Healthy Policy

Of Health Care and Politics

We all know federal and state governments are buckling under the cost of health benefits. But their priorities have become more than a little perverse:

As they prepared to send the spending cuts to the floor, Senate Majority Leader Bill Frist of Tennessee and his GOP lieutenants realized they were headed for defeat unless they secured one more vote. And to get that, Frist had to meet the asking price of one of two GOP senators, Norm Coleman of Minnesota or Gordon H. Smith of Oregon.

Smith vowed not to support the bill unless it was changed so that proposed savings on Medicaid, the federal healthcare program for the poor, were achieved at the expense of drug companies and other providers instead of coming in the form of lower benefits for Medicaid recipients.

Coleman's price for supporting the package was removing from the bill a provision that would have eliminated $30 million in subsidies for sugar beet growers, many of them in his home state.

In the end, sugar farmers got to keep their subsidy and Frist got Coleman's vote.

Politics as usual, right? Maybe, until you see this stat:

There were 568,000 Medicaid recipients in Minnesota last year, and 40,000 people whose livelihood depended on sugar beets.

That's just in Minnesota. 52 million people are covered by Medicaid nationwide. That means one out of every six folks in this country are on Medicaid. You really think one out of every six people in this country farms beets ?

But the fed's cuts go much further than trade-offs between sugar producers (who have a part in our obesity epidemic, for sure) and a Minnesota senator. 29 states saw a decrease in the number of federal dollars they received for Medicaid in 2006, and states like Missouri and Tennessee are making significant changes in eligibility and payments.

Some people will be knocked out of the system altogether and join the ranks of the uninsured. Others will just postpone care. Either way, it's a lose-lose situation. We're running out of short-term fixes for Medicaid. Its long-term fiscal health is in danger, and it needs a long-term solution -- one that addresses the problems of the entire health care system.

Why we need review boards.

This is just totally inexcusable and unbelievable.

Penlac Nail Lacquer rarely cures the nail fungus it is designed to treat, yet it costs $130 a thimbleful. As a result, more than 20 state Medicaid programs and dozens of private health insurers require doctors to get advance permission to prescribe it. But not New York Medicaid, which spent $12 million on the drug last year, more than eight times as much as any other state.

New York spent $74 million last year, far more than any other state, on Nexium, the "new Purple Pill" for heartburn. The drug is virtually identical to Prilosec, available at one-sixth the cost over the counter, and so at least 20 state Medicaid programs and many private health insurance companies severely restrict its use. Only now, two years after other states began imposing limits on Nexium, has New York moved to restrict it.

And those amounts are pocket change compared with the $348 million or more that New York could have saved if it were as aggressive as a state like Michigan in setting the prices it pays pharmacies for the drugs they dispense.

What an utter waste of money. But what this really shows is a desperate need for an advisory board -- one that makes the efficacy of various therapies and pharmaceuticals clear for all health care payers to examine. While some people know that Prilosec is the same as Nexium, it's not general information. It's crucial that this information is easily accessible to help reign in spending.

Update: Health Care Renewal has more