In his Monday blog, "Drug Wonk" Dr Robert Goldberg comments on the news that President Obama and Congress have gotten Big Pharma to agree to pay $80 million towards covering some of lower- and middle-income seniors' brand name drug costs while they're in the "donut hole" (the infamous bait-and-switch scheme written into the Medicare Part D law by lawmakers and the relevant industries in 2003).

Here's Goldberg's rather left-handed praise:

"So drug and biotech companies are finally being permitted what they wanted to do all along but were banned from doing -- giving seniors a discount to give them a seamless drug benefit.  That makes sense since the decision about what drug to take should be what works, not the price or cost.  At least that is what the evidence says.  And making that decision on clinical evidence leads to value based benefit designs which focus on overall health outcomes."

I call this left-handed because Goldberg credits drug companies with the desire to give seniors a "seamless drug benefit" and thus implicitly criticizes lawmakers for not having "permitted" them to do this
before now. As if the drug industry actually cares about all that value-based benefit stuff - the fact of the matter is that the industry, being an industry, is driven by its bottom line. Of course drug prices matter to them, but this has little to do with whether or not brand-name drugs work better than cheaper generics. If the industry can subsidize part of seniors' brand-name drug costs, that's that many more prescriptions being written for those medicines on which the drug companies still have active patents. It does better than balance out for the industry - we can rest assured that pharm company accountants are being paid a pretty penny to make sure of this before offering to "help" seniors. And an industry focus on "overall health outcomes"? Needless to say, it is to laugh.

Fortunately, that's where the Obama Administration and a bipartisan coalition of lawmakers are stepping in. Peter Orszag, Obama's Directer of the Office of Management and Budget, has fingered exorbitantly wasteful health spending as our country's biggest financial drain, and has outlined real "value based benefit designs" to cut spending while improving quality of care ("real" as in driven by concern for the public welfare rather than profits, as in the cases of Big Pharma and Insurance). Here's Orszag's May 15 article in the Wall Street Journal.

Unfortunately, Goldberg goes on to mislead readers by generalizing the Administration's specific cost-cutting proposals. He rightfully notes that Medicare payments to hospitals would be reduced, but he neglects to mention that these reductions will be directed at providers who provide inadequate care that results in high rates of hospital readmission. Most people would agree that it makes no sense for the government to subsidize poor health care.

And it makes no sense for the government to subsidize private companies that work unseemly profit margins into their government-contracted services. Which is precisely what has been happening with Medicare Advantage, something else that Goldberg conveniently fails to mention when he wonders how the scheduled elimination of Advantage (in 2011) will affect those currently covered. Medicare Advantage is a network of plans offered by insurance companies to Medicare Part D beneficiaries (mainly seniors and the disabled) whose Part D plans don't sufficiently ease their drug spending. Of course, there would be no need for these supplementary Advantage plans if the Bush Administration had cared more about cost-effectiveness than the Pharm and Insurance industries in the first place. Sigh.

ANYway, cutting wasteful payments to Medicare Advantage plans, along with those to inefficient health care providers, makes sense. According to health care economist Maggie Mahar, the Advantage plans are hardly the saviors Goldberg makes them out to be: They demand government reimbursements that are 17% above what Medicare would spend on the same treatments if it were paying for them directly, without these profit-seeking middlemen. In addition, the particulars of Advantage plans are very confusing for ill seniors and are riddled with hidden disadvantages, a long list of which Mahar provides on her Health Beat blog.

So when Goldberg criticizes Obama for "pillaging the one part of Medicare that provides...a preventive approach to health care" (not sure where the heck he got the idea that Advantage represents a preventive approach), he's really criticizing the excision of ineffective money-sponges from health care reform. Big surprise, coming from a guy who works for the "astroturf tort 'reform' group for the big drug companies," the Center for Medicine in the Public Interest. (No joke, I just uncovered this tidbit seconds ago while locating links for this post.)

It just goes to show - there is always more to the story! Gotta love the Internets.