Medicare, the free market, and a drug that doesn’t work

This story will make you discouraged about BOTH the government AND the free market when it comes to healthcare.  Peter Whoriskey reports:

The U.S. health-care system is vastly overspending for a single anemia drug because Medicare overestimates its use by hundreds of millions of dollars a year, according to an analysis of federal data. The overpayment to hospitals and clinics arises because Medicare reimburses them based on estimates rather than the actual use of the drug.

The government for years has tried to rein in spending on the prescription drug, Epogen, which had ranked some years as the most expensive drug to taxpayers through the Medicare system.

Medicare’s current estimates are based on Epogen usage in 2007 for dialysis treatments. But since then, use of the drug has fallen 25 percent or more, partly because of Food and Drug Administration warnings about its perils and partly because Congress removed the financial incentives for clinics and hospitals to prescribe the drug. Because Medicare continues to reimburse health-care providers as if the dosing levels haven’t changed, the significant savings in doses has not translated into savings for the U.S. Treasury.

The amount of the overspending is more than $400 million annually, according to calculations done separately by The Washington Post and experts.

“I think we probably left money on the table,” said Rep. Pete Stark (D-Calif.), a critic of the way the drug had been used who helped shepherd through legislation that removed the financial incentives for bigger doses beginning in 2011.

The overpayment for Epogen reflects both the promise and difficulty of large-scale government reform of health-care spending.

For years, Epogen was one of a trio of anemia drugs — all manufactured by Amgen, a California biotech firm — that cost Medicare as much as $3 billion annually. Overall U.S. sales of the drugs exceeded $8 billion.

Nearly two decades after the drugs were first approved in 1989, their purported benefits were found to be overstated, and the FDA issued a series of stern warnings about their potentially deadly side effects, such as cancer and heart attacks.

At least some of their popularity stemmed from the fact that hospitals and clinics made lots of money using them: The spread between what they paid for a dose and what Medicare paid them to administer one reached as high as 30 percent, according to the Medicare Payment Advisory Commission.

The incentives drove up usage. By 2007, about 80 percent of dialysis patients were getting the drugs at levels beyond what the FDA now targets as safe.

Congress pushed Medicare to revise its payment system to remove the incentives for larger doses. Under the new system for dialysis patients, Medicare pays a set fee for a bundle of dialysis services and drugs.

via Medicare overspending on anemia drug – The Washington Post.

So Medicare reimbursed based on ESTIMATES rather than actual usage?  And hospitals and doctors prescribed the drugs so much in part because “they could make so much money using them”?

Of course, the reason the drugs were so lucrative is because Medicare paid so much for them, so it’s the unholy alliance between the government and the private sector–which is at the heart of Obamacare– that is to blame.  Still, this dashes further the assumption that our medical treatment is always based on objective considerations of patient care.

Are business practices that work in other profit-making enterprises fitting for health care?  For example, why are all of these prescription drugs being advertised on television?  Are patients now “consumers” who are expected to demand certain medicines from their physicians, in which case, what happens to objective determinations in the practice of medicine?  Or are the physicians the target of these marketing campaigns, in which case, again, what happens to objective determinations in the practice of medicine?

Paul Ryan & Ayn Rand

Vice-presidential candidate Paul Ryan is  a social conservative, a devout Roman Catholic with a  strong pro-life record.  And yet one of his most formative influences is reportedly Ayn Rand, the radical libertarian, an atheist who viciously attacked Christianity because it teaches love and compassion, advocating instead “the virtue of selfishness.”  Those two influences, Catholicism and Rand’s philosophy of Objectivism, don’t seem to gibe.

Democrats are playing up the connection between Ryan and Rand in order to portray him as a heartless amoral extremist.  Here Ryan tries to set the record straight:

“I, like millions of young people in America, read Rand’s novels when I was young. I enjoyed them,” Ryan says. “They spurred an interest in economics, in the Chicago School and Milton Friedman,” a subject he eventually studied as an undergraduate at Miami University in Ohio. “But it’s a big stretch to suggest that a person is therefore an Objectivist.”

“I reject her philosophy,” Ryan says firmly. “It’s an atheist philosophy. It reduces human interactions down to mere contracts and it is antithetical to my worldview. If somebody is going to try to paste a person’s view on epistemology to me, then give me Thomas Aquinas,” who believed that man needs divine help in the pursuit of knowledge. “Don’t give me Ayn Rand,” he says.

via Ryan Shrugged – Robert Costa – National Review Online.

For a more detailed examination of how Ryan now differs from Rand, see this.

More Classical Lutheran Education online

I told you about Wittenberg Academy, offering an entire classical Lutheran high school curriculum online.  Those are asynchronous courses, which means they are self-contained and may be taken whenever the student wants to fire up the computer, though there is personal interaction with the teacher and other students built in.   Now Faith Lutheran Church in Plano, Texas, which has an excellent classical Lutheran high school, is making some of its courses available to homeschoolers live.  Pastor Woelmer of Faith, Plano, sent me this notice:

Faith Lutheran High School is a classical high school in Plano, Texas. Faith will now offer classes live using two-way HD-Video streaming through the Internet. The student will see the teacher on their home computer or lap-top, see the notes the teacher puts on the e-board, listen to the lecture, participate in live discussions with other students, and the teacher will be able to see the student as well.

Faith will offer the Omnibus 1 and Omnibus 3 classes taught from a Lutheran perspective. The Omnibus class consists of English, Theology, and History (3 credits) and is taught by a professional Lutheran school teacher with many years of classroom experience. Classes will start August 22, 2012.For more information, including cost and other details, call 972-423-7448 or send an email to: school@faithplanoschool.org.

I judge the superhero movies

Well, to celebrate our anniversary and to catch up with our fast-disappearing summer, my wife and I constructed a “double feature” (anyone remember those?) by seeing BOTH Spiderman and Batman:  The Dark Knight Rises on a single Saturday, with a late lunch in between.   We had a good time despite the Batman movie.

The Dark Knight Rises is pretentious, ponderous, ludicrous, and lugubrious.  It makes me miss what I thought I was tired of–namely, irony.  The movie was so serious, so full of itself, even while its main characters were putting on silly costumes.  A super-hero movie can be philosophical or angst-ridden, but it needs to have at least some element of fun.

As the Spiderman movie shows.   (Normally, one waits several weeks or months between superhero movies, so seeing them side-by-side makes the comparisons stand out.)  The best part of that movie was the part I didn’t expect to like, yet another version of the origin story.  But this time the origin made much more sense even than in the comic book (I write and criticize as a fan), picking up on the motif of interspecies genetic engineering.  What the movie did especially well was in showing high school nerd Peter Parker gradually learning about his new superpowers.  What science fiction and fantasy can do at their best is give us a sense of wonder.  Juxtaposing the spidey powers (super strength, agility, ability to climb and hang upside down and swing on webs, sticky hands and feet) with the ordinary routines of school and family life was an effective way to stimulate the imagination.  Later we get to the obligatory and conventional friend-turned-monster, but that’s all right, given the genre.

So what about any political themes in the Batman movie, as we discussed on this blog?  It does pick up on the Occupy Wallstreet threat of an uprising against the wealthy and privileged, such as millionaire industrialist Bruce Wayne living in stately Wayne Manor (to use the comic book language).  And it comes out decisively against the mob.  (The best scene was the sight of thousands of police officers coming out of the ground to restore social order.)  So the movie managed to be pro-rich, while still blaming the wealthy for  economic and social disintegration.  It presents the point of view of the wealthy-but-guilt-ridden-over-their-wealth.  That is, the new base of the Democratic party.

(That’s not why I disliked the movie.  That’s a perfectly defensible position and appropriate in many cases.  I disliked the movie for the reasons given in the second paragraph.)

Olympics post-mortem

The Olympics are over.  The United States took the most medals (104), including the most golds (46).  China came in second, with 87, 38 being golds.  The television ratings were huge.  I resisted at first, but every time I would surf by, I would be drawn in.  What were the high points?  What were the low points?  Any other observations about the games and their significance?

Romney picks Paul Ryan

Mitt Romney has chosen Wisconsin congressman Paul Ryan to be his vice-presidential running-mate.  Ryan is known for his deficit-slashing budget proposal and his fiscal conservatism.

Does this help Romney?  Will it rally conservatives behind him or just alarm the general public worried about Social Security reform?

iPhone App: Romney Selects Paul Ryan | The Weekly Standard.


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