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Kaiser Health News reported on Pfizer's fight to reimburse Medicare patients for out-of-pocket medication costs. Without context, Pfizer's move might sound puzzling: why would a private company fight to reduce patient costs, and why would the government stop a private company from doing so?

Kaiser Health News reported on Pfizer's fight to reimburse Medicare patients for out-of-pocket medication costs. Without context, Pfizer's move might sound puzzling: why would a private company fight to reduce patient costs, and why would the government stop a private company from doing so?

To understand the motivations, it is helpful to understand why insurance policies have patients pay a portion of their medical expenses through arrangements known as co-pays, co-insurance, and deductibles. Essentially, if a service or good becomes free to a consumer, the consumer will tend to want to over-consume it. For example, if all doctor appointments were free to patients, many patients would want to schedule more appointments than what they are scheduling now, even if there is not a compelling medical reason (i.e. many patients might choose to see doctors in cases that they would not choose to see them under current circumstances). As a result, insurance policies tend to include some patient responsibility in their coverage. While the patient responsibility will not cover the full cost of the procedure (otherwise, insurance might become pointless), the financial cost to the patient might discourage wanton use of medical services. Patients often are not the direct customers of medical goods and services -- insurance companies are. As a result, patient responsibility is a way for insurance companies to reduce over-consumption.

Turning back to Pfizer's fight, we can now see why they might be interested in reducing patient costs: doing so would remove a barrier for patients to choose their medications, causing the government to pay for more doses. Paying patients directly might be considered too brazen of a kickback; instead, pharmaceutical companies can direct funding through non-profits whose missions are to increase patient access to life-saving medication. Pfizer's lawsuit seeks to gain permission to give funding to non-profits to increase patient access to a specific drug of theirs (the article reports that Pfizer settled with the government three years ago for a similar scheme).

It seems unclear whether the current courts will allow Pfizer to go forward with its strategy; if it does, many companies might follow suit. It could be that new legislation will be necessary to prevent this particular tactic.

Kaiser Health News reported on an executive order issued on July 9 with the aim of reducing prescription drug prices. The executive order seems to have two major parts: allowing importation of drugs and plans to expedite the approval of generic drugs.

Kaiser Health News reported on an executive order issued on July 9 with the aim of reducing prescription drug prices. The executive order seems to have two major parts: allowing importation of drugs and plans to expedite the approval of generic drugs.

Interestingly, allowing the importation of drugs was also put forth by the previous administration, suggesting some bi-partisan support for the idea. However, foreign countries (namely Canada) might oppose exporting drugs to the US for fear of compromising their own supply.

The executive order calls for a more detailed plan to be released in 45 days, at which point, policy experts can weigh in on whether they think the plan will be effective. Even still, the system is a dynamic one, with various players (whether pharmaceutical companies or other countries) looking out for their own interests, so it remains to be seen whether the executive branch can effectively reduce drug pricing without legislative support.

Kaiser Health News reported on some Democratic ambitions to increase healthcare spending. Highlights include adding dental, vision, and hearing benefits to Medicare, and extending expanding long-term care benefits. While most changes appear to subsidize the cost of health care, part of the plan is to also reduce the cost of prescription drugs by allowing Medicare to negotiate drug prices.

Kaiser Health News reported on some Democratic ambitions to increase healthcare spending. Highlights include adding dental, vision, and hearing benefits to Medicare, and extending expanding long-term care benefits. While most changes appear to subsidize the cost of health care, part of the plan is to also reduce the cost of prescription drugs by allowing Medicare to negotiate drug prices.

The plan includes non-healthcare related expenditures and seems to work out to about $3.5 trillion. Democrats are trying to pass this legislation as budget reconciliation, meaning that they do not need to have a super-majority to thwart filibusters. Currently, Democrats hold the slimmest possible majority when including the vice-presidential tie-breaker vote, meaning that the proposal might have to heavily cater to a few senators in order to pass.

Kaiser Health News published a column recounting the author's experience in comparing procedures across different hospitals. The author, a healthcare reporter, concludes, "The prices I examined were as transparent to me as hieroglyphics."

Kaiser Health News published a column recounting the author's experience in comparing procedures across different hospitals. The author, a healthcare reporter, concludes, "The prices I examined were as transparent to me as hieroglyphics."

Surprisingly, the author found different prices for the same procedures listed at the same facility, perhaps defeating the idea of pricing transparency. It appears that some of the differences arise from some prices including ancillary services (or add-ons) that others do not. So, it appears that as much as the Health and Human Services agency wanted to enable easier price comparisons across hospitals, the industry's response is not sufficiently standardized. Nevertheless, the agency's regulation is a step in the right direction.

Kaiser Health News reported on California Medical Association's (CMA) response to some proposed legislation to raise physician licensing fees and to give non-physicians greater oversight of the medical board, whose mission is to "protect health care consumers." Presumably because of CMA's lobbying efforts, the increase in licensing fees was reduced to about a fifth of the original proposal, and non-physicians were not given greater oversight of the medical board. The medical board relies on licensing fees, and is reported to be "teetering on insolvency."

Kaiser Health News reported on California Medical Association's (CMA) response to some proposed legislation to raise physician licensing fees and to give non-physicians greater oversight of the medical board, whose mission is to "protect health care consumers." Presumably because of CMA's lobbying efforts, the increase in licensing fees was reduced to about a fifth of the original proposal, and non-physicians were not given greater oversight of the medical board. The medical board relies on licensing fees, and is reported to be "teetering on insolvency."

A bigger problem from the patient perspective is that in the fiscal year 2019 to 2020, cases "took an average of 548 days from start to end." Investigations taking a year and a half seems unreasonably long, and it would be interesting to hear a response from the industry. The medical board investigated about 20% of the 10,868 complaints that it received in the same time period, which also sounds rather low. Unredacted public disclosure of those complaints that were not investigated would certainly be problematic, so it would be good to have an independent review of those complaints to see if the board should be investigating many more complaints. Kaiser Health News additionally reported that "Patients and their families who have testified at legislative hearings describe an unresponsive and uncommunicative board that usually allows doctors accused of negligence or malpractice to continue to practice."

From the looks of it, it seems that the CMA has acted against patient interests. Of course, the CMA was organized to advocate for physician interests, not patient interests. The true issue might be the strength of CMA's political reach.