Yeah but...it ain't that simple, as has already been addressed by others here. Fixing the cost of healthcare is a hydra. You lop off one head and three others grow. Even if we ascribe good intentions to the regulation you address, the law of unintended consequences always wins and smart number crunchers will figure out a way to game the system as long as the system is as opaque as ours is. We hear a lot about transparency but what we have is anything but. With the onerous restrictions/regulations/mandates placed on all of us (as knee jerk reactions to other perceived or real problems) we have all seen the graphs depicting the meteoric rise in administrative positions put in place over the last twenty years or so. (https://caas.athenahealth.com/knowledge-hub/sites/insight/files/inline-images/Chart.jpg), primarily to have someone to check the boxes that come with those impositions. I applaud the author of identifying this layer of the onion but the rot is much deeper. To finish with my favorite foil…a medical community (us) that can allow EMR’s to exist in their present form will capitulate to anything.
True of almost every law to improve transparency and reduce costs. Let's talk about the 80/20 MLS (Medical Loss Ratio) part of the ACA law. 80% of commercial premiums are supposed to be spent on claims. Enter the TPA (Third Party Administrator), which are not regulated as insurance companies or pharmaceutical companies. The plan pays the TPA for the agreed formulary. The plan pays more than the actual cost to justify the 80% MLS and receives kickbacks through the TPA from PHARMA and because the actual costs were less than what was pain from patient premiums. This is "extra income" and is NOT counted within the 80/20 MLS ruling. In the case of United, the most profitable of the commercial insurers, they actually OWN their own TPA -- Optum Rx. How convenient. The law wasn't just skirted, it was "raped." I have an article on this and can't find a place to publish. If any interest, perhaps I will post my full article here.
More troubles created by the drug companies who make solid profits from pricing power and destructed channels. And we fall for the mantra "negotiating" prices. I think this is only industry that is able to manipulate prices and use patents to ensure long term profit. Try that with any other commodity. The lobbyists who create these laws know what they are doing.
Speaking as a pharmacist at a Critical Access Hospital I do have a few critiques for this piece. It makes some arguments that I have seen quite a bit recently. I take issue with the framing that the intention of this program is solely to provide cheap outpatient drugs for patients, as noble as that is. Another critical (no pun intended) component of the 340b program is to provide some additional source of revenue for our Critical Access Hospitals (CAH's) and other potentially financially challenged health systems by collecting the spread between the 340b price and the typical reimbursement rate from insurance. Without such additional revenue, there is a high likelihood that even more small hospitals and health systems would have to dramatically reduce their services or even close- like we've seen many CAH's do in the past 10 years.
I would also like to highlight the additional frustration that 340b participants have with drug manufacturers deciding to unilaterally "opt-out" of their 340b drug pricing, charging 340b hospitals the standard price for now- and fighting the legal battle that will inevitability ensue later. It's unclear if our 340b-eligible facilities will ever be able to claw back that overcharging that has occurred. It's also unclear if HRSA has any interest in doing anything to remediate this situation- which I find troubling. (If you want to read more- https://www.statnews.com/2022/06/10/pursuit-of-profits-is-driving-drug-companies-to-break-the-340b-law/)
Altogether- I do feel like the current implementation of the 340b Program has serious issues, and I would be in favor of significant restrictions on eligibility for the large chains (CVS, Walgreens, etc.) that are very much abusing the system, and at the end of the day are NOT what these programs are for. But also, at the end of the day, our smaller independent pharmacies and CAH's rely on these programs to survive financially- and it doesn't feel like there are many advocates for us out there. I would love to see some accountability for the manufacturers that have decided to illegally "opt-out", but we will have to wait and see. Appreciate the piece, hope the context that I mentioned is also considered in the 340b conversation.
Some truths here but way over simplified. However, physcian salaries don't drive up costs (in academic medicine, overpaid, under productive physicians do somewhat) but their practice drives up costs. Prescribing the latest, most expensive medications when cheaper, effective ones are available, over ordering diagnostic tests and procedures, prolonged hospitalization, etc.
This is a disturbing eye-opener. Thanks for posting bad but necessary news about a rather obscure, truly sleazy, but "not-so-little" pipeline for more cash to flow silently and electronically from Gubment right into the coffers of "healthcare systems". Al Capone himself could not have invented a slicker fund-raising gimmick. This off-the-rails drug pricing program conveniently creates a tempting modus operandi for steadily sucking up more *fungible moolah* that can support stuff like [wait for it. . . .] the outlandish salaries & benefits accruing to the wankers who nowadays populate the carpeted, clean, nicely furnished, and very quiet "Administrative Suites" found inside most every medical center. We are now an "Industry" and you know exactly who the people are that I'm talking about here -- those folks with the fixed smiles and the capped teeth, and sometimes the Botoxed faces; they often wear the tasseled loafers; the folks who have now enshrined the putrid idea that "being smart" amounts simply to having an ability to sling the bull and the creativity to fashion animated Power Point slides that can be used to "show leadership" during talks that they give periodically to hospital employees (we the serfs), and most especially talks that are accompanied by the intense use of a set of peculiar hand-waving motions and finger gestures that oddly are now everywhere common for this class of cretins; folks who often have creatively and self-consciously changed their professional names from "John B. Smith" to "J. Brandon Smith" because well. . . . . . . gosh, it just sounds more important; folks who literally don't do shit except for *creating the impression of being busy* with all their important decision-making, all their going to meetings in the Board Room, and of course dodging diligently anything at a hospital that might ever involve even a minuscule risk of their custom-fitted shirtings and Hermes ties and 900-dollar blazers being sprayed with blood or stool or emesis, etc. God forbid! As far back as 1985, during my early academic surgery career, I predicted in plain language during invited lectures given at various major academic medical centers that the well-intentioned, but misguided and hijacked, Healthcare Quality Movement (thanks Don Berwick but you did not see this coming) would more likely than not eventuate in the rise of what I have called "The Big Pee-Pees", a new species of greedy, self-important, buzzword-spouting Power Players who do NOT take care of patients. Instead, they prance about as if they are the CEOs at General Motors or Amazon, etc. And that, my colleagues, is exactly what has happened to us. It's a disaster. Good luck.
Just because a hospital is Non-Profit doesn't mean they aren't out to make Money.
I pissed off a professor once when I told her that after she had touted the virtues of Non-Profits.
Yeah but...it ain't that simple, as has already been addressed by others here. Fixing the cost of healthcare is a hydra. You lop off one head and three others grow. Even if we ascribe good intentions to the regulation you address, the law of unintended consequences always wins and smart number crunchers will figure out a way to game the system as long as the system is as opaque as ours is. We hear a lot about transparency but what we have is anything but. With the onerous restrictions/regulations/mandates placed on all of us (as knee jerk reactions to other perceived or real problems) we have all seen the graphs depicting the meteoric rise in administrative positions put in place over the last twenty years or so. (https://caas.athenahealth.com/knowledge-hub/sites/insight/files/inline-images/Chart.jpg), primarily to have someone to check the boxes that come with those impositions. I applaud the author of identifying this layer of the onion but the rot is much deeper. To finish with my favorite foil…a medical community (us) that can allow EMR’s to exist in their present form will capitulate to anything.
True of almost every law to improve transparency and reduce costs. Let's talk about the 80/20 MLS (Medical Loss Ratio) part of the ACA law. 80% of commercial premiums are supposed to be spent on claims. Enter the TPA (Third Party Administrator), which are not regulated as insurance companies or pharmaceutical companies. The plan pays the TPA for the agreed formulary. The plan pays more than the actual cost to justify the 80% MLS and receives kickbacks through the TPA from PHARMA and because the actual costs were less than what was pain from patient premiums. This is "extra income" and is NOT counted within the 80/20 MLS ruling. In the case of United, the most profitable of the commercial insurers, they actually OWN their own TPA -- Optum Rx. How convenient. The law wasn't just skirted, it was "raped." I have an article on this and can't find a place to publish. If any interest, perhaps I will post my full article here.
More troubles created by the drug companies who make solid profits from pricing power and destructed channels. And we fall for the mantra "negotiating" prices. I think this is only industry that is able to manipulate prices and use patents to ensure long term profit. Try that with any other commodity. The lobbyists who create these laws know what they are doing.
Speaking as a pharmacist at a Critical Access Hospital I do have a few critiques for this piece. It makes some arguments that I have seen quite a bit recently. I take issue with the framing that the intention of this program is solely to provide cheap outpatient drugs for patients, as noble as that is. Another critical (no pun intended) component of the 340b program is to provide some additional source of revenue for our Critical Access Hospitals (CAH's) and other potentially financially challenged health systems by collecting the spread between the 340b price and the typical reimbursement rate from insurance. Without such additional revenue, there is a high likelihood that even more small hospitals and health systems would have to dramatically reduce their services or even close- like we've seen many CAH's do in the past 10 years.
I would also like to highlight the additional frustration that 340b participants have with drug manufacturers deciding to unilaterally "opt-out" of their 340b drug pricing, charging 340b hospitals the standard price for now- and fighting the legal battle that will inevitability ensue later. It's unclear if our 340b-eligible facilities will ever be able to claw back that overcharging that has occurred. It's also unclear if HRSA has any interest in doing anything to remediate this situation- which I find troubling. (If you want to read more- https://www.statnews.com/2022/06/10/pursuit-of-profits-is-driving-drug-companies-to-break-the-340b-law/)
Altogether- I do feel like the current implementation of the 340b Program has serious issues, and I would be in favor of significant restrictions on eligibility for the large chains (CVS, Walgreens, etc.) that are very much abusing the system, and at the end of the day are NOT what these programs are for. But also, at the end of the day, our smaller independent pharmacies and CAH's rely on these programs to survive financially- and it doesn't feel like there are many advocates for us out there. I would love to see some accountability for the manufacturers that have decided to illegally "opt-out", but we will have to wait and see. Appreciate the piece, hope the context that I mentioned is also considered in the 340b conversation.
Some truths here but way over simplified. However, physcian salaries don't drive up costs (in academic medicine, overpaid, under productive physicians do somewhat) but their practice drives up costs. Prescribing the latest, most expensive medications when cheaper, effective ones are available, over ordering diagnostic tests and procedures, prolonged hospitalization, etc.
This is a disturbing eye-opener. Thanks for posting bad but necessary news about a rather obscure, truly sleazy, but "not-so-little" pipeline for more cash to flow silently and electronically from Gubment right into the coffers of "healthcare systems". Al Capone himself could not have invented a slicker fund-raising gimmick. This off-the-rails drug pricing program conveniently creates a tempting modus operandi for steadily sucking up more *fungible moolah* that can support stuff like [wait for it. . . .] the outlandish salaries & benefits accruing to the wankers who nowadays populate the carpeted, clean, nicely furnished, and very quiet "Administrative Suites" found inside most every medical center. We are now an "Industry" and you know exactly who the people are that I'm talking about here -- those folks with the fixed smiles and the capped teeth, and sometimes the Botoxed faces; they often wear the tasseled loafers; the folks who have now enshrined the putrid idea that "being smart" amounts simply to having an ability to sling the bull and the creativity to fashion animated Power Point slides that can be used to "show leadership" during talks that they give periodically to hospital employees (we the serfs), and most especially talks that are accompanied by the intense use of a set of peculiar hand-waving motions and finger gestures that oddly are now everywhere common for this class of cretins; folks who often have creatively and self-consciously changed their professional names from "John B. Smith" to "J. Brandon Smith" because well. . . . . . . gosh, it just sounds more important; folks who literally don't do shit except for *creating the impression of being busy* with all their important decision-making, all their going to meetings in the Board Room, and of course dodging diligently anything at a hospital that might ever involve even a minuscule risk of their custom-fitted shirtings and Hermes ties and 900-dollar blazers being sprayed with blood or stool or emesis, etc. God forbid! As far back as 1985, during my early academic surgery career, I predicted in plain language during invited lectures given at various major academic medical centers that the well-intentioned, but misguided and hijacked, Healthcare Quality Movement (thanks Don Berwick but you did not see this coming) would more likely than not eventuate in the rise of what I have called "The Big Pee-Pees", a new species of greedy, self-important, buzzword-spouting Power Players who do NOT take care of patients. Instead, they prance about as if they are the CEOs at General Motors or Amazon, etc. And that, my colleagues, is exactly what has happened to us. It's a disaster. Good luck.