As The Sentinel Effect Goes, So Goes the New York Times

April 15, 2008

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Yesterday we wrote this about the New York Times article on Tier 4 pharmaceuticals:

Defenders of the Tier 4 system will say that health premiums will become unaffordable if these costly treatments … are paid by insurance. There’s some truth to that. But here’s the problem with that argument:  The function of insurance is to protect individuals from expenses they can’t afford. Once you start withdrawing that protection, it’s a misuse of language to describe the product you sell as “health insurance” …if it isn’t really “insurance” anymore, what are they offering?

Yesterday’s post was called “When Is Health Insurance Not Insurance?” The New York Times ran an editorial about Tier 4 drugs today. Here’s an excerpt:

The insurers say that forcing patients to pay more for unusually high-priced drugs allows them to keep down the premiums charged to everyone else. That turns the ordinary notion of insurance on its head. Instead of spreading the risks and costs across a wide pool of people to protect a smaller number of very sick patients from financial ruin, insurers are gouging the sickest patients to keep premiums down for healthier people.

Coincidence? We report, you decide. But if the New York Times wants some more help with their editorial page then, believe me, I have some more suggestions …


One Response to “As The Sentinel Effect Goes, So Goes the New York Times”

  1. As one pundit put it: Changing demographics and medical technology pose a cost challenge for every nation’s system, but ours is the outlier. The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization. The dominance of for-profit insurance and pharmaceutical companies, a new wave of investor-owned specialty hospitals, and profit-maximizing behavior even by nonprofit players raise costs and distort resource allocation.
    My take on this?
    1. Virtually every member of the Senate and the House of Representatives is in the pocket of Big Pharma, the food industry (from the farmer to your plate) and the Health Insurance industry. The lobbing efforts and Big Pharma’s successes as the Medicare drug benefit was passed made even the old timers shake their heads. The deal making and arm twisting lasted all night you know. Every Congressman and Senator had at least 2 Big Pharma lobbyists on their arm all night long.
    2. The deal: Medicare buys all the drugs they need at pretty much full retail prices. That’s sort of like the Feds going to their neighborhood Rite-Aid, standing in line, turning in their multi-billion $ script and then paying for it like everyone else –with a credit card. Can you imagine? No volume discounts. Of course that adds billions to Uncle Sam’s costs and the same to Big Pharma’s bottom line. Soon after this all-night-long debacle a number of Congressional leaders went to work for Big Pharma. Coincidence?
    3. It follows that changes in the way things are done may be recommended by one or a panel of experts in Congressional hearings or in the press but it is just not going to happen. The people who count, the people at the top like the way it is right now. The chairmen and directors at the companies that make up Big Pharma are taking home multimillion dollar bonuses every Christmas. We taxpayers are giving it to them right out of our own pockets. Don’t bother to send any money to the IRS. Just make out the check to Merck and Pfizer Inc.
    4. In the usual sense of the word, health “insurance” is not insurance, it is an entitlement. Everyone wants it, needs it and feels they are “entitled” to it. All of the politicians foster that belief. You want to get elected President? You better promise health insurance for everybody, else you don’t stand a chance against Hilary, Obama or McCain.
    5. Here is the real problem: everybody needs to use it. That is why the system is broken. Now I have fire, flood, earthquake, auto and life insurance and I’ve never had any claims. (Okay, a couple small auto claims.) That is how insurance works; only a few of the 1000’s of insured ever make a claim. That keeps the costs down for all the rest of us. Try buying flood insurance in New Orleans or hurricane insurance in Jamaica and South Florida and you’ll see what I am talking about.
    6. I take issue with: “The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization” and “the set of perverse incentives produced by commercial dominance of the system.“
    7. If we took as poor care of our cars as we do our bodies most would be unable to afford auto insurance either. Can you imagine such a scenario? Letting the oil and radiator water and tire pressures get too low. Using the wrong grade of fuel which is both old and contaminated. Never washing the windshield. Never fastening your seat belt. Speeding in town and on the highway with your lights off at night while intoxicated with legal and illegal drugs. Sounds extreme? Let me tell you about some of the many 100’s of patients I have seen in my 12 years as a hospital based doctor in Los Angeles. Train wrecks all would be an understatement. All of them brought in plastic grocery bags full of pills, some duplicates, some expired, some dangerous in combination with others. And there they were anyway with all the medical problems the pills were supposed to prevent.
    8. That is the HEALTH CARE CRISIS. As Pogo once said: “We have met the enemy and he is us!”

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