Tag Archives: Medicare

Hospitals and Drug Companies Gone Wild

Pearl River       If you run a hospital, what do you do whether it’s a pandemic or wholesale panic? Jack up the prices seems to be the answer.

A report hit the news from the Rand Corporation the other day about hospital prices.  On average they pile on the charges two-and-a-half times the level that the federal government’s Medicare program establishes as its baseline.  In nine states the Times reported they don’t double up but triple down on the prices for care.  West Virginia, South Carolina, and Florida were in that unhappy number.  Amazingly, according to the report, in Arkansas they only inflate the prices 185%, rather than double, making the state almost an outlier, meaning they were ripped off, just not as badly.

Who is getting soaked by this kind of price-gouging?  Employers and their workers are the answer to that question.  For those still lucky enough to have health insurance on the job, and in fact a job at all, this means a constant downward pressure on wages to pay for skyrocketing insurance premiums and usually deteriorating coverage and increasing co-pays and deductibles, as hospitals lard on the cost increases.  As the Times’ reporter wrote,

Employers provide health insurance coverage for more than 153 million Americans. The companies and insurers in the study paid nearly $20 billion more than Medicare would have for the same care from 2016 through 2018, according to the RAND researchers.

Trust me, employers are not simply sucking down these whooping increases.  They are passing them on down to the workforce, contributing to the inequity gap everywhere.

Employers aren’t happy about this either.  One spokesperson for an employer group described the hospitals’ price jumps as “a runaway train.”  Politically, this also argues loudly for the public option, advocated by Biden in the current campaign.  The failure of private insurance companies, backed by businesses, to negotiate fair prices compared to the federal government speaks loudly in favor of that path for the future.

President Trump in his campaign desperation went back to the bench and pulled out an executive order on drug pricing, speaking of another area where healthcare pricing is out of control.  The order said that drugs in the United States couldn’t be priced any higher than drugs in Europe.  Hey, if we can’t lead, maybe we can learn to follow.  There will be lawsuits from the industry, undoubtedly, so don’t run out and do a happy dance in the street yet.

Of course, this is Trump and his White House, so there is a backstory.  There was almost a deal struck between the pharmaceutical industry and the government.  They were going to come up with $150 billion to pay for most Medicare copays and patient out-of-pocket costs.  It fell apart when the White House insisted on them sending out $100 drug cards to seniors before the election to help boost the Trump campaign.  On the industry side, they called them “Trump cards,” given the president’s tendency to brand everything sooner or later with his name.  The industry backed off of this plan realizing it was too much of a political campaign stunt for them to get the public relations benefit during the pandemic they hoped to achieve.

Maybe that’s good news?  Maybe we’re finally coming to the point where hospital and drug companies realize there are limits to what they can get away with?  Unfortunately, hope is not a plan.  We have to find a better way and hospitals and drug companies are not going to lead us there.


Choking on the Doughnut Hole

Little Rock      Driving through Mississippi back and forth on my regular route from New Orleans to Greenville to Little Rock and then back again, when I hit the long rural stretches since we belong to the noncommercial radio religion, I listen often to Mississippi Public “Think” Radio.  On Wednesdays, I’ve come to know their lineup well in these stretches from McComb until I pick up the WDSV signal near Greenville.

First, there is the Fix-It show, where I learned how to get vermin out of the attic and walls by using peppermint essential oil, not peppermint extract they were clear, and spraying it there.  Then there’s the tech show where we got a good explanation on how the hardware syncs up with the software when you turn on your computer and sometimes an update can make it all go haywire.  And, Jimmy Stewart comes on who I sometimes tell mi companera is my doctor with his call-in show on medical questions.  He’s a doctor and professor in Jackson, and pretty much can take on all comers and their questions.  This show he helped me understand why your hands sometimes fall asleep when you’re asleep.  Another time he advised all of us to brush our tongues along with our teeth, because they are germ factories.  He’s a fount of great medical information!

The last show took a hard turn though.  He got a call from an elderly woman that blew up the phone lines with various suggestions.  She was caught in the doughnut hole on her Medicare Part D coverage.  It would cost her $500 a month that she didn’t have for a critical heart medicine.  Another caller chimed in from deep in the doughnut hole about the cost of insulin that she had to have, and why it was so expensive when the patent should have been long gone and generics should have replaced the high drug prices.  Other callers lamely suggested writing to the drug companies and begging for help or various funds.  Dr. Jimmy didn’t handle it well.  He tried, as always to be empathetic, but it came off as if he was defending both the hole and the drug companies even while admitting that this was an inexcusable mess.  Trust me, he’s better on medical advice that political wisdom.

The doughnut hole in Medicare drug coverage is a case study on the callousness and ineffectiveness of the crazy ideological Congressional process and the power of drug lobbyists.  Basically, there is a lapse of coverage once a beneficiary has paid their deductible and hit a threshold of coverage.  She is then forced to pay 100% out of pocket up to several thousand dollars until coverage begins again.  This has been going on since 2006.  Supposedly, the gap has been closed or is closing since January of this year, but as the callers indicate, the pain persists and given the percentage payments for some of the higher priced drugs, people can’t climb out of the hole still.

Now, after you hit $4020 in a year, a Medicare patient will be paying 25%, so as it’s not a hole, but it’s a big hit, and it takes money to get there that people don’t have.  As the Times pointed out recently, the new policy will take longer to climb out of as well.  In 2019, catastrophic coverage kicked in at $5100 of your out-of-pocket costs, now in 2020 it will be $6350, which they correctly call “a big jump.”  Furthermore, out-of-pocket costs are never capped, but require an ongoing 5% of the total – which adds up! – throughout the year.  This is not a solution to the doughnut hole but a continuing shift of the costs, all of which fall on the elderly poor patients, like Dr. Jimmy’s callers, and not on the Congressman trying to make the drug companies and the lobbyists happy and pretend they are fixing something that is broken.

Why give people this darned doughnut, when they really need an apple fritter that fills the gap, tastes great, and actually includes some delicious fruit along with the flavor of the fry?


Please enjoy Logan Ledger – (I’m Gonna Get Over This) Some Day

Thanks to WAMF.