Category: Health

Healthcare Spending Is Still Growing, but More Slowly

(p. A6) WASHINGTON—Growth in U.S. healthcare spending slowed to 2.7% last year after a 2020 surge in federal outlays on the pandemic, according to a new government report.

The analysis from the Centers for Medicare and Medicaid Services says national healthcare spending grew in 2021 to $4.3 trillion.

Overall health spending had risen by 10.3% in 2020, and the more moderate increase last year was largely driven by a drop off in federal spending related to Covid-19.

. . .

The healthcare share of the gross domestic product was 18.3% in 2021, down from 19.7% in 2020.

For the full story, see:

Stephanie Armour. “Healthcare Spending Growth Slows Down.” The Wall Street Journal (Saturday, Dec. 15, 2022): A6.

(Note: ellipsis added.)

(Note: the online version of the story has the date Dec. 14, 2022, and has the title “U.S. Healthcare-Spending Growth Slowed in 2021, Report Finds.”)

Lancet Editorial Praised Chinese Communists’ Covid Policy of “Restricting Public Freedoms”

(p. A17) China’s zero-Covid policies have recently come under criticism from public-health leaders—including those at the World Health Organization—who once held them up as a model for the West.

“China’s success rests largely with a strong administrative system that it can mobilise in times of threat, combined with the ready agreement of the Chinese people to obey stringent public health procedures,” the Lancet editorialized on March 7, 2020. Western countries, it added, “must abandon their fears of the negative short-term public and economic consequences that may follow from restricting public freedoms as part of more assertive infection control measures.”

That hasn’t worn well. The negative social and economic consequences of lockdowns in the West—from learning losses and destroyed small businesses to alcoholism and drug abuse—weren’t “short-term.” Nor were China’s draconian zero-Covid policies, which three years later are only slowly being eased.

For the full commentary, see:

Allysia Finley. “LIFE SCIENCE; Western Scientists Cheered On China’s Covid Repression.” The Wall Street Journal (Monday, Dec. 12, 2022): A17.

(Note: the online version of the commentary has the date December 11, 2022, and has the same title as the print version.)

Unintended Consequences Make “Government-Provided Health Care” a “Fiscal and Regulatory Nightmare”

(p. A17) The private plans participating in Medicare’s prescription-drug program, known as Part D, currently draw on three sources of revenue to finance prescriptions: out-of-pocket payments from patients, premium payments made by plan members, and subsidies from the federal government. In 2025, under the Inflation Reduction Act, both government subsidies and out-of-pocket payments by patients are scheduled to be cut sharply. The difference will have to be made up by premiums. But the statute inhibits this third revenue source, which is also subsidized, from increasing more than 6%. That’s hardly enough to cover inflation, let alone compensate for the other two revenue losses.

. . .

Existing plans have room to cut benefits, although the original Part D statute limits their ability to do so. As plans are under no obligation to take a loss, their other choice is to exit the market, which from the patient’s perspective means that all the benefits disappear. In essence, the Inflation Reduction Act statute may prohibit Part D plans from being economically viable, even if it doesn’t explicitly ban them.

. . .

Welcome to the fiscal and regulatory nightmare known as government-provided health care, where those writing the rules don’t understand the consequences of what they do. Democrats hate that Medicare Advantage has been available as a pseudo-private alternative to original Medicare’s single-payer arrangement. Yet they have (unwittingly?) passed a law that so thoroughly disrupts traditional Medicare as to render it the worst of the Medicare options.

For the full commentary, see:

Casey B. Mulligan and Tomas J. Philipson. “The Inflation Reduction Act Comes for Medicare.” The Wall Street Journal (Tuesday, November 22, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 21, 2022, and has the same title as the print version.)

By 2030 mRNA Vaccines May Boost Immune Response of Metastatic Cancer Patients

(p. C4) The cofounders of BioNTech recently announced that vaccines targeting cancer may be available before the end of the decade. Researchers at Duke University are already developing a vaccine that targets mutations commonly arising in people with certain types of advanced breast cancer. Using the same mRNA technology deployed against Covid-19, these types of vaccines would not be administered prophylactically but, rather, used as a treatment to trigger a stronger immune response in patients with locally recurrent or metastatic disease. When it comes to conquering breast cancer, future medical historians will have plenty to write about.

For the full essay, see:

Lindsey Fitzharris. “A Medical Historian Confronts Breast Cancer.” The Wall Street Journal (Saturday, December 3, 2022): C4.

(Note: the online version of the essay has the date December 1, 2022, and has the same title as the print version.)

Project Entrepreneur Alex Oshmyansky Switched from Nonprofit to Profit to Raise Funds to Enable Project; Let Mark Cuban Take Credit for Project

(p. B1) DALLAS—When Mark Cuban got an email in 2018 from a stranger asking if he wanted to invest in a company dedicated to bringing down the cost of prescription drugs, he replied: “Tell me more.”

Today, the Dallas Mavericks owner and entrepreneur is helping steer the fledgling startup as it takes aim at high prescription drug prices and the industry middlemen who he says keeps them that way.

The Mark Cuban Cost Plus Drug Co. PBC, born from that brief email pitch from the company’s founder, Alex Oshmyansky, buys generic drugs from pharmaceutical manufacturers and sells them directly to patients online, rather than charging their insurance providers. By cutting out intermediaries and using a transparent pricing system, the pharmacy says it charges less than rivals for drugs: a 15% profit markup on a medicine’s cost, plus several dollars in fees for shipping and labor.

. . .

(p. B4) Several startups are attempting to reinvent parts of the pharmaceutical supply chain, removing costs by taking control of reimbursement, manufacturing and distribution.

Some firms, like ProvideGx and Civica Rx, are making drugs themselves so that they can control pricing and supply volumes. Others are selling directly to patients, bypassing the middleman known as pharmacy-benefit managers that traditionally handle drug coverage for health insurers.

A radiologist and former math prodigy, Dr. Oshmyansky received his undergraduate degree from the University of Colorado at Boulder at age 18, followed by an M.D. from Duke University and a Ph.D. in math from Oxford. He had the idea for a pharmacy after growing frustrated with pharmaceutical-industry pricing practices, such as companies hiking prices dramatically on decades-old drugs.

He planted the seed for the Cuban pharmacy in 2015 when he founded Osh’s Not-for-Profit Pharmaceuticals with a mission of manufacturing generic drugs and selling them to hospitals at a small markup on its costs.

He struggled to find investors to fund a nonprofit drug company, however, and eventually transitioned Osh’s into a for-profit entity. In 2018, he secured $1 million from investors through the Silicon Valley startup-incubator Y Combinator.

A few months later, in 2018, Dr. Oshmyansky emailed Mr. Cuban at his publicly available email address.

. . .

Eventually, Dr. Oshmyansky agreed to rename the company after Mr. Cuban in a bid to trade on his celebrity and attract free publicity.

For the full story, see:

Joseph Walker. “Mark Cuban Lands a Job at an Online Pharmacy.” The Wall Street Journal (Saturday, Dec. 10, 2022): B1 & B4.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date December 9, 2022, and has the title “Mark Cuban Has New Job: Working at Online Discount Pharmacy.”)

After Getting $170 Billion in Government Subsidies, Hospitals “Were Major Financial Beneficiaries of the Pandemic”

(p. B12) . . . hospitals . . . were major financial beneficiaries of the pandemic, receiving more than $170 billion in subsidies to defray their operating losses. A study looking at the finances of more than 2,000 hospitals concluded that financial losses from Covid-19 were largely offset by government relief in 2020, keeping profit margins largely intact. What is more, says Dr. Ge Bai, a professor who conducted the study with two other academics, profit rose significantly in 2021 as government aid persisted even as non-Covid activity rebounded.

“Contrary to the public perception, the industry benefited from the pandemic,” says Dr. Bai, a professor of health policy at the Johns Hopkins Bloomberg School of Public Health.

For the full commentary, see:

David Wainer. “A Profitable Prognosis.” The Wall Street Journal (Saturday, November 5, 2022): B12.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 4, 2022, and has the title “HEARD ON THE STREET; Hospitals Say They’re Still Ailing From Covid-19. Their Investors Feel Better.”)

Philosopher Argues That Human Flourishing Has Grown With “Access to Fossil Fuels”

(p. C13) The brilliance of Alex Epstein’s recent “Fossil Future” is that he writes not as a scientific expert but as a philosopher.

. . .

What is the best course of action to improve human flourishing? His answer is clear and unapologetic: more plentiful, reliable, abundant access to fossil fuels. The climate-disaster-related death rate, he points out, is 98% lower today than it was just a century ago—largely owing to innovations powered by fossil fuels. The right way to handle climate change isn’t to reverse it but to master its effects—a thesis that is as provocative as it is intuitive.

For the full review, see:

Vivek Ramaswamy. “12 Months of Reading; Vivek Ramaswamy.” The Wall Street Journal (Saturday, Dec. 10, 2021): C13.

(Note: ellipsis added.)

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Thinkers and Tastemakers.”)

The book praised by Vivek Ramaswamy is:

Epstein, Alex. Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas–Not Less. New York: Portfolio, 2022..

Heat Deaths Rise Mostly Due to Rise in Fragile Aging Population

(p. A17) One recent and much-cited Lancet report appears deliberately deceptive.

The study offers a frightening statistic: Rapidly rising temperatures have increased annual global heat deaths among older people by 68% in less than two decades. That stark figure has been cited all over, from the BBC and Time to the Washington Post and the Times of India, the world’s largest-selling English-language daily.

. . .

Annual heat deaths have increased significantly among people 65 and older world-wide. The average deaths per year increased 68% from the early 2000s to the late 2010s. But that is almost entirely because there are so many more older people today than there were 20 years ago, in no small part thanks to medical innovations that keep us alive longer. Measured across the same time span the Lancet maps heat deaths, the number of people 65 and older has risen by 60%, or almost as much as heat deaths. When the increase in heat mortality is adjusted for this population growth, the actual rise that can be attributed to rising temperatures is only 5%.

It is hard not to see the Lancet study’s failure to adjust this figure as a deliberate act of deception.

For the full commentary, see:

Bjorn Lomborg. “The Lancet’s ‘Heat Death’ Deception.” The Wall Street Journal (Saturday, November 5, 2022): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date November 4, 2022, and has the title “Climate Change and the Lancet’s ‘Heat Death’ Deception.”)

Share of Insulin Revenues Going to Middlemen Pharmacy Benefit Managers (PBMs) Increased by 155%

(p. B12) Pharmacy-benefit managers, or PBMs, have captured a growing slice of America’s world-leading drug spending during the past decade. The spotlight could soon shift to them.

. . .

While the three largest manufacturers of insulin—Eli Lilly, Novo Nordisk and Sanofi—charge more for their products in the U.S. than they do elsewhere, their take of overall spending has been decreasing in recent years as the relative power of middlemen has grown. PBMs have steadily gained negotiating clout by consolidating and merging with large insurance companies. The three largest PBMs are owned by CVS Health Corp. (which owns insurer Aetna), UnitedHealth Group Inc. and Cigna Corp.

. . .

. . . increases in recent years have mostly been passed on to PBMs in the form of heavy discounts that are hidden from public view.

A recent study by University of Southern California scholars showed that, between 2014 and 2018, the share of a hypothetical $100 insulin expenditure accruing to manufacturers decreased by 33%. During that same period, total U.S. spending on insulin hasn’t budged, but the share of insulin expenditures retained by PBMs has increased by 155%.

. . .

“What’s happening in this market is that the middlemen are making more and more money,” said University of Southern California professor Neeraj Sood, one of the authors of the study who has previously done consulting work for drug companies.

Yet the drug-pricing provisions in the recently passed Inflation Reduction Act singularly focused on what manufacturers charge while ignoring other players that take a slice of profits farther down the chain.

For the full commentary, see:

David Wainer. “HEARD ON THE STREET; Sanders, Musk Miss the Mark on Insulin.” The Wall Street Journal (Tuesday, November 22, 2022): B12.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 21, 2022, and has the title “HEARD ON THE STREET; Elon Musk, Bernie Sanders and Others Miss the Mark Over Pricey Insulin.”)

The academic study co-authored by Sood, and mentioned above, is:

Van Nuys, Karen, Rocio Ribero, Martha Ryan, and Neeraj Sood. “Estimation of the Share of Net Expenditures on Insulin Captured by Us Manufacturers, Wholesalers, Pharmacy Benefit Managers, Pharmacies, and Health Plans from 2014 to 2018.” JAMA Health Forum 2, no. 11 (2021), doi:10.1001/jamahealthforum.2021.3409.

Nonprofit Hospitals Get $60 Billion in Annual Tax Breaks in Order to Aid the Poor, but Often Use High-Pressure Opaque Tactics to Collect Full Payment

(p. A1) Nonprofit hospitals must have financial-assistance policies for needy patients, under federal requirements tied to an estimated $60 billion in annual tax breaks.

They often make that aid hard to get. Hospitals put up obstacles, delay checking eligibility and sometimes press for payments that aren’t refunded even if a patient eventually gets qualified for assistance.

That is according to a Wall Street Journal analysis of thousands of nonprofit hospital policies in filings to the Internal Revenue Service and posted by hospitals, as well as thousands of pages of internal documents from government hospitals obtained through public-record requests and the experiences of dozens of advocates and patients who have (p. A9) applied for aid.

. . .

An earlier Journal analysis of Medicare filings highlighted how little of nonprofit hospitals’ billions in revenue goes toward financial help for low-income patients. The new analysis uncovered the barriers many hospitals place in the way of patients who should qualify for assistance—even under the hospitals’ own criteria.

Under tax laws, nonprofit hospitals are set up to function as charities benefiting their communities. Government facilities, whose policies the Journal also looked at, are also intended to serve the public, though they aren’t subject to all the same IRS requirements as private nonprofits. The Journal found that many of these hospitals act like for-profit businesses in their efforts to get paid, even by those who can’t afford it.

. . .

Separate from the analysis of nonprofit hospitals’ IRS documents, the Journal also obtained internal documents on patient-billing procedures from large state and local government hospitals, including academic medical centers, through public-records requests. These hospitals share a similar mission with private nonprofits to serve communities.

The thousands of pages of procedures, scripts and other training material for hospital staff give an inside look at how some hospitals routinely push patients toward payment, including through installment plans that may come with interest. The guidelines often play down or don’t raise the option of financial assistance. Adding to the pressure, these tactics are often deployed before the patient gets care.

In a document titled “Collections Scripting for Non-Emergent Visits,” used by Georgia-based Augusta University Health System, staffers are supposed to start by requesting the entire amount due from the patient, saying, “How would you like to take care of that today?”

For the full story, see:

Anna Wilde Mathews, Andrea Fuller and Melanie Evans. “Some Hospitals Skimp on Aid.” The Wall Street Journal (Friday, Nov. 18, 2022): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date November 17, 2022, and has the title “Hospitals Often Don’t Help Needy Patients, Even Those Who Qualify.”)

Cardiologist Braunwald Transformed Treatment of Heart Attacks

The book praised by Collison is about one of the founders of modern cardiology. David McCullough praised the book as “splendid.” Others did too.

(p. C6) We recently started Arc, a new biomedical research organization, and I’ve been digging into the early days of other institutions. Thomas Lee’s “Eugene Braunwald and the Rise of Modern Medi-(p. C7)cine” stood out.

For the full review, see:

Patrick Collison. “12 Months of Reading; Patrick Collison.” The Wall Street Journal (Saturday, Dec. 10, 2021): C6-C7.

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Political and Business Leaders.”)

The book praised by Patrick Collison is:

Lee, Thomas H. Eugene Braunwald and the Rise of Modern Medicine. Cambridge, MA: Harvard University Press, 2013.