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White House budget eyes reserve to pay for health system overhaul

BY Jim Frederick

WASHINGTON Submitting a $3.55 trillion budget plan to Congress today, President Barack Obama proposed the creation of a $634 billion “reserve fund” to help pay for a massive overhaul of the nation’s stressed healthcare system.

Among other uses, the fund would help defray the costs of insuring more of the estimated 46 million Americans without healthcare coverage, the President said. It would also help spur the adoption of health information technology, a new agency to oversee the effectiveness of health spending and treatments, cost-lowering health prevention and wellness initiatives, and other programs.

The White House’s massive spending plan for 2010 is short on details about specific elements of the health reform plan, and instead proposes that those details will be worked out through negotiations in Congress. Already clear, however, is that the President intends to expand coverage for drugs and medical care to more Americans, particularly children, and to boost the use of generic drugs, including follow-on biologics, as cost-saving tools.

To pay for the reserve fund, the White House is proposing an end to tax breaks for the wealthiest 2% of Americans already set to expire in 2010, as well as the closing of corporate-tax loopholes and a cutback in payments to insurance plans, doctors and hospitals serving Medicare patients and others. Those proposals have angered Republican lawmakers, insurance companies and other constituencies.

Reacting quickly to the Obama budget plan, House Republican Whip Eric Cantor, R-Va., today decried the President’s health reform proposals as “old-style spending increases and government-knows-best approaches which have historically failed to achieve better outcomes at lower costs.

“For too long, waste, inefficiency and bureaucracy have been the hallmarks of our system instead of access, choice, quality and affordability,” Cantor charged. “Republicans believe we should focus on preserving patient’s options for their care while ensuring that doctors are free to make critical decisions without interference from restrictive government policies.”

Under the Administration’s fiscal proposals, wealthier seniors would also pay more for their Medicare premiums. Also proposed, although details have yet to be worked out, are additional payments for drugs dispensed under Medicaid.

Pharmacy and health groups have registered support for some aspects of the President’s budget plan, including the steps it takes to at least build a framework for universal health coverage of Americans, and to cut down on waste and fraud in the Medicare system.

“Today’s budget submission sends a signal to the American people that this Administration is serious about prioritizing health care. We applaud the President for laying out a bold framework and setting aside significant resources to put our nation on a path towards comprehensive healthcare reform, which is a goal that has eluded our country for more than a century,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans. “We have strongly supported recent efforts by the Administration and Congress to strengthen the health care safety net, expand coverage for kids, conduct comparative effectiveness research, and invest in health information technology.”

Also weighing in today was the managed care industry. In particular, the Pharmaceutical Care Management Association praised the President’s call in the fiscal 2010 budget for a regulatory pathway at the Food and Drug Administration for the approval of generic versions of biologic drugs.

“The key to health reform is to improve access to quality care while reducing waste and unnecessary spending,” said Mark Merritt, the PCMA’s president and CEO. “For over a quarter century, generic medicines have increased access and affordability for consumers, employers, labor unions, government agencies, and others. However, expensive biologics have not faced generic competition, straining payers’ ability to provide affordable drug benefits for these necessary and often life-changing products.

“PCMA strongly supports the provision in the President’s budget that would create a regulatory pathway to approve generic biologics,” added Merritt. “This will save billions of dollars for both the public and private sector by introducing competition and will help finance broader health reforms.  It also protects incentives to produce new biologics.”

As of press time, other groups, including the National Association of Chain Drug Stores and the National Community Pharmacists Association, had yet to issue new statements on the President’s budget proposals.

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Americans postponing health care due to economic crunch

BY Michael Johnsen

MENLO PARK, Calif. As economic conditions continue to worsen, the public is increasingly worried about the affordability and availability of care, with many postponing or skipping treatments due to cost in the past year and a notable minority forced into serious financial straits due to medical bills, according to the Kaiser Family Foundation’s first health care tracking poll of 2009, released today.

In the face of the country’s current economic challenges, the public’s support for health reform remains strong and their trust in President Obama to do the right thing in health care reform is high.

Slightly more than half (53%) of Americans say their household cut back on health care due to cost concerns in the past 12 months.  The most common actions reported are relying on home remedies and over-the-counter drugs rather than visiting a doctor (35%) or skipping dental care (34%).  Roughly one in four report putting off health care they needed (27%), one in five say they have not filled a prescription (21%), and one in six (15%) say they cut pills in half or skipped doses to make their prescription last longer. “Experts and policymakers have multiple agendas in health reform, but when half the public reports skimping on care because they can’t afford it, it’s very clear that what the public wants most from health reform is relief from health care costs,” stated Kaiser president and CEO Drew Altman. 

The 27% of the public that reported they had “put off or postponed getting health care [they] needed” were asked about the specific types of care they had foregone.  The most common responses were delaying going to the doctor for a temporary illness (19%) or for preventive care (19%).  But nearly as many — 16% — report putting off care for a more serious problem, either postponing a doctor’s visit related to a chronic illness such as diabetes or delaying major or minor surgery. 

Not all medical care can be postponed, however, and the survey indicates that roughly one in five (19%) people experienced serious financial problems recently due to family medical bills. Specifically, 13% reported they have used up all or most of their savings trying to pay off high medical bills in the past 12 months, and just as many say their medical debt means they have difficulty paying other bills. A similar proportion (12%) say they have been contacted by a collection agency, while a smaller share (7%) report being unable to pay for basic necessities like food, heat or housing. 

Beyond actual financial hardship due to medical care, the survey also indicates a rise in worries associated with health care costs.  Nearly half of Americans (45%) report they are “very” worried about having to pay more for their health care or health insurance, the highest proportion measured in Kaiser polls since late 2006.  Roughly four in 10 (38%) are very worried about affording health care they need — a number that rises to 56% among those who believe someone in their household will lose a job this year. 

Fully one-third (34%) of those with health coverage are worried they will lose it.  While these concerns are prevalent among low-income Americans, one-third of households earning between $30,000 and $75,000 per year are also “very worried” about losing their health care benefits. 

The share of Americans who say that the country’s economic problems make it more important than ever to take on health care reform has remained remarkably stable over the past five months at roughly six in 10 (62%).  However, the partisan divide also remains large with Democrats overwhelmingly (79%) saying reform is more important than ever and most Republicans (58%) saying the nation cannot afford to tackle health care reform at this point.  Independents tilt the balance by being in favor of reform now (57%). 

Health care continues to rank as one of the top issues on the nation’s policy agenda.  The economy dominates (71%) the public’s priorities for the president and Congress, followed by making Medicare and Social Security more financially sound (49%) — a new issue added to the list this month.  Terrorism (42%) and health care (39%) rank third and fourth. 

Interestingly, while the majority of Americans view action on health reform as more important than ever and believe reform would be good for the country as a whole (59%), fewer think it would personally benefit them or their family (39%).  A plurality (43%) of Americans do not expect to be personally impacted by reform and a small minority (11%) think they would be worse off.

“Far more people see themselves directly benefiting from health reform and far fewer see themselves being negatively affected than we saw in the Clinton health reform debate. Today’s economic anxieties have created a better starting point for health reform than we saw last time around,” Altman said.

While health reform remains popular, the public has high expectations for how easily reform might be achieved. A majority (58%) of Americans say that if policymakers made the right changes, they could reform health care “without spending more money to do it.”  This majority view is shared across political party identification, age group and income level.  A majority (56%) of the public also believes that the health system can be reformed “without changing the existing health care arrangements of people like yourself.” 

Seven in 10 Americans (72%) have a “great deal” or “fair amount” of trust in President Obama “to do or recommend the right thing for health care reform,” giving him a 12 percentage point lead over the next most trusted actor in health care reform. Following Obama on the list of trusted players are doctors’ organizations (60%), Democratic leaders in Congress (57%) and AARP (57%). When Americans hear policymakers talk about health care reform, they predominantly are thinking about cost and coverage.  When asked what “health care reform” means to them, 40% of the public respond with a cost concern – people paying less for care, care being more affordable, or lowering the prices of medical goods such as prescription drugs.  Just as many (39%) describe reform as providing insurance to more people or helping the uninsured. Quality or delivery system reform did not leap to the minds of Americans with only nine percent mentioning it in their responses.

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Wegmans launches program to lower cost of generics

BY Michael Johnsen

ROCHESTER, N.Y. Wegmans on Wednesday announced a new program that will lower the cost of nearly 390 select generic maintenance drugs and those used to treat acute conditions. The list is made up of the most-commonly prescribed generic prescription drugs filled at Wegmans, the retailer stated.

“We started by lowering food prices in November, and then began to look at other ways we could lower costs for customers and employees,” stated Colleen Wegman, Wegman’s president. “Free antibiotic prescriptions followed in early January,” she said. “It has confirmed what we’ve always known. If we approach everything by doing what’s right for our employees and customers, it is also good for our business.”

But more than saving money for its customers, expanding prescription savings programs in this economy prevents pharmacy share erosion.

“When a patient feels they must shop around for lower prices, we risk sacrificing the data that shows all of the prescribed drugs for that person,” stated John Carlo, Wegmans’ VP pharmacy. “It’s vital that we have a complete patient profile for every customer in order to identify drug interactions. We don’t want to give our patients a reason to use another pharmacy.”

The most-significant savings from this program will go to the people who need it most:  the uninsured who pay cash for prescriptions; those who have experienced a change in health care coverage; and the unemployed or uninsured who may not be filling their prescriptions. Consumers with prescription insurance coverage will see an immediate reduction in the amount of their co-pay.

Wegmans expects this to impact approximately 3.6 million new and refilled prescriptions annually. The total estimated savings for employees, customers, insurers, self-insured employer groups, and federal and state programs, like Medicare, Medicaid or EPIC in New York State, will exceed $15 million, according to the company. “It was stunning to realize the impact this program alone will have on health care costs in the communities where we have stores,” Wegman said.

The new prices go into effect March 1. A 30-day supply of the listed drugs will now cost $4.00.  A 90-day supply will cost $10.  The complete list will be available on wegmans.com.

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