Exploring Human Potential

The Pharmacy Benefit Manger (PBM) Syndicate

Posted on | June 14, 2018 | 5 Comments

Mike Magee

“Syndicate: a self-organizing group of individuals, companies, corporations or entities formed to transact some specific business, to pursue or promote a shared interest. In most cases formed groups aim to scale up their profits.”

Drug channel companies including Pharmacy Benefit Managers (PBMs) (like United Healthcare’s Optum, Express Scripts and CVS/Caremark) and distributors (like AmerisourceBergen, Cardinal Health, and McKesson) are now 6 of the the top 25 companies in the Fortune 500.

What’s the source of all that market power? Let us count the ways:

1. Management of outpatient prescription drug benefits (including kickbacks)

2. Representing insurers and large employers (including kickbacks)

3. Organizing Medicare Part D benefits (including kickbacks)

4. Setting formulary policies (including kickbacks)

5. Negotiating with drug manufacturers (including kickbacks)

6.  Assigning formulary tiers (including kickbacks)

7. Distributing drugs through mail order and retail outlets (including kickbacks)

The parentage of PBM’s from insurers like UnitedHealth Group, or  pharma companies like Merck, or pharmacy chains like CVS helps explain how we have now arrived at an opaque system of profit sharing that deals in everyone except the patient.

It also helps explain the stratospheric rise in profitability usually associated with crime syndicates and money laundering operations. Since 1990, the prescription drug market in the U.S. has grown tenfold from $38 billion to over $360 billion.

PBMs may appear to be independent but in reality they have been built out “alongside a dominant fee-for-service health insurance system”. They are in fact agents and managers for a syndicate hidden in plain sight. It features contractural profit sharing, market protections to members that prevent competition and intrusion, and distribution of the spoils in a manner that prevents open warfare among participating members in the scheme.

And since DTC advertising was given the green light in 1997 (the only place on Earth besides New Zealand that allows it), the spoils have grown exponentially with the help of a “dog-eat-dog culture” reinforced by remarkable over-prescribing. 50% of Americans have filled a prescription in the past 30 days and 10% of Americans are on more than 5 prescription drugs. That’s quite an appetite!

If there was ever cause for pushing the “reset” button, this must be it.

Is it time for the “next” health care, or a total reboot?

Posted on | June 6, 2018 | 2 Comments

Mike Magee

This week’s big news is no big surprise. “Medicare’s Trust Fund Is Set to Run Out in 8 Years. Social Security, 16”, said the New York Times. We told you so, screamed the Republicans, anxious to fulfill Paul Ryan’s dream of taming endowments. We told you so, blared the Democrats, claiming this was always the end game with the recently passed, mega-deficit enhancing tax break for the rich which purposefully pushed the programs over the cliff.

Both are right in that this was predictable. But both are wrong in expending energy pointing fingers at each other rather than addressing the real issues: 1) our health system is massively inefficient, 2) our system rewards profiteering at every turn, 3) our system fails to deliver health in an even and equitable manner compared to all other developed nations.

A few facts:

More than 60 million Americans rely on Social Security, Medicare or both.

Social Security and Medicare currently consume 40 cents of every federal dollar.

Trump’s weakening of the ACA, most especially the penalty for going uninsured, means that our broken system will have more “uncompensated care” which simply adds fuel to the fire.

American taxpayers contribute $13,600 for every Medicare beneficiary. In five years, the projected figure will be $17,000.

Quasi-privatization of Medicare through the use of Medicare Advantage plans that further pad the pockets of insurers, Pharma, and PBMs, skimmed off 20 million seniors this year. In 10 years, that number is projected to increase by 50%.

The ratio of workers to beneficiaries is in steep decline. It was 3.3/1 in 2005, 2.8/1 in 2016, and is projected to be 2.2/1 in 2035. By then, there will be nearly 90 million eligible for Medicare.

While elderly numbers are rising fast, teenagers and young adults are dying at record rates causing economists to worry about the “work-loss costs.” Unintentional deaths from opioids, firearms (suicides and homicides), and motor vehicle accidents (mostly tied to texting) have risen from 15,851 in 2012 to 23,984 in 2016.

Princeton economist Alan Krueger estimates that negative health impacts have led to a 20% decline in workforce participation in males 25 to 54, and a 25% decline in women.

As record spending and profiteering fuel biotech speculation, public health spending continues a decades long decline. We are the only developed nation that spends more on fighting disease than on all our other social service programs combined.

Mayo Clinic’s Michael Joyner says, “In addition to the specific mix of greed, bad corporate governance, and too much ‘next’ Steve Jobs, Theranos (the fraudulent testing company led by Elizabeth Holmes) thrived in a biomedical innovation world that has become prisoner to a seemingly endless supply of hype.”

Life expectancy in the U.S. will decline for the third straight year in 2018. Ironically, the last time that happened was exactly a century ago, during the Spanish flu epidemic.

Bottom line: Bad policy is killing us and killing our future. We need to nationalize health planning and health insurance for all. We need to admit that fighting disease is not the same as providing health. And we need to mandate price transparency and appropriate protections for all Americans.

Does Maternal Health Care in America Deserve Its “Me-Too” Moment?

Posted on | May 23, 2018 | 3 Comments

Mike Magee

The U.S. birth rate dropped for the second year in a row, down 3% from the prior year, the largest decline since 2010. In 2017, there were nearly 4 million births, 500,000 fewer births than in 2007, even though there has been a 7% increase in women 20 to 39, prime childbearing years, over the past 10 years.

The declines cut across all demographics but are especially evident in women of color. While birth rates in white women over the past 10 years were down 4%, Hispanic women declined 27%, black women 11% and Asian women 5%.

If you look at US health care outcomes, women can hardly be criticized for being cautious. Moms giving birth in the U.S. are three times as likely to die in the process as moms in Canada or the U.K. But that’s not the worst of it. For every woman who does die, 70 more (an estimated 50,000 moms) come close to dying.

There’s a laundry list of contributors – for example pre-eclampsia induced stroke or organ failure, placentas incompletely removed leading to hemorrhage and sepsis, and pulmonary emboli following delivery. These problems are more likely in the uninsured and poor, in those with obesity and diabetes, and in older moms. Women in their 30’s are now having more babies than women in their 20’s.

If a mom is lucky enough to have an uncomplicated birth in the U.S., she is discharged in less than 48 hours and still not completely out of the woods. That’s because post-partum care in America is abysmal. The critical 12 weeks after delivery, which advocates for women’s health have taken to calling the “4th trimester”, traditionally includes one solitary office visit for moms at 6 weeks.

As moms quietly struggle to manage their new infants needs, they end up ignoring their own substantial recovery challenged by perineal and incisional pain, depression and anxiety, bleeding and cramping, chills and night sweats, engorged breasts, constipation, hemorrhoids and more.

If she were in Switzerland, the hospital stay would be longer. In England or France, a midwife would be by in the first week for a home visit. In Sweden or Norway, there’d be a generous maternity leave. (In the U.S., ¼ of women go back to work less than two weeks after birth.)

Maternal care looks bad when numbers are rolled up and averaged. But, as with all other measures in U.S. health care, the geographic, economic and racial disparities are far, far worse. What we tolerate in women’s health care is pitiful.

The Affordable Care Act took measures to address this abuse. Prior to the ACA, 1/3 of women attempting to purchase health insurance were either rejected, surcharged with a higher premium, or excluded based on a prior condition. Numbers of uninsured women under 65 climbed from 13% in 2001 to 20% in 2010. For those who were covered, maternity coverage was often missing. ACA outlawed these skinny benefits and exclusions.

By 2016, only 11% of women under 65 remained uninsured, down from 20%. For those uninsured below 200% of the poverty level, the change after ACA was even more striking with uninsured falling from 34% to 18%. In parallel with these changes, all measurers of access to care, from office visits to pharmaceuticals for these vulnerable women have improved.

And yet, the Republican led Congress in lockstep with Trump, stills dreams of “repeal and replace”, and focuses on renewed attacks on women’s health services through defunding of Planned Parenthood.

The “Me-Too” movement is here to stay. There will be no turning back on individual abuse of women. But now is the time to also address broad scale institutional abuse of women as part of the movement. Universal health coverage with a consistent single payer package of meaningful maternal health offerings is an obvious and long overdue response.

How to gin up the Base: “Repeal and Replace” – again?

Posted on | May 21, 2018 | No Comments

Mike Magee

It’s been 11 months since Sen. John McCain (R-AZ) gave the thumbs down to repealing Obamacare. But get ready for another push at “Repeal and Replace!” That’s what’s circulating within the halls of Congress right now. This has little to do with over-riding the wishes of the majority of Americans, and more to do with riling up Trump’s base for the 2018 mid-terms.

Still the fire drill will once again require a mandatory push back. If there is any silver lining, it may be that accompanying polls will likely reveal that Americans are inching ever closer to a universal approach with “single payer/multi plan” efficiencies.

During the last attack on the popularly supported ACA, veteran Health Policy expert, James A. Morone, Ph.D., made an interesting argument for single payer health care in the NEJM. In proposing a sweeping change that would directly address “the American patchwork”, assert “the norms of communal decency”, promote planning and efficiency, and empower “a righteous band of reformers, deeply committed to a cause, pushing against all odds”, he did not sidestep higher taxes on the rich.

Rather he sold into them, presenting high taxes on the rich in return for universal health coverage as “on a short list of available policies designed to push back on inequality.”

His argument boiled down to the fact that a central element to the populist anger that helped to elect Trump was our remarkable income inequality. In roughly a half-century, our separation between rich and poor that used to mirror France and Japan, now aligns with Mexico and Brazil.

Our top 1% controls roughly 40% of all wealth, while the bottom 90% manages a paltry 23%. If you’re a white family in America, you were born lucky. On average, your family is about 10 times as wealthy as your black family counterpart.

But what about taxes, and distrust of “Big Government?” Morone reminded us that major policy changes can, and have, flipped on a dime in the past. As he wrote, “Disruptive populism ended past American gilded ages, and it shows signs of challenging the current one.” With better health delivery, and more equality and social justice, we might also redirect the course of American politics and American politicians.

What Trump and his Congressional enablers are doing is fairly transparent – they are intentionally undermining the two critical pillars of American society, truth and trust. The rehashing of “repeal and replace” force one more look in the mirror for all Americans trapped within an epic American struggle over how to topple the health care status-quo, a Medical-Industrial Complex controlled and directed by members of the 1%.

The outcome hangs on whether we – the citizens – are able to discern fact from fiction.

The key question for health reform and for the future of America: Do we trust our own government to assure each of its citizens have the right to “life, liberty, and the pursuit of happiness.”

So if we must, let each of us repeat once again the principles that define why universality through a simplified, single payer methodology makes common sense for Americans today:

Universality: Health coverage is a right of citizenship.

Public Administration: Administration of basic health coverage is organized in the most cost-efficient manner possible with central oversight by the government.

Local Control of Delivery: The actual delivery of services is provided by health professionals and hospitals at the local and state levels.

Health Planning a Priority: Creating healthy populations is a high priority on the federal and state levels.

Transparency: Providers submit bills. Government ensures payment of bills. Patients focus on wellness or recovery.

Juul – Fun Facts!

Posted on | May 14, 2018 | 3 Comments

Mike Magee

Most everyone by now has heard about Juul, the leading brand name for e-cigarettes. But, for most of us, that’s where our knowledge begins and ends – except for a growing awareness that there’s a controversy brewing about risk, teenage use, school policy, and profiteering by Big Tobacco which is getting a piece of the action.

So here are the facts:

Juul is a thin high tech vaporizer about half the width and half the weight of a Bic lighter – which means it’s easy to hide and conceal in your hand. It costs $34.99. The habit forming experience is called “vaping.” Juul is the market leader with 60% of all e-cigarette sales.

A juul is the energy required to produce one watt of power for one second. So there’s that, but also the name evokes the preciousness of a rare jewel as well.

It’s flavored nicotine package, called a pod, is the size of a thumbnail and comes in eight flavors (mango and mint are the best sellers). The pods each contain the amount of nicotine in a pack of cigarettes. The nicotine makes up 5% of a pod’s weight. A pack of 4 pods caosts $15.99.

40 million Americans continue to smoke cigarettes. Cigarettes remain the #1 cause of preventable death in the U.S., killing about 500,000 Americans a year.

Teen smoking of cigarettes continues to decline, but new school “vaping” in on the steep incline. Sales are up 25% over last year at $5 1/2 billion (still small compared to $120 billion in U.S. cigarette sales).

E-cigarettes were invented by Chinese pharmacist Hon Lik who patented the heating device that vaporized liquid nicotine in 2003. Juul’s high tech vaporizer comes from China. It’s liquid nicotine is stored in five-gallon containers and is made in the U.S. but no one knows where – big secret!

A cigarette has over 600 ingredients. Juul has five – glycerol, propylene glcol, nicotine, benzoic acid, flavoring.

Juul employs 400 workers. The 54 year old CEO, Kevin Burns, came from Chobani in 2017. He’s their positioner, saying that Juul is the “cigarette killing company.” The company has its own PAC now and is trying to fight off FDA regulation.

High school administrators are going nuts trying to keep Juuls out of the classroom. Use under age 21 is technically illegal. But you can get it on the Internet and there’s a brisk drug trade inside school walls by enterprising students. Kevin Burns has a new wave answer – Jule’s new “mindfulness curriculum” – and a new Android app to track your nicotine intake.

Jonathan Winickoff, former chair of the American Academy of Pediatrics Tobacco Consortium, isn’t too impressed. He says: “Juul is already a massive public health disaster.” The Heart Association and Lung Association also oppose exposure to this “lethal and addictive” substance.

But David Abrams, former director of the Office of Behavioral and Social Sciences Research at the NIH, isn’t too worried about kids vaping their brains off. It’s only nicotine, adding reassuringly, “It changes your heart rate a little bit…” As for the pediatricians, he adds: “The AAP is doing its job. And we should be protective of kids. But there are adult lives at stake, too.” Abrams believes that over 6 million lives a year would be saved if 10% of American smokers switched to Juuls.

Guys like Abrams like to quote anti-smoking guru Michael Russell who said in 1976, “People smoke for the nicotine, but they die from the tar.”

The kids love the Juul in part because it’s distinctly their’s with its sleek design, ability to be personalized, armed with its own circuit board, and upsetting to school officials and parents alike. It’s deliberately “not their parents cigarette” – no tip glow, no rounded tube – and yet it still “peps you up while calming you down.”

And that’s why 50% more middle-schoolers and high schoolers in America now vape than smoke.

Cutting Safety Net Sends Health Status Lower in U.S.

Posted on | May 8, 2018 | No Comments

Mike Magee

A Commonwealth Fund study in 2015 compared 13 nations on cost and quality. As most know by now, the U.S. finished near the bottom in quality measures and at the very top, by far, in cost. But the chart that drew my attention was the one above showing health expenditures vs. total spending on all other social services combined.

As you can see, the U.S. is the only nation that spends more on health care (by a margin of 2 to 1) than all of our other social spending combined. What are the consequences of such short-sightedness? Let me share just two from the news this week.

1. Nutrition:

In the U.S. we invest remarkably little taxpayer money on nutritional education. Instead we relegate that space to food and beverage companies in the name of free enterprise, and have convinced ourselves that their advertising has an educational component. So we should not be surprised that that latest obesity numbers are the worst ever.

Our overall obesity incidence in 2016 sits at 40%, up from 34% a decade ago. Extreme obesity has risen from 5.7% to 7.7% during the same time frame. The five worst states now have obesity rates greater than 35%

Obesity accounts for 18% of deaths and is the leading cause of death in the U.S. It is a contributor in 40,000 cancer deaths a year, and obese people are 2.5 times more likely to die of heart disease.

Other nations address obesity through national social services programs that emphasize nutrition education, local access to healthy foods, aggressive taxing of unhealthy foods, school programs focused on nutrition and exercise, and general public health campaigns.

2. Poverty:

The majority of Americans will now experience poverty some time in their lifetime. For those age 25 to 60, 62% will experience at least 1 year in the lowest 20% by income, and 42% will spend 1 year in the lowest 10% by income. Your chances of poverty increase if you are young, nonwhite, female, not married, have a high school education or less, or have a work disability.

Childhood poverty cost the nation $1.03 trillion or 5.4% of its GDP in 2015 by undercutting productivity, engaging in crime, or suffering poor health. For each $1 spent to ameliorate poverty, our nation would save $7 in the economic costs of poverty.

This week President Trump vowed to further compromise social spending levels approved by Congress in their 2018 budget agreement. As with all things Trump, members of his own party in Congress have remained mute.

They should take heed of Mark Rank’s recent New York Times editorial. He’s a professor of social welfare at Washington University, and wrote: “Instead of slashing an already weakened safety net, we should be following the example of most leading countries, which have built effective support systems that prevent poverty. By doing so, we would give our children a much better chance of reaching their full potential, which benefits us all.”

Where will reform come next, and who will lead the way?

Posted on | April 16, 2018 | No Comments

Mike Magee

“On résiste à l’invasion des armées; on ne résiste pas à l’invasion des idées.”  – Victor Hugo.

It’s useful for all health professionals  to reflect on the words of this 19th century French writer. The translation: “Greater than the tread of mighty armies is an idea whose time has come.”

As the AEI chart above illustrates, there is growing collective awareness that our health care system is breaking the bank as it fails to deliver a healthy America while robbing resources from other critical societal needs that contribute to our health and wellbeing.

Hospital cost inflation over the past two decades tops the inflation list above at over 200% with general medical care weighing in at 125%. One in every five dollars consumed by health care today goes to our medical-industrial complex.

Warren Buffett’s assessment that “Medical costs are the tapeworm of American economic competitiveness”  is right on. His critique has focused on data, cost, and level of engagement. We are challenged by the virtual absence of national health planning and a massively inefficient delivery system.

One of the pillars of resistance to addressing the status-quo, the medical establishment, is eroding as we speak. More than half of all physicians are now corporate employees. Teams with “physician extenders”, known by their patients as health professionals, are the standard, not they exception. Physicians sloppy prescribing has ignited the opioid epidemic and exposed them as easy marks for health product marketers. And it’s not just opioids. Witness anti-depressant addiction especially in women over 55 or poly-pharmacy in seniors nationwide.

Quality issues beg for health delivery disruption. Add to this that there is more than enough money in the system were it to be redirected. The centralized standardization of basic benefit packages and billing systems alone would deliver a 15% savings on our $4 trillion plus annual spend right off the block. Centralization is not socialization. Delivery solutions in all developed nations involve public/private solutions executed on a local level.

In our own country,  we are witnessing the emergence of “disruptors.” The current favorite for speculators in the health sector is CVS who has a $69 billion offer to purchase Aetna on the table. In this week’s JAMA, the new Panning Dean of the new Kaiser Permanente School of Medicine, geriatrician and medical ethicist Christine Cassel offered her analysis.

She notes that CVS has 9700 stores nationwide and 1100 attached retail clinics thus far. Leaders of the corporation envision providing “10,000 front doors” to patients of the future.

CVS’s growth in direct care thus far has been based on access and convenience – and sometimes physician choice. For example, when I was due for a shingles vaccine recently, my internest ( who is employed by a corporate health system)  elected to send me to the pharmacist next door rather than spend time (and money) himself.

Another CVS standard is pharmaceutical continuity and delegation of care to non-physicians. Offerings at first were limited, but they are rapidly approaching the offerings of most primary care offices, quite a feat since CVS has made a minimal investment as yet in adequate brick and mortar to house the services. Cost-effectiveness is also a goal with almost all services coming in under $100, and insurers welcome.

CVS has also been making a run at the status-quo with data (They now own a dominant PBM and will soon add a major insurance database). All that’s left is engagement. Specifically, they need to connect to existing health care systems. With Aetna, they may have a running start since the insurer has been active in the Medicare Advantage plans and in Medicaid risk bearing health delivery, both proposed as vehicles for a public march toward universality.

But they needn’t wait for Aetna – and as it turns out, they haven’t. Four years ago, the Advisor Board reported that CVS already had formal relationships with 350 hospitals in addition to clinics and physician groups. In the D.C. area at the time they were integrating their electronic medical records with MedStar Health’s 10 hospitals and 4000 doctors, and promising the system’s patients the future ability to access their medical records at any of the CVS stores nationwide. And it wasn’t just MedStar. At the time CVS had 41 similar health-system agreements formalized. That was four years ago.

But has “the time come” as Victor Hugo professed?

Consider the politics in addition to the financials. For the past two years we have witnessed our worst tribal instincts on full display. In general, America’s goodness has so far survived and appears to be  growing in strength and organization whether it be teens rising up against gun violence, media on hyper-alert as they face off  “fake news” or the independence of our Justice System reinforcing through action that “no one is above the law.”

The 2018 election could create the momentum for a push toward solidarity and a refocus on positive values. If so, at least based on the chart above, health care reform and educational reform will likely lead the way.

“On résiste à l’invasion des armées; on ne résiste pas à l’invasion des idées.”

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