several ways and is not synonymous with Single Payer System. A Single Payer System is a way of funding healthcare.

Single Payer System: Affordable Health Care For All?

Session 2

Keynote Speaker: David U. Himmelstein, M.D., Faculty, Harvard Medical School,

Founder, Physicians for a National Health Plan

Panelists: Mitchell T. Rabkin, M.D. , CEO Emeritus,

Beth Israel Deaconess Medical Center

Charles A. Welch, M.D. President, Massachusetts Medical Society

Presentation Summary

Dr. David Himmelstein defines the health care crisis as having two components. The first is the lack of access to health care for the 41 million uninsured in our country. By and large, the uninsured are in the mainstream of our society. They are the working uninsured and the self-employed who cannot afford insurance.

The second component of the health care crisis is the rising cost of care. Health care premiums are rising by 15% a year. Coverage for serious and prolonged illness is not adequate. Of all the nation’s personal bankruptcies, 45% are due to the large medical debt of insured people. In spite of insurance coverage, seniors spend approximately 25% of their income on health care. The various types of managed care plans, particularly HMO’s, have required health care providers to increase administrative staff to handle their utilization requirements and billing procedures. The cost has been astronomical.

For-profit HMO’s have increased across the country. Senior HMO’s want to enroll healthy seniors and are profitable when they do so. Experience has shown that when seniors become ill they transfer back to traditional Medicare to get the care they need. Dr. Himmelstein had much data that demonstrated that on quality measures, for-profit HMO’s did poorer than not-for-profit insurers. Also, the elderly and sick fared worse in for-profit HMO’s. For-profit hospitals have higher death rates and for-profit nursing homes are more frequently cited for poorer care. The point is that for-profit incentive creates problems in care. The goal of "money for shareholders" conflicts with the goal of "money for care".

The U.S. is spending enough money to provide excellent health care for all its citizens. Yet we have no universal health coverage or universal drug coverage, as do most of the developed countries of the world. We rank 23^rd in the world for infant mortality. This is extraordinary when one realizes that more than 13% of health care costs go to overhead.

Dr. Himmelstein advocates a National Health Plan, i.e. a Single Payer system managed by the government. It would do the following:

1. Cover all our citizens.

2. Eliminate co-payments.

3. Simplify reimbursement for providers.

4. Allow free choice of physicians and hospitals.

5. Raise taxes to fund the system but eliminate health insurance premiums.

6. Cost 1% in overhead rather than the current 13%.

7. Provide public accountability for quality and cost.

The Congressional Budget Office and the General Accounting Office agree that there is enough money in the system to cover everyone under a Single Payer System.

Dr. Himmelstein stresses that government has its problems, but it is accessible to hearings and debates and can be voted out. The private insurance system responds only to stockholders. Single payer system means that the financing system is public but the health care delivery system is private. This is not socialized medicine, but is a nationally run group insurance program.

Dr. Mitchell Rabkin agreed that a Single Payer System would reduce costs. He warned, however, that no matter how cost control is done it will not be effective unless it achieves the following goals:

1. It produces a budget.

2. Medical decisions are made by the doctor and patient based on the best scientific knowledge available.

3. There are reasonable economic incentives to meet standards of care.

4. The budget provides for fair payment for services rendered.

5. The budget provides appropriate support for medical education.

Dr Charles Welch, spoke about the problems intrinsic to the health care system from the physician’s perspective. They are as follows:

1. While health care costs increase by 15% a year, none of this is going to providers and patients. Physicians are being hassled by managed care over the amount or type of care they render and the reimbursement rates. Many doctors are leaving the state.

2. It is very expensive for physicians to deal with the administrative overhead related to getting approval for care and for billing.

3. Data systems are lacking so that there is much inefficiency because of the lack of historical data on patients.

4. The use of technology and pharmaceuticals is “irrational”. New technology and new drugs are over priced and over used because there is no evidence based system about which should be used.

5. Patient compensation for injury is inadequately handled by the tort system. In the end many people receive no compensation at all. Those who receive it pay as much as 60% to their lawyers. There need to be other ways to reimburse losses and to encourage doctors to report safety problems. Currently the tort system encourages doctors to practice defensive medicine.

6. Physicians are not allowed to negotiate fees so they have to accept reimbursement rates given to them by insurers.

Dr. Welch said physicians are afraid of the Single Payer System if government can do to it what it has done to Medicaid in Massachusetts. In addition, to support Single Payer, physicians want to be sure they can negotiate fees, which they can not do now.

All speakers concurred that seniors were in a position of influence. Legislators want to know what they think. Letter writing and voting is essential to change. Educational forums are needed in communities. Citizen movements need to begin as there is going to be much change within the next three years. We need to make sure that the public is heard.

Long-Term Care in Massachusetts: Problems, Causes, and Solutions

Session 3

Keynote Speaker: Alan Sager, Ph.D., Faculty, Boston University School of Public Health

Panelists: Mary Ann Outwater, R.N. Director, Assisted Living Development,

Covenant Health Systems

Al Norman, MAT, Executive Director, Mass Home Care

Presentation Summary

Dr. Sager began his presentation with a discussion of general problems surrounding Long Term Care. The problems he enumerated are as follows:

1. Currently, there is a greater need for LTC as the population has more seniors who are living into advanced years with the additional probability of having increased disability.

2. Families who use to provide most of the long term care are less available. Families may live in distant places or may be economically bound to earning two incomes.

3. Other families are reconstituted through divorce and remarriage so the issue of obligation to elders may be blurred.

In spite of the above, families through their own efforts are providing 70 to 80 % of the long term care in this country.

Specific problems with long term care are as follows

1. Insufficient dollars are invested in limited options.

2. Inadequate payment rates are paid to all providers.

3. Seniors need to be impoverished to receive state help. Currently 5% of seniors over the age of 65 are in nursing homes.

LTC is paid for either privately or through the state Medicaid program. Medicaid spends 90% of its long term care dollars on nursing home care while 10% is spent on home care. People want home care. The orientation towards nursing home care comes as a result of government feeling obliged to care for the most disabled people in Nursing Homes where costs can be spread over many services. It is expensive to bring the needed services into the home unless there is family to carry a major share of the work. For example, one nurse can cover many more patients in a nursing home than she can if she must do home visits.

Payments to all Medicaid providers particularly nursing homes are very poor. Salaries for those who provide chronic care to patients are among the lowest of all employment groups. The payments simply are not keyed to what is needed to provide good care. As a result care is not always adequate.

Dr. Sager suggested the following solutions to current LTC problems.

1. A long term care benefit through Medicare is needed. This was discussed a decade ago by Congress, but has not been raised recently because health care costs have been escalating out of control. Dr. Sager feels the first health problem that needs to be resolved is drug expenses. He feels the drug program is so onerous that until it is fixed no one can contemplate LTC benefits.

2. Private LTC insurance should be available to all. Current premiums are very high.

3. Alternative Housing such as Continuing Care Retirement Communities and Assisted Living need to be available and affordable.

4. Reverse Mortgages are an option for home care.

5. Acute care monies need to be diverted to long term care. Dr. Sager feels we squander money on acute services which invariably are not needed for seniors and we waste money on administrative health care expenses.

6. We need to prevent fraud and invest that money in LTC.

7. We need to establish a Time Bank.

People who care for others would be able to bank their hours. When they needed

care for themselves, they could withdraw hours at no charge from the bank.

Mary Ann Outwater supported the issues raised by Dr. Sager. She stated that "there are no easy answers and we are all in this together". LTC providers are in "the trenches" and currently the number and complexity of referrals are staggering.

The shortage of RNs and all staff is a problem. Some people say "There are no nurses in nursing homes!" We need to change the laws about what must be done by nurses. Some of it could be done by others. LTC is now mostly done by people form other countries----they need training, decent pay, benefits and instruction in English.

She pointed out that another new burden on the LTC system is Alzheimer's disease. Cognitive impairments require LTC. It is worth our while to invest in cures.

Al Norman stressed that LTC is not necessarily medical care. It involves health and support services and has to be viewed, organized and funded around this knowledge. Acute care is short term and episodic. Long term care is chronic and does not end.

There are four problems around LTC, they are:

1. Money for long term care is not patient centered. It is fragmented and disorganized. It is allocated to services not human need.

2. LTC in Massachusetts is overly reliant on institutional care; 90% of Medicaid LTC funds go to Nursing Homes.

3. The State ignores the consumer preference to have LTC at home.

4. By sending people who want to remain home to Nursing Homes we are violating their civil rights. This was affirmed by the Supreme Court in the Olmstead decision.

A better way of approaching long term care is by allowing dollars to follow the patient. This is a principle endorsed by President Bush. Instead of allocating funds to settings such as nursing homes or home care, money should be allocated to individuals to be used in settings they choose. This concept is being referred to as "equal choice". The Mass Legislature has a bill before it to allow LTC dollars to be used for individual choice.

Clearly state dollars for LTC belong to the poor. Those who are wealthy can afford LTC. Those in the middle have to rely on private long term care insurance, which can be too costly, incomprehensible and unavailable to the disabled. Or they must spend their money until they become impoverished and eligible for State support.

A LTC product organized on the model of Prescription Advantage is needed for the middle class. However, government must also be committed. Governor Romney has just cancelled Prescription Advantage.

Our LTC system should allow people to move back and forth from home to hospital to nursing home and back home again if feasible.

Financing Health Care & Eliminating Fraud

Session 4

Keynote Speakers:

Michael S. Dukakis, JD, Faculty, Political Science Department. Northeaster University and Visiting Professor UCLA School of Public Policy, and Social Research

Malcolm K. Sparrow, Ph.D. Faculty, John F. Kennedy School of Government, Faculty Chair, Executive Program Strategic Management of Regulatory and Enforcement Agencies

Presentation Summary – Governor Dukakis

Governor Dukakis began by pointing out that seniors and the chronically disabled are the only ones who have universal health care, which is provided through Medicare. However, the way the health system works, the uninsured have universal care when they become sick enough to go to an emergency room. They are not turned away. Emergency room treatment is expensive (approximately $1000 a visit), inefficient and usually is prompted by serious illness. The patient usually has no medical record so expensive work-ups are sometimes required to understand his medical status. Treatment, while helpful, can be too late to ameliorate the major problem. The bill goes to the free care pool. This ultimately results in increased rates to employers. Premiums are rising by 15% per year. Seventy-five percent of employers are paying for health insurance and, therefore are paying the bills for the 25% that do not cover their workers. There are 600,000 uninsured people in this state, many of whom are working.

It puzzles the governor that we have not come to grips with the situation. When vocational injuries were occurring at a rapid rate 100 years ago and lawsuits against employers were escalating, the first Workmen’s Compensation Act was passed. Under this all employers have to contribute to the compensation pool which covers medical care and unpaid work time for injured workers. Why has healthcare not had the same approach?

In 1912 Theodore Roosevelt first proposed universal health care. In 1916 Governor McCall and Lieutenant Governor Calvin Coolidge of Massachusetts proposed universal health care for Mass.

President Truman proposed it in 1945, Nixon in the 1970’s and Clinton in 1993. Universal health

coverage was passed under the Dukakis administration in 1988. Implementation was phased in over a three-year period but at the end of that time Governor Dukakis was no longer in office. Governor Weld, along with small businesses were not in favor of it. It was repealed.

In Governor Dukakis’ view, universal health needs to be mandated through an employer paid system. He chooses this rather than another payment system such as single payer because this one is in place. He feels premiums will increase more slowly when people have primary care versus emergency room care. This will not happen without a government mandate. Opposition will come from the small business lobby and from small insurance companies. Small insurance companies do not want to be mandated to insure anyone but the healthy who enable them to have higher profits. These companies now set up pre-existing conditions by which they refuse coverage.

Health care inflation will not be curtailed by a universal health system alone. Governor Dukakis believes that the huge expenses acquired in billing and meeting the demands of insurance companies have to be controlled. Everyone has to have a standard contract. Bills should be bundled together and sent to a central clearinghouse for payment. This is what is done in the banking industry around check processing. Many insurers agree that this is the way to proceed. They also acknowledge that it will not happen without a government mandate.

However, it is Governor Dukakis’ final opinion that we can not come to grips with health care costs until we cover all people and enable them to have primary care

Presentation Summary – Professor Sparrow

Fraud is a difficult problem to study because it is invisible. If it is not caught at its inception then it usually takes time to discover it and only through an aggregate of events.

A computer study of a provider network was undertaken in Florida. The network had 122 providers and 181 patients. The computer discovered that all of the providers had served all of the patients. That is an extraordinary amount of care. Surveillance was done on this situation, and it was discovered that a busing operation paid Medicare patients to go from clinic setting to clinic setting. Little if any care was given but billing was done for all of them. Other providers were found to be billing for people they had never seen. In this particular Florida situation $326 million was billed and 120 million was paid. This study has not been repeated elsewhere so we are only left to imagine how many other fraudulent operations exist. This kind of fraud is easy to perpetrate because all billing is done electronically. One only needs to understand the billing

system and have a license. If the biller makes a mistake, the electronic system tells him how to correct it. Fraud is very easy particularly when no human being is involved in the process. Lying is acceptable as long as it is done correctly.

Organized crime and drug dealers are entering the billing arena because money can be made easily and safely. Our billing systems have been created for honest doctors but have been perverted by the dishonest few. The health care industry does not see this as a problem. They view overpayments or payments for people who have not been seen as billing errors not fraud. Consumers are very frustrated by fraud. When they read their statements and learn that providers they have never seen are being paid, it is difficult to find someone to deal with this.

Medicare projects that 7% of their health care dollars, or some 100 billion dollars, are lost to fraud each year. If this is the same for other insurers, the amount is astonishing when we consider that 1.4 trillion dollars is being spent on health care.

Medicare has set up a system to report fraud. Their hotline directs the consumer back to the provider. If the provider is committing fraud, then they apologize for the “mistake” and promise the consumer that the error will be corrected. Of course it is never done and the government is none the wiser.

Dr Sparrow says that nothing serious will happen without government mandates. Fraud drains dollars meant for care. Government needs to learn how to identify criminal activity from honest

billing. Until such a time, fraud will continue.

Prescription Drugs: Why So Costly?

Session 5

Keynote Speaker: Marcia Angell, M.D., Harvard Medical School, Former Editor –in-Chief, New England Journal of Medicine

Panelists: Frederick J. Vinick, Ph.D., Senior Vice President. Drug Discovery, Genzyme

Corporation

Nicole G. DeVita, R.Ph, MPH, Director of Pharmacy, Partners Community Health Care, Inc.

Keynote Address – Marcia Angell, M.D.

The United States spent $170 billion on drugs last year. Costs are anticipated to rise 14% a year. Factors determining this are that more people are taking drugs; new drugs are more expensive than old ones; and the old ones are increasing in price. The average price for a top selling drug is $100.00 a month

The drug companies, on the following basis, defend increasing costs:

1. High prices reflect the enormous costs of research and development The industry says it takes $802 million dollars to bring a drug to market. Dr. Angell feels this is a bogus figure. National data indicates that pharmaceuticals spend 19% of income on Research and Design; 35% of income goes for marketing and executive salaries, while 19% of revenues are for profits. The profit figure is 3.3% for other U.S. industries. Prices could go down and there would be sufficient funds for research and development.

2. High prices are reflective of other cost savings i.e. Drugs keep people out of hospitals.

Dr. Angell says there is no way to study the accuracy of this assertion.

3. Profits are high because this is a risky innovative business. Lawsuits abound. Price controls

would deter initiative and innovation. Dr. Angell went on to assert that the drugs companies

are not innovative inspite of their costs.

Dr. Angell informed the audience that 100 new drugs are produced a year. However, only 20 of these are new molecular compounds. The others are variations on old drugs. A molecule in one drug may be changed to make it a new drug. These are called “Copy Cat” or “Me Too”: drugs. For example, Nexium, which is advertised as the “purple pill” has had a molecule changed to make it different from Prilosec, which has gone off patent. It does the same thing as Prilosec. A lot of money is being spent convincing people that Nexium is better than Prilosec. This is not proven. However, Nexium is far more expensive than Prilosec. It is possible to receive approval for these new drugs from the FDA because the FDA only requires that the new pill be more effective than a placebo (sugar pill) There is no requirement to prove that it is better than the less expensive one it is trying to replace.

Last year only seven drugs were classified as being improvements. The rest were “Me Too” drugs. New drugs are being developed by the National Institute of Health, medical centers, or small biotechnology companies. Drug companies are given the right to patent, make and sell these drugs for a limited period of time. For example the National Cancer Institute which is part of NIH developed Taxol (used for treating cancers) from the Yew tree. Because the Yew tree is not in abundance, a synthesized form of it needed to be developed. Florida State University did this. The government gave Bristol Myers the right to patent and sell it in return for royalties. Bristol Myers was able to keep 90% of the profits. When innovative drugs are developed, this is usually the way it is done.

Research and development dollars in the pharmaceutical industry are going to “Me Too” drugs and the enormous effort it takes to market them. “Me Too” drugs are designed to move in on

blockbusters. Blockbuster drugs are usually for chronic conditions and are sold to large numbers of people. An example of this is anti-depressants. The original anti-depressants were based on NIH research. Now there are many “Me Too” anti-depressants. These companies are not interested in developing drugs for rare diseases or third world diseases as there is not enough money in it.

Drug Companies insist on the right to set prices and decide what to develop. However, the industry is increasingly dependent on federal research and exclusivity patents coming from it.

This is not an innovative industry except when it comes to extending patents. Each additional year secured on a patent is worth $800 million. The Hatch-Waxman Bill, passed several years ago allows them 30 additional months of patent time if they sue a generic company planning to make the drug. Now drug companies can patent several attributes of a drug and then can sue the generics on any of these attributes. In addition Congress has granted 6 more months of patent time if a drug company agrees to test the drug on children. It takes a long time for a drug to come off patent. In some cases, the pharmaceuticals pay generic companies not to get into the market on specific pills. When a drug comes off patent, the drug company will make another drug having minor changes but doing the same thing as the old one. Enormous amount of money are spent on advertising and large discounts are given to medical centers in order to get the public to switch to the more expensive drug. Nexium is a prime example of this.

Response – Fred Vinick, Ph.D.

Dr. Vinick agreed with Dr. Angell’s comments. He did make some remarks in defense of the pharmaceutical companies. He stated that the $800,000 million it costs to make a new drug takes into account all failures. Drug companies do not want to take high risks because of stock market investors. If something goes wrong they stand to lose money. Drug companies are competing with all other industries for investors. Taking risks can cost them investors. Lawsuits are also a certainty if innovative approaches go wrong. It is easier to play it safe.

Dr. Vinick feels that government needs to regulate the things that interfere with innovation.

Response – Nicole DeVita

Ms DeVita is responsible for educating physicians in the Partners Group about which are the best drugs for the cost. People lose track of actual costs of drugs because they are usually only responsible for co-payments. They are often told that generics are not good enough. Generics must pass FDA approval and provide the same intended clinical effect as the original drug. They are must less expensive. Therefore, patients should be asking if generics are available or if there is another generic available in the same class of drugs. She also spoke about Nexium and said that Astra Zeneca, which produces this, gives it to MGH free of charge for inpatients and free care patients. Clearly if a patient starts on this they will not want to give it up when they leave the hospital.

She advised people to shop around for the least expensive drugstores and to choose one. It is important for one pharmacy to know all your drugs in case of adverse interactions. She also advised people to evaluate all insurance options along with the cost of their drugs to see which is least expensive. She recommended mail orders drugs which are safe, easy to get, and cost less.

All drug companies have free care programs. Forms are available through physicians’ offices. Some drug companies have discount cards which are worth 20% off a prescription, but they are only good for the drugs they produce.

She feels that if people made lifestyle changes many drugs would not be necessary. Other medical drugs would not be necessary if people were compliant with the ones they have.

She is opposed to purchasing drugs from Canada or Mexico. This is illegal; there is no quality assurance and one could get a substitution and not the needed substance.

Ms. DeVita recommends that we let out legislators know we will not vote for them if they support the pharmaceutical companies in their lawsuits of generics and if they do not support the re-importation of drugs safely.

Health Care: Where Are We Headed?

Session 6

Moderator

John J. Sullivan, JD, Boston College Law School, Partner, Hall and Sullivan, Attorneys at Law

Panelists

Alan G. Macdonald, JD, Executive Director, Massachusetts Business Roundtable

Senator Susan Fargo, MAT, MPA, State Senator Fifth Middlesex, Member Joint Committee on Health Care

Presentation Summary – Alan Macdonald

The Massachusetts Business Roundtable was formed in 1979. Its membership was comprised of the 50 largest employers in Mass. Today it has 75 members, many of which come from the service sectors such as healthcare and education. As many large industries have closed, the education and healthcare fields have become the major employers in the state. The purpose of the roundtable is to take a long-term look at major issues such as healthcare, education, energy etc. and to make helpful recommendations to government.

Healthcare became a major issue to the Roundtable in the 1980’s as costs began to escalate. Through the efforts of the Roundtable, the legislature passed legislation placing caps on hospital costs. For five years the hospitals were heavily regulated. However, it then became clear that other areas of the industry needed controls so that business could project their expenses. Therefore, the Roundtable supported HMO’s. HMO’s and actuarial tables could predict the kinds of occurrences that would need medical care and project expenses based on that need. Delivery of care would be managed by the HMO to avoid duplication and other costly issues. Therefore, expense could be projected. This seemed to work well in the early 90’s and prices came down. However, there was a backlash from employees who wanted to go outside the HMO system. When this happened, there was no way to predict use outside of the system, and costs could not be controlled.

Health insurance is not taxed for employees. If companies were to provide food, shelter, or clothing, it would be taxed. For this reason there has been more pressure from unions to get

increased health care benefits rather than salary increases

National and state roundtables believe in universal health care. It is more humane. However, the question is how to pay for it. Business worries about the results of an abrupt change if we went to a single Payer system. In 2001, $42billion was spent on health care in this state. The Roundtable commissioned a study that told them that more than this amount would be needed for a Single Payer System. In addition, business fears that if we move to cover everyone, there will be an enormous problem because people will expect too much and will not be happy with limitations on health care. Therefore, business wants incremental change.

Business wants health insurance to be health insurance. All other insurances (car, house etc.) cover extreme situations. Health insurance covers from the first dollar spent. There are people

able to pay who are shut out from paying because of the coverage. The goal is to educate business, government and individuals that they are the insurers. The cost ultimately comes back to them. Greater participation from the enrollees is needed. Business is in international competition and cannot compete with foreign prices when their own costs are too high. Healthcare is a part of this.

Business believes that if individuals want to benefit from high technology and be cared for by teaching hospitals rather than community hospitals, then there has to be a cost to them. Allow people to have choice but at a cost. Business is about incentive. Give people incentives to pay for health care choices or else they will get regulatory control.

Presentation Summary – Senator Susan Fargo

Senator Fargo outlined how Mass. had been first in innovations in healthcare in the past. However, we are now suffering from an increase in the uninsured, increases in drug prices, loss of nurses, and closure of community hospitals. We have no leverage to deal with drugs and pharmaceuticals; Medicaid has become the second largest item in the state budget after education.

We are losing the brightest and the best of our students who are educated in this state. They leave

because of the high cost of living. Businesses leave because of heath care costs and their inability to attract the educated labor force.

The evening before this presentation, the legislature had passed the budget which is now on its way to the governor’s desk. Within this budget were some healthcare issues. The budget contained provision for the Prescription Advantage Drug Program for seniors. It restored access to Mass Health (Medicaid) for 36000 who had lost coverage. And it bailed out the free care pool which pays hospitals for uncompensated care.

In the future, the legislative committee on healthcare will be looking at legislation to deal with nursing/patient ratios and the demand that nurses work back to back shifts. It will also consider the fact that the state has no plan to deal with ailing community hospitals and with the loss of skilled workers and doctors. The Healthcare Committee will also try to deal with the cut back in Aids and Hepatitis treatment funds and with the fact that more money is being spent on nursing homes rather than on home care.

Panel Discussion – John Sullivan, Moderator

John Sullivan praised the Health Care Forum series and announced that the Murphy Foundation, which is devoted to providing education in Winchester, has voted a grant of $5000 to the Council on Aging to go continue with this education in health care.

Senator Fargo and Mr. Macdonald agreed that jobs, education, affordable housing and transportation affect the economy and this in turn affects healthcare.

Many retired employees were given, by their companies, the promise of health care for their

senior years. Companies have broken this promise because of severe financial losses or, in some cases, going out of business.

The “Nursing Home User Fee” was discussed. Senator Fargo agreed it was a tax on private pay patients who had planned for their long-term care. The tax was levied on nursing homes which in turn levied it on private pay patients to the tune of $3000 a year. The State can use this money to get additional federal funds for Medicaid. Senator Fargo voted against this. She said it was an unfair tax, but pointed out that the legislature saw it as a way of getting more federal dollars.

Prepared by Ruth C. Young, Administrator, Council on Aging

Top