Archive for November 13th, 2010

Dr. Alan Preston Offers Perspective to Previous Post on This Blog

Saturday, November 13th, 2010

In the article “Health Insurers, Drug-makers Oppose Repeal of Obama Healthcare Overhaul”, the title suggest that health insurers and drug makers love what is in the bill.  That is not an accurate representation for anyone who has come to that conclusion.  If you pay me a million dollars next week, and in doing so, you bankrupt my neighbors and friends, I may recognize the damage you are doing around me; however, I benefit so much financially, I would never want you to reverse your course.  Therein is the issue with this reform bill.  It will benefit a few and benefit them substantially at the unsustainable level of the many.  Those who benefit are not for the reform bill per se, they are for the financial windfall it may create for them.

I would love the government to create a program that requires all Americans to have an insurance policy that guarantees that when you buy my product, someone else will pay the bill and eliminate any likelihood that I will ever have bad debt.  That would be a tremendous benefit to me. I would also get very rich in the process even if it did hurt many people along the way. And as long as I am doing well, why do I care if others are harmed in the process?

Well, we need to care.  It is ok for individuals to benefit at a greater or lesser level than others but it shouldn’t be that I benefit at your expense or demise. Somehow, that just doesn’t resonate with me. 

How does a government benefit by having this reform in place?  Well for some, the ideology is that it will benefit those who cannot afford health insurance and then allow the same individuals to access their healthcare needs for free.  Medicaid programs provide such a safety net now and states are struggling how to continue to finance this program.

 Providers that care for these people complain that they do not get enough from the government and want more.  They seem to forget that if the tax payers did not support the Medicaid program, they would receive little to nothing from the person obtaining their service.  Since doctors are considered “rich” under the Obama administration, the desire is to tax them more so we can pay for programs like Medicaid which will provide free care to the poor and continues to provide a financial benefit to the doctors.

The other political ideology is that the government should run healthcare and anything the government can do to destroy the private insurance system will make people believe that they need to depend on the government for insurance solutions. This way, those in power can stay in power because they will try to convince people, through scare tactics, that if the party that brought you the benefit must stay in power or you will lose the benefit by switching parties.

 That ideological thinking suggest that all business is greedy and they exist to benefit the business to the exclusion of all others. They think the government is about the people helping the unfortunate by going after all the greedy businesses and greedy “rich” people in society and punishing them for their “greed” by taxing them more and wiping them out (i.e. insurance companies) though policy like Obamacare. This way, there is an appropriate balance in society and the rich can never get too rich and the poor never have to suffer too much.  Unfortunately, those who think that way really do not understand how a business works or how a society is motivated to create solutions. 

The article says  “The (healthcare) system is broken now …,” said Fowler, the policy deputy director at HHS’ newly formed consumer and insurance office. “We may tweak (the law), but overall it is a very positive direction forward.”  Statements like these are designed to pull on emotional strings of people.  Our system is far from broken.  We have a quality healthcare system.  Most heads of state around the world come to the US when there is a need for serious healthcare.  Would they come here if the system was broken?

 The system costs a lot and if that is the definition of a broken system, then Obamacare is going in the wrong direction.  It adds to the costs of health insurance.  Taxing the healthcare supply chain and mandating additional benefits will have to be paid for by the users and they will see premiums go up to pay for the additional benefits and pay for the increase in drugs and medical devices due to the added taxes of such. If cost is the reason it is broken, then Obamacare just added to the costs and broke it even more. In addition to the increased direct costs in the form of insurance premiums, there are other costs to consumers; increased taxes to pay for all of the subsidized care and that will not be cheap.

 Dr. Alan M. Preston

Alan M. Preston, MHA, Sc.D.

   Healthcare Policy, Biostatistics, Epidemiology

Editor’s Note: Dr. Preston can be reach via email at .

Health Insurers, Drugmakers Oppose Repeal of Obama Healthcare Overhaul

Saturday, November 13th, 2010

By Susan Heavey
November 12, 2010

Copyright Reuters

Repeal reform? No thanks, say health insurers, drugmakers and others looking for a clearer picture of the U.S. healthcare market after the bruising passage of the controversial overhaul law.

Company executives at the Reuters Health Summit this week said the law is far from perfect and said they will push for more steps to tackle stagnant health information technology and skyrocketing costs.

But after two years of debate over the issue, they need to move forward with clear steps on how to realign their businesses.

The new healthcare law created “a stable, predictable environment, however painful it has been in the short term,” GlaxoSmithKline Plc’s Chief Strategy Officer David Redfern said at the summit in New York.

“When you are running a business, the hardest thing is changing policy and a changing environment because it is very difficult to plan, predict and ultimately invest in that sort of scenario,” he said, echoing other speakers.

The industry’s assessment comes a week after U.S. elections saw gains among Republicans, who take over part of Congress in January after campaigning with a promise to repeal the healthcare overhaul passed by Democrats in March.

Few executives and industry experts anticipate any substantial changes to the overhaul despite the heated debate.

Uncertainly has plagued the sector since President Barack Obama won the 2008 election and pledged to revamp the nation’s $2.6 trillion healthcare system and help the uninsured.

The resulting law enacts major changes on insurers, from consumer protections and more company taxes to new spending rules. It also requires people to buy health policies or face fines starting in 2014, among other provisions.

Health officials must still hammer out how to implement the law and finalize hundreds of new rules and regulations. Many such details are key, as the sector looks to adjust its business for 2011 and beyond.

Republicans have vowed to repeal the law, though some have said they more realistically will have to target either specific parts of the measure or its funding.

“Anti-reform made good talking points before the election,” said the Department of Health and Human Services’ Liz Fowler, adding that people “will find more to like than to dislike” in the law once it is more in place.

“The (healthcare) system is broken now …,” said Fowler, the policy deputy director at HHS’ newly formed consumer and insurance office. “We may tweak (the law), but overall it is a very positive direction forward.”


Even insurers, which were vilified by Democrats in passing the reforms, said they don’t want a repeal, even as they push for clarity on forthcoming rules and seek additional changes.

Cigna Corp. CEO David Cordani and Aetna Inc. President Mark Bertoliniboth urged the nation to move forward on the overhaul.

So far, insurers are awaiting rules that limit how much they can allocate toward medical care versus administrative costs and profits. The rules take effect in January, weeks before any shift in Congress.

Republicans, who won control of the U.S. House of Representatives, will likely hold hearings and launch probes although Democrats in the Senate, and Obama can block attempted changes to the law.

Kris Jenner, portfolio manager at T. Rowe Price Healthcare Sciences Fund, said having Republicans in greater power should reduce pressure on industry.

“That level … negative rhetoric is likely to be scaled back. And from a stock level, that is a positive,” he said.

Since the start of 2009, the Morgan Stanley Health Care Payor index has risen 75 percent, outperforming a roughly 35 percent rise for the broader Standard & Poor’s 500 index.

“There should be less bark, if you will, out of Congress,” Jenner said.


Unlike insurers, drugmakers have escaped largely unscathed under the law, although there is still incentive to shape it.

“There are a couple things we don’t like about it,” said AstraZeneca Plc CEO David Brennan. “But in the end … no law is going to be perfect.”

Pharmaceutical companies cut a deal with Democrats to offer some discounts and pay billions in taxes to help fund the overhaul.

That means largely the status quo for sales, but a major chance to help mold other, seemingly more obscure parts of the law that may boost the industry as scrutiny over healthcare spending increases over time, said IMS Health’s Murray Aitken.

He urged drugmakers to try to influence the law as it is implemented over the next few years. “Don’t stand by and wait for this,” said Aitken, a senior vice president for the drug industry tracking company.

Drugmakers, such as Pfizer Inc. and Merck & Co. Inc., should target the Medicare advisory board aimed at cost-cutting and another comparative effectiveness group that will compare medications with each other as well as with other treatments.

All could eventually shape doctors’ use of pharmaceuticals, Aitken said, even though most increased use will be generic.

(Reporting by Susan Heavey; additional reporting by Lewis Krauskopf; editing by Gerald E. McCormick)