
Pharma CEO Worries Americans Will Embrace Single-Payer Plan - rbanffy
https://theintercept.com/2017/09/13/pharma-ceo-worries-americans-will-say-enough-is-enough-and-embrace-bernie-sanders-single-payer-plan/
======
singlepayer
Throw-away because I like to keep my financial details personal.

I'm self employed and have been for about 15 years. We purchase health
insurance from the state exchange. Prior to this, I'd purchased it as an
individual directly from the insurers, or used the plan my wife had through
her employer. Those options are no longer available to us, so we use the state
exchange.

My family's health insurance rates increased 17% last year. This year, my
state has approved an increase of 27% for the provider I use and a 31%
increase for one of the other providers in the state.

To insure our family of four, we'll pay around $25,000 for insurance before a
dollar is spent on deductibles, co-pays or other associated costs. We're
generally all healthy. Have no pre-existing conditions to speak-of. We earn
more than the level where you qualify for any subsidy.

This is unsustainable.

~~~
knz
> This is unsustainable.

It's not just unsustainable, it's absurd! $25,000 USD is most of, if not the
entirety, of the TOTAL income taxes many people pay in other OECD nations. How
are these other nations providing all of the functions of government,
including universal health care, for what Americans are paying just for
insurance? This shouldn't be a partisan issue - even the most conservative of
Americans should be outraged that we are being ripped off.

[https://data.oecd.org/healthres/health-
spending.htm](https://data.oecd.org/healthres/health-spending.htm) \- the US
spends $9,800/year per capita, clearly an outlier, and yet we still can't
cover everyone in a reasonable way?!

I took my child in for a regular 15 minute doctors appointment recently and
the cost of seeing the provider (no tests) was $350. Does it really cost
$1,400/hour to operate a medical clinic? Google tells me that the average GP
salary in the US is $189,000 ($90/hour), average salary for a nurse is $67,000
($32/hour), and average for a receptionist is $27,000 ($12/hour). Add another
nurse for administering shots/drawing blood and the total payroll per hour is
about $166/hour. Where is the other $1,234/hour going?

I'm sure there are reasonable explanations for some of it (cost of the
building, cost of medical equipment in the clinic, professional insurance, and
maintenance on the fish tank) but the ridiculous cost of everything is the
elephant in the room that no amount of "cracking down on fraud" or
"incentivizing healthy behaviors" will solve.

As an immigrant to the US, it's maddening. It just doesn't have to be this
way, there is half a century of evidence showing that alternative systems are
cheaper and more effective. I also look at that $9,800/year per capita and
wonder what our economy looks like if everyone had an extra $2-4,000/year in
their pocket. Or if we eliminated the burden of health care from businesses
and individuals trying to start a business.

~~~
klipt
To some degree, hospitals perform a kind of internal socialism: a poor,
homeless person can't be turned away from the emergency room, but they also
can't pay for its actual cost. To balance their books, hospitals then have to
overcharge people with good insurance.

This is similar to private universities charging rich students the full
sticker price, while giving poorer students scholarships and financial aid.

~~~
maxerickson
Hospitals put the costs of uncompensated care at 5-6% of total expenses:

[http://www.aha.org/content/16/uncompensatedcarefactsheet.pdf](http://www.aha.org/content/16/uncompensatedcarefactsheet.pdf)

(that's charity care and non payments but not any unfunded expenses due to
Medicaid and Medicare)

~~~
creaghpatr
"*The above uncompensated care figures represent the estimated cost of bad
debt and charity care to the hospital."

Cost is the key word there and is bolded in the link. The billed amount they
would have lost would be much higher. Most hospitals collect about only 25% of
patient payments owed to them. When they write it down, they use the cost to
the hospital not the amount billed.

~~~
maxerickson
I don't see what is important about that.

What is interesting about the amount they attempt to bill?

~~~
creaghpatr
For example, if we're talking about a $5 bandaid (in terms of cost), the
hospital will list the price at $20 on the chargemaster. They'll charge an in-
network payer $15 and an out of network payer $20. An uninsured patient would
probably get charged $10.

In any case, if the patient gets charged $10 and doesn't pay, the hospital
only writes off $5 as uncompensated care because that's the requirement for
government reimbursement. But really they lost $10 on gross patient revenue.
It scales up much higher as you can imagine. The point is that the financial
cost of uncompensated care is much higher than the dollar amount and why so
many hospitals are in financial danger today.

~~~
maxerickson
Why are "cost" and "financial cost" different things?

The stated "cost" of say, taking an x-ray, should be the fully loaded cost,
the facility space, the equipment depreciation, any consumables, the time,
etc.

~~~
creaghpatr
Because the margin is so huge in healthcare products and services, especially
at hospitals. Hospitals rely on astronomical margins on certain payer classes
to subsidize uncompensated care costs.

The point is that providers are far more invested in maintaining the huge
margins rather than minimizing the cost.

Problem is the payer mix has been shifting from insurance companies to
patients via high deductible health plans over the past decade so it's
starting to wreck their margins, even though the cost doesn't change.

------
codegeek
Something has to be done as status quo is not working. The idea that one could
go bankrupt if they don't have health insurance or god forbid are hit with an
illness such as Cancer is ridiculous.

Is single payer the answer ? Frankly I don't know. But as Americans, we live
in fear when it comes to healthcare. If you have a job where your employer
provides great coverage, then you are ok for the time being. But what if you
lose that job ? What if you want to start your own business ? What if you want
to be self employed ? What if...there are more like this.

Ok lets pay out of pocket then. Fine. If you have a family of 4 or more, be
ready to shell out anywhere from $1500-$2000/Month (yes per month) to get a
decent enough plan that doesn't have crazy deductibles and out of pocket
limits. Can't afford this ? Oops sorry, you are on your own (some exceptions
if you can prove you are extremely poor and get medicaid etc)

Fear. That is the issue I have. I don't want to be scared and I am not a
dramatic person. But it is scary. Just the thought of getting sick and not
having insurance.

Not to mention too many cooks. Don't believe me ? See below:

1\. The Patient (so far so good)

2\. The doctor/hospital (still good)

3\. Insurance Company (things start to get worse. Too much power)

4\. Doc's/Hospital Billing Company and their own process (now this is really
idiotic). I once ran for a month to get billing errors corrected (not
kidding).

Ideally, a system should only have the top 2 mentioned above. Single payer can
certainly replace #3 with Govt. but that part is the tricky one. Part 4 should
not even exist. But hey, medical billing/coding is an entire Business in the
US.

~~~
Synaesthesia
>Is single payer the answer ? Frankly I don't know

I think so, it works for European countries, and Canada, which are comparable
in wealth to the US. I don’t see why not.

~~~
daxorid
They're not, however, comparable in obesity rates.

I'd be happy to see a single-payer healthcare system in the United States with
strict denial of coverage for smoking-linked lung cancer, type 2 diabetes, and
any other medical problems caused by the choices of the patient.

~~~
in_hindsight
What about sports-related injuries? Serious question.

Should a marathon runner in this scenario get treatment for knee damage or
amateur / recreational boxer - for head trauma?

~~~
daxorid
I didn't say no treatment, just no coverage. If you choose to engage in risky
behaviors/activities, then you are more than welcome to buy supplemental
insurance as one of the costs of your lifestyle. It would likely be fairly
cheap for boxers and runners. Possibly even offset entirely by their
associated healthy lifestyles, and therefore eligible for default coverage on
a net cost basis.

------
tabeth
Isn't it in everyone's best interest to revamp healthcare? Who exactly loses
here? Rich people in the health industry? I don't get it.

I read somewhere that half a trillion _a year_ [1] would be saved by single-
payer. It's probably an exaggeration, but even if its an order of magnitude
too high... sounds good to me.

[1]
[http://www.pnhp.org/sites/default/files/docs/2012/Dollars%20...](http://www.pnhp.org/sites/default/files/docs/2012/Dollars%20and%20Sense.pdf)

~~~
Synaesthesia
Absolutely, except for the wealthy private interests like pharmaceutical
companies and insurance.

Polls show the majority of Americans have favoured a single-payer system now
for decades. This was the case under Reagan even, and still is today.

This shows the degree to which the US is not in fact a true democracy, but
more of an oligarchy. However things can change if there is enough public
pressure. People just need to be organized.

~~~
jonlucc
Pharma companies don't necessarily lose out with single payer. Consider that
the vast majority of drugs prescribed are generics, and most generics (aside
from those making headlines) are available pretty cheaply (you can check
GoodRx to see real prices). Of course, you might shave a good amount of profit
from big pharma by negotiation (if there's a single payer or a few payers,
they have a lot of power), but you don't want to stop R&D. How we shift that
R&D burden and to whom, I have no idea.

Disclaimer: I work in big pharma research (nothing to do with pricing)

~~~
refurb
This is very true. Prices might go down under single payer, but more people
are covered. Overall, prices may go down, but volume drives overall revenue
up.

------
droopybuns
Healthcare is a racket. It takes advantage of our fear of death and suffering.
It suggests it has solutions if you are willing to exchange your life savings
for a few more weeks in $100k/ day ICUs.

I lean libertarian, but I have given up on the current system. I'd like to see
all of the insurance companies and health care bureaucracy burned. This is an
idea worth voting for Bernie.

I doubt that any real change is on the horizon as long as people keep
confusing affordable health insurance with affordable health care. Obamacare
was never the solution to the actual problem, which is unnatural pricing that
is extracted under duress.

------
jakelarkin
"The CEO has been under fire for taking the unprecedented step of transferring
the patent of one of Allergan’s blockbuster drugs, the eye medication
Restasis, to a sovereign Native American tribe as part of a bid to maintain
monopoly control of the drug and its revenue."

"The Restasis patent was approved 15 years ago and was set to expire in 2014,
but the Allergan deal is part of an attempt to renew the patent and extend the
company’s control of the drug through 2024."

no shit people are fed up

------
otalp
I like Sanders as much as anyone else, but can anyone who supports it explain
how Single Payer is obviously better than expanding the current system to
provide universal healthcare? It seems to me that single payer would require a
radical overhaul(more than 100 million people leaving their employer given
insurance) and huge tax increases that requires a level of political consensus
among the public and Democrat majority in both houses not seen since The New
Deal.

That's not even to mention the fact that more vulnerable Blue seats are up for
grabs than Red in 2018. I just don't see the current roster of the GOP
supporting anything the Democrats put forward, especially something as radical
as medicare-for-all.

~~~
pm24601
... yet all of these concerns have been addressed by every other nation doing
single-payer...

Your own research might be the best way to go - that way you can get the
answer to your exact question.

People: We Americans think we are special - really we are just isolated and
not exposed to other ideas _directly_.

There is a world of difference between reading about an idea, visiting a
country's hotels, and really talking to the locals.

I see discussion time and time again:

* Healthcare * High-Speed Rail * Renewable Energy * Cities built for walking/biking instead of driving

All the above are solved problems for a generation in other parts of the
world.

At some point, we owe it to ourselves to find out directly from the locals how
things work.

~~~
virmundi
What you list were solved by two things: the US providing the EU a military
during the cold war and the fact that most of Europe was centered around dense
cities since the Middle Ages.

You can't make high speed rail with stops in the US because our cities are
spaced just far enough with low enough density to make the start stop process
worthless. Walking cities are only possible if we force people into dense
cities. As a country that does like freedom, you're going to start a civil war
trying to relocate people through emanate domain into small apartments.

We need to learn what works for us. We have a different land useage pattern
than Europe. We have a different approach the neighbors than The EU. Learn
from them, but don't mindlessly copy.

------
dsr_
Single-payer is the most startup-friendly system available.

It moves variable health care costs entirely out of your HR and payroll
systems. You can get more experienced employees when they aren't afraid to
risk their family's health care on a job move. By reducing risk exposure
there, the risk of salary vs equity becomes more attractive.

~~~
maxxxxx
You don't even need single payer. Most European countries don't have single
payer either. what they have is more rules on pricing.

~~~
ashark
Price controls might see more resistance in the US than setting up a
government (near) monopsony and letting that reduce prices (single-payer). The
idea that price controls can ever, _ever_ be a good idea is heresy to a lot of
people here, to the point that they hold it as nigh-axiomatic that they
_always_ fail, and (clearly) no amount of real-world examples will convince
them to add any nuance to their economic ideas.

~~~
maxxxxx
I am afraid the US would mess up single payer if that attitude doesn't change.

------
exabrial
Until I can see the VA work successfully or Doctors being excited about
TriCare, I don't think we should entertain this idea. Further, right now all
parts of the government are being weaponized by Democrats and Republicans. The
last thing I want is my healthcare being used a political leverage, even more
than it has been since Obamacare was passed.

------
wonderwonder
I went to a walk in clinic a few months ago to get antibiotics for a severe
sinus infection and I have insurance. I had to pay a $50 copay. While I was
waiting another customer walked up who did not have insurance and was charged
$99. A few weeks later I was billed an additional $97 because my insurance
refused some items.

The clinic is allowed to charge some customers more than others, that seems
unreasonable. The root issue though is that health care is a for profit
business.

While I understand that profits are what drives drug companies to assume the
risk of new drug development, people should not be forced to decide between
going to the doctor or dentist to get important medical help or paying the
rent. Many high cost procedures could be eliminated if they were caught
earlier with affordable preventative care. Health care costs are further
driven up by the hospital having to initially eat the cost of treating
uninsured people.

Prior to obamacare both of my parents were uninsured due to being self
employed and pre-existing medical conditions. In a span of a week my father
had a heart attack and my mother shattered her arm (requiring surgery). Total
cost was over $80,000. They of course could not pay that and defaulted.

Once Obamacare was introduced they both signed up and had insurance.

Long story short if you provide affordable options for people they will
generally take it. Basic human decency states that the cost of medical care
should never be prohibitive enough to stop people from seeking the care they
need.

If Europe can make it work I see no reason the US cannot.

------
Overtonwindow
Want to hear something completely mind-blowing? I'm working on an issue
regarding prescription drug benefit scoring. Whenever you fill a prescription,
the pharmacy is required to share that information with certain entities, such
as your insurance company. However, those entities then share it with data
brokers.[0] Ever been turned down for health, or life insurance? Seen a
premium spike? It could be because the prescription data brokers have rated
you (based on your prescriptions) as a health risk. You cannot opt out of
this. The only way to opt out is to never fill a prescription.

Whenever you apply for any type of health or life insurance, these brokers
(think credit score for health) report a score based on the medications you
take, have been prescribed but not filled, and those you've filled. You have
no idea what's in the report, but you can request your report if you've been
denied.

[0] [https://www.consumerreports.org/drugs/prescriptions-not-
secr...](https://www.consumerreports.org/drugs/prescriptions-not-secret/)

------
grandalf
There is a sweet spot for businesses who have massive regulatory protection
the way pharma does, and who want to maximize rent extraction from society as
much as possible.

For big pharma, this peaked in the past few years. The Mylan lawsuit and the
outrage about Martin Shkreli are flare-ups that signal that public outrage is
on the horizon.

In terms of social benefit, the trade-offs are not optimal at all. We are
overly risk-averse to the point where FDA bureaucrats needlessly hold up drug
approval, yet once a drug is granted approval we are very slow to sound the
alarm if it turns out that additional data shows unanticipated risks. For
example, the risks of Vioxx (as with many other NSAIDS) were well known to
physicians long before the drug was taken off the market.

There is no such thing as a single _wise_ entity that can appropriately vet
all drugs for maximal societal value. Different people have different levels
of risk-aversion. Our system exists to maximize the winner-take-all aspect of
intellectual property protection for pharma, not to maximize the benefits of
innovation to society or maximally incentivize innovation.

Certainly, someone who is 80 might be more willing to try a new drug with
unknown 20 year side-effects than the parents of a 10 year old. The single
regulator model is deeply flawed and creates massive harm on both ends of this
risk spectrum.

But there is no need for big pharma to worry. We have broad bipartisan support
of massive, long-term sponsorship of big pharma companies. Unlike Martin
Shkreli, these companies play a longer-term game and for the most part avoid
embarrassing fiascos such as the one that impacted Mylan.

But yet, in spite of this, they are insulated from competition by regulators
and manage to extract sweeter and sweeter deals. Note the way Mylan gradually
ramped up the cost of epi-pens following ACA? Mylan was just trying to get its
share of the pie. Other firms, like health insurance firms, got their piece of
the pie "de-contenting" bronze plans and removing high deductible options from
ACA. The government got its share by being able to claim credit for passing a
landmark law, etc. Like tigers tearing chunks of flesh from a fallen gazelle,
the powerful interests manage to get what they came for, which is why the ACA
passed in the first place, they all knew/expected the benefits to occur. The
only group who got a bad deal were Americans relying on the ACA who were not
poor enough to get a heavily subsidized plan... these people just had a
massively regressive additional tax.

------
samstave
I simply cannot understand why the following question is never asked,
addressed or even acknowledged to be a valid question:

"What health plan are all senators and government officials on? If congress
cares about healthcare "for all Americans" \- then put every American on the
same health plan they have, or force them to only be allowed to use ObamaCare
or whatever plan it is that they offer the people."

WTF!

~~~
maxerickson
People ask it all the time.

At the moment, Congress and staff get subsidies to buy plans from the DC
exchange.

All the time:
[https://www.google.com/search?q=congress+dc+exchange](https://www.google.com/search?q=congress+dc+exchange)

~~~
samstave
I mean, I want a prominent, on air "news" personality to ask specifically this
of any senator kvetching about healthcare live in front of millions.

It's like on NPR today they were talking about the tax reform, and the senator
was asked if there was one single thing that he would want to see come from
the tax bill. He said "many" she said again "name one" he said well there are
dozens" and she said "yeah but name one change you want to see that will help
middle class" and he deflected again and said "we will see what happens and if
the American people want a simple tax system, then we will see about giving
that to them" \--- they are all lying sacks of shit.

~~~
maxerickson
What would the question reveal? They _are_ on the same system as everyone
else.

"Yes Woof, I buy my plan from the DC exchange and get services both in DC and
from an excellent hospital in my district." KAPOW!

------
pm24601
Non-story.

TL,DR: CEO of company screwing Americans, says one thing for PR purposes and
then continues behavior for the dollars, euros, pounds.

Move along nothing to see here.

------
norswap
> I think we’ve got to do things to bring that trust back

The cynic in me wants to say "like not making indecent amount of profits on
the back of miserable people".

There is nothing wrong with turning a profit, which is healthy. But when
profit maximization is the prime directive, well... you know what happens.

As other commenters have pointed out, single-payer works well enough in Europe
(there are issues, but I doubt they are directly inputable to the single-payer
policy). Of course, that's rather hard to understand for the fringe of the
population that can't distinguish between socialism and communism, solidarity
and reckless selflessness.

------
alistairSH
Enough IS enough. When common arthritis drugs cost more than a year's salary,
there is a problem. Normal people can't afford that. [0]

[0] [https://www.everydayhealth.com/news/real-monthly-cost-
arthri...](https://www.everydayhealth.com/news/real-monthly-cost-arthritis-
medication/)

------
marze
So what fraction of GDP goes to health costs in US vs other countries?

And are Americans healthier as a result?

