Will the Health Care Bubble Burst in 2019?

Posted on | August 7, 2018 | 4 Comments

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Mike Magee

In the dead heat of the summer of 2018, we’re experiencing an epic  “non-real fight” over “non-real work” with potential real consequences in 2019.

The initial battle lines were drawn some months back when Jeff Bezos, Warren Buffett and Jamie Dimon recognized a unique opportunity to dip into the wasteful troughs of American healthcare and targeted the control center of the Medical-Industrial Complex – the Pharmacy Benefit Manager. The PBM’s with original parentage from Merck, United Healthcare and CVS, are fast at work formalizing the rules of the syndicate game with hidden kickbacks that deal in everyone…except the patient.

Amazon, Berkshire and JP Morgan sees big money and a truck load of “non-real work” in the pushing and reshuffling of pills, data, and cash, and correctly is in the process of seizing opportunity. It’s a  “Why not us?” moment.

In response to Amazon’s move and CVS/Caremark’s grab for insurer Aetna, Cigna has made a play for Express Scripts. All this bottom-feeding capitalism understandably attracted Carl Icahn who has now launched a shareholder move to squelch the Cigna move (probably because he has shorted his position with Express Scripts.)

Icahn’s open letter states, “When Cigna entered into this agreement several months ago I believed a $60 billion purchase price made no sense, but there were at least arguments that could be made by management to try to persuade us into thinking that it was not completely ridiculous. These arguments now disappear in light of certain material events of the last month, such as Amazon’s almost certain entrance as a competitor to Express Scripts and the government’s direct challenge to the highly flawed rebate system. As a result, Express Scripts’ earnings will almost certainly be seriously diminished, but even more importantly, Express Scripts will be existentially challenged, i.e., their very existence might well come into question over the next few years.”

Carl is right about the existential challenge to Express Scripts, but wrong about the reason. It’s not Amazon’s competitive advantages in moving product, but disruption on a far greater scale that is the threat. The “health care bubble” now consumes 1 in 5 American dollars and is about to burst in three doable steps:

1. Single Payer: Centralizing purchase of universal insurance will shave 15% off the health care bill and relegate the Aetna’s and Cigna’s to government contracting and provision of supplemental health plans to cover services outside the basic benefit package.

2. Reference Pricing of Pharmaceuticals: Forget buying drugs from Canada. Instead do what Canada and all the European governments do. Set standard pricing annually for your list of approved drugs based on an average of seven or eight nation’s prices around the world.

3. Eliminate DTC advertising: Like every other nation in the world, a ban on this practice will radically decrease demand for pharmaceuticals, and secondarily challenge the concept that “fighting disease” is the same as “achieving health.”.

These three actions will not only disrupt PBM scheming on behalf of the Medical Industrial Complex, it will eliminate the need for their very existence. As for the “bubble”, plan to see $1 trillion of the current $4 trillion annual spend reallocated (wisely we hope) to other purposes over the next 2 to 4 years.

As for the “non-real workers” (there are 18 health care employees for every one doctor, and ½ of these are non-patient care related), you need not worry. They will follow the money elsewhere.

Carl Icahn is right but for all the wrong reasons. Amazon is neither salvation nor threat here. At best he’s a future government contractor. It’s the bubble with fall-out disruptive reform solutions waiting in the wing that he should be watching.

While You Were Sleeping – Majority of Physicians Now Support Single Payer.

Posted on | July 23, 2018 | Comments Off on While You Were Sleeping – Majority of Physicians Now Support Single Payer.

Mike Magee

During the dog days of summer, the Trump Administration has continued its attempts to dismantle the ACA, bit by bit. But in the process, they are inadvertently reinforcing  the foundations for more comprehensive reform supported not only by a majority of patients, but also now by a majority of their physicians.

Consider last year’s Kaiser Family Foundation’s analysis of the August, 2017 Merritt Hawkins survey of 1,033 US physicians which showed for the first time a plurality of US physicians favored movement to a Single Payer system. Compared to 2008, when 58% of physicians opposed such a shift, 56% now support it (42% “strongly”, 14% “somewhat”).

Merritt Hawkins attributed the shift to four factors:

1. Physicians are seeking “clarity and stability”. They believe “single payer” will reduce “distractions.”
2. There is a generational shift underway. “Younger doctors are more accepting.”
3. Physicians have become resigned that “we are drifting toward a single payer system” – so let’s get on with it.
4. There is a philosophical change occurring that increasingly embraces the societal value of universal coverage.

The Kaiser release also referenced a June 2016 American Public Health Association published proposal drafted by the Physicians for a National Health Program with now nearly 22,000 physician and medical student members. That proposal echoed some of the five Code Blue points – universality, single administration, local delivery, health planning, and inclusive transparency.

Specifically it also unveiled weaknesses in the incremental approach under the ACA including:

1. Not Universal: A CBO report predicting 27 million remaining uncovered by 2026.
2. Reporting Requirements: “Mind numbing” and time consuming requirements for documentation and reporting.
3. Administrative complexity”: Robs time with patients.
4. Limited comprehensiveness: A trend toward “skinny plans” which are little better than no coverage at all. Plus they push narrow physician and hospital panels.
5. Underinsurance: A tripling of deductibles and “punishingly high copayments” paid by consumer.
6. Failure to Control Costs: A decade of Republican attacks on ACA “has elicited ubiquitous gaming of risk adjustment and quality measure” incentives, spawning giant moves toward hospital and insurer consolidation.
7. Market-Based: “Any method of payment can create perverse incentives in a market-based system.”

You can’t cure crony capitalism with more capitalism – even if it comes from Bezos and Buffett.

 

Number of Separated Children Now 4,100 and climbing!

Posted on | June 30, 2018 | Comments Off on Number of Separated Children Now 4,100 and climbing!

As Health Commentary predicted this week, the number of missing children resulting from the Trump “zero-tolerance” policy would far exceed 2,300. New estimates by NBC News place the number at 4,100 and climbing. Will it be 5,000, 10,000, more? We don’t know.

From NBC News:

“Officials have said that at least 2,342 children were separated from their parents after being apprehended crossing the border unlawfully since May 5, when the Trump administration’s “zero tolerance” policy towards migrants went into effect.

But numbers provided to NBC News by the Department of Homeland Security show that another 1,768 were separated from their parents between October 2016 and February 2018, bringing the total number of separated kids to more than 4,100.”

ProPublica Has Mapped 97 Immigrant Children Retention Sites – Please Help!

Posted on | June 27, 2018 | Comments Off on ProPublica Has Mapped 97 Immigrant Children Retention Sites – Please Help!

ProPublica has established an open source registry to identify and map all immigrant children retention sites. So far, 97 sites all over the US have been verified. The Trump administration says there are only 2,300 children out there. But the Walmart site in Texas has 1,450 alone.

If you are caring for immigrant children in retention, register them with ProPublica HERE.

Doctors and Nurses – Called To “Bear Witness!”

Posted on | June 26, 2018 | 2 Comments

Mike Magee

Edmund Burke, a member of the British Parliament in 1787, stated “There are Three Estates in Parliament; but, in the Reporters Gallery yonder, there sits a Fourth Estate more important far than they all.” Even lacking formal recognition by the political system, Burke was acknowledging the “indirect but significant influence on society” of the news media or press.

Two hundred and twenty years later, in United States vs. PFC Bradley E. Manning, one expert witness described the “4th Estate as a “set of practices, organizing models, and technologies that are associated with the free press and provide a public check on the branches of government.” But he also was quick to note that modern day non-traditional journalistic media and Wikileaks were challenging well-accepted norms.

Trump, with the help of Bannon and the Russian government, have seriously undermined our “4^th Estate.” By confusion and obfuscation, they have successfully undermined public confidence in “the truth.” Of course, in unleashing these forces, unintended consequences redound to the perpetrators. For example, Americans question the number 2,300 for the number of missing immigrant children spread in the dead of night across the United States. Could it not as easily be 5,000 or 10,000 explaining why they had to be dispersed far and wide? After all, this is the same crowd that 10-fold understated casualties in last year’s Puerto Rican hurricane disaster.

Legitimate journalists are fighting hard to uncover the truth. But it’s an uphill battle as they follow the finger pointing from the DHS to ICE to HHS to the DOD. Is it incompetence, malevolence, intransigence? We don’t know.

What we do know is that our Executive Branch has been occupied and is on a tear to dismantle democratic institutions and expand autocratic control. Our legislature is feckless, and thus far unwilling to “check” the unbalanced. Our Judiciary is slow to catch up, awaiting perhaps a Muller-driven spark. And our “4^th Estate” for the time being at least, has been at least partially neutered.

One reason for hope is the emergence of a “5^th Estate” led by America’s doctors and nurses. Two decades ago, I had the benefit of serving as faculty at the Jefferson Medical College led by Paul Brucker, one of the early founders of the American Academy of Family Physicians. With his encouragement, our team identified the characteristics of 188 of the nation’s most proactive and empathetic health leaders. Their psychological profiles showed extraordinary scores in scales for Activity, Competence, Dutifulness, Trust, Assertiveness, and Altruism.

Last week, medical and nursing organizations, en masse, spoke out for the children and parents torn from each other. Trump appeared to acquiesce, but trusting his word without independent verification is quite pointless.

This week, the American Academy of Family Physicians followed up with this statement:

“The American Academy of Family Physicians continues to place high priority on the mental and physical health and safety of families separated during border crossings. The AAFP notes that an executive order purports to ensure that, going forward, migrating children will remain with their parents and/or caregivers during the detention process. We are deeply concerned that the order fails to address the previously separated families.

The children originally detained at the southern border remain held apart from their parents, some as far away as Michigan, New York and South Carolina. The administration is silent on its plans to reunite these families in an expeditious and humane manner. Further, while we assume the children’s physical needs are being met, with each passing day apart from their families, the mental and emotional toll taken on these children continues to mount.

Accordingly, we urge the following of the administration:

· Immediately place the highest priority on reuniting the previously separated families.

· Ensure the mental and physical health and safety of the families, in particular, by providing access to qualified medical professionals to assess and monitor the emotional well-being of the children in the custody of the U.S. government.”

“Bearing Witness” is a critical role for doctors and nurses serving at the crossroads of injustice and human cruelty, as Médecins Sans Frontières has so nobly revealed over many decades. But now it is our turn, on our own native soil.

Paul Brucker died one year ago at age 85. Were he here today, he might reflect on the emergence of doctors and nurses as the “5^th Estate”, a final stopgap and protectorate who, by their actions not their words, have earned the titles of “doctor” and “nurse” by serving on the receiving end of our Statue of Liberty’s invitation to, “Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore.”

Now we must bear witness, and our “5^th Estate” needs to organize and act. Here are three steps we should take together.

1. Activate doctors and nurses nationwide to help identify immigrant patients and detention centers of those in their care who appear to have been incarcerated, detained, and dispersed by the government.

2. Use the Propublica open source site (HERE) to list the names and locations of all illegal immigrant children you’ve cared for who have been incarcerated and dispersed throughout the U.S. since January 1, 2018.

3. Create a genomic database and philanthropic funding, under the guidance of  original human genome-decoders Francis Collins and Craig Venters, to test and match all separated illegal immigrants and children with a goal of reunification by August 1, 2018.

The House of Medicine Stands Tall – A Day of Reckoning.

Posted on | June 20, 2018 | 6 Comments

 VIDEO

 

Mike Magee

Last evening, the normally controlled Rachel Maddow could no longer contain her humanity when forced to report that the Trump administration has been placing innocent babies and and other young children in three  “tender age shelters” in south Texas. She broke down in tears and could not speak on camera.

Long time Republican strategist, Steve Schmidt, spoke for her and the majority of Americans this morning when he resigned membership in Trump’s party stating, “This child separation policy is connected to the worst abuses of humanity in our history. It is connected by the same evil that separated families during slavery and dislocated tribes and broke up Native American families. It is immoral and must be repudiated. Our country is in trouble.”

As a physician and a Roman Catholic, I am proud to say that Schmidt’s  words followed the words and actions of leaders of both the House of Medicine and the Church last week.

One week ago, with the support of the Pope, Cardinal Daniel N. DiNardo, president of the U.S. Conference of Catholic Bishops, labeled participants in this policy as “sinners” adding these words, “Separating babies from their mothers is not the answer and is immoral.”

This was 9 days after the American Academy of Pediatrics public rebuke of the president, followed on CNN by AAP President Colleen Kraft’s blunt critique, “That’s child abuse!”

The American Academy of Family Physicians stood side by side with the pediatricians echoing “the gravity of the long-term harm that can be caused by forced separation at this critical and stressful time for a family.” Pushing back on the Trump/Bannon denigration of immigrants, the AAFP stated, “Once on American soil, regardless of their citizenship status, migrating children are the concern of the American Academy of Family Physicians.”

The American Medical Association last week issued a carefully worded rebuke stating, “The separation of children from their parents who are detained while seeking safe haven causes unnecessary distress, depression, and anxiety”, and that Trump’s actions “will do great harm to children and their parents or caregivers, who felt compelled to make a dangerous and uncertain journey because of safety concerns in their own countries.”

A week later, their CEO, Dr. James Madara, added his own exclamation point with these words, “Families seeking refuge in the U.S. already endure emotional and physical stress, which is only exacerbated when they are separated from one another. It is well known that childhood trauma and adverse childhood experiences created by inhumane treatment often create negative health impacts that can last an individual’s entire lifespan.”

The American College of Physicians, representing the nation’s internists, were on this issue nearly a month ago. On May 31st they stated, “a policy of universally separating children from their parents entering U.S. borders will do great harm to children, their parents, and their families… The American College of Physicians calls on the Department of Homeland Security, Attorney General Sessions, and President Trump to withdraw its new policy.”

The American Psychiatric Association a day earlier had stated, “These children deserve our protection and should remain with their families as they seek asylum. The APA recommends an immediate halt to the policy of separating children from their parents.”

By June 15th, the American Public Health Association labeled Trump’s actions as “inhumane…a dire impact on their health, both now and into the future. Decades of public health research has shown that family structure, stability and environment are key social determinants of a child’s and the communities health.”

In taking the steps they have taken, the Trump/Cannon cabal has revealed itself. It’s intentions are sinful, and beyond defense. They demand not only an immediate response, but an enduring solution as well. Tears reveal the magnitude of this inhumanity. Resignations from the party of Trump reflect a weakening of the iron grip of an oppressor. The Roman Catholics swift response in the defense of human dignity and human life is reassuring. And Medicine’s ability to place patients first – especially those most vulnerable and at risk – is a source of pride for this aging physician.

The Pharmacy Benefit Manger (PBM) Syndicate

Posted on | June 14, 2018 | 5 Comments

Mike Magee

“Syndicate: a self-organizing group of individuals, companies, corporations or entities formed to transact some specific business, to pursue or promote a shared interest. In most cases formed groups aim to scale up their profits.”

Drug channel companies including Pharmacy Benefit Managers (PBMs) (like United Healthcare’s Optum, Express Scripts and CVS/Caremark) and distributors (like AmerisourceBergen, Cardinal Health, and McKesson) are now 6 of the the top 25 companies in the Fortune 500.

What’s the source of all that market power? Let us count the ways:

1. Management of outpatient prescription drug benefits (including kickbacks)

2. Representing insurers and large employers (including kickbacks)

3. Organizing Medicare Part D benefits (including kickbacks)

4. Setting formulary policies (including kickbacks)

5. Negotiating with drug manufacturers (including kickbacks)

6.  Assigning formulary tiers (including kickbacks)

7. Distributing drugs through mail order and retail outlets (including kickbacks)

The parentage of PBM’s from insurers like UnitedHealth Group, or  pharma companies like Merck, or pharmacy chains like CVS helps explain how we have now arrived at an opaque system of profit sharing that deals in everyone except the patient.

It also helps explain the stratospheric rise in profitability usually associated with crime syndicates and money laundering operations. Since 1990, the prescription drug market in the U.S. has grown tenfold from $38 billion to over $360 billion.

PBMs may appear to be independent but in reality they have been built out “alongside a dominant fee-for-service health insurance system”. They are in fact agents and managers for a syndicate hidden in plain sight. It features contractural profit sharing, market protections to members that prevent competition and intrusion, and distribution of the spoils in a manner that prevents open warfare among participating members in the scheme.

And since DTC advertising was given the green light in 1997 (the only place on Earth besides New Zealand that allows it), the spoils have grown exponentially with the help of a “dog-eat-dog culture” reinforced by remarkable over-prescribing. 50% of Americans have filled a prescription in the past 30 days and 10% of Americans are on more than 5 prescription drugs. That’s quite an appetite!

If there was ever cause for pushing the “reset” button, this must be it.

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