Medicare for All is No Easy Fix

I have shied away from weighing in on the flurry of health proposals being discussed as part of the Biden Administration’s big spending bill. So many proposals have been floated, and I can’t handicap their odds of enactment better than you.

However, the resurgence of Medicare for All measures makes me think that some version of this proposal will be included in the measure the Senate hopes to pass via a simple-majority reconciliation bill.

Medicare for All falls far short of Progressives’ hopes for a single-payer overhaul of U.S. health insurance. But it has broad public support and, at the very least, could be an important stepping stone toward more substantive changes.

Medicare for All also can mean different things, and represents an interesting horse-trading vehicle for Congressional discussion and possible compromises. For example, it might encourage many of the roughly 180 million people now covered by employer health plans to switch to Medicare.

While this may seem a good thing, America’s employer health insurance providers are rightly concerned that it would undermine if not seriously weaken employer health plans, according to a recent analysis by the American Benefits Council (ABC).

Lower-income, younger, and healthier workers are the most logical ones interested in a public option. Any large-scale shift would force employer plans to raise rates on their remaining members, who by definition would have costlier medical bills. This kind of adverse selection response could feed on itself, leading to a worst-case death spiral for some employer plans.

Still, I expect serious consideration of Medicare as a public option for employees and those covered by other forms of private insurance (i.e., the Affordable Care Act exchanges). Giving people such a choice creates good optics for Democrats, although it may not lead to a lot of change so long as the option is voluntary.

Doctors and hospitals have long complained that Medicare’s accepted payment rates are too low. Employer plans pay rates nearly 2.5 times higher than does Medicare. The appetite for medical providers to serve Medicare patients clearly is supported by the higher prices they collect from employer plans. The prospect of millions of employees switching to lower-cost Medicare is a  major threat to providers.

More to the point, Medicare for All might not really change the huge profit incentives now enjoyed by the insurers, drug companies, and equipment providers that dominate the market for Medicare coverage. If you expect doctors and hospitals to flock to serve people with public-option plans if they feature low reimbursement rates like Medicare, you might want to color yourself naive.

And if you assume that Medicare for All would mean more government-provided health insurance, tack on another credulity demerit. Private companies dominate this market and are often the preferred partners of government Medicare and Medicaid program administrators.

This tangled web of mutually beneficial deals has cemented the continued escalation of U.S. health spending – now about twice as high per person as in any other developed economy. And it has made health care a darling on Wall Street.

If Medicare for All simply provides more of the same, it might appear as progress to some by expanding the pool of people with health insurance. But it might have nothing to do with badly needed health reforms that would change the trajectory of U.S. health spending, reduce the volume of unneeded care, and align the care that is provided with better health outcomes for people with health insurance.

To be sure, something does need to be done here. The pressures for higher health spending will only get worse. The AMC analysis includes a solid summary of future health trends. Here are a few sobering excerpts:

  • Health care utilization is not driving spending growth, price is driving spending growth. Patients are using the same or lower quantities of health care but are paying more for it every year.
  • Spending on hospital services accounts for 44 percent of total personal health care spending for the privately insured; hospital price increases are key drivers of recent growth in per capita spending among the privately insured.
  • According to the Centers for Disease Control and Prevention (CDC), 90 percent of the nation’s $3.8 trillion in annual health care expenditures in 2019 were for people with chronic physical and mental health conditions.
  • By 2030, an estimated 83.4 million people in the U.S. will have three or more chronic diseases—compared to 30.8 million in 2015.

Medicare Drug Pricing Rules Under the Microscope

Here’s background to help you keep track of two ongoing processes – one by Medicare and one in the courts – that could lead to big changes in the way Medicare charges you for expensive drugs. You’ve likely heard of one but perhaps not the other.

Under Medicare’s complicated rules for Part D drug plans, there is no ceiling on out-of-pocket costs for prescription drugs. There is protection here, but even in what’s called the catastrophic phase of Part D drug coverage, consumers are still responsible for paying 5 percent of the billed price for meds.

As someone who takes a very expensive medicine whose costs exceed $5,000 a month, I can tell you that I reach the catastrophic phase of my Part D plan each year February! For me, at least, 5 percent of that price is still a financial burden.

The price I pay is not so different from the tentative price announced by Biogen for its new dementia drug, aducanumab (the brand name is Aduhelm).

Unlike my situation, however, nearly every older Medicare beneficiary is interested in a drug that could delay the onset of a condition that they find terrifying. The collective bill could overwhelm not only consumers but the entire Part D program, which is heavily subsidized by taxpayers.

The Centers for Medicare & Medicaid Services (CMS) announced last week that it was launching a formal process to explore who should receive Aduhelm and what it should cost. The process is called a National Coverage Determination analysis and is designed to set national policy for how Medicare will cover the drug.

“Alzheimer’s is a devastating illness that has touched the lives of millions of American families and as CMS opens our National Coverage Determination (NCD) analysis, we invite interested stakeholders to participate,” said CMS Administrator Chiquita Brooks-LaSure in a CMS press release. “We want to consider Medicare coverage of new treatments very carefully in light of the evidence available. That’s why our process will include opportunities to hear from many stakeholders, including patient advocacy groups, medical experts, states, issuers, industry professionals, and family members and caregivers of those living with this disease.”

You can track the process of this NCD and submit your own thoughts here. While the NCD is underway, Medicare’s regional administrative contractors – there are 12 across the country – may issue Local Coverage Determinations (LCDs). You can track those determinations here. (Sorry for all the bureaucratic gobbledygook!)

Private insurers aren’t waiting for the CMS to weigh in. Some have already announced they will not cover the drug. Some prominent medical centers said last week they won’t administer it.

The second development involves a legal challenge to Medicare rules that prohibit medical providers, including drug companies, from providing consumers with price discounts and other financial assistance. Doing so would amount to trying to induce consumers to buy that company’s product.

Drug assistance programs are widely offered to non-Medicare consumers covered by private insurance plans. The reasonableness of the price and even the efficacy of the drug or product may never be discussed.

A compelling motivation for drug companies, of course, is to make expensive drugs more affordable and, not incidentally, thus induce more people to use the products. This is precisely why Medicare frowns on the practice.

You might ask why the companies don’t simply lower their prices. Good question. Only a cynic would note that maintaining high list prices helps the companies reap big gains from Medicare beneficiaries. Under the Part D program, the federal government pays 80 per cent of the price of drugs once they’ve reached the catastrophic phase of the program.

According to the Axios news service and reporter Bob Herman, Pfizer has challenged this rule in a court case involving heart medications that cost a whopping $225,000 a year. The case is now before a U.S. District Court.

If the government loses this case, the impact on Medicare users of expensive drugs could be enormous. Even if it wins, the case could add further pressure to legislative efforts to lower drug costs, especially for Medicare users.

What Does Successful Aging Mean to You?

Until the end of my career or life, whichever comes first, my journalism beat is going to be Successful Aging. Since beginning my first reporting assignment more than 50 years ago at The Charlotte Observer (I was the textile reporter), this is the first time I’ve been able to pick my own assignment.


I chose this topic because, after about 15 years specializing in writing articles and books about aging, health, and retirement, I believe these were just the “prelims” and that nearly everything of import in our later years is part of the universal quest to successfully age and come to terms with our brief time on Earth.


I don’t pretend to have the answers for what successful aging means to you. That’s your job, and there are no “averages” here or thresholds to meet. Your unique mix of attributes, values, and priorities will define what successful aging might look like.


What I can offer is a guide to the building blocks of a successful life and the roles they can play in shaping this definition. I don’t claim to know all these variables, and look forward to your help in defining more. But I have a beginning list, and it’s pretty long:


Age Friendly Communities

Aging in Place



At-Home Care

Budgets and Spending


Continuing Care Retirement Communities

Charitable Giving, Divorce



Elder Abuse

End of Life












Long Term Care




Nursing Homes

Pain Management

Paying it Forward


Preventive Health Care

Reverse Mortgages



Social Security







List or not, you are the real experts here. I can tell you how a program works, its cost-benefit analytics, and what research experts have found about its role in successful aging. But your experiences and advice are hugely important here.


So, please flood my inbox with your thoughts. What have been the most important elements of your pursuit of successful aging, and why? What new elements would you add to this list?


Most importantly, please tell me a bit about yourself. Success, especially as we move into our 70s and beyond, doesn’t mean an idyllic life with no setbacks or physical constraints. It is shaped by how we deal with these universal companions of aging.


I will share your stories with the appropriate concern for your privacy. I also will be doing stories about the building blocks on my list, and any you convince me to add. These will not be click-bait pieces but will include extensive facts, comments from experts, and links to reports and websites.


The goal of these stories is to provide you with enough information to make an informed choice of what you want to do. That should be the goal of every story but of course it is not.


At the end of this process, or at least my role in it, you will have access to an archive of anecdotal and reported material that will help you as far along the path to successful aging as you are willing to travel.


Bon voyage!

Drug Prices and Unintended Consequences

Who isn’t angry about high drug prices? Complaints to pharmaceutical companies often produce tone-deaf defenses. And when a $56,000 annual price for the newly approved dementia drug aducanumab (the brand name is Aduhelm) was described by its maker last week as reasonable, rational thought became more difficult.

The clarity of these views about high drug prices, however, does not extend to clear solutions. Health care abounds with complex balancing acts. Plug one hole in the dike and others may appear, causing more damage than the original hole. Nowhere is this more true than with drugs.

One thing that is clear is that what we know about drug prices from news stories, talking heads, and Washington critics is just the tip of the proverbial iceberg. Understanding what those solutions should be will require a level of open and thorough analysis that would be difficult at any time but most likely impossible in today’s dysfunctional legislative environment.

There is no question that U.S. drug prices are the highest in the world. But to what degree have they also spurred pharmaceutical companies to spend hundreds of billions of dollars to research, develop, and test marvelous new medications we all want? I don’t know and I’m not willing to gamble on the unknown. The stakes are too high.

Would cutting these prices reduce the financial incentives for companies to pursue new and improved medications? Yes, but I have no idea by how much.

Was there a relationship between lucrative drug prices and the amazing work by these companies to produce highly effective COVID-19 vaccines in record time? I’m sure there was one, but, again, I can’t quantify it.

This leads me to two conclusions that are hardly brilliant or original.

The first is that drug prices are awesomely complicated and changing them will trigger unintended consequences that, like the phrase implies, can’t be known for sure in advance.

The second is that tackling drug prices needs to be an international effort, not something that U.S. lawmakers can accomplish successfully on their own.

If you want to dig into the way drugs are regulated in this country, spend some time with the source documents presented below.

A recent study of how drugs are sold by pharmacy benefit managers (PBMs), for example, illustrates the complexity of the system set up by drug companies, with oversight by government regulators who often are overmatched by their private-sector counterparts.

Kaiser Family Foundation’s assessment of the impact on Medicare of paying for Aduhelm describes how paying for this single drug could overwhelm program finances.

A New York Times story and three related research studies illustrate how we are literally hooked on prescription medicines and how pharmaceutical companies have gamed the system. By offering co-pay programs and other subsidies to younger consumers and families, they maintain an otherwise unsustainable marketplace.

Their payoff comes from Medicare beneficiaries covered by Part D drug programs. Part D rules prohibit the use of private co-pay subsidies, and Medicare also is legally prevented from using its market clout to negotiate lower drug prices. This permits drug companies to sell drugs at inflated prices. Under Part D rules, consumers are limited to paying only part of these prices but taxpayers are socked with 80 percent of the bill. This is a good deal for no one but the pharmaceutical companies.

The major legislative effort already put forward in the new Congress and introduced earlier by House Democrats – the Elijah E. Cummings Lower Drug Costs Act – was analyzed by the Congressional Budget Office in 2019. The savings are huge but so are the possible impacts on financial incentives for Big Pharma.

If you spend 30 or 40 hours reading these documents, you can become a card-carrying member of nerds who understand how hard it will be for the U.S. to combat high drug prices. Until recently, I would have said fashioning a global approach to drug prices was impossible.

However, Treasury Sec. Janet Yellen’s successful efforts to get major nations to agree to tackle low corporate tax rates provides a framework that deserves scrutiny by pharmaceutical-industry critics. By agreeing on a minimal tax rate that private companies should pay, Sec. Yellen’s initiative could reduce the incentives of companies to squirrel away their profits in low-tax nations.

Likewise, agreeing that nations should be unified on drug prices could reduce U.S. prices without destroying financial incentives that drug companies say they need for their development efforts.

Convincing the rest of the developed world to raise the prices they pay for drugs is a non-starter on its face. But combined with other things the U.S. does, particularly its massive international military presence, provides the Biden administration with leverage for developed nations to support a global system for drug pricing.

This may seem far-fetched today. But the inventory of new drugs will increasingly be populated with more Aduhelms, creating unsustainable pricing burdens on the U.S.

As always, I look forward to your informed views of how to get a handle on runaway drug pricing.


National Bureau of Economic Research

Common Agent or Double Agent? Pharmacy Benefit Managers in the Prescription Drug Market

“In 2018, three PBMs (Express Scripts, CVS Health/Caremark, and OptumRX) accounted for 80 percent of prescription drug volume and six PBMs account for 95 percent of the prescription drug market (Fein, 2019; Feldman, 2020). The CVS-Health/Caremark PBM alone reports nearly 90 million members in its PBM business—and so negotiates on behalf of a customer population larger than the population of Germany.”


Kaiser Family Foundation

Juliette Cubanski and Tricia Neuman

FDA’s Approval of Biogen’s New Alzheimer’s Drug Has Huge Cost Implications for Medicare and Beneficiaries

“It is hard to know exactly how many Medicare beneficiaries will take Aduhelm, but even a conservative estimate would lead to a substantial increase in Medicare spending. In 2017, nearly 2 million Medicare beneficiaries used one or more of the currently-available Alzheimer’s treatments covered under Part D, based on our analysis of Medicare Part D claims data. If just one-quarter of these beneficiaries are prescribed Aduhelm, or 500,000 beneficiaries, and Medicare pays 103% of $56,000 in the near term, total spending for Aduhelm in one year alone would be nearly $29 billion, paid by Medicare and the patients who use this drug – an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending. To put this $29 billion amount in context, total Medicare spending for all Part B drugs was $37 billion in 2019.”


Associated Press

Medicare copays for new Alzheimer’s drug could reach $11,500


Government Accountability Office

Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements


The New York Times

Looking to Tackle Prescription Overload

Health Affairs

Ultra-Expensive Drugs And Medicare Part D

“It is not coincidental that the recent growth in Medicare Part D catastrophic coverage spending coincides with the rapidly increasing share of ultra-expensive drugs.7 For many users of ultra-expensive drugs, the beneficiary enters the catastrophic phase simply by filling a single prescription. . . .  Although increased spending for one or two ultra-expensive drugs can be absorbed by the health care system, the growing number of ultra-expensive drugs and patients receiving them is affecting Medicare Part D as well as other insurers and, most important, the patients faced with high cost sharing for these drugs.”


Journals of the American Medical Association (JAMA)

Prescription Drug Out-of-Pocket Cost Reduction Programs: Incentives and Implications

“Research has consistently shown that manufacturer copayment coupons used to induce demand for higher-cost drugs when lower-cost alternatives are available are inefficient and that this practice should be banned.”


Congressional Budget Office

Budgetary Effects of H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act



Later-Life Money Issues Dominated by Health and Bequests

At some point, everyone fortunate enough to still be around as they enter their eighth or even ninth decade will begin to think about their financial needs and resources in a different way.

Until then, a top concern is not running out of money in retirement, and having enough to pay the bills and enjoy leisure activities.

But there will come a time, if not a specific day, when you believe your personal hourglass is beginning to run out of sand. Your time on earth will then look very, very finite.

At this point, people look less at current expenses. Instead, they tote up their retirement wealth and see how it spreads over the years they are likely to have left.

Medical expenses and legacy issues move to the forefront. Medical expenses are up there because they often are the big unknown wild card in retirement spending. Legacy issues are activated because people can get a better line of sight into how much money will be available to leave to heirs or donate to important causes.

There is no “average” decision path here but there is good guidance at how our elders have wrestled with these issues. A recent economic analysis of how medical expenses and legacy issues interact in our later years is helpful. Mariacristina De Nardi, Eric French, John Bailey Jones, and Rory McGee have attempted to address the topic of “Why Do Couples and Singles Save During Retirement?”

To do so, they looked at mountains of data on the past spending decisions of thousands of older people. I risk making errors in providing general characterizations of their work, but of course that is exactly what I’m about to do. Please read their paper, particularly for details on how people in different income and wealth groups approach this matter.

“The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees,” they write. “Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.”

Couples differ from singles:

“Being in a couple allows its members to pool their longevity and medical expense risks, potentially reduces medical spending due to spousal care giving, but also exposes each member to their spouse’s risks, including the income loss and high medical expenses that often accompany a spouse’s death. A couple also cares about leaving resources to the surviving spouse, and potentially about leaving bequests to other heirs.”

More affluent couples are able to self-insure for their future health expenses. This causes them to be cautious about spending down their assets. For the same reason, they tend to squirrel away money for whichever spouse lives the longest. The death of a spouse is a watershed event for many reasons.

The surviving spouse is most often the wife, given longer longevity for women in general and the frequency with which women marry men a few years older then they, and sometimes much older. When a spouse dies, household income usually drops, often by a lot more than household living expenses.

Leaving money behind for the surviving spouse or other uses thus becomes more important here than being able to pay for medical expenses. As household wealth declines, so does the relative weight of what the authors call “bequest motives.” And while you’ve probably never thought of legacy giving in this way, it is viewed in economic terms as a “luxury good.”

“On average, the wealth of households experiencing a death declines by an additional $160,000 compared to those not experiencing it,” the study found. “While the decline begins up to six years in advance of death, a substantial share of the decline occurs in the final two years. . . . A large share of this drop is explained by high medical expenses before death, but not the majority, which is accounted for by transfers to non-spousal heirs. By the time the second spouse dies, much of the couples’ wealth has vanished.”

The impact of medical expenses on household wealth in later years is not great. But it has an outsized role here due to the uncertainty of such spending. To plan for this unknown, people practice “precautionary saving.” This boosts the odds they will die with money left over for distribution to their heirs and charities.

Employee Benefits Set to Expand

Employers are planning to sweeten their mix of employee benefits, according to a recent survey from workplace consultants Willis Towers Watson. The survey was based on polling done a few months ago, and it cited the pandemic as the cause.

Since then, of course, the attractiveness of expanded benefits has only increased. Many workplace managers are searching for more successful ways to recruit new workers as well as lure recalcitrant employees back to work.

“Employers view voluntary benefits as a cost-effective way to offer employees a wide range of benefit options that best meet their needs,” Lydia Jilek, senior director, Voluntary Benefits Solutions, said in a press release. “The pandemic has given rise to an increase in benefits that protect employees against big hospital bills and loss of income, and provide personal protection.”

The five benefits that employers plan to expand the most in the coming years are all related to insurance or other ways to protect employees from risks, many of which have been highlighted during the pandemic. They are identify theft, indemnity from big hospital bills, pet insurance, critical illness insurance, and group legal coverage.

Here are the half dozen most voluntary benefits overall are:

  • Financial planning/counseling through an existing vendor (93 percent)
  • Tuition reimbursement programs (88 percent)
  • Telephonic financial planning/counseling (77 percent)
  • Onsite fitness center (54 percent)
  • Backup childcare (48 percent)
  • Elder care (44 percent)



Inflation, Volatility, and Liquidity

Price increases at the wholesale and retail level – check out the numbers here — have rattled investment markets, and with good reason. The widely forecast U.S. economic boom was expected to be fueled by continued low interest rates.

That assumed people would return to the job market as employers expanded their businesses. But employers are struggling to fill job openings. Many people are not eager to return to work. The three main causes are pandemic concerns, low wage rates for many service jobs and, yes, expanded government benefits that allow some people to postpone re-employment.

While this is going on, President Biden is pushing his $4 trillion package to fund infrastructure improvements and provide the most substantial boost to the middle class since the 1930s. Putting aside the merits of his case, the prospect of such an enormous increase in federal spending is adding further jitters to an already nervous market.

With continued inflation and market volatility likely in at least the short run, it’s essential that retired investors develop enough liquidity in their portfolios to avoid having to sell investment securities – at least for six months and perhaps longer. This defensive posture may reduce overall returns but it avoids being forced to sell holdings when market values are depressed.

This is not the advice I would give younger investors. First, markets may bounce back quickly. We don’t have a lot of experience recovering from a pandemic, and the resilience of the U.S. economy has proven itself many times over the years.

But retirees need to be more defensive, both in their investing and spending plans.

Look at the four primary spending needs – day-to-day living expenses of things you need, discretionary spending on things you don’t need but would like to have, travel and other bucket-list items, and emergency spending, most likely involving health problems.

Guaranteed income from pensions and Social Security should be enough (I know they’re often not) to cover essential needs, with anything being left available for “nice to have” items. Retirement funds would cover big-ticket items, and this is the place where cash from your holdings would be especially nice. Home equity is the ideal piggy bank for emergency spending needs, although wealthier investors can likely squirrel away cash for unexpected events.

Going on a financial diet may be unpleasant but can produce great results. With a slimmed-down spending footprint, you can handle a market correction. And if things don’t get that bad, you’ll wind up with more money at the end of whatever cycle we’re now entering.

Real Health Reform Not on the Menu

Providing private and public health insurance to more people is a pale imitation of the kind of health reforms Americans need. Yet it is the focus of nearly all discussions in Washington about how to change the nation’s health care system. The rest of Capitol Hill’s bandwidth is devoted to rolling the price-cut rock for drugs up the hill and watching it roll down again and again.

Outside the Beltway, health experts and researchers have been begging policymakers to pay serious attention to glaring health shortcomings. Research studies this past week emphasized some of them. My health care book tries to pound away at them as well.

Primary Care

Despite all the wonder drugs, digital monitoring tools, and other “smart” health tech, a continuing relationship with a primary care physician remains the single most healthful behavior that Americans should pursue. Research shows that such continuing care literally extends life spans.

“High-quality primary care is the foundation of a robust healthcare system, and perhaps more importantly, it is the essential element for improving the health of the U.S. population,” according to a report from the National Academies of Sciences, Engineering and Medicine. “Yet, in large part because of chronic underinvestment, primary care in the United States is slowly dying.”

The fixes are easy to list but not to make: loosen the American Medical Association’s chokehold on medical school slots for new doctors, change the financial compensation system that places primary doctors at or near the bottom of physician pay scales, and support promising new models of primary care that product better health outcomes for less money.

The Research:
Implementing High-Quality Primary Care

Unneeded Care

As much of 30 percent of the health care Americans receive is unneeded. With annual health spending of $3.8 trillion in 2019, that’s a lot of meatballs, so to speak. But which is the 30 percent we don’t need, and how do we push back against the recommendations of our doctors, hospitals, and other medical experts whose recommendations we’ve been conditioned to passively accept, if not enthusiastically welcome?

We need enlightened practitioners to help us, plus more government focus on the worrisome rise of vertical integration among hospitals, doctors, and other providers. Study after study shows us that medical practices controlled by hospitals and private investors regard their bottom lines as their most important patients. They simultaneously raise prices and reduce the quality of care.

The Research:
Acquisitions of Hospice Agencies by Private Equity Firms and Publicly Traded Corporations
Higher Medicare Spending On Imaging And Lab Services After Primary Care Physician Group
Vertical Integration
Hospital Employment Of Physicians In Massachusetts Is Associated With Inappropriate Diagnostic Imaging
Is your hospital performing unnecessary tests and procedures?

Setting the Table for Serious Healthcare Changes

President Biden’s address to Congress omitted little when it came to fundamentally changing the nation’s healthcare system. We heard about expanding enrollment and financial supports in the Affordable Care Act, affecting private insurance plans and state Medicaid participation. More child care and health workers would remake home-based care in a post-pandemic era. Drug prices would be reduced. Medicare coverage would be expanded either to those 60 and older, or 55 and older, or even 50 and older.

Do we need such changes? Your views carry as much weight as mine. How much of Biden’s healthcare agenda will be enacted? I have no idea.

What is clear, however, is that healthcare is more ripe for change than at any time in my memory. Since Medicare was enacted in 1965, the nation has for the most part has not been committed to major changes but has simply moved the healthcare chess pieces around the board, Even the ACA’s main impact was to get more players into the health insurance game, and not to change the game itself.

Four drivers of change stand out today as fundamentally more impactful than previous change agents: the pandemic, health equity, affordability, and acceptance of a broader role for government.

  1. Pandemic

People and institutions are more open to change during an emergency than when times are good. The pandemic has created an expanded role for government, a la point number four below. It also has changed the delivery of health care, providing a showcase for telehealth and digital healthcare tools that can be both better and cheaper than traditional forms of care.

These traditional channels have been under great stress and the pressure for finding better solutions is sending existing players back to the drawing board and drawing disruptive entrepreneurs in droves.

Big tech, in particular, is becoming ascendant in health care just as it has in other parts of our lives. We’re still in the first inning of this new game but it’s clear that it will not be the game we’re used to seeing played.

  1. Health Equity

The impact of the pandemic has been distressingly uneven on different groups of Americans, falling particularly hard on women, people of color, and those with low incomes. Cynically speaking, America has long worked this way.

This time around, however, the human toll of inequality has been displayed in public for everyone to see. Equally meaningful, it has occurred during an unprecedented reckoning with the effects of race-based differences in how police do their jobs and in the sustained public outrage over sexual harassment and assault.

Public support for more people and money to combat healthcare inequality is strong. Some Republicans may not admit that investing in child care and at-home caregiving is an infrastructure issue. Nearly everyone else does.

  1. Affordability

The nation’s healthcare bill was $3.8 trillion in 2019 – roughly twice as much per person as in any other developed country. The relentless increase in prices paused during the pandemic as people cancelled doctors’ appointments and elective surgeries. But the resumption of strong economic growth will also revive health care inflation. This trend is not sustainable and had already begun to drive business-led efforts to curb costs before the pandemic changed our healthcare priorities.

  1. Government

President Biden’s singular impact on health care may be reestablishing the federal government as a welcome and relatively trusted source of support for the nation’s citizens. His first 100 days has gone far to reassure many people that a motivated and focused government has been able to make a big difference in COVID vaccinations and provides a source of consistent and credible advice to Americans.

Expanding acceptance of a more active government role to other parts of health care is not a big stretch. The usual suspects here are opening Medicare to younger participants and using the government’s negotiating muscle to lower drug prices. So far, the White House is not using its political capital on these measures. It has more than enough to do to secure movement on the more than $4 trillion in infrastructure, education, and other child support initiatives.

While the public’s support of these measures has been strong from the beginning, the business community has lately emerged as a powerful and non-traditional supporter on the social equity and infrastructure fronts, both of which entail a degree of acceptance and support for stronger government roles.

Portraying corporate America as “woke” is certainly a stretch. But a survey of business attitudes toward healthcare costs produced a strong consensus that private business health insurance needs government help to combat rising costs.

The Kaiser Family Foundation was one of the organizers of the survey. According to its head, Drew Altman:

“87 percent of the corporate officers we surveyed said they believe the cost of health benefits will become unsustainable over the next five to ten years, and 85 percent said the government needs to take on a bigger role in controlling costs and providing coverage.

“78 percent expressed some level of support for government action on hospital prices, in areas where there is limited competition. And perhaps more significantly, coming from what has always been an anti-regulatory crowd, less than 5 percent opposed such regulations. . . .

“65 percent expressed some level of support for a public insurance option for their workers, and a large majority also supported lowering the age for Medicare eligibility.”

If employers begin using their influence in Congress to support such change, it will happen.


Billion Dollar Medicare Drugs Highlight Stakes in Price Fight

Congress talks a lot about high prescription drug prices but for the most part it’s all talk. Pharmaceutical companies continue to charge U.S. consumers prices much higher than they charge outside the U.S.

Once all the rhetorical hot air has been blown from the room, the most compelling reason for this is that they shaft U.S. consumers because they can. And the primary reason they can is because our government lets them, while governments in other countries do not.

Nothing is ever so simple and that’s the case here. But this simplified narrative contains much truth.

Hope springs eternal for lower drug prices and so it is today, given the pro-consumer bent of the new Biden administration. But with Democrats needing a tie-breaking vote in the U.S. Senate to achieve a bare majority, lowering drug prices will require some bipartisanship. This assumes the Senate filibuster is not nuked or that Democratic leadership doesn’t further stretch the bounds of budget reconciliation to write a prescription for lower drug prices.

The Kaiser Family Foundation has studied 2019 drug prices for Medicare beneficiaries using the programs Part D program for self-administered drugs and its Part B program, which administers drugs in outpatient settings.

The distinction is important because Part D and B pay differently for drugs. The private insurance plans that administer the Part D program have different tiers and coverage levels for drugs, with an annual cap on total consumer drug spending of $6,550 plus no more than 5 percent of the cost of drugs once spending has exceeded that cap. (Of course, 5 percent of a big number can still be a lot.)

Part B of Medicare pays only 80 percent of covered prices, which saddles beneficiaries for the other 20 percent. That could devastate the household budgets of people who must have expensive medications. Some Medigap supplement insurance plans will pay all of that 20 percent, meaning that out-of-pocket Part B costs are close to zero after backing out the annual Part B deductible).

Here is Kaiser’s take on the billion-dollar drugs in the Part D and B programs. These budget busters tend to have no competition and often are exploiting legally creative strategies to extend their patent protection well beyond the legal maximum period enacted by Congress.

“The 250 top-selling drugs in Medicare Part D with one manufacturer and no generic or biosimilar competition (7 percent of all Part D covered drugs) accounted for 60 percent of net total Part D spending” of an estimated $145 billion in 2019. “The top 50 drugs covered under Medicare Part B (8.5 percent of all Part B covered drugs) accounted for 80 percent of total Part B drug spending” of more than $37 billion in 2019.


2019 Billion Dollar Medicare Part D Drugs
Brand Name Generic Name Total Spending
Eliquis Apixaban $7,305,511,813
Revlimid Lenalidomide $4,673,676,342
Xarelto Rivaroxaban $4,077,247,672
Januvia Sitagliptin Phosphate $3,535,983,474
Lantus Solostar Insulin Glargine,Hum.Rec.Anlog $2,495,768,702
Imbruvica Ibrutinib $2,440,072,734
Trulicity Dulaglutide $2,273,120,393
Lyrica Pregabalin $2,025,948,600
Symbicort Budesonide/Formoterol Fumarate $2,016,077,018
Novolog Flexpen Insulin Aspart $1,844,090,302
Ibrance Palbociclib $1,826,419,730
Humira Pen Adalimumab $1,749,521,125
Levemir Flextouch Insulin Detemir $1,622,206,517
Victoza 3-Pak Liraglutide $1,527,143,436
Advair Diskus Fluticasone Propion/Salmeterol $1,449,351,617
Jardiance Empagliflozin $1,447,765,688
Myrbetriq Mirabegron $1,445,078,415
Xtandi Enzalutamide $1,420,960,113
Restasis Cyclosporine $1,355,395,141
Breo Ellipta Fluticasone/Vilanterol $1,339,667,821
Enbrel Sureclick Etanercept $1,291,577,655
Spiriva Tiotropium Bromide $1,275,581,786
Invega Sustenna Paliperidone Palmitate $1,249,951,724
Humalog Kwikpen U-100 Insulin Lispro $1,218,126,351
Latuda Lurasidone HCl $1,207,659,482
Humira(Cf) Pen Adalimumab $1,205,602,277
Pomalyst Pomalidomide $1,192,203,838
Tradjenta Linagliptin $1,187,579,077
Lantus Insulin Glargine,Hum.Rec.Anlog $1,158,911,973
Tecfidera Dimethyl Fumarate $1,131,050,801
Jakafi Ruxolitinib Phosphate $1,125,223,954
Biktarvy Bictegrav/Emtricit/Tenofov Ala $1,119,648,620
Epclusa Sofosbuvir/Velpatasvir $1,015,526,591
2019 Billion Dollar Medicare Part B Drugs
Eylea Aflibercept $2,911,408,262
Keytruda Pembrolizumab $2,673,427,541
Opdivo Nivolumab $1,782,346,828
Rituxan Rituximab $1,738,104,061
Prolia Denosumab $1,605,208,840
Lucentis Ranibizumab $1,266,791,097
Neulasta Pegfilgrastim $1,168,110,100
Avastin Bevacizumab $1,034,812,259