Conflicting Studies

An article from the current New England Journal of Medicine is zipping around our e-mails this week, written by a prominent Harvard professor and physician, Jerry Avorn. The title says it all: “Part ‘D’ for ‘defective’ – The Medicare drug-benefit chaos.

Avorn uses the past tense to describe the benefit, using terms like “debacle” and “inept” and says, “The drug benefit was defective from its conception and then malnurtured at birth.” The reason people are listening is because Avorn is chief of pharmacoepidemiology and phamacoeconomics at Brigham and Women’s Hospital.

But the article shows he’s clearly an advocate of a government-run benefit. He lays out a list of action items, and then says, “Only then might we expect government to provide universal drug coverage without relying on intermediaries to second-guess doctors and patients.”

Give me a break. Does he really think that getting private companies out of managing the drug benefit and putting government in charge would give him more freedom? Just take a look at Europe to see the restrictions and long delays in accessing drugs, especially new medicines.

Seniors who have signed up for the new Medicare drug benefit are overwhelmingly satisfied. A survey by America’s Health Insurance Plans said that 84% of those who have enrolled had no trouble signing up or using their benefit, and 59% already are saving money. Only 3% had trouble enrolling.

The New York Times reported on Sunday about a couple that together takes 24 medications. With the new Part D, their drug bills “will plunge to $4,900 or less a year, from more than $25,000.”

The Centers for Medicare and Medicaid Services recently announced that more than 27 million people are now enrolled in the drug benefit, including 7.2 million who’ve signed up on their own.

The worst thing about the criticism is that it is discouraging people from signing up for a benefit that could provide important protection in case they find themselves facing major drug costs in the future. It may not be perfect, but it is an insurance policy!


And speaking of insurance: I visited a busy medical practice this week in Washington, D.C., and saw first hand how frustrating today’s third-party driven medicine is for both doctors and patients.

I had made an appointment to get a baseline bone scan (at the insistence of several of my women friends) and went to the front desk of the 12-person ob-gyn practice to check in.

The “receptionist” handed me a long paper form to fill out (despite the fact that I am an existing patient and they already have this information) and demanded my insurance card. I told her that it would be of little use to her since I have a $2,000 deductible; this is my first, and probably only, trip to the doctor this year, and I’ll be paying cash.

“Then I have to take your Visa card or a check now. You can’t go in until I have payment up front.”

I suggested that this is not the way consumers are accustomed to being treated. We are people, not “billable items.”

A few minutes later a nurse called me in and said she had to take my blood pressure. I said this might not be the best time to do that, but she insisted. (It was 190/90, when it is usually 120/60.)

I talked with both the doctor and his office manager about my frustrations, and they shared their frustrations with me. They said it is almost impossible to run a practice these days: Patients complain about the way they are treated at the front desk and that they get too little time with the doctor.

But they said they are paid so little by health plans that they can’t hire more experienced office staff, and they have to run patients through the offices rapidly to make their numbers work.

The office manager was clearly at her wit’s end in trying to train staff, (two workers hadn’t bothered to show up that day) and she hadn’t told the doctors yet that the practice has more than 100 babies due in the month of September alone!

And doctors are virtually being held prisoner by the system: The office manager said that if a doctor wanted to move to Boston, for example, he would have to buy a “tail” for his malpractice insurance equivalent to three years of premiums (in case of future lawsuits). Plus paying the malpractice insurance in the new city!

The practice also tried to drop several insurance companies that were paying below costs, but were told they could not drop them. (This is the People’s Republic of Washington, D.C.)

I suggested they might want to consider a new way of dealing with cash customers like me, but the idea clearly instilled fear.

Physicians have been the first to lose their health care freedom to third-party payers, and it is taking a terrible toll on morale and their ability to freely practice medicine. The doctors who are happiest are those who have moved to cash practices. This is why the incentives and initiatives we support though consumer-directed health care, like funded accounts and portable health insurance, are so important. Despite what Dr. Avorn says, this is the way to get doctors and patients back in charge of medical decisions.


Correction: We seldom have to do this but?We quoted a Benefit News Connect article in last week’s newsletter about health advisers, and learned afterward that the Connect misidentified the company that provides medical decision support for Eastman Chemical Company. The provider is Consumer’s Medical Resource.

The Connect article had said the provider to Eastman Chemical was Health Dialog. But the important thing is that both Consumer’s Medical Resource and Health Dialog are impressive companies offering similar support services to help consumers make smarter decisions about their health care.

Grace-Marie Turner


  • A representative survey of M.S. patients on attitudes toward the benefits and risks of drug therapy
  • For some who solve puzzle, Medicare drug plan pays off
  • Doctors opt to have private operations
  • 2005 State Snapshots
  • Emerging issues 2006
  • Bolstering the safety net: Eliminating Medicaid fraud

Author: John E. Calfee
Source: AEI-Brookings Joint Center for Regulatory Studies, 03/06
Jack Calfee of the American Enterprise Institute reports on the results of a survey showing that patients with multiple sclerosis (M.S.) want to know about the risks of drugs, but they want to make their own decisions about whether to use them. A representative telephone survey of 200 M.S. patients showed that, “A substantial majority agreed that the FDA should tightly control drugs with safety concerns, but a larger majority agreed that once the FDA has provided a warning, patients should be free to decide with their physician whether to use such drugs,” writes Calfee. He concludes, “After the FDA has reviewed drug safety and provided reasonable warnings, many M.S. patients wish to be free to choose to incur a 1-in-1,000 (or even greater) risk of a fatal side-effect in return for significantly more effective drugs, and are willing to work with the physicians in doing so,” including more frequent visits to their neurologists.
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The American Enterprise Institute has released another new paper by Jack Calfee titled “Playing Catch-up: The FDA, Science, and Drug Regulation” in which Calfee explains that “obsolete regulation stands in the way of efficient utilization of recent advances in technology and basic science.”
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Source: The New York Times, 03/26/06

New York Times reporter Robert Pear talks to seniors in Tulsa, Oklahoma, and finds that many are satisfied and seeing significant savings with the new Medicare prescription drug benefit. “They are not vocal, they are not organized, but they say it was worth wading through the hassles, confusion and complexity of the new program to enroll,” writes Pear. In one example, Mary Hooser, 89, was spending $476 a month on eight medications, and her children had been helping to cover the cost. After signing up for the new drug plan, the cost for all of her medications is under $100 a month. “Those who have signed up say the total cost of all their drugs under Medicare is often less than the amount they were paying for just one prescription in the past,” writes Pear.
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Author: Sarah-Kate Templeton
Source: The Sunday Times, 03/26/06

A survey of 500 doctors commissioned by a private health insurer in Britain finds that 41% of senior hospital doctors “are spurning the National Health Service by paying for medical insurance so they can be treated privately if they become ill,” reports the Sunday Times. “NHS treatment is not a pleasant experience in any way – from the standard of the food, to ward cleanliness and the chance of catching MRSA [a drug-resistant bacterial infection],” notes Dr. Sarah Burnett, a consultant radiologist who worked in the NHS for 15 years. She was diagnosed with breast cancer last year, and received quick treatment through her private medical insurance. “I was lucky enough to have exceptionally prompt treatment because I choose to pay for insurance. Under the NHS I would not have been screened until [age] 50 for breast cancer and would not have been able to catch my cancer at such an early stage.”
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Source: Agency for Healthcare Research and Quality, 03/17/06

State Snapshots is a web-based tool released by HHS’ Agency for Healthcare Research and Quality that provides information on health care quality measures for all of the states. It is based on the 2005 National Healthcare Quality and Disparities Reports. The Snapshots provide good visuals to help states see their “strengths, weaknesses, and opportunities for improvements.” Viewers can click on each state to see “performance meters” that show how the state stacks up against the other states (above or below average). Then viewers can click to access the underlying data to see details on 15 representative measures.
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Edited by: Diane Carol Bast and Michael Van Winkle
Source: The Heartland Institute, 03/06

The Heartland Institute has published the edited transcript of its annual Emerging Issues Forum held last fall in Chicago. Eleven experts, including Grace-Marie Turner, addressed emerging public policy issues from health care and welfare reform to the economy and education. The Heartland Institute writes, “Emerging Issues 2006 is timely, authoritative … and written in plain English, making it an excellent introduction to public policy debates for an entire government affairs or public affairs staff.” You can view each chapter online or purchase the book by clicking on the link below.
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Here is the link to Grace-Marie’s keynote luncheon address:

Source: U.S. Senate Committee on Homeland Security and Government Affairs, Subcommittee on Federal Financial Management, Government Information, and International Security, 03/28/06

A recent Senate hearing examined fraud and abuse in the Medicaid program, and witnesses described how the Deficit Reduction Act of 2005 (DRA) gives them new tools to combat fraud.

  • Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services, testified that funding provided by the DRA will allow his office “to continue to devote substantial resources to auditing, evaluating, investigating, and prosecuting abuses in the Medicaid program.”
  • Medicaid Director Dennis Smith described how his office is implementing the DRA’s Medicaid Integrity Program and the nationwide expansion of the Medicare-Medicaid Data Matching Project.
  • Leslie G. Aronovitz of the Government Accountability Office said, “Implementing the Medicaid Integrity Program and developing a comprehensive plan gives [the Centers for Medicare and Medicaid Services] a unique opportunity ? to identify risks, develop strategies to address them, and measure the results through assessing improper payment rates and potential recoveries.”
  • Finally, Brian G. Flood, Inspector General for the Texas Health and Human Services Commission, described how the state’s efforts to control Medicaid fraud have “resulted in the equivalent of over 130,000 new Texas Medicaid recipients receiving benefits for a year and a return to the state and the taxpayer, in cash, $10 for every one dollar spent on its operational budget.”

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Consumer-based Universal Healthcare Coverage Plan Presentation
Baylor University Event
Tuesday, April 4, 2006 – 10:00 – 11:00 a.m.
Indian Affairs Committee Meeting Room, 485 Russell Building
Washington, DC

For more information, contact Dr. Earl Grinols at 254-710-7522 or email

Bioscience Innovation and Pharmaceutical Industry Competition in Europe and the United States
Center for Transatlantic Relations (Johns Hopkins University) Event
Wednesday, April 5, 2006, 12:30pm
Location: Bistro Bis in the Hotel George
Washington, DC

Please RSVP to Jeanette Murphy at (Put April 5 LUNCH in the subject line) or call 202-663-5730.

Medical Malpractice Liability and Physician Supply
American Enterprise Institute Event
Wednesday, April 5, 2006, 9:00-11:00 a.m.
AEI’s Wohlstetter Conference Center
Washington, D.C.

For additional details and registration information, go to:

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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