Sunday, September 27, 2009

Fears that NHS switch to cheaper drugs could put millions of British patients at risk of side-effects

Millions of patients could face life-threatening side-effects under a scheme which will swap branded drugs for cheaper versions. More than five million asthma sufferers and up to 500,000 with epilepsy could be hit by the change, while patients with conditions such as Parkinson's, bipolar disorder and hypertension may also be affected.

Pharmacists will be expected to substitute a brand of drug written on a prescription with a generic, cheaper version. For the first time, outside an emergency situation, they will not have to consult with a doctor to change a patient's prescription. The plan is expected to save the NHS up to £70million a year, but critics claim it may end up costing more in treating side-effects unless certain medical conditions are exempt from the rules.

Generic products are developed to cash in when branded drugs lose patent protection. Although generics are meant to be identical, the active ingredients can vary within an agreed percentage and inactive ingredients, such as colourings, may also differ.

In epilepsy even tiny changes in bioavailability - the amount of active medication absorbed into the body - can have serious consequences. NHS guidelines on epilepsy drugs currently warn against changing the brand for individual patients because of 'increased potential for excessive side-effects'.

Doctors claim it is vital the 5.4million asthma sufferers in the UK are protected from having their inhalers automatically switched to cheaper versions. Dr Mike Thomas, chief medical adviser to the Asthma UK charity, said: 'Patients should only be swapped to another inhaler in a face to face consultation with a doctor or nurse. 'Generic substitution means asthma control may be lost and asthma that is not well controlled puts the patient at risk of an attack. 'An opt-out scheme will not be good enough, we need asthma inhalers to be exempt from the regulations.'

And Simon Wigglesworth, deputy chief executive of Epilepsy Action, said a survey of members revealed around 10 per cent had suffered more seizures as a result of changes to their anti-epileptic medication. 'We know people's epilepsy gets worse after their medication changes and seizures are life-threatening,' he said. 'Epilepsy patients should receive the same version of an anti-epileptic drug whenever they get a repeat prescription, from the same manufacturer and the same country of manufacture. 'The only safe way to bring in this scheme is to exempt anti-epileptic medication. 'The financial savings to be made from prescribing generically rather than by brand may not outweigh the cost of extra A&E admissions and hospital stays.'

Other countries with generic substitutions allow doctors to tick a box to indicate that a branded drug must not be changed. Around 86 per cent of NHS prescriptions are already written for generic drugs and Britain has one of the lowest levels of spending on drugs per head of any developed country.

David Fisher, of the Association of the British Pharmaceutical Industry, said savings from using cheaper drugs must go back to the NHS.

A spokesman for the Department of Health said: 'Currently, there is nothing to prevent the prescribing of a particular generic or brand of drug if the prescriber considers it essential for the patient to receive a specific product. Our proposals for implementation of generic substitution will maintain this position.'


Northern Ireland public hospitals cannot afford treatment that patients need

Patients being treated in the Belfast Health Trust will no longer be referred to the private sector for operations because the Trust cannot afford them. Patients throughout NI are often referred to private clinics for knee, hip, heart and cataract operations, helping to reduce waiting lists. The trust's Chief Executive William McKee said the move was temporary but it would impact on waiting times.

The Vice Chair, Eileen Evason, said the health service was "in real trouble". She said: "I don't think we can manage financially. We cannot sustain the service unless we get help and get it soon." The Belfast Trust paid for 7,000 private operations last year and commissioned another 4,000 so far this year.

Mr McKee said: "It doesn't appear, at this stage, we have enough money to meet the activity we were able to do last year." He told BBC Radio Ulster: "This is hopefully a brief pause while we take stock of how much money is available and how much more we can do internally." He admitted that the trust was finding things "very difficult" financially and said hard choices would have to be made.

The Trust needs to save £130m over the next three years. Earlier this week it emerged it may cut 152 beds at two hospitals in the city.


Obamacare: Taxes for Everyone

Now that the various healthcare plans are being reduced to print, the financial details are emerging and with them a fundamental conclusion is becoming evident: The Obama plan is a giant tax increase for much of the American people (not just the rich).

Start with the mandate that falls on those whose welfare is the supposed object of the entire program -- the uninsured. According to the Congressional Budget Office, the average uninsured person or family will have to pay between 15 and 20 percent of his or their total income on health insurance (counting premiums, deductibles and co-payments) before any of the subsidy in the Baucus bill kicks in. Even in the more generous House bill, the tab that the uninsured must pay is very, very high.

Most uninsured would likely be quite happy to avoid paying this much of their income for health insurance. But they will be forced to shell out the money under the program. Others would want catastrophic coverage (which for the young would likely not be too costly) but the Obama program requires comprehensive insurance that is costly to satisfy the government requirement.

Having spent the entire campaign speaking about "affordable" coverage, it turns out the program is not at all affordable, but a massive new tax on the average uninsured American.

Then there is the tax on health insurance premiums that is to finance about a quarter of the subsidy for the uninsured. This tax, billed as only to be levied on "gold-plated" policies, will, in fact, reach down to the average American. The Baucus bill specifies that the tax of 35 percent would be put on all premiums over $8,000 for an individual and on proportionately higher premiums for families. Current estimates are that about one-tenth of the current health insurance policies would be taxable. But the $8,000 premium level that will trigger coverage is not indexed for inflation, let alone for medical inflation, which typically runs twice as high. ObamaCare will take effect in 2013. By then, the percentage of Americans subject to the tax will doubtless expand dramatically. Indeed, this trigger is a new Alternative Minimum Tax waiting to happen. As inflation pushes more and more Americans into tax eligibility, it will become a universal health insurance excise tax of 35 percent. While the tax will be imposed on health insurers and employers, it will, obviously, be passed along to the policyholders.

So if you are insured, you will increasingly have to pay 35 percent more for the privilege. And if you are uninsured, you will have to pay one-fifth of your income in premiums, deductibles and co-payments before any subsidy kicks in.

And then there is the final piece of the puzzle -- the $500 billion cut in Medicare that will pay for the bulk of the subsidy under the bill. We are literally slicing services to the elderly in order to transfer healthcare to others. Obama's claim that only "waste and inefficiency" in Medicare will be cut is, at best, disingenuous. Most of the cuts will be in reimbursement for doctors and hospitals. That will lead to less care, shorter office visits, fewer tests, fewer surgeries and less care. And it will lead to fewer doctors. As a result, a survey by the Investor's Business Daily indicates that 45 percent of all doctors would "consider retiring or closing their practices" if the Obama bill passes. The result will be a greater scarcity of medical services, even as the patient load expands by at least 30 million people.

Each of these fiscal pieces is movable. The left will pressure Obama to increase the subsidy to the uninsured. But that will necessitate raising the Medicare cut borne by the elderly or increasing the tax on health insurance policies -- or adding to the deficit. Any of these options will alienate moderate senators. Balancing these competing priorities only works if the taxpayers don't know what is going on.

If the average middle-income American family realizes that it will have to pay one-third more for health insurance or the uninsured learn that they will have to pay a fifth of their income to get insurance, they will make their dissatisfaction felt by their Democratic senators.

All of which begs the fundamental question: How willing are Democratic congressmen to commit political suicide? Are they willing to lose the elderly and to antagonize the uninsured as the health insurance cops chase them around the block? When does JFK's comment kick in: "Sometimes party loyalty asks too much"?


Don't want Obamacare? Go to jail!

This doesn't happen often enough.

Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance.

Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty, Barthold wrote on JCT letterhead. He signed it "Sincerely, Thomas A. Barthold."

The note was a follow-up to Ensign's questioning at the markup.


Is emergency care a failed market?

In response to my recent article on health-insurance mandates, I received many emails from readers who argued that mandates, as unappealing as they may be, are necessary to prevent market failure in emergency medical services.

Specifically, they argued that there is a "free-rider problem" in emergency care because individuals are currently able to visit the emergency room (ER) without insurance or the means to pay, receive care, and then skip out on the bill. Such free riders force the hospital to either accept the losses or spread the costs to other patients. Therefore, the readers reasoned, there is a market failure in that health insurance is under-demanded and ER care is over-demanded, increasing health care costs and dumping them onto those consumers who do purchase insurance and pay for their visits.

As accurate as this common depiction of the symptom is, however, it misdiagnoses the disease. The free-rider problem in ER care is not a market failure, but a government failure. The Hippocratic Oath notwithstanding, hospitals only accept all patients irrespective of their ability to pay because they are required to by government regulations. These laws, which are in place in countries around the planet, result in a simple welfare scheme whereby the costs of the uninsured are transferred to insured patients. With this reality in mind, it is easy to see that the free-rider problem in ER services is not a market failure, but rather a government failure.

How, then, would truly free-market hospitals handle patients who are now free riders? There is every reason to expect that these uninsured, mostly low-income people would be treated more humanely and with greater dignity than they are in the current quasi-socialist system.

Without government regulations on their payment collection methods, hospitals would be free to offer more flexible prices and payment options, and to negotiate contracts with individual consumers. Those patients with little financial leverage would be able to form creative payment plans, and those without any savings or insurance could even contract to pay for their services with labor.

Furthermore, in a truly free market for medical care, even patients who intentionally try to skip payments and thus dump the costs on others cannot. This is because, in the absence of supposedly compassionate hospital legislation, to admit oneself or someone else to emergency care is to agree to the terms and conditions of service at that hospital — most importantly, to pay for treatment.

Thus, in the libertarian society, checking out without arranging payment would constitute a violation of contract, and therefore these malicious free riders would be held accountable. In the current situation, however, such predatory patients are subsidized by others in the name of social compassion.

Another advantage of contractual enforcement of payment for ER services on the free market is that it removes hospitals from financial responsibility for those patients who are admitted to the ER by another party while incapacitated. Which party will be held responsible for the hospital bill in each case would be decided by negotiation between the two parties and perhaps even by court arbitration. Which party eventually pays is not important for this matter, though; what matters is that the hospital will be paid either way, and that other patients will no longer be stuck with the bill.

Now that we've seen that the free-rider problem does not exist in a free market for medical care, we can address other readers' concern that the profit-driven market process is unsympathetic to the suffering of those patients who are truly unable to pay in any way and can't afford market insurance, but who shouldn't simply be left to suffer.

To argue that the market discards those it regards as undesirable is to both ignore the prevalence of private charity and deny the existence of the entire public-relations industry. Indeed, setting socialist doctrines aside, we can see that affectionate treatment of the poor and downtrodden is actually a very profitable endeavor.

In every market, firms of all sizes expend resources to maintain a positive public image. There are few actions better received by a community than healing and treating their vulnerable and disabled at a discounted or zero price. As such, it is absolutely foolish to believe that hospitals would not take in such customers for treatment.

In fact, if we examine the nature of prices and income differentials closely, we arrive at another instance of destructive government intervention. Price discrimination of almost every form is illegal in almost every market, and health care is certainly no exception.

Price discrimination may feel unfair, but if allowed by law it can lead to much more efficient market outcomes and higher market quantities of all goods and services. Using price discrimination, hospitals would be free to provide additional and cheaper services to low-income consumers without decreasing the price for high-income consumers.

Price discrimination would benefit the hospitals as well, because they would not only increase the quantity of services they perform and add potentially loyal new customers, but would also be able to increase the price of services to their high-income patients without losing their business.

Viewing the converse of this market outcome, then, we can observe that laws against price-fixing necessarily decrease quantities of goods and services, and squeeze marginal consumers out of the market. In the health care market, this means that those who are most in need of low-cost care are forced out of the market in the name of social justice.

In contemplating competition between medical service providers, we can deduce that the market will indeed treat people who are now free riders with dignity, but that those consumers will no longer actually be free riding on others. Instead, they will provide a valuable good to society — namely, the satisfaction that comes with supporting others in their time of need. While it may seem strange to think of this as an economic good, it certainly is, as evidenced by consumers' willingness to forgo other forms of consumption in favor of charity.

While caring for these patients would still redistribute costs to other consumers, it would do so only to the extent that these paying consumers would tolerate it by continuing to purchase care and services. That is to say that consumers' choices between competing hospitals' services would, just as in any market, force those hospitals to provide equilibrium quantities of charitable care.

This efficient market quantity would therefore be determined by the charitable inclinations of insured and higher-income patients. And in a truly libertarian market, which would lack taxes, we can say that these individuals would inarguably be more giving of their own income.

Perhaps the best feature of the free-market process in a libertarian health market is that it would allocate charitable funds to their best use. In our emergency services case, this axiom of market behavior implies that hospitals will spend their charity budgets on the most destitute and impoverished patients.

Whereas government funds are allocated according to political cronyism and electoral opportunism, free-market hospitals will always attempt to maximize the benefit to their public image — nothing more than profit maximization — by providing for those patients who are most in need.


With rigorous examination, we can see that emergency medical services function like any other market, and that the free-rider problem is the result of a government failure. Furthermore, we can safely expect that the free market would treat the most deserving of these free riders more humanely than does the supposedly compassionate central health administration.


Obama’s New Claim That 30 Million 'Cannot' Get Health Insurance Not Supported by Census Bureau

In his Sept. 9 speech to Congress, President Barack Obama unveiled a new claim that 30 million Americans “cannot” get health insurance, but this statistic is not supported by the government's latest definitive data produced by the Census Bureau on Americans lacking health insurance.

In his speech to Congress, Obama said, “There are now more than 30 million American citizens who cannot get coverage” – presumably taking into account conservative critics’ observation that Obama's earlier claims that 46 million Americans lacked health insurance was contradicted by Census Bureau data that indicated that more than 9 million of that number were not in fact U.S. citizens.

In a Sept. 10 blog posting, Office of Management and Budget (OMB) Director Peter Orszag explained the president's new claim that 30 million Americans "cannot" get insurance, saying that the figure was based based on Census Bureau data.

That study, “Income, Poverty, and Health Insurance Coverage in the United States, 2008,” was released Sept. 10 as part of the Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS). “With the two different numbers, there has been some confusion as to which is accurate,” Orszag wrote. “Well, both are--and the President’s version is more focused on the relevant target population for health reform since it excludes unauthorized aliens. “The Census report indicates that of the 46 million uninsured individuals, 34 million were native born and 2.8 million naturalized citizens. The report thus shows that there were 36.8 million uninsured U.S. citizens (native born and naturalized) in 2008.”

Orszag explained that Obama was merely playing it safe and using a lower-than-reality figure in his speech. “To be conservative, the President thus stated that ‘more than 30 million American citizens’ cannot get coverage.” While that explanation accounts for why Obama used the figure of “30 million," it does not account for why he claimed those 30 million "cannot" get insurance coverage.

The Census Bureau report cited by Orszag does not contain any data about why people don’t have health insurance. It does not distinguish between people who cannot get health insurance and people who freely decide not to get it. The only question it asks is whether or not a person had health insurance during the previous year. If someone had coverage for part or all of the year, the Census Bureau counted them as “insured”--if they didn’t, they were counted as “uninsured.”

The Census Bureau also says that insurance coverage is often underreported, with people more likely to answer “no” if they are currently without coverage even if they were covered for part of the previous year--meaning they should have answered “yes.” “[H]ealth insurance coverage is underreported in the CPS ASEC for a variety of reasons,” the Census Bureau noted. “For example, some people may report their insurance coverage status at the time of their interview rather than their coverage status during the previous calendar year.”

In fact, a spokesperson in the Census Bureau’s health insurance division told that there is nothing in the health insurance report that has anything to do with why people are uninsured. “There isn’t. The survey that that report is based on, the Current Population Survey, doesn’t ask any questions about why [people lack coverage]. We really don’t ask any questions about why.”



sisterrosetta said...

Thank you for this blog.

Would it be alright if I asked you a question or two?

I can't seem to find answers anywhere.

JR said...

Ask away