#271: Transparency Is Relative

#271: Transparency Is Relative
May 9, 2011

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

Today, Tim Carney of the Washington Examiner has a report on open government issues that follows on prior stories about the lack of transparency in the creation of Obamacare. The best demonstration of this remains this video of the president’s repeated promises as a candidate, but Carney fills in a few gaps:

Two House committee hearings last week focused on the Obama administration’s lack of transparency. Cliff Stearns’ Energy and Commerce subcommittee on oversight and Darrell Issa’s Government Reform Committee both assailed the administration for operating behind closed doors. The hearings only scratched the surface of the problem.

Stearns quoted President Obama’s promise to have health care “negotiations televised on C-SPAN” so that “people can see who is making arguments on behalf of their constituents and who is – who are making arguments on behalf of the drug companies or the insurance companies.”

But the March 5, 2009, White House meeting on health care reform wasn’t on C-Span, so we don’t know what top drug industry lobbyist Billy Tauzin and Pfizer CEO Jeff Kindler were asking for. Neither did we get to see what Amgen CEO Kevin Sharer asked for on April 20. Or what AstraZeneca Chairman David Brennan asked for on May 8. The White House, in fact, did not disclose the content of any of Tauzin’s dozen meetings, nor the meetings with other drug industry CEOs.

We do know the White House did its best to accommodate the industry’s requests: Tauzin’s lobby, the Pharmaceutical Research and Manufacturers of America, endorsed the bill, and – as agreed in a meeting with top Senate Democrats (also not on C-Span) – spent generously on campaign ads supporting embattled Democrats who voted for the subsidy-laden bill.

When Congress requested that the White House hand over documents and information related to its meetings with the pharmaceutical industry, the AMA, the AHA, and others, White House Counsel Bob Bauer said no dice, claiming Executive Branch privilege. They’ve even claimed not to have any records related to some major aspects of the creation of the law. The Hill reports on this week’s Energy and Commerce hearing:

Rep. Michael Burgess (R-Texas) has requested records specific to a May 2009 agreement in which a group of industries agreed to trim $2 trillion per year in healthcare spending. The administration has said his requests are overly broad or that no relevant records exist.

“Two trillion dollars and no one even jotted down a note on the back of an envelope?” Burgess said.

Back to Carney for the irony alert we’re all used to by now:

These were the same excuses the Bush administration gave in rejecting transparency requests on its energy task force hearings – the ones about which then-Sen. Obama complained, “The oil companies were allowed to craft energy policy with Dick Cheney in secret. ... The industry got everything it wanted.”

At the hearing this week, Rep. Steve Scalise (R-LA) had a suggestion for a possible solution: “Maybe next time, instead of holding the hearing here, we can go to the Caribou Coffee shop next to the White House.” Perhaps instead of going to town halls to talk to congressional representatives or Senators who are just one voice out of more than 500, citizens should instead go to the real place where decisions get made?

-- Benjamin Domenech


IN THIS ISSUE:


POLITICIANS CAN”T CONTROL HEALTH CARE COSTS

John R. Graham of PRI writes on Assembly Bill 52, which would “give the executive branch in Sacramento the power to decide whether health plans should be allowed to increase their premiums at rates that keep pace with medical costs.” Graham outlines how giving politicians the reins causes collateral damage without providing a solution:

Health plans are largely pass-throughs, paying medical claims from providers whose charges have been rocketing skyward. A recent analysis of daily inpatient charges for California hospitals revealed that payments from private health plans increased from $1,954 in 2000 to $5,061 in 2009 – 159 percent – in a period during which consumer prices nationwide increased by 25 percent. The charge for a normal (non-Caesarian) childbirth went from $3,805 to $6,424 – a jump of 69 percent.

There is little or no evidence that prior approval of premium increases has protected consumers from unreasonable rate hikes. I have examined data on premiums and premium-review laws for small-group premiums in 43 states in 2006 and 2008. Nineteen states were “file and use,” which means that health plans must submit premium increases to the insurance commissioner, but he has no power to reject them. Twenty states required prior approvals of rate changes by the insurance department, and four were unregulated.

There does not appear to be any connection between prior approval and a lower change in rates from 2006–08, nor the absolute value of rates in 2008. The average increase over the period was 8 percent for both file-and-use states and states requiring prior approval. The highest increase in the file-and-use states was 27 percent (in Virginia) and the highest in the states which required prior approval was 25 percent (in neighboring Maryland). Of the 45 states for which premiums were available for 2008, the average rate in 2008 was very slightly lower in file-and-use states ($345 per month) versus states with prior approval ($351).

An aside: I realize I should probably be jaded about this after years spent in health policy work, but that whole “should government allow your business to price its products” thing? Yes, it still sticks in my craw. In this case, it’s a bad idea, it’s unprincipled, it’s anti-liberty, and it doesn’t work. I assume California will therefore adopt it with gusto.

SOURCE: John R. Graham


FLORIDA TACKLES TORT REFORM

Last week, Florida legislators passed several laws designed to cut down the number of malpractice suits against health care facilities, including adding provisions to three Medicaid bills to restrain lawsuits against teaching hospitals, cap pain-and-suffering damages against nursing homes at $250,000, and adding a “cap on doctor liability at $300,000 unless the provider acted maliciously.” It also puts in place a hurdle for the use of expert witnesses:

Sent to the governor for signature yesterday, the bill requires out-of-state expert witnesses to obtain a certificate from the state health department, and allows the state Board of Medicine to discipline expert witnesses whose testimony is fraudulent, deceptive or misleading.

The Orlando Sentinel reports that while progress was made under the Jeb Bush reforms in 2003, there’s still a need for improvement:

Malpractice claims and payouts have decreased since the 2003 reforms, and the number of doctors in the state has grown.

The number of closed lawsuits has dropped from 3,574 in 2004 to 3,087 in 2009, the last year that the Office of Insurance Regulation has data. Payouts have fallen from $664 million to $570 million during the same time frame, and total premiums paid dropped to $550 million, from $860 million.

But backers argue Florida still lags the nation in recruiting and keeping doctors with specialties such as emergency medicine, neurology, orthopedics and internal medicine.

More than one-third of the state’s doctors are over the age of 56, according to the Department of Health. And doctors still pay much higher medical-malpractice premiums than their peers in other states – nearly $42,000 for primary-care doctors in 2009 and $171,000 for specialists.

SOURCE: Fierce Health Care


ADD DRUG SHORTAGE PROMPTS FINGER-POINTING

The Wall Street Journal reports on another shortage, and another round of accusations from producers and regulators:

A recent shortage of a drug for attention-deficit/hyperactivity disorder in the U.S. has sparked a round of finger-pointing between Shire PLC and the Drug Enforcement Agency.

Shire blames the shortage of branded and generic versions of its Adderall XR product on DEA limits on the amount of product Shire can manufacture. The Ireland-based company didn’t get DEA clearance on boosting supply until December, which has caused “spotty availability” in some regions of the country this year, said Shire spokesman Matt Cabrey.

The DEA, however, is deflecting the blame. Spokesman Lawrence Payne said the agency approved a sufficient amount of the drug’s active ingredient to allow for uninterrupted supplies.

The shortage has generated controversy. Sen. Amy Klobuchar (D., Minn.) sent a letter to Shire last week saying patients and pharmacies were having difficulty getting access to generic versions of ADHD drugs, forcing some to switch to more expensive branded drugs. She urged Shire to take immediate action to resolve the problem.

Ms. Klobuchar has introduced legislation that would give the Food and Drug Administration more tools to help address and prevent drug shortages. A rash of shortages have hit the drug industry, including the cancer chemotherapy cytarabine.

SOURCE: The Wall Street Journal


ROMNEYCARE: THE DOCTOR IS ACCESSIBLE -- YOU JUST HAVE TO WAIT

David Hogberg at Investor’s Business Daily hits on a recent shoddy defense of Massachusetts’ wait times from Andrew Dreyfus, president and CEO of Blue Cross Blue Shield of Massachusetts.

“Have you heard ... that newly insured residents can’t find doctors? Also false. Everyone enrolled in the new subsidized plan for low-income residents belongs to a private health plan and has access to primary-care physicians.”

We all know, of course, that coverage is not the same as actual access, and Hogberg rebuts this handily:

That is exceedingly clever. It’s subtle enough that you might not realize that critics aren’t saying people can’t find new doctors because of RomneyCare, but that they are having a harder time finding one – and getting to see him or her.

The Massachusetts Medical Society’s “Physician Workforce Study” found that the number of family physicians accepting new patients fell from 70% in 2007 to 46% in 2009. In recent years, the average wait in number of days to see a family physician had climbed, but then fell in 2010. For internists, the data go back a little further. In 2006, the year before RomneyCare got into full swing, 64% of internists accepted new patients and the average wait time was 33 days. By 2010, those numbers were 51% and 52 days.

More evidence is provided by the research firm Merritt Hawkins & Associates. In 2004, it surveyed wait times to see physicians in 15 major cities including Boston. At that time, the average wait time in Boston was 37 days. A subsequent study post-RomneyCare found that by 2009 that number had jumped to over 49 days.

In short, residents of the Bay State still have access to primary-care physicians. What Dreyfus and Rosenberg don’t tell you is that access has become more and more restricted.

For more on this, see this post at the Boston Globe, which notes that according to the latest MMS survey, the “average wait ranged from 24 days for an appointment with a pediatrician to 48 days to see an internist.”

SOURCE: Investor’s Business Daily

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)