Want Drug Pricing Regulation? Why Not AMNOG?

[This article was posted on December 29th 2016 on the Health Affairs blog.  It was co-written with Dr. Karl Lauterbach, the Deputy Leader of the Social Democratic Party in the German Bundestag, and Dr. Elizabeth Seeley of the Harvard Chan School of Public Health.] 

Donald Trump and Hillary Clinton agreed on almost nothing during the 2016 presidential campaign — but they did agree that the U.S. needs to address unaffordable prescription drug prices. And the public also supports this idea. A survey released in October 2016 showed that 64 percent of voters, including 52 percent of Republicans, believe that the federal government should place a “limit on how much pharmaceutical companies can increase prescription drug prices.”germanparliament

Further, 73 percent of all voters (68 percent of Republicans) concur that the federal government should be able to negotiate with drug companies to lower Medicare drug prices for seniors. While the November 8 federal election results have dampened prospects for policy change along these lines, does anyone believe that this issue now will disappear? We think not.

The German Model for Regulating Drug Prices

If political will emerges to tackle this issue, is there a realistic and politically savvy model to use? On what basis would drug purchasers and drug makers negotiate? How would the value of new prescription drugs be determined? And how would genuine scientific innovation be encouraged and rewarded, and not stymied?

We suggest that a superior model to accomplish these goals now exists and can be found in Germany’s drug pricing regulatory system that has performed admirably since 2011. Called AMNOG (the Act to Reorganize Pharmaceuticals Market in the Statutory Health Insurance System or Arzneimittelmarktneuordnungsgesetz), the system has noteworthy advantages in that it:

  • Rewards innovative drugs that provide genuine breakthrough clinical benefits;
  • Provides immediate access to new drugs by allowing marketing, sale, and full reimbursement in the first year, during which time the drug’s clinical benefits are assessed;
  • Uses non-governmental, non-profit organizations for review and decision making, with the pharmaceutical manufacturers bearing much of the costs;
  • Makes decisions based on clear empirical evidence of clinical benefit to patients;
  • Determines prices only after—and based on—a determination of clinical benefits, and through negotiations involving drug companies and key system stakeholders, not government bureaucrats;
  • Avoids controversial tools such as Quality Adjusted Life Years (QALY) that place a monetary value on each additional year of life;
  • Ensures full transparency in all key processes and steps.

Historically, as with the U.S., Germany has had a reputation for high drug prices. Prior to AMNOG, drug prices in Germany were 26 percent higher than average drug prices in the European Union. Since AMNOG’s 2011 launch, by August 2016, 146 new drugs have been assessed. Of the newly assessed drugs, 63 percent were determined to have an additional benefit, though half of those only for select patient groups. In 2015 alone, Germany achieved savings of $1 billion on new drug spending, with discounts averaging 21 percent in this market segment.

If the U.S. cares to examine other national models, AMNOG should top the list. Because of AMNOG, the average annual growth rate in public pharmaceuticals expenditure per capita between 2009 to 2013 in Germany was -0.7 percent, as compared with +2.7 percent in the US. In a recent international comparison of health benefits assessments of pharmaceuticals, Germany showed more rigorous appraisals of new drugs than other countries in the survey.

How the AMNOG process works

First, once a new drug has been demonstrated as safe and efficacious by the European Medicines Agency (the European Union’s equivalent to the U.S. Food & Drug Administration) or by the German Federal Institute for Drugs & Medical Devices, the drug maker may introduce the product into the German market at any initial price of its choosing, fully reimbursed by all German insurance plans for the first 12 months.

Second, during those 12 months, the Federal Joint Committee (G-BA), a non-governmental body of payer, provider, and patient representatives, with authority over coverage decisions for all German payers, commissions a clinical comparative effectiveness review by a non-governmental and non-profit research body known as the Institute of Quality and Efficiency in Healthcare (IQWiG). IQWiG assembles, evaluates, and reports all evidence of a new drug’s clinical effectiveness and benefits compared with standard treatment and/or existing drugs, including data on benefits for different demographic groups. Drug makers must submit all their relevant data in a “Benefit Dossier,” and will face sanctions for withheld information. Results are subject to an expert hearing published and used to inform both doctors and patients.

Third, within six months of a drug’s market introduction, and with IQWiG’s report in hand, the G-BA determines the new drug’s added benefit over existing drugs or treatments, including information on benefits and risks for specific patient subpopulations. New drugs are rates 1-6:

  1. Major added benefit — sustained and substantial improvement not previously achieved by current therapies;
  2. Considerable added benefit — significant improvement over current therapies;
  3. Minor added benefit — moderate improvement;
  4. Added benefit present but not quantifiable;
  5. No added benefit proven;
  6. Lower benefit than current therapies.

A drug can receive differential rankings for varied patient subpopulations. In addition, the quality of the studies and data on which the classification is based is specified in three categories:

  1. Proof of benefit
  2. Indication of benefit
  3. Hint of benefit

The combination of benefit ratings and quality categories summarizes the extent and probability of additional benefits of drugs in patient groups.

Fourth, if the G-BA accepts the IQWiG recommendation and the new drug is ranked in any of categories 1-2-3, then the newly established clinical value rating sets the basis for negotiations between the drug maker and the National Association of Statutory Health Insurances, the organization of all public insurance providers in Germany. If parties cannot reach agreement, the matter is submitted to an arbitration panel for a decision based on other international prices.

Fifth, if a drug offers no additional value over a previously available drug, ranked in categories 4-5-6, then payers will reimburse only at prices currently paid for the older existing drugs or therapies. Drug companies can choose to sell their product at higher prices, though patients who want the newer and lower ranked drug must pay the difference out of their own pockets. Importantly, if a drug company charged an excessive rate for a lower ranked drug in the first year of availability, the extra revenues must be returned to payers. A drug company can opt for their drug to not be assessed, in which case the drug’s price is set through the German reference pricing system. Under the reference pricing system, a drug’s price is based on the price of other drugs in that therapeutic class, including lower priced generic alternatives.

Results and Implications for the United States

As mentioned, in 2015 alone, Germany achieved savings of $1 billion on new drugs, with discounts averaging 21 percent in this pharmaceutical market segment. This savings estimate does not include a calculation for drugs that were placed in categories 4-6, so full savings would be significantly larger. Rather than stifling innovation, in AMNOG’s first four and one half years, 124 new products had completed assessments and launches, and only 13 were withdrawn from consideration.

Though some American policymakers suggest that the U.S. has little to learn from other nations, Germany may be an exception. Unlike single payer systems in Canada and the United Kingdom, Germany has a private multi-payer system where more than 90 percent of the insurance market is managed by non-profit “sickness funds.” Public anger led to AMNOG’s establishment as drug prices began to skyrocket in the last decade, reaching a growth rate of over 6 percent by 2009. Growth rates in the U.S. were 12.2 percent in 2014 and 8.1 percent in 2015.

In the U.S., the Patient Centered Outcomes Research Institute (PCORI), established under the Affordable Care Act, was created to commission clinical-effectiveness research to provide evidence to support patient-centered care, evaluating drugs and medical therapies. Like PCORI, IQWiG in its early days chose research targets on its own initiative. Under AMNOG, IQWiG now systematically reports on all new drugs and also may assess the effectiveness of older ones, including medical devices, plus surgical and screening procedures. PCORI may be well positioned to review manufacturers’ comparative-effectiveness documents as IQWiG now does.

In the U.S. pharmaceutical industry and elsewhere, a growing movement among some drug makers proposes payment based on the “value” of their products rather than on arbitrary price setting. This new “pay-for-value” movement, of course, now extends far beyond the pharmaceutical sector through initiatives such as accountable care organizations, bundled payments, and hospital readmission penalties set in motion by the Affordable Care Act. AMNOG represents a scientific and evidence-based way to pay for drugs based on their value.

For sure, the AMNOG system faces challenges, as any new and complex policy would. At times, the G-BA has chosen comparator drugs about which manufacturers disagree, that have resulted in negative benefit ratings. Parties have disagreed about appropriate end points that manufacturers must include in disclosed studies, especially in domains such as oncology where surrogate endpoints may not reflect ultimate clinical outcomes. However, the G-BA works extensively with manufacturers up front during the assessment process to communicate their choice of comparators and endpoints, allowing manufacturers a hearing or appeals process in which they disagree or develop new data.

Germany’s AMNOG system is value and evidence-based, transparent, non-governmental, publicly managed, and innovation embracing. If the U.S. wants to create an evidence and value-based system to pay for prescription drugs, we could not start at a better place than emulating the AMNOG model.

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Five Affordable Care Act Questions for the GOP

[This commentary was published today on the website of Commonwealth Magazine.]

SO, REPUBLICANS ARE planning a major blitz to repeal and delay/replace/collapse the Affordable Care Act/ACA/ObamaCare. I’ve got five questions to ask leaders of the Grand Old Party.

First, if your guarantees are honest that your replacement law will be better than the ACA, why not share real numbers?

President-elect Donald Trump, Speaker Paul Ryan, and Majority Leader Mitch McConnell have each promised that their ACA replacement will cover as many Americans as the ACA with higher quality and lower costs. Bully for that!

Here’s the problem. None of the plans you’ve produced, including the 2016 Reconciliation bill, Trump’s platform, Ryan’s Better Way, Health & Human Services Secretary designee Tom Price’s Empowering Patients First plan, or others from Republicans and conservatives, comes close. Except for this year’s reconciliation bill, none has been submitted to the Congressional Budget Office for a score. Reputable analysts peg the drop in insured lives between 20-30 million currently insured.wash-monu

Your message is “trust us.” Would businessman Trump take such a deal?

Second, when you promise to continue “guaranteed issue” of health insurance with no-pre-existing conditions or medical underwriting, why do you always fail to mention the fine print?

Trump, Ryan, and other Republicans’ statements are clear – any reform will maintain “guaranteed issue.” Yet your written plans tell another story – guaranteed issue will be kept only for persons who maintain “continuous coverage” (undefined). This means if you lose your insurance and have a coverage gap beyond the allowed time, you will be newly subject to medical underwriting and pre-existing condition exclusions for an unspecified period (forever?).

How many people might fall into this new medical underwriting Circle of Hell (CoH)? Start with 28-29 million currently uninsured, add the estimated 20-30 million increase because of Republican plans to eliminate income-based premium subsidies. We start at 48-58 million Americans, and the numbers will only grow as more fall into the medical underwriting CoH.

This is detailed in numerous replacement plans, including Ryan’s. Yet you never mention this life-important detail when talking with media who buy your line that you will continue the ACA’s elimination of pre-existing conditions for everyone. Untrue.

Third, what will you do about enormous losses for those dealing with substance abuse and mental health needs under your plans?

Most Americans don’t realize that the ACA is the biggest law ever in covering Americans for substance abuse and mental health services (aka: behavioral health). It’s true. ACA guaranteed issue means no one can be denied insurance because they had or have substance abuse/mental health problems. Bans on lifetime and annual benefit limits allows countless persons with expensive substance abuse or mental health disorders to keep covered.  Requiring insurers to cover 10 “essential health benefits” insures that nearly all Americans have behavioral health coverage (#5) PLUS prescription drugs (#6) to treat their disorders.

All Republican plans – Trump, Ryan, Price etc. – propose eliminating “essential health benefits.” They propose eroding guaranteed issue (see above) and canceling elimination of annual benefit limits. So, the ACA’s enormous advances for  mental health and substance abuse would become major losses under Republicans’ plans. I’m not sure you get this at all.  I am certain most Americans have zero idea of this and they will strongly object when they find out.

Fourth, why are you so mean to the nation’s hospitals? 

In crafting the ACA, America’s hospitals committed a mortal sin in Republicans’ eyes by making a deal with President Barack Obama and the US Senate. In exchange for Democrats’ commitment to get as close to universal coverage as politically possible, hospitals agreed to $155 billion in federal payment reductions between 2010-19 (now about $350 billion between 2016-2025). They did this to stop being the default caretakers of America’s uninsured.

Now Republicans plan to repeal the ACA’s new taxes on wealthy Americans, on drug, medical device, and health insurance companies, even on indoor tanning salons! And, they plan to leave in place the $350 billion in payment cuts to hospitals even as their policies will send as many as 30 million recently insured Americans back into the ranks of the uninsured and back to America’s emergency departments.

The American Hospital Association and the Federation of American Hospitals, who brokered the 2009 deal, wrote a letter on December 7 to Republicans: “…any repeal legislation … must include repeal of the reductions in payments for hospital services embedded in the ACA.” Sounds reasonable to me, but maybe not to others because if Congress sends the money back, it will raise Medicare’s costs for the next decade and beyond, resulting in premium increases for Medicare enrollees across the nation, and shortening the lifespan of the Medicare Hospital Trust Fund (now solvent through 2028) by years. Sad!  (Read this excellent Kaiser Health Policy Brief for more details on the impact of ACA repeal on Medicare.)

Fifth, why don’t you just fix the ACA exchanges instead of killing them?

A parable: Last summer, Alaska realized that premiums in its health exchange and individual health insurance market would be rising in 2017 by over 40 percent. In response, the Republican legislature established a state reinsurance pool to protect insurers against high losses; after passing the law, insurance companies dropped their premium increases to about 7 percent.

Some health insurance exchanges (i.e., California, New York, Massachusetts) are working well, and some are having high rate increase problems. These problems are fixable with sufficient political will to address them.  The problem is that Republican lawmakers don’t want fixes – they want repeal. In 2014, 2015, and 2016, exchange premium increases were below projections. In 2017, they have risen at high rates in most states because of the end of rate protections known as “risk corridors” and “reinsurance” as well as the underfunding of “risk adjustment” in the ACA. All of these “3Rs” are permanent features of the Medicare Part D prescription drug program that Republicans support there and despise in the ACA.

These exchange problems are fixable. Yet you refuse to support them and fix the problems because that would undermine your case for ACA repeal.

These are my top five questions right now. Any answers, my friends?

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Is “Dental Care for All” on the Horizon?

[This commentary, “Might Oral Health Be the Next Big Thing?” was published in the December 2016 edition of the Milbank Quarterly.  It was written back in September — pre-November 8th.  Just sayin’…]

Has the time come for a national movement in the United States to expand access to affordable and quality oral health services? A growing network is betting that the answer is yes. Let’s consider this nascent movement using the three ways that public health knowledge gets translated into public policy: the knowledge base, the social strategy, and political will.1

The Knowledge Base—What Do We Know?

The United States has problems with oral health. While most Americans’ oral health has improved markedly over 60 years, many millions are left behind and hurting. Societal improvements in science, technology, education, hygiene, community water fluoridation, and school-based services have not been broadly shared.2 Today, 130 million Americans, primarily adults, have no dental coverage. Many Americans with coverage find today’s health insurance cost-sharing requirements a prohibitive barrier to care. Medicare provides no dental coverage for 70% of its enrollees; 40% of them did not visit a dentist in 2014 and 60% have severe or moderate gum disease. Medicaid does cover dental services for low-income children but 17 million of them got no dental care in 2009. In most states, Medicaid covers no or little dental care for poor adults, while 47 million Americans live in areas where finding a dentist can be impossible.dental-diseases

Because of these access issues, 25% of adults over age 65 have lost all their teeth (edentulism). In 2009, US hospital emergency departments saw 850,000 visits for preventable dental pain. The avoidable disease called dental caries (or cavities) is 5 times more prevalent than asthma and affects 60% of children age 5 to 17. For those left behind, it’s a crisis. Oral health is an important part of US racial and ethnic health disparities.

Bad oral health results in pain, substandard nutrition, sleep loss, lost school time, work absence, worse jobs, and lowered self-esteem. Chronic oral infection is a proven risk factor for diabetes, osteoporosis, heart and lung disease, low birth weight, and if a dental abscess grows out of control, sepsis. Good oral health care improves overall health and decreases hospitalizations for conditions such as cerebral vascular disease and rheumatoid arthritis. The link between tobacco use and oral disease has been recognized since the US surgeon general’s 1964 report on smoking and health.3
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Both Sides Now on the ACA at AEI

On Friday, December 16 I participated in a panel on the future of U.S. health reform at the new headquarters of the American Enterprise Institute at 1789 Massachusetts Avenue in Washington DC (note the street address number).  There were two panels on the program called “What’s Next for Health Care?”

AEI’s Joe Antos and James Capretta were the session moderators.  Former Urban Institute Chief Bob Reischauer and I, respectively, were the ACA defenders on each of the two panels.

Feel welcome to watch the full session below — my panel starts about 1 hour into the 2 hour event which was also shown on CSPAN.

What I picked up from the session is lots of uncertainty on the Republican/ conservative side on how to proceed, both on process and substance.  Some of them are now suggesting the need for a 4-year transition, not 2 or 3 are previously discussed.  Repealing and replacing the ACA is not going to be easy for them.

Meanwhile, please check out this new column by Noam Levey in the LA Times: “Trump and the GOP are charging forward with ObamaCare repeal, but few are eager to follow.”   Levey could not identify “a single major organization representing patients, physicians, hospitals or others who work in the nation’s healthcare system (that) backs the GOP’s Obamacare strategy.”  Neither can I.

The Republicans’ ObamaCare death march is getting more interesting every day as we move closer to the cliff.

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Assessing President Obama’s Health Legacy

I was asked last August to write an assessment of President Barack Obama’s public health legacy for the January issue of the American Journal of Public Health.  My drop-dead deadline was mid-October when the overwhelming consensus indicated a likely electoral victory for Hillary Clinton who would have continued President Obama’s directions.

Funny how things can turn so suddenly, as they have with the electoral college victory of Donald Trump and the emergence of a new and conservative federal Administration.  Some of my commentary — just released — still seems appropriate, even if a big chunk of Obama’s legacy is repealed.

So here’s my official appreciation of what Barack Obama has done for Americans’ health and America’s health care system.  (If you look at the AJPH, you will see two companion editorials, one by Drs. Steffie Woolhandler and David Himmelstein critiquing the Obama legacy from the left, and one by Dr. David Sundwall with a critique from the moderate right.


A CONSEQUENTIAL EIGHT YEARS FOR HEALTH CARE AND PUBLIC HEALTH

Every modern US president since Harry Truman has impacted the nation’s health through his successes and failures.1 Arguably, Lyndon Baines Johnson created the most important legacy through the establishment of Medicare and Medicaid in 1965. Whether Barack Obama’s health achievements equal or exceed those of LBJ is a judgment best left for historians. At this point, it is reasonable to conclude that the Obama public health legacy will be deep, broad, and wide.barack-signature

Obama’s landmark achievement, the Affordable Care Act (ACA; Pub L No. 111–148), along with related enactments, assumes outsized significance in the real world and in this commentary. In addition, many other laws, regulations, executive orders, and other actions contribute to a compelling Obama public health record. In this brief overview, I consider the ACA and the President’s other public health accomplishments.

From the ACA to Obamacare

Although the ACA, to date, has fallen far short of the public health community’s expectations on many fronts, it is close to the most ambitious health reform law that could have been achieved in the 2009–2010 US Congress, or in any other modern Congress for that matter. Also, the ACA is still only six years old. The 1935 Social Security and 1965 Medicare–Medicaid laws initially fell well short of their respective visions, and only later matured into their current recognizable forms after decades of subsequent improvements. So it is and will be with the ACA, born in a contentious and madly partisan legislative environment, with many improvements still needed to fully realize its ambitious goals. That realization should not denigrate the law’s accomplishments.

On access, more than 20 million formerly uninsured Americans have obtained health coverage, and the US rate of uninsurance has dropped to the unprecedented low rate of 8.6%.2 Coverage gains have disproportionately benefitted those most in need, especially lower income, non-White, and younger adult households. The shameful health insurance practices of medical underwriting and preexisting condition exclusions, as well as annual and lifetime benefit limits, have been abolished. Medicaid now makes quality and affordable coverage available to nearly all low-income Americans in the 31 states that have adopted the ACA expansion; over time, the 19 other states will follow. Although the work is far from done, this is extraordinary progress after so many decades of trying and failing.

The content of health insurance in all markets has been improved markedly. The ACA’s Title I guarantees that nearly all health insurance policies include 10 essential health benefits including, for example, mental health and addiction services, as well as prescription drugs. Another section requires that all health insurance policies must offer all clinically effective preventive services such as vaccines and cancer screenings that are recommended by the US Preventive Services Task Force, and with no cost sharing. Many millions more than the formerly 20 million uninsured have benefited from the ACA’s access and coverage provisions.

On transforming medical care, the ACA has reset the US health system irreversibly on a course away from wasteful and inefficient fee-for-service payment toward value-based models that reward quality, effectiveness, patient centeredness, and population health management. Accountable care organizations, patient centered medical homes, bundled payments, readmission, and hospital-acquired condition penalties—all these and more have become part of the nation’s emerging accountable care and “triple aim” landscape. Implementation of electronic health records has advanced with impressive speed and reach, as more than 80% of nonfederal acute care hospitals have adopted basic electronic health records with clinician notes. Although partisan bickering slows the continuous policy improvement of most ACA provisions, the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), approved by the Republican-controlled House and Senate and signed by President Obama, only expands and deepens the ACA’s direction toward alternative payment models.

Yet another ACA landmark is the major expansion of federally qualified community health centers that now serve more than 24 million Americans at 1375 centers in 9200 communities, as well as the National Health Service Corps that provides medical student debt relief in exchange for service in underserved communities. As of 2015, 9600 Corps clinicians were providing primary care services, more that twice the number of 3600 doing so in 2008.

Beyond the ACA

Any list of the Obama Administration’s key health gains must include groundbreaking achievements in environmental health protection. The successful negotiation of the Paris Agreement on climate change, formally ratified in October 2016, for the first time has set the global community on a low-carbon course. Additionally, the Obama Administration’s numerous initiatives to limit carbon and other forms of pollution from power plants, cars, trucks, homes, and businesses are changing fundamentally how Americans consume energy, enabling the nation to meet its environmental goals in ways that will save countless lives. For example, the Environmental Protection Agency’s 2013 regulation on “National Ambient Air Quality Standards for Particulate Matter” will prevent thousands of premature deaths of elderly and young children from cardiovascular and respiratory illnesses caused by soot pollution.

Smoking is still the nation’s leading cause of preventable death. The 2009 signing of the Family Smoking Prevention and Tobacco Control Act, giving the US Food and Drug Administration authority to regulate nicotine as a controlled substance, was only the most public evidence of progress. The 2009 federal tobacco tax increase of 62 cents per pack, included in the reauthorization of the Children’s Health Insurance Program, combined with the “Tips from Former Smokers” campaign launched by the US Centers for Disease Control and Prevention, were among many initiatives that have contributed to major declines in both adult and adolescent smoking rates, including a drop among adults from 20.6% in 2009 to 15.3% in 2015.3

Regarding nutrition and food policy, the Obama Administration has reformed essential federal nutrition programs that provide a critical safety net for millions of American children and families. Lead by the US Department of Agriculture, for the first time in decades, the most current dietary science is being applied to nutrition programs. More than 50 million children now have healthier food environments at school. Because of new food standards, nearly four million schoolchildren have access to nutritious meals each day in summers, and eight million low-income women, infants, and young children receive improved WIC food packages.

Unknown to the public has been massive upgrading and professionalization of emergency response systems in the United States and globally. Two National Health Security Strategy Plans (NHSS), 2010 to 2014 and 2015 to 2018, have galvanized national efforts to minimize the health consequences of large-scale emergencies in response to the deficiencies evidenced by the tragedies of the 9/11 terrorist attacks in 2001 and Hurricane Katrina in 2005, to achieve a “health-secure and resilient nation.”4 The work’s impact can be seen in the US government’s response to national and global health security threats over the past eight years such as the 2009 influenza pandemic (H1N1), Middle East respiratory syndrome (MERS), the West African Ebola epidemic, and the current Zika virus threat. This new infrastructure helped to address health security threats from recent international crises such as the 2010 Haitian earthquake, the 2011 Japanese tsunami and nuclear power plan incident, and the 2013 Philippines typhoon.

Space constraints do not permit a thorough presentation of the public health achievements and progress by the Obama Administration. Such a full list would also describe: national and global progress in addressing the HIV-AIDS epidemic; fundamental changes in behavioral health financing and access including progress in addressing the advance of the opioid epidemic; adoption by numerous federal agencies of social determinants of health approaches in housing by the US Department of Housing & Urban Development and in transportation by the US Department of Transportation; major declines in adolescent pregnancy rates; unprecedented attention to the health needs of lesbian, gay, bisexual, transgender, and questioning communities; and much more.

Conclusion

Every Presidency leaves a unique record and legacy of accomplishments and shortcomings, of wins and losses.  Noteworthy during the Obama years has been the extraordinary number of initiatives, programs, experiments, and demonstrations that move moved the needle toward greater access, quality, equity, effectiveness, and efficiency in important matters relating to health care and public health.  Wherever Barack Obama lands in the historic hierarchy of significant and positive contributors to health, the extraordinary efforts made by him personally and by his talented, dedicated, and principled Administration have set a high bar and model for all who follow.  The Obama era has been a consequential eight years, and the Administration’s impact has been overwhelmingly for the better for the American people and for the people of the world.

References

1. D Blumenthal, J Morone. The Heart of Power: Health and Politics in the Oval Office. Berkeley, CA: University of California Press; 2010.
2. K Avery, K Finegold, A Whitman. Affordable Care Act has led to historic, widespread increase in health insurance coverage. ASPE Issue Brief. US Dept of Health and Human Services. September 29, 2016. Available at: https://aspe.hhs.gov/sites/default/files/pdf/207946/ACAHistoricIncreaseCoverage.pdf. Accessed October 11, 2016.
3. Early release of selected estimates from the National Health Interview Survey, 2015. National Center for Health Statistics. Available at: http://www.cdc.gov/nchs/data/nhis/earlyrelease/earlyrelease201605_08.pdf. Accessed October 11, 2016.
4. Assistant Secretary for Preparedness and Response. National Health Security Strategy and Implementation Plan 2015–2018. US Dept of Health & Human Services. Pg. v. 2014. Available at: http://www.phe.gov/Preparedness/planning/authority/nhss/Documents/nhss-ip.pdf. Accessed October 11, 2016.
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The Price Is Wrong — Trump’s Health Secretary Is a Bad Sign for Health Reform

[This column was printed today on Commonwealth Magazine’s website.]

PRESIDENT-ELECT DONALD TRUMP has nominated Rep. Tom Price of George, an orthopedic surgeon and the House Budget Committee chairman, to be his first secretary of health and human services. For those lulled into believing that Trump was moderating his views on the Affordable Care Act because of recent statements on 60 Minutes that he leaned toward supporting ACA provisions on banning pre-existing condition requirements and allowing young adults to stay on their parents’ insurance plans, this nomination is a bucket of ice cold water.

UNITED STATES - APRIL 16: Rep. Paul Ryan, R-Wisc., right, Chairman of the House Budget Committee, and Rep. Tom Price, R-Ga., prepare for a hearing in Cannon Building titled "The President's FY2014 Revenue and Economic Policy Proposals," featuring testimony by Treasury Secretary Jack Lew. (Photo By Tom Williams/CQ Roll Call)

UNITED STATES – APRIL 16: Rep. Paul Ryan, R-Wisc., right, Chairman of the House Budget Committee, and Rep. Tom Price, R-Ga., prepare for a hearing  titled “The President’s FY2014 Revenue and Economic Policy Proposals,” . (Photo By Tom Williams/CQ Roll Call)

Price, a leading member of the House GOP’s “doctor caucus,” and a founding member of the Tea Party caucus, has been a strident ACA critic from the start, issuing and reissuing his own ACA replacement plan – the “Empowering Patients First Act” – on several occasions. He has carved a role as House Speaker Paul Ryan’s strongest ally in proposing a radical reconstruction not just of the ACA but of the entire US health security landscape, seeking not just to obliterate President Obama’s health legacy, but also that of President Lyndon Johnson, who signed Medicare and Medicaid into law way back in 1965.

The Ryan-Price agenda includes four key components:

  1. As far as possible, repealing the ACA’s private health insurance and Medicaid coverage expansions, along with most of the new taxes that finance them;
  2. Reengineering the Medicare program into “premium support” in which enrollees will receive fixed dollar vouchers to purchase health insurance policies;
  3. Reconstructing Medicaid into a “per capita allotment” financing model to drastically limit federal dollars to state governments that would be incentivized to limit eligibility and benefits to low income enrollees while increasing cost sharing; and
  4. Capping the federal employer health insurance tax deduction that would sharply increase insurance costs for workers and their employers.

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The Future of Public Health under President Trump

[The Q&A below was published in Harvard media this past week.]

How might the election of Donald Trump as the next U.S. president impact public health over the next four years? John McDonough, professor of the practice of public health at Harvard Chan School, who worked in the Senate on the passage of the Affordable Care Act (ACA), offers his perspective in this Q&A.

mcdonough-head-shot
John McDonough

Many are worried that Obamacare will be in deep trouble—and likely be repealed—once Donald Trump is in the White House, working with Republican majorities in both the House of Representatives and the Senate. A week after the election, Trump appears to be hedging on his prior pledge to completely do away with the health reform law. What do you think will happen to the ACA—and to the millions of people who gained health insurance because of it?

The likelihood for total 100% repeal of the ACA is unlikely for two reasons: One is that this would have to be accomplished through regular legislative order in the U.S. Senate and Republicans would not be able to attract the necessary eight votes needed from Democratic senators to do this. Of course, if Republicans choose to abolish the filibuster, that would change. A second reason that repeal is unlikely is that many Republicans appreciate many non-controversial provisions in the ACA and repealing them would be backward steps they would not want to make happen.

Instead, and for now at least, Republicans appear to be moving toward a two-track process of “repeal and replace.” Repeal of the ACA’s essential health insurance coverage provisions, as well as the new taxes that financed the ACA’s expansions, could be achieved through the special “budget reconciliation process,” which only requires 51 votes for passage and cannot be filibustered. This would take some months to achieve, and is doable as long as 50 of the 52 Republican senators are willing to vote to eliminate coverage for as many as 22 million Americans—the number newly insured under the ACA—and their willingness to do that is not yet certain. Republicans did vote to repeal the most important parts of Obamacare in January of this year, but they did it knowing that President Obama would veto the measure. It would be a different vote knowing that President Trump would sign it.

Replacing the ACA with some other sort of health care law would be far more difficult because that legislation would need to proceed through regular legislative order and could and would be filibustered by Democrats, thus blocking the legislation. So it is conceivable that repeal could happen and replace might not follow, which would leave the up-to-22 million most at risk in a most difficult situation.

It’s been reported in the media that President-elect Trump may consider keeping some of the ACA’s more popular provisions, such as the requirement that insurance companies not deny coverage to people with pre-existing medical conditions, or that children up to age 26 can be covered under a family’s health plan. How do you think this might play out?

House Speaker Paul Ryan and House Republican leaders, in their “Better Way” document on repeal and replace last summer, indicated that they would continue the ACA’s “guaranteed issue” provisions—those making it illegal for insurers to deny anyone coverage because of health status, age, gender, or other factors—though only for those who are able to maintain “continuous coverage” with no or only short-term coverage breaks. For the millions of Americans who find themselves unable to afford coverage for some period of time, Republicans would, by their own words, return pre-existing condition exclusions and medical underwriting—charging the sick higher prices than the healthy. The provision for children up to age 26 being able to stay on parent’s health insurance policies is most likely not to be repealed.

How might the new president’s policies impact women’s health? He has said he would nominate a conservative Supreme Court justice who would be in favor of a pro-life agenda. Could this lead to Roe v. Wade being overturned? What other ways might women’s health be impacted under the Trump administration?

Even with a Trump appointment to the U.S. Supreme Court, there are five current votes, including Justice Anthony Kennedy, opposed to a Roe v. Wade repeal. So President Trump would need at least one additional replacement of those five to have a chance at repeal.

Other aspects of women’s health coverage are at risk because of Republican plans to repeal large portions of the ACA. Republicans want to return all discretion over required benefits to states, including the ACA’s mandates on benefits such as birth control, mammography, prescription drugs, behavioral health, and much more. So it’s possible that women could lose coverage for services that are currently free, such as contraception, mammograms, folic acid supplements during pregnancy, and screenings for gestational diabetes, sexually transmitted diseases, and cervical cancer.

Trump broke with conservative orthodoxy when he said that he’s in favor of Medicare being able to negotiate drug prices. He also has said that he would take on the Big Pharma lobby in order to reduce high prescription drug costs. Do you think he’ll be able to follow through on these pledges?

President Trump’s administration would only be able to negotiate drug prices or make other significant changes in pharmaceutical policies with the consent of Congress, which is most unlikely to provide that authority to him.  Also, though the health policy section on his campaign website included drug-related proposals, the health policy section on his presidential transition website includes no mentions of these.

There were a number of health-related ballot initiatives across the nation. Three states, including Massachusetts, voted to legalize recreational marijuana and another three voted in favor of medicinal pot; voters in California, Washington, and Nevada approved various gun control measures; Californians raised cigarette taxes; and four cities voted to tax sugar-sweetened beverages. Also, Colorado rejected the establishment of a single-payer health insurance system in that state. How are these ballot initiatives changing the public health landscape?

On recreational marijuana, the tide of public opinion is changing the national landscape in spite of bipartisan opposition to this liberalization from elected officials all over the nation. It feels somewhat like the fast-changing tide a few years ago on gay marriage. And it feels unstoppable.

Taxes on sugar-sweetened beverages, at least on the local level, seem to be approaching the level of public acceptance we have seen in prior years with relation to tobacco taxes. The public seems supportive, at least in cities, especially when the revenues raised are clearly defined in terms of spending targets, such as public education. We have yet to see this approach pushed at a state initiative level, which would be a much more challenging proposition.

Regarding the vote against single-payer health insurance in Colorado, it seems that the U.S. sees one of these single-payer ballot initiatives every decade or so, and in each case, they start with some robust public support and then lose in a landslide: California in 1994, 73% to 27% no; Oregon in 2002, 77% to 23% no, and now Colorado in 2016, 80% to 20% no. It has always been a difficult sell and the Colorado results demonstrate that it still is.

Karen Feldscher

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Explaining our Health Care Dilemma to the World

I co-wrote the article below for the British Medical Journal with John Park, a Kennedy Scholar at the Harvard TH Chan School of Public Health:

America’s HealthCare Dilemma

The insurance of at least 22 million Americans hangs in the balance

The election of Donald Trump as 45th president of the United States has triggered concerns in many globally important areas of public policy, including climate change. But for Americans, one of the most unsettling challenges is the future of domestic healthcare policy and the fate of the 2010 health reform law, the Affordable Care Act (ACA).

For 45 years, the US healthcare system has been accurately characterized as the most expensive among nations in the Organization for Economic Cooperation and Development (OECD), as mediocre regarding quality and effectiveness, as inadequate in that it left nearly 50 million Americans uninsured, and as substandard in core outcomes such as infant mortality and life expectancy. In short, the only category at which Americans seemed to excel was in spending the most money.1

Between 2005 and 2008, many sectors in American society became vocal in calling for comprehensive healthcare reform to address failings in access, quality, cost, and outcomes. Between January 2009 and March 2010, new President Barack Obama worked with hefty Democratic majorities in the US Senate and House of Representatives to fashion comprehensive reform to tackle these deficiencies, signing the ACA on 23 March 2010. Though some Republican members of Congress initially expressed support for reform, objections to the Democratic approach and political resistance from their grassroots left zero Republican supporters by the time that the ACA was signed. Continue reading

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Pre-Election Reflections on Health Reform in the 2016 Campaign

[This post appeared in the Health Affairs blog on November 7 2016.  Happy election day, everyone!]

We are nearing the grand finale of our long and disheartening election opera, one we dare not ignore because the outcomes matter so much. While the election results will not be determined by public reactions to the Affordable Care Act, the ACA’s fate will be mightily determined by Tuesday’s outcomes. What have we learned about our collective health future over the past 18 months and what might this mean for our health system’s future?

Public opinion on health reform is as frozen today as it was in spring, 2015

Kaiser monthly tracking polls show reliably unfavorable attitudes toward the ACA, slightly beating favorables, and stuck since 2014 in 40 percent purgatory. The advantages millions of Americans feel from ACA insurance coverage expansions and other access reforms are balanced by those who now blame the ACA for everything bad that happens in health care. The misnamed Pottery Barn rule—“if you break it, you own it”—applies here even though the dish was broken well before the ACA. Beyond this, if there is one thing on which both sides of the new Republican divide concur, it is a deep hostility towards ObamaCare. The election cycle seems to have only hardened these views.

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The essential differences between Democrats and Republicans are now more clear

We know more about the preferences of both parties with respect to the ACA than we did 18 months ago. Hillary Clinton, Donald Trump, and House Speaker Paul Ryan, have released health reform planks that clarify their intentions — regardless of Congressional feasibility.

Clinton wants to maintain and strengthen the ACA by improving premium affordability and by addressing excessive cost sharing in the Exchanges and beyond. She has an eight-point plan to address pharmaceutical prices. She will emphasize women’s health, and much more. Her campaign has articulated the first full agenda of any leading Democrat to improve and advance the ACA, helping to define the arena of possibility, whether far-fetched or not.

After early teasing about his admiration for the Canadian and Scottish single-payer systems, Trump embraced standard Republican orthodoxy on ObamaCare, most recently announcing his intention to call a special Congressional session as soon as possible to repeal the law. Two independent research institutes (Committee for a Responsible Federal Budget and the Commonwealth Fund) have concluded that Trump’s agenda, if implemented, would result in 20 million Americans losing health insurance and would increase the federal deficit by $330-550 billion over 10 years.

Meanwhile, Speaker Ryan announced in September his intention—if Republicans control both houses of Congress and the White House in January—to expedite budget reconciliation legislation that would repeal as much of ObamaCare as possible. Though Ryan’s plan is more ambitious than Trump’s, of the latter’s seven health policy planks, five also show up on the Speaker’s agenda.

The final week’s fireworks over premium increases in the individual health insurance market only emphasize that the political volatility of the ACA/ObamaCare has not diminished at all.

Differences involving the ACA are not about facts or data, but about fundamental values

One of my favorite political scientists, Deborah Stone, in her book Policy Paradox, writes that much of the policy process involves debates about values masquerading as debates about data and facts. That sure describes the past eight years of health reform. As my colleague Robert Blendon showed in his pre-election special report for The New England Journal of Medicine:

The political parties fundamentally differ over the role the federal government should play in intervening in the U.S. health care system, (and) the desirability of the federal government moving ahead with future efforts aimed at universal coverage…

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Source: POLITICO, Harvard T.H. Chan School of Public Health Poll. Voters and health care in the 2016 election. September 14–21, 2016.

The notion that these differences might be leavened, for example, by changing the age-rating bands (the maximum amount an insurer can charge in premiums for young people versus older enrollees) in the Exchanges from three-to-one up to six-to-one, is delusional. Six and a half years after its signing, the ACA has yet to become settled policy because the differences are simply too deep and neither side of the political divide can risk the backlash of surrender.

Republicans don’t want to fix the ACA car at any cost; they are determined to smash it

The excessively high premium increases in 2017 in the ACA Exchanges, more than anything, are tied to elimination in 2017 of risk corridors and reinsurance, as well as the undermining of risk adjustment. This past summer, Alaska’s Republican Legislature established its own reinsurance mechanism to stabilize rates, and immediately saw premium increases drop from over 40 percent to under 10 percent.

In my time as a member of the Massachusetts House of Representatives (1985-1997), I learned that when political partners like and respect each other, the most difficult challenges could be met with seeming ease; and conversely, when parties disliked and disrespected each other, the easiest chores were impossible to achieve. And thus it is with the ACA Exchanges, eminently fixable technically, and utterly unfixable politically.

And ACA demolition is advanced with no clearly defined replacement alternative. Yes, Speaker Ryan advanced a health reform agenda this past summer; yet he and his team did not put their ideas into legislative language that could be scored by the Congressional Budget Office, perhaps because they knew that the results on both lost insurance coverage and rising costs would turn the public against them.

“The future, like everything else, is no longer quite what it used to be.” (Paul Valery, 1937, not Yogi Berra).

As I write this on November 3rd, the most likely outcome from November 8 is divided government, with a Senate majority hanging by a thread. (Please recall that Senator Al Franken (D-MN) took his U.S. Senate seat for the first time in July 2009 after an eight-month recount process.) Republicans know that the electoral map in 2018, all things being equal, will offer substantial gains in both the Senate and the House, particularly if their political base is pleased. Democrats know that they will need to deliver on at least some of their promises, and not allow the signal accomplishment of the Obama Administration to fall apart.

Dare I say it: we’re going to need some statesmanship at a time when that commodity is in short supply.

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The Choices on Health Reform in the US Presidential and Congressional Elections

The commentary below was published in JAMA Internal Medicine online on October 10 2016 and was written by me and David K. Jones from the Boston University School of Public Health:

Although the outcomes of the US Presidential and Congressional elections in November 2016 will not be determined by attitudes toward the Affordable Care Act (ACA), the results will likely determine its long-term fate. As was the case in 2008 and 2012, the electorate’s decisions on whether the Republicans or the Democrats control the White House, the Senate, and the House of Representatives will have fundamental consequences for the future of national health reform.

A Republican victory that includes that party’s control of the White House, Senate, and House of Representatives would likely augur huge shifts in national health policy. A Democratic victory that included the White House and a Senate majority would likely further embed the ACA into state and federal health policy, and perhaps lead to further expansion and reforms. More than 6 years after President Barack Obama signed the legislation into law in 2010, the ACA has yet to become settled policy.

The Republican Agenda

Over the past 4 years, Republican members of Congress and conservative think tanks such as the American Enterprise Institute and the Manhattan Institute have advanced numerous proposals to repeal and replace the ACA. As the final stages of the 2016 campaign approach, 2 plans stand out: Republican presidential candidate Donald Trump’s agenda as outlined on his campaign website,1 and the House Republican leadership plan released by Speaker Paul Ryan (R-WI) in June 2016.2 Continue reading

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