Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Thursday, January 19, 2006

Michael Hiltzik on the Prescription Drug Benefit Rollout

Michael Hiltzik has a good piece about the Medicare Part D prescription drug rollout:

Golden State: Bush's Catastrophic Drug Benefit: The defining fiasco of the Bush Administration may prove to be the utterly disastrous Medicare prescription drug benefit, formally known as Medicare Part D. Already the newspapers are filled with stories about Medicare-Medicaid patients, the poorest of the poor, being denied prescriptions by the thousands because the government, with only two full years to prepare, didn't have its computer systems tested, up, and running when the program launched January 1. The pain is just beginning.

What's instructive about this project is that it provides a concrete illustration of what Social Security would have looked like after a Bush privatization job: A program that should be designed to serve citizens turned instead into a plaything for lobbyists and business interests.... Is there a saving grace in the disaster? Only that, considering that most eligible people will be signing up in early May, then discovering the flaws in the system through the summer and early fall, they'll be reaching the peak of fury and be well poised to wreak vengeance on the perpetrators at the ballot box in November. Good riddance.

When I began to research this issue some weeks ago, my intention was to write one column. I soon realized that wouldn't scratch the surface. This column will be followed by a second column on Monday, explaining the so-called "doughnut hole" in the system that will trap millions of Americans in doughnut hole hell....

One recent afternoon in Los Alamitos, I watched Marcy Zwelling-Aamot, M.D., pick her way through a government website designed to help elderly patients select the right Medicare drug plan.... The website... identified 48 individual plans... sponsored by private health insurance companies administering the government drug benefit for a profit. The plans' monthly premiums ranged from $5.41 to $66.08; their lists of covered drugs differed from one another, sometimes significantly; and all imposed different annual out-of-pocket costs on enrollees - a critical consideration for patients on fixed incomes.

Zwelling-Aamot is a private internist who accepts a limited number of patients but places herself at their beck and call. She and her staff have spent months helping her patients navigate the new benefit, a process that requires at least an hour and a half of research per patient (time for which she's not compensated by Medicare).... [S]he has come to see it not as a boon for elderly consumers, but as a scandal. "As a patient, you are totally hoodwinked by this system," she told me. "It's not just an economic tragedy; it's a moral tragedy."

The Medicare drug benefit is shaping up as the single most cynical scam perpetrated by the Bush Administration on American consumers. Designed to maximize profits for drugmakers and health insurers, the program was launched so ineptly Jan. 1 that hundreds of thousands of patients have been prevented by computer glitches from filling their prescriptions. California and 25 other states have had to step in temporarily to pay for improperly rejected prescription claims.... The program is ostensibly tailored to serve up to 43 million elderly Americans, most of them subject to an enrollment deadline of May 15 and a stiff financial penalty for late enrollment. Yet, most seniors seem to be biding their time; Medicare says that only 3.6 million persons people, out of an estimated 18.3 million who are eligible for the stand-alone benefit, have signed up thus far. Even the government acknowledges that selecting a plan is dauntingly confusing for those without access to its Internet help site. That's a big hurdle, because an estimated 70% of Americans over 65 have never been online.

The toll-free information lines set up by Medicare and various health plans have been overwhelmed for weeks. Medicare regulations discourage physicians, pharmacists and healthcare advocates from helping patients select a specific plan. Yet many professionals say they themselves are so confounded by the program's intricacies that their patients will be hard pressed to make the right choices on their own. The health plans have filled the vacuum with glossy marketing brochures, some of which are flagrantly misleading....

It's worth remembering that the prescription drug program was born in an act of fraud. The Bush Administration sold it to Congress in 2003 by estimating its cost at less than $400 billion over 10 years. Scarcely a month after its enactment, the White House issued a new estimate: $535 billion....

As written, the legislation complied with a drug industry demand that Medicare be prohibited from negotiating with manufacturers for lower drug prices. Among those helping the industry make its stand was Rep. Billy Tauzin (R-Louisiana), whose committee on energy and commerce oversaw Medicare. In an odoriferous development, Tauzin soon quit Congress to become president of the Pharmaceutical Research and Manufacturers of America - Big Pharma's Washington lobbying group...

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