08/2001: The Galen Report

Published August 1, 2001

In “Importing HCFA-Style Regulation Into the Private Sector Through The Patients’ Bill of Rights,” Robert E. Moffit of The Heritage Foundation looks beyond the litigation aspect of the patients’ bill of rights and examines the regulatory implications.

“If enacted, the Senate bill, like the House versions, would have a massive impact on the structure and functioning of the American health care system. Beyond the highly visible issue of litigation, the legislation would extend federal rules, guidance, or control over virtually every major aspect of private health plan operations,” he writes. “The accumulation of these provisions is tantamount to a massive transformation of private health insurance into something more akin to a public utility.”

Moffit’s paper incorporates a previously published analysis by health care attorney John S. Hoff. Moffit compares the regulatory schemes in the House and Senate versions of the bill and warns of the sweeping control the federal government will gain over private health insurance, which, if the bill becomes law, “is likely to be ‘private’ in name only.”

The full text of Moffit’s paper can be found on the Heritage Foundation Web site at http://www.heritage.org/shorts/20010627pbormemo.html


Beyond the Patients’ Bill of Rights
Author: Daniel H. Johnson Jr., MD
Source: The Wall Street Journal, 7/10/01

Lawmakers must move beyond the patients’ bill of rights and make changes that will promote consumer-driven health care, says Stormy Johnson, former president of the American Medical Association and visiting fellow at The Heritage Foundation. The core problem is that most Americans receive health insurance selected by their employers and therefore have little control over their coverage.

“When employees are denied some desired benefit by a plan they didn’t choose in the first place, they are understandably angry,” Johnson says. “When a physician is told what to do by someone 2,000 miles away, the physician is apt to be irate.” Americans must be able to see the “true costs of their medical care,” lawmakers should change the tax laws, and new purchasing mechanisms should be set up to create a consumer-driven system.

The full text of Johnson’s article is available at the Wall Street Journal‘s Web site at http://interactive.wsj.com/archive/retrieve.cgi?id=SB994727391212554351. Registration and a fee are required.

Pfizer Avoids Pressure on Prices By Helping Florida on Medicaid
Authors: Russell Gold, Scott Hensley, and Joni James
Source: The Wall Street Journal, 7/9/01

The Wall Street Journal reports that Pfizer Inc. and the state of Florida have entered into a “novel pact” to deal with the state’s rising Medicaid costs.

In exchange for getting all of its drugs onto Florida’s formulary without rebates, Pfizer negotiated an agreement with Gov. Jeb Bush for an innovative program to provide health care services in lieu of price discounts. Pfizer says the agreement will save Florida’s Medicaid program $33 million over two years.

The company will hire nurses to monitor the care of tens of thousands of patients, especially those with chronic illnesses, through a disease management program. If the savings don’t materialize, Pfizer will pay the difference.

See the Kaiser Daily Health Policy Report summary at http://www.kaisernetwork.org/daily_reports/rep_hpolicy_recent_rep.cfm?dr_cat=3&show=yes&dr_DateTime=09-Jul-01#5665

Perspectives on the European Health Care Systems: Some Lessons for America
Authors: Robert E. Moffit Ph.D., Philippe Manière, David G. Green Ph.D., Paul Belien, Johan Hjertqvist, and Friedrich Breyer Ph.D.
Source: The Heritage Foundation

The Heritage Foundation and the Centre for the New Europe cosponsored a conference in Washington this spring to assess what Americans can learn from the European experience in health care and pension policy. This paper offers presentations by health care experts from France, Great Britain, Belgium, Sweden, and Germany and should be a mandatory read for anyone who thinks socialized systems are the answer.

The experts each offer lessons that should be heeded by U.S. policymakers as the information age, medical innovation, and consumer empowerment begin to collide with centralized control-and-command systems. The Galen Web site will soon have a more complete report on this important conference and paper.

The full text of the article can be found on The Heritage Foundation Web site at http://www.heritage.org/library/lecture/hl711.html.

New Drugs: The Right Remedy
Authors: Frederick Goodwin and Robert Goldberg
Source: The Washington Post, 7/7/01

Frederick Goodwin and Robert Goldberg discuss flaws in an earlier commentary article in the Post by physicians Marcia Angell and Arnold Relman, “Prescription for Profit.”

Angell and Relman echoed the claim of many liberals that drug companies have excessive profits, more than are needed to finance their research. Goodwin and Goldberg point out, “Only the top 10 percent of all drugs actually bring a return on investment,” and the real return is only about 9 percent, not the 20 percent Angell and Relman claim. The two also ignore studies showing “the value of increased pharmaceutical investment, research, and drug utilization.” Frank Lichtenberg of Columbia University, for example, shows cost savings and other benefits of existing drugs.

The full text of the Goodwin/Goldberg article is available on the Washington Post‘s Web site at http://www.washingtonpost.com/wp-dyn/articles/A29895-2001Jul6.html.

The Galen Report is a monthly review of health policy matters provided by The Galen Institute, P.O. Box 19080, Alexandria, VA, 22320. Grace-Marie Arnett, president. The report is compiled by editor Liz Turner. Turner can be contacted at 703/299-9550, or visit the Galen Institute Web site at http://www.galen.org.