January 22, 2004

For Your Consideration

Today's SF Chronicle offers two opinions on health coverage in their current Open Forum:Bottom Line in U.S. Health Care

The first, "Cheap drugs from Canada are a harmful illusion" by Sally C. Pipes, debunks the myth that Canadian drugs are really cheaper and why prices will rise on both sides of the border if state and local governments purchase en-mass across the border.

San Francisco's Board of Supervisors is the latest to enlist its city in the quest to import prescription drugs from Canada.

For some time now, Americans have had the option of purchasing drugs at Canadian prices -- the result of the Internet, entrepreneurs and modern shipping. What the supervisors, several governors and mayors really want is to import Canadian price controls. But if such plans are successful, the politicians will soon find their nets ensnaring few fish in this once-hot fishing hole after it has been descended upon by a voracious fleet.

That's the message from Canada's Internet pharmacists -- the very folks who would supply and, therefore, appear to benefit from south-of-the-border municipal contracts. They are making a killing supplying the U.S. market one consumer at a time. They worry that group buyers, such as states and municipalities, will increase demand while causing pharmaceutical companies (who, after all, supply the product) to further restrict the supplies they send north. This is already happening. Companies such as Pfizer, Lilly and GlaxoSmithKline are now limiting their shipments.

Given that pharmaceutical companies are global, we will in effect be underwriting the Canadian health system, and create higher costs in our own market. This doesn't make sense. Who is really being served besides the politicans?

But below-market pricing has to be borne by someone. Until now, it has been the U.S. consumer, who supplies the pharmaceutical companies with the revenues necessary to invest in the next generation of breakthrough drugs.

Meanwhile, the dirty little secret is that as crusading American politicians head north, embattled Canadians travel south to get life-enhancing drugs that are unavailable in Canada. Because of Canada's system of price controls, it takes much longer for new drugs to reach consumers, and some never do. Examples, according to Health Canada's Patented Medicines Prices Review Board, include Embrel and Remicade for arthritis, Retuxin for AIDS and Glucophage 2 for diabetes -- to name a few.

Canadians also travel south to receive treaments that are not offered or have long waiting lists for procedures we consider quite routine.

Which brings me to the second article in the forum:

"The road map for universal health-care coverage", by Robert K. Ross.

The health-care crisis rumbling throughout California has extended its reach beyond low-income, working families: More than 640,000 of the state's uninsured have incomes of $70,000 or more, and approximately 1.6 million have incomes of more than $50,000, according to a 2003 report from the California HealthCare Foundation.

Although President Bush's recommendations of tax credits and medical- savings accounts are positive signs, they will still leave millions of people without health coverage. What's needed is an approach that ensures coverage for all.

Last week, a 13-member advisory committee of the Institute of Medicine released a report calling for universal health coverage. The private, nonpartisan institute that advises Congress on science and health issues concluded that the incremental expansion of existing programs is not working. With 6.4 million Californians lacking health coverage, no other state is feeling the impact more profoundly.

Firstly, are the 3 million estimated illegals factored in, if so then Mexico or the Federal government, should reimburse the state forthwith.

The other problem I have is that Ross claims a family with an income of $70,000 cannot afford health insurance. According to the credit industry, this same family also has an average of 11 credit cards. Something doesn't add up.

The notion that this is an "us" versus "them" issue is a fallacy. As revealed by the Kaiser Commission on Medicaid and the Uninsured, 80 percent of those without health coverage nationwide are from working families; moreover, growth in health-care costs and insurance premiums is outstripping general inflation and family and business incomes.

See the first article, our costs will continue to rise as we underwrite research and drug development. There is also no mention of tort reform. The costs of liability insurance has a direct and immediate effect on healthcare costs. How will universal coverage address this issue? If a patient can sue the government healthcare system, then costs would continue to rise, would they not? A law or regulation denying due process in a case of wrongful death, malpractise or malfeasance, would most certainly result in court challenge by the ACLU and patients-rights groups.

Furthermore, a push by business to overturn SB2, a new state law mandating employers with 200 or more workers to provide health insurance by 2006, doesn't bode well for the future of employer-based coverage, either.

Nor does SB2 bode well for retaining employers. In order for cost shifting to be effective, one must have an entity on which to shift costs. SB2 has accelerated a relocation of labor intensive service companies to Nevada that began when inventory taxes were raised and most large warehousing and distribution operations left the state or employers will continue to move jobs offshore.

The IOM report outlines four different plans for national universal health coverage by 2010:

-- Major public program expansion and new tax credits;

-- employer mandate, premium subsidy and individual mandate;

-- individual mandate and tax credit; and

-- single payer.

Perhaps Mr. Ross can name a single country where universal, single payer, mandated health care is not in fiscal crisis and treatment is not rationed and/or sub-par to ours.

Given that our current federally mandated healthcare systems are not self-sustainable, and badly broken, how do we add tens of millions more to the rolls just as a large sector of our top earners leave the work force and enter the Medicare system in 2010?

We cannot fiscally sustain universal healthcare coverage as outlined above, and that is the bottom line.

UPDATE: Dean Esmay sparks an impromtu comment debate on Canadian healthcare vs U.S.

Posted by feste at January 22, 2004 12:49 PM | TrackBack
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