HealthBlawg

David Harlow's Health Care Law Blog

    • Twitter
    • Facebook
    • LinkedIn
    • RSS
    • Email
  • About
  • Archives
  • Podcast
  • Press
  • Awards/Reviews
  • HIPAA
  • HCSM

To negotiate or not to negotiate – That is the Medicare drug benefit question

January 2, 2007

One of the Democrats’ "first 100 hours" issues seems to be repeal of the ban on Medicare negotiation of drug prices. 

That’s a good thing.

The N.Y. Times reports today that acting CMS administrator Leslie Norwalk

said that under the Democrats’ proposal her agency would have to “hire hundreds of people to negotiate prices for 4,500 different drugs.” And Ms. Norwalk said the agency would be besieged by lobbyists seeking higher Medicare payments for specific drugs. That, she said, is “how Washington really works.”

I’d call that a copout.   

Remember, her colleagues in the Bush Administration misled Congress when they projected the ten-year cost of the Medicare drug benefit to be $400 billion.  (It will cost $1 trillion; that’s how Washington really works.)  So she can afford to hire a couple hundred employees — not that it should take that many — and still come out ahead.  A one percent savings off the lowball estimate ($4 billion) dwarfs the alarmist supposed cost of administering this program (let’s call it $250 million over ten years if it takes 250 $100,000-a-year employees to do the job).  If we use the current cost estimate, a 1% "shave" for Big Pharma would yield savings of $10 billion.

Yes, Virginia, there are transaction costs inherent in our inefficient health care system, and we have to make sure the savings don’t land in the pockets of the benefit plan administrators, but there’s no excuse for failing to use the market power of the federal government in negotiating drug prices.

Other issues on the agenda include looosening restrictions on federally-funded stem cell research.  The Times article continues:

Lawmakers are also likely to wrestle with these issues:

¶Many Democrats will try to reduce Medicare payments to managed care plans. They contend such plans are overpaid by about 10 percent. Insurers intend to fight back, with support from the Bush administration, Republican lawmakers and beneficiaries who see the plans as a way to obtain extra benefits at an affordable cost.

¶Congress faces a huge challenge in devising a new formula to pay doctors for treating Medicare patients. Under the current formula, doctors’ fees would be cut more than 4 percent a year for the next decade. Lawmakers are determined to avert such cuts, but see no easy way to pay the cost.  [See earlier HealthBlawg posts on this issue here and here.]

¶Democrats have drafted legislation to speed the approval of safe, low-cost versions of expensive biotechnology drugs, which account for a growing share of spending on pharmaceuticals.

Stay tuned.

— David Harlow

Filed Under: CMS, Health Law, Medicare

you might also like:

  1. Medicare fraud attracts South Florida drug traffickers

  2. Medicare trigger pulled again . . . yawn

  3. First 100 hours agenda item – House passes Medicare prescription drug negotiation requirement

« Health care insurance reform notes from South Carolina
HIPAA security guidance for off-site use of electronic protected health information (EPHI) »

Follow me on Twitter

David Harlow 💉😷 Follow 42,911 17,570

Mastodon @healthblawg@c.im #HealthCare #MedDevice #Compliance #Privacy @MyOmnipod #HIPAA #digitalhealth #HarlowOnHC #pinksocks Tweets are tweets No more no less

healthblawg
healthblawg avatar; David Harlow 💉😷 @healthblawg ·
3h 1620630690076282880

ICYMI> Natalie Davis, CEO of United States of Care — Harlow on Healthcare https://healthblawg.com/2022/11/natalie-davis-usofcare.html?utm_source=twitter&utm_medium=social&utm_campaign=ReviveOldPost #digitalhealth #hcldr #hitsm

Image for the Tweet beginning: ICYMI>  Natalie Davis, CEO Twitter feed image.
Reply on Twitter 1620630690076282880 Retweet on Twitter 1620630690076282880 0 Like on Twitter 1620630690076282880 1 Twitter 1620630690076282880
healthblawg avatar; David Harlow 💉😷 @healthblawg ·
10h 1620535759902998528

The Harlow #Healthcare #Innovation Daily #digitalhealth #hcldr #HarlowOnHC #digitalhealth #healthtech

Image for twitter card

Google Research and DeepMind develop AI medical chatbot

digitalhealth.net A new AI-powered medical-specific chatbot developed by Google and DeepMind has shown some potential for clinical applications.

paper.li

Reply on Twitter 1620535759902998528 Retweet on Twitter 1620535759902998528 0 Like on Twitter 1620535759902998528 0 Twitter 1620535759902998528
healthblawg avatar; David Harlow 💉😷 @healthblawg ·
10h 1620524933863378944

ICYMI> Paul Schrimpf, at Prophet Consulting, Driving Health Care Transformation — Harlow on Healthcare https://healthblawg.com/2022/12/paul-schrimpf-prophet-consulting.html?utm_source=twitter&utm_medium=social&utm_campaign=ReviveOldPost #digitalhealth #hcldr #hitsm

Image for the Tweet beginning: ICYMI>  Paul Schrimpf, at Twitter feed image.
Reply on Twitter 1620524933863378944 Retweet on Twitter 1620524933863378944 0 Like on Twitter 1620524933863378944 0 Twitter 1620524933863378944
Load More
Follow me on Mastodon

HIPAAtools

Hipaatools

The HIPAA Compliance Toolkit

The Walking Gallery

The Walking Gallery

Quick Links

  • Home
  • Categories
  • Archives
  • Podcast Interviews
  • HIPAAtools
  • HIPAA Compliance
  • Health Care Social Media
  • Speaking
  • In the Press
  • Blogroll

David Harlow

David Harlow

HealthcareNOW Radio

Connect with David

  • Twitter
  • Facebook
  • LinkedIn
  • RSS
  • Email
  • Subscribe
  • Contact
  • Book Me: Speaking
  • About
  • The Harlow Group LLC
Copyright © 2006–2023
HealthBlawg is a publication of The Harlow Group LLC. See Copyright notice and disclaimer.
Fair use with attribution and a link is encouraged. Click for more on David Harlow.
[footer_backtotop text="Back to top" href="#"]