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terpfan1980
terpfan1980
Join Date 08/2004
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Wash Post says Dems have wrong prescript on Medicare drugs

Warns of harm that Dems plans could bring

January 13, 2007 5:04:41 PM from JoeUser ForumsJoeUser Forums

Even as I see yet another gleeful article posted by the Clueless Old Liberal (who has, at last count, never admitted to being the Democrat that he obviously is) touting the wonders that the Democrats will bring to the masses by putting pressure on drug prices for Medicare, there are those that would typically be on the Democrat side of things that are saying NOT SO FAST!!!

As an example, there's the liberal leaning Washington Post.  The same liberal leaning paper that normally marches in lock step with Democrats, the New York Times, and others on the liberal side.  Yes, that paper.

The Washington Post today (here: Editorial for Saturday, 1/13/2007) has an editorial warning of potential 'side effects' that could come from the Democrat's plans for mandating that the government negotiate drug prices for medicare.

The original article covers the topic very well.  I'm going to snip some of the words there in, but I encourage everyone to just read the original materials.  It's well worth it and may very educational on why some people shouldn't be so quick to jump for joy over everything that the Democrats are promising.  Remember, the road to hell is paved with the best intentions.  Well, the Democrats could certainly drive us all to fairly easily with their intentions.

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terpfan1980
terpfan1980
Join Date 08/2004
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Reply #1 January 13, 2007 5:10:13 PM
from JoeUser ForumsJoeUser Forums

Here's a few choice quotes from the original editorial.

The Wrong Prescription

Government should not negotiate drug prices in Medicare.

Saturday, January 13, 2007; Page A18

HOUSE Democrats delivered on a campaign promise yesterday, passing a bill that would require the government to negotiate the price of pharmaceuticals covered by the new Medicare drug benefit. The idea is that government negotiators could force prices down, generating savings that could be used to make the benefit more generous. But the measure is misguided.

The Democrats point to the Department of Veterans Affairs, which manages to negotiate discounts for the drugs covered in the veterans' health program. But the department can do this because it is free to deny coverage for drugs whose makers refuse to provide discounts: Fully 3,000 of the 4,300 medicines covered by Medicare are unavailable under the veterans' program. Restricting the list of covered drugs saves money, but it also reduces the quality of the benefit -- 1.5 million veterans are sufficiently unhappy with the result that they opt to buy the more inclusive Medicare coverage. Recognizing that narrow formularies are unpopular, the Democratic plan does not permit Medicare to establish one. But if drugmakers know that Medicare must buy their pills, why would they grant a discount? The Congressional Budget Office estimated this week that savings from direct negotiation would be "negligible."

What was that last (highlighted) word there?  NEGLIGIBLE?!  Are you kidding me.  No, obviously not, as the Post continues on with their review of this plan and the likely outcome passage (which is still not guaranteed) could bring.

Read on...

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terpfan1980
terpfan1980
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Reply #2 January 13, 2007 5:14:43 PM
from JoeUser ForumsJoeUser Forums

Here's a bit more from the editorial:

Not only are the Democrats too optimistic about government negotiation; they are also too pessimistic about the current system in which private insurers administering Medicare drug benefits do the price bargaining. These private insurers stand to profit if they can secure discounts and cut premiums and thus attract more customers: Witness the fact that the average monthly premium has fallen since the program began a year ago. Private insurers can do this precisely because they are free to establish formularies, but market discipline ensures that these lists are not unappealingly narrow. The insurers need to keep customers.

Ah, so the Post does understand letting the economy work without interference and letting natural market forces take care of the issue for us.  Sadly most Democrats and liberal leaners will never understand those points, but oh well.

More still:

The Democrats' stance is troubling because it suggests an excessively government-led view of health-care reform. One of the key challenges in health policy is to understand which drugs, tests and therapies are most cost-effective; although it will take government pressure on doctors and hospitals to disclose the information necessary to figure out what works, solutions are most likely to be found by competing private entities. In drugs, for example, there needs to be a culture of paying handsomely for new ones that really do add value -- and refusing to pay for pseudo-new drugs that merely mimic cheap generics. Striking the right balance is not easy, and it won't be accomplished by government fiat. The better approach is to let each insurer offer its own version of the right balance, see whether it attracts customers -- and then adapt flexibly.

Ah, I think I've probably clipped too much here, but it is really worth the read.  Do read it all, and learn from it.  (Or remain a Democrat if you wish).

There's a lot of value in the message and the potential for damage that could be done to the Medicare drug benefit if the Democrats got their way.  It won't stop them from trying, but at least for now there's a Republican in the White House that just might pull out the old Veto pen one more time and turn it lose on these misplaced good intentions.

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