Consumer Power Report #462
Health Affairs posted a lengthy rebuke of state Right to Try laws arguing such laws create unrealistic expectations on the part of terminally ill patients and their families. Here’s an excerpt:
Over the past year, state Right-to-Try (RTT) laws that claim to enable terminally ill patients to access unapproved, experimental drugs, biologics, and devices have swept the nation. As of early May, seventeen states have enacted RTT laws (most recently, Florida and Minnesota), and bills creating such laws are currently pending in over twenty state legislatures.
Although these laws have created an expectation that terminally ill patients will be able to quickly access potentially life-saving treatments by being exempted from the rules of the U.S. Food and Drug Administration (FDA), this expectation is, quite simply, false.
Federal preemption laws prevent states from creating workarounds that purport to supersede the extensive regulatory scheme enforced by the FDA. Contrary to the hype surrounding them, so-called Right-to-Try laws do not create any additional “rights” for patients. And, even if they did, RTT laws fail to address fundamental questions of patient welfare and public health inherent in considering whether, and which, individuals should have access to experimental treatments outside of clinical trials.
While each law has unique aspects, the RTT laws generally aim to permit patient access to an investigational treatment if: (1) the patient is terminally ill; (2) a physician recommends use of the treatment, (3) the patient provides informed consent; and (4) the treatment has completed a “Phase I” clinical safety/dose limitation trial. Both manufacturers and physicians would receive liability protection against claims arising from adverse events caused by the experimental treatments.
Manufacturers may choose to charge for the treatments, and health insurers are not required to cover the costs of the treatments or care resulting from their use. What the laws do not do is compel anyone or any company to fulfill a patient’s request for an experimental drug, device, or biologic. The result will be false hope and unmet expectations on the part of patients with no therapeutic options.
This seems to me to be an unfair depiction of the aim of these laws. While it’s certainly possible state legislators are misrepresenting what the laws will achieve in the short term, ultimately they are about placing pressure on the national approval mechanisms that currently prevent terminally ill patients from receiving these drugs.
State legislatures cannot overrule federal policies. But they can set up political contrasts and legal clashes that lead in time to policy changes. Suggesting Right to Try laws are false advertising would suggest any state policy that puts pressure on the federal government is being advocated under false pretenses. This point of view would render many state legislative advances moot and would restrict the actions of states to those things they know they can control within their borders as opposed to teeing up conflicts that can demonstrate state interests in a tangible way and force the feds and the administrative state to reconsider their policy stances. That’s the real aim of Right to Try laws – not necessarily an immediate benefit, but a demonstration of interest and a tangible degree of pressure. That seems worthwhile to me.
— Benjamin Domenech
IN THIS ISSUE:
The 340B program, created by Congress over two decades ago, was originally intended to help vulnerable and uninsured patients gain access to prescription medicines. Since then, the program has ballooned to a multi-billion dollar slush fund for hospitals – on the backs of low-income patients – thanks to minimal government oversight and new expansions authorized within Obamacare.
The way it works is fairly simple. The federal government requires pharmaceutical manufacturers to provide steep discounts to hospitals that qualify for 340B. Yet, many hospitals don’t always pass along the discounts to the low-income patients they are meant for and instead, turn around and charge patients full price for these drugs – all the while pocketing the additional profits. Some chain pharmacies have even gotten in on the act by contracting to be extensions of the hospital pharmacy.
Now, a program that was originally created to serve 90 truly safety-net hospitals is serving more than 10,000. Spending on the program has skyrocketed from $1.1 billion in 1997 to more than $7 billion in 2013, and that number is projected to hit $16 billion by 2020. It’s also worth noting that the national average for charity care in hospitals is 3.3 percent of their total patient care. In Tennessee 67 percent of 340B hospitals and in South Carolina 50 percent of 340B hospitals provide less charity care than the national average.
At the state level, these numbers should be particularly riveting for lawmakers who have been pummeled by hospitals to support Medicaid expansion under the guise of “operating on razor-thin margins.” In Tennessee, Governor Haslam (R) told taxpayers that hospitals could be trusted not to shift costs to patients when they agreed to help finance his expansion proposal. If their 340B actions are any indication of whether they can be trusted, Tennesseans should be greatly alarmed. And in South Carolina, while hospitals in many rural areas struggle, cost data filed with the federal government shows that taken together, Palmetto State hospitals made $1.1 billion in profits in 2013 – a 70 percent increase over 2011.
At some point between now and the end of June, the Supreme Court will decide King v. Burwell and, in the process, determine whether the phrase “established by the State” actually means “established by the State.” This phrase, which appears twice in the Patient Protection and Affordable Care Act (PPACA) provisions authorizing tax credits for the purchase of health insurance in exchanges, has bedeviled defenders of the IRS rule purporting to authorize credits in federally established exchanges. Some claim this phrase is “convenient shorthand” for “exchange” (even though it’s neither more convenient nor shorter), while others argue the phrase is effectively meaningless, or actually means something else (such as established in the State). The plaintiffs, on the other hand, maintain that the language means precisely what it says.
If Congress did not mean to refer to state-established exchanges, why did it use the phrase “established by the State”? According to story by Robert Pear in the New York Times “the words were a product of shifting politics and a sloppy merging of different versions. Some described the words as ‘inadvertent,’ ‘inartful’ or ‘a drafting error.'” In other words, by this account it was a mistake – and a mistake no one noticed until well after the bill’s passage.
This may be how congressional staffers and legislators characterize the drafting process now, but that’s not what the federal government and its supporting amici told the Supreme Court. The solicitor general, for instance, proclaimed in its brief that the phrase “established by the State” was a “statutory term of art.” At oral argument, the SG also denied that there were any last-minute revisions (as I discussed here). Throughout, the federal government has insisted that the statute actually authorizes the contested IRS rule.
Why hasn’t the SG embraced the “drafting error” argument? Because that would be a sure way to lose. As I explained years ago, when first discussing this issue on the VC, the courts are not in the business of fixing purported “drafting errors,” and the burden on those making such arguments is quite high. Justice Elena Kagan made the same point in her opinion last year in Michigan v. Bay Mills Indian Community, in which she explained that the “Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that … Congress ‘must have intended’ something broader.” It’s also hard to maintain that the inclusion of a phrase is a “drafting error” when it was added in multiple places and multiple separate times during the drafting process, as “established by the State” was in Section 1401.
SOURCE: Jonathan Adler, Washington Post
A Supreme Court ruling due in a few weeks could wipe out health insurance for millions of people covered by President Barack Obama’s health care law. But it’s Republicans – not White House officials – who have been talking about damage control.
A likely reason: Twenty-six of the 34 states that would be most affected by the ruling have Republican governors, and 22 of the 24 GOP Senate seats up in 2016 are in those states.
Obama’s law offers subsidized private insurance to people without access to it on the job. In the court case, opponents of the law argue that its literal wording allows the federal government to subsidize coverage only in states that set up their own health insurance markets.
Most states have not done so, because of the intense partisanship over “Obamacare” and in some cases because of technical problems. Instead, they rely on the federal HealthCare.gov website.
If the court invalidates the subsidies in those states, an estimated 8 million people could lose coverage. The results would be “ugly,” said Sandy Praeger, a former Kansas insurance commissioner.
“People who are reasonably healthy would just drop coverage,” she said. “Only the unhealthy would keep buying health care. It would really exacerbate the problem of the cost of health insurance.”
There are just a handful of psychiatrists in all of western Nebraska, a vast expanse of farmland and cattle ranches. So when Murlene Osburn, a cattle rancher turned psychiatric nurse, finished her graduate degree, she thought starting a practice in this tiny village of tumbleweeds and farm equipment dealerships would be easy.
It wasn’t. A state law required nurses like her to get a doctor to sign off before they performed the tasks for which they were nationally certified. But the only willing psychiatrist she could find was seven hours away by car and wanted to charge her $500 a month. Discouraged, she set the idea for a practice aside and returned to work on her ranch.
“Do you see a psychiatrist around here? I don’t!” said Ms. Osburn, who has lived in Wood Lake, population 63, for 11 years. “I am willing to practice here. They aren’t. It just gets down to that.”
But in March the rules changed: Nebraska became the 20th state to adopt a law that makes it possible for nurses in a variety of medical fields with most advanced degrees to practice without a doctor’s oversight. Maryland’s governor signed a similar bill into law this month, and eight more states are considering such legislation, according to the American Association of Nurse Practitioners. Now nurses in Nebraska with a master’s degree or better, known as nurse practitioners, no longer have to get a signed agreement from a doctor to be able to do what their state license allows – order and interpret diagnostic tests, prescribe medications and administer treatments.
Mr. Himmelstein and Ms. Woolhandler combine two categories of spending – government administration and the net cost of private insurance (i.e., overhead) – to reach their estimates of administrative costs. Combining the two categories masks significant differences. While private insurance overhead is projected to rise at an average annual rate of 8.2% between 2014 and 2022, government administration is projected to rise at a 22.7% annual rate – nearly three times as fast. That’s consistent with my 2012 analysis, which noted that federal actuaries projected double-digit increases in spending on government administration for three of the first four years of Obamacare implementation (2011, 2012, and 2014).
This week federal regulators proposed extending medical-loss ratio requirements – a price control on overhead spending – to Medicaid managed-care plans. Meanwhile, several state-run insurance exchanges face financial difficulties, with structural challenges to their ability to attain self-sufficiency while limiting their charges on consumers to only a small share of premiums. The growing spending on bureaucracy reported in Health Affairs suggests that regulators should perhaps focus first on increasing efficiency and reducing government’s own costs before issuing more requirements on the private sector – such as the 653-page regulations issued Wednesday ‒ that attempt to pass them on to consumers.