Healthcare

Opinion/Analysis: You’ve probably never heard of anti-competitive ‘certificate of need’ laws but they’re harming your health care

Imagine if a state law prohibited new restaurants from opening in your town unless an aspiring restaurateur successfully convinced the government that the area “needed” another eatery. Now imagine if that law didn’t stop there – that it also gave incumbent restaurants a say in the matter. If one could persuade the government that a new entrant would harm its interests – or could marshal its employees to lobby the state to protect their jobs – then that new restaurant would never open. Freed from competition, existing restaurants could hike prices or reduce service. And there would be little diners could do about it. Such laws actually exist. But they don’t govern restaurants. They prevent new hospitals and clinics from being built. These anti-competitive statutes, known as “certificate of need” (CON) laws, are driving up health care costs across the country. It’s time to repeal them. New York enacted the first certificate of need law in 1964. State lawmakers feared that hospital groups would build too many facilities and pass the cost of creating and maintaining excess capacity on to consumers. So they required health care providers to seek permission before constructing or expanding hospitals or clinics. In 1974, the federal government effectively forced states to put certificate of need laws on their books as a condition for receiving federal funding. But instead of keeping health care prices stable, CON laws concentrated market power with incumbent providers, who then gouged consumers. On average, U.S. hospital spending grew at a 14 percent annualized rate during the 1970s and a 9.6 percent annualized rate over the course of the 1980s. The federal government repealed its CON law requirement in 1986. Since then, 15 states have abolished their statutes. But 35 states and the District of Columbia still enforce them. And their residents pay a heavy price. Those 36 jurisdictions have 99 fewer hospital beds per 100,000 people than non-CON states, according to a study from the Mercatus Center at George Mason University. Patients in CON states also travel farther to receive health care. And they pay a lot more for it. Per capita health spending is 11 percent higher in states with CON laws than in those without them. These anti-competitive laws make it particularly hard for rural patients to access care. There are 30 percent fewer rural hospitals per capita in states with CON laws, according to another Mercatus study.

Thanks to Sally C. Pipes for that piece.  Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is “The False Promise of Single-Payer Health Care” (Encounter 2018). Follow her on Twitter @sallypipes.

Elizabeth Warren on Drugs

Elizabeth Warren is grasping. Having failed in her gambit to establish minority status, the 2020 presidential contender is now following the path of her competition. As Kamala Harris did with the housing crisis, Warren has picked a very real issue — the expense of generic drugs — and decided to address it with a bill that is unlikely to achieve much except gain her personal accolades for “doing something.” And should it pass, it could inhibit efforts to actually resolve the problem, because “something has been done.” Senator Warren debuted her plan before the holidays in the Washington Post, with the title “It’s time to let the government manufacture generic drugs.” Perhaps the senator thought this would generate buzz and capture attention before she officially launched her bid for the presidency on New Year’s Eve. Given that she followed this announcement with a botched attempt to out-Millennial Alexandria Ocasio-Cortez in an online video, though, perhaps it isn’t going as she desired. Here’s the real problem Warren is trying to address: There were 356 drug shortages in 2012, up from 154 in 2007 — and strikingly, most of these drugs are no longer under patent. That tells us that the critical problem is not one of manufacturing capacity, for any medical company with the capability to produce these medicines could simply do so, using the relevant formulas. The normal behavior of the market, when there is a shortage of a product, is for a new entrepreneur to start providing that product. The fact that this is not happening suggests there must be some barrier in the way of it. For each new generic drug, the manufacturer must submit an Abbreviated New Drug Application (ANDA), whose very name reveals that it is itself an improvement on an older process. Before 1984’s Hatch-Waxman Act, new generics had to go through the full clinical trials required of a new medicine, even though they were simply a new source of the very drug that had already been chemically approved. The ANDA pathway is quicker and cheaper, requiring a manufacturer to show that the generic is “bioequivalent” to the brand-name product and that it meets manufacturing standards. Even so, the ANDA pathway is an expensive process, and its cost has increased from about $1–2 million in 2005 to $15 million in 2015. The process isn’t limited to new providers, either. Should an existing manufacturer want to supply more of its approved medicine, it must go through the approval process again for any new production lines or factories. As a result, it can be too costly to make up the shortfall in supply. The issues don’t end there. Sometimes, even if a generic manufacturer is willing and able to take on all the costs of this process, brand-name manufacturers can effectively put a stay on generics by preventing generic manufacturers from obtaining samples. In other cases, brand-name drug manufacturers will pay generic manufacturers to stay out of the market. The fact that some critical yet out-of-patent drugs have only a single generic manufacturer has created an opening for speculators who buy decades-old basic medicines and raise the prices dramatically — most infamously in the case of Turing Pharmaceuticals, which purchased the rights to a $13 pill and immediately raised its price to $750. This behavior is not the market in action; it is the manipulation of a regulatory regime for financial gain. Clearly, something is very wrong. A solution is necessary. But rather than tackle the dense and boring problems that are holding back access to essential drugs, which can’t really be boiled down to a stump-speech line, Warren proposes that the United States government start producing generic drugs under the auspices of a new “Office of Drug Manufacturing,” which would pass off its products to cooperating private companies. In effect, assuming that the office operates at least as well as the average private manufacturer (unlikely though that is), this would simply mean the creation of a new drug company, albeit one with a public imprimatur. This new company, however, would run into the same hurdles that are faced by private actors — the text of the bill does not lay out a regulatory exemption for this new state-run firm, after all.

Bernie Sanders’ ‘Medicare for all’ bill estimated to cost $32.6T, new study says

The “Medicare for All” plan pushed by Sen. Bernie Sanders and endorsed by a host of Democratic congressional and presidential hopefuls would increase government health care spending by $32.6 trillion over 10 years, according to a new study. The Vermont senator has avoided conducting his own cost analysis, and those supporting the plan have at times struggled to explain how they could pay for it. The study, released Monday by the Mercatus Center at George Mason University, showed the plan would require historic tax increases. The hikes would allow the government to replace what employers and consumers currently pay for health care — delivering significant savings on administration and drug costs, but increased demand for care that would drive up spending, according to the report. According to the report, the legislation’s federal health care commitments would reach approximately 10.7 of GDP by 2022, and rise to nearly 12.7 percent of GDP by 2031. But the study, conducted by senior research strategist Charles Blahous, said that those estimates were on the “conservative” side. Sanders’ plan builds on Medicare, the insurance program for seniors. The proposal would require all U.S. residents be covered with no copays and deductibles for medical services. The insurance industry would be regulated to play a minor role in the system. Sanders is far from the only liberal lawmaker pushing the program. 2020 hopefuls like Sen. Kamala Harris, D-Calif., and Sen. Elizabeth Warren, D-Mass., endorsed a “Medicare for all” program last year. Political newcomer Alexandria Ocasio-Cortez, who beat House Democratic Caucus Chairman Joe Crowley, D-N.Y., in a recent upset primary and instantly became a prominent face of the democratic socialist movement, also is promoting a “Medicare for all” platform. “Enacting something like ‘Medicare for all’ would be a transformative change in the size of the federal government,” Blahous, who was a senior economic adviser to former President George W. Bush and a public trustee of Social Security and Medicare during the Obama administration, said. Blahous’ study also found that “a doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

House votes to repeal ObamaCare’s medical device tax

The House of Representatives on Tuesday voted to repeal the controversial medical device tax created by former President Barack Obama’s 2010 health care law. “The House just voted to repeal Obamacare’s Medical Device Tax,” House Speaker Paul Ryan tweeted. “This bipartisan legislation will make healthcare more affordable and ensure Americans have access to the most innovative life-saving and life-improving medical technology.” The measure passed 283-132. The Senate would need to pass it before it could be signed into law by President Trump, who supports a repeal. The medical device tax was designed to help pay for the health care overhaul, which has expanded coverage for millions of people. It is imposed on equipment like artificial hearts and X-ray machines, but not items used by individuals, like glasses. It went into effect in 2013 but Congress had temporarily suspended it until 2020. Opponents of the repeal effort say taxes the law imposed on many branches of the health care industry were outweighed by the added customers the law has created. Supporters of repeal — including Democrats from states where the devices are made — say the tax drives up companies’ expenses and stifles innovation.

Agreed..  Glad to see this move by the House.  Let’s hope the Senate follows their lead soon.   🙂

Judge rejects bid by 18 U.S. states to revive Obamacare subsidies

A U.S. judge in California on Wednesday refused to block President Donald Trump’s decision to end subsidy payments to health insurers under Obamacare, rejecting a request by Democratic attorneys general from 18 U.S. states. U.S. District Judge Vince Chhabria in San Francisco sided with the Trump administration, saying the government does not have to make the payments while litigation over the subsidies unfolds. Chhabria, appointed by Democratic former President Barack Obama, wrote that although the case appears to be a close call “it appears initially that the Trump administration has the stronger legal argument.” The Trump administration this month terminated the payments to the insurers, which help cover medical expenses for low-income Americans, as part of several moves to dismantle Obama’s signature healthcare law formally known as the Affordable Care Act. Chhabria also said the kind of emergency order requested by the states was not necessary. “The truth is that most state regulators have devised responses that give millions of lower-income people better health coverage options than they would otherwise have had,” Chhabria said. “This is true in almost all the states joining this lawsuit,” the judge added.

Exactly!!  Kudos to this Democrat judge for seeing through the bs.  This is another huge win!  Excellent!!

Trump declares Obamacare payments illegal; deals second blow to health law

The Trump administration announced late Thursday that it has concluded it can no longer legally make critical Obamacare “cost-sharing” payments and will cut them off, dealing another blow to the struggling 2010 health law. The payments had specifically been denied by Congress but President Obama had made them anyway, drawing a rebuke from a court who said he was overstepping his powers. The case has raged for months, and both the Obama and Trump administrations had continued making payments — until now. White House press secretary Sarah Huckabee Sanders, in a statement, said the Justice Department has concluded the judge’s ruling is correct, and there is no valid legal ability to make the payments. “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” Mrs. Sanders said. “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.” The White House statement doesn’t explicitly say Mr. Trump won’t make the payments anymore, but a Justice Department statement said the agencies responsible for them “have decided not to spend money to fund those payments.” The cost-sharing payments go to insurance companies to pay for reimbursements for low-income customers’ out-of-pocket costs. Without the payments, insurers have said they would jack up premiums, which would further upend the already shaky economic underpinning the Affordable Care Act. The move comes just hours after Mr. Trump signed an executive order pushing his administration to allow association health plans, which would allow individuals and small businesses to join up and purchase insurance on the group market across state lines.

This was exactly the right, constitutionally sound, move on the part of the Trump White House.  Obama had illegally raided the U.S. Treasury, and got slapped down by a federal court which found his actions unconstitutional, and actually a violation of ObamaCare itself!  So, Pres. Trump was exactly right for doing this, and sending it back to Congress, which is how it’s supposed to work.  Kudos to Pres. Trump for following the actual Constitution!  Imagine that..  To read the rest of this article, click on the text above.

Sen. Cassidy fires back at Kimmel in health bill feud: ‘Jimmy doesn’t understand’

Sen. Bill Cassidy fired back Thursday at late-night talk show host Jimmy Kimmel, as their feud over the health care bill the Louisiana Republican senator has co-authored extended into a third day. “Jimmy doesn’t understand,” Cassidy told “Fox & Friends.” The host of ABC’s “Jimmy Kimmel Live,” who delivered a memorable monologue in May when he revealed his newborn son’s heart condition, first took aim at Cassidy and his bill on Tuesday night. He said Cassidy “was not very honest” in an earlier appearance on his show. Kimmel said Cassidy coined the term, “the Jimmy Kimmel test,” which was summed up by Kimmel as: No family should be denied medical care, emergency or otherwise, because they can’t afford it. They agreed the test would mean no lifetime caps, Kimmel said. Kimmel claimed, “This guy, Bill Cassidy, just lied to my face.” The host doubled down Wednesday night, again accusing the senator of breaking a vow to oppose plans that allow insurers to turn back people with pre-existing conditions. But Cassidy said Thursday that his legislation, which he and Sen. Lindsey Graham, R-S.C., introduced, would “absolutely” be cheaper and better than ObamaCare. “Jimmy doesn’t understand, not because he’s a talk show host — because we’ve never spoken,” Cassidy said. “He’s only heard from those on the left who are doing their best to preserve ObamaCare. He’s not heard from me, because we’ve not spoken.” The senator has spoken to Kimmel; he appeared on Kimmel’s show back in May. Challenged on that point, Cassidy acknowledged he was on the show but seemed to say that he and the host have not spoken specifically about his latest bill, which he said would give millions to the states to help low-income families get access to insurance and care for pre-existing conditions. Amid the feud, the White House is trying to rally support for the legislation in hopes of a possible Senate vote next week. “This may well be our last best chance” to pursue health care reform based on “individual choice” and “state-based innovation,” Vice President Pence told “Fox & Friends” on Thursday. He added, “We have to recognize that ObamaCare has failed.” At its core, the bill would put ObamaCare’s financing for subsidized private health insurance and Medicaid expansion into a giant pot and redistribute it among states according to new formulas. States could obtain federal waivers allowing them to modify insurance market safeguards for consumers. This means states could set their own coverage requirements. The bill also would allow insurers to boost prices on people with serious medical conditions, end former President Barack Obama’s mandates that most Americans buy insurance and that companies offer coverage to workers, and cut and reshape Medicaid. The bill’s full impacts are difficult to predict because the Congressional Budget Office has not had time to assess it.

There ya’ go..  That’s the 2-dimensional analysis of the situation from the very liberal Associated Press (AP), a major player within the dominantly liberal mainstream media.  We’ve since learned that Jimmy, who isn’t exactly the brightest bulb on the Christmas tree, has been getting his monologue talking points from none other than Sen. Chuck Schumer (D-NY).  Sen. Bill Cassidy (R-LA) is also an M.D.  That’s right.  A Medical Doctor.  He also happens to be married to one.  Let’s be clear…  The Graham-Cassidy bill being sponsored by Sen. Cassidy and Sen. Graham (R-SC) is by no means the end all be all fix to the nightmare that is ObamaCare.  BUT..  It DOES fix a things, and yes, covers pre-existing conditions, etc.  And, it rightfully returns the control to the states in keeping with our wonderful 10th Amendment.  The question you have to consider is..  Would you rather listen to some canned talking points disguised as late not comedy (more like late-night rant) by some idiot like Jimmy Kimmel and use that as your guide for thinking through the complexities of the healthcare debate…OR…would you like to listen to professional opinion of a MEDICAL DOCTOR like Sen. Cassidy?  And just think..  There are a LOT of people who think that’s a difficult choice…