Watching for cronies in Washington, D.C., is like birdwatching in a known nesting area. The cronies are all over the place, but some of them are more common and some have brighter plumage than the others.
Cronies are most common in healthcare. With the fate of Obamacare almost completely assured, they’re already lining up to do their dance.
Republicans seem poised to repeal Obamacare through the reconciliation process. However, what the “repeal” looks like will come down to several variables, almost all hinging on how the Senate parliamentarian will rule on various proposals. No matter what, it’s unlikely Republicans or President-elect Trump will want to throw 20 million people off their insurance, so the actual “repeal” will probably be kicked down the road a good distance.
That gives healthcare cronies time, so over the next two years we’re likely to be bombarded with messages from the insurance companies, hospital associations and drug manufacturers all scrambling for their piece of the pie.
The hospitals are going to all say they’re losing money, even though almost every hospital seems to be under construction and expanding their so-called money-losing business.
But one particular brand of crony to watch out for are insurance companies. They enthusiastically supported Obamacare because they knew that forced enrollment, government-backed price hikes and expanded insurance-coverage mandates all meant additional profit.
But the health insurance industry has a new priority left unaddressed by Obamacare: Restricting access to high-cost life-saving drugs. Insurers don’t like covering these treatments because, while they might improve healthcare outcomes, they reduce industry profits.
The insurance industry has an answer for expensive drugs: The Institute of Clinical and Economic Review. It may sound like an unbiased group of scientists and health economists, but when ICER receives two-thirds of its funding from a single grant from an insurance company’s foundation, as it did in 2013, you’d be forgiven for thinking of it more as a front group than an impartial arbiter of sound drug policy. ICER advertises itself as a “Drug Efficacy Watchdog.” That means when a new drug comes out they try to publish a report that says patients don’t need it, or won’t get “value” from it. That gives the insurance companies the “academic” backing they need to exclude a drug from their formulary without too much public pushback.
The corollary would be a research group, paid for by the drug companies, stating how valuable a new drug is. It just wouldn’t be acceptable.
Unfortunately, the Obama administration’s Centers for Medicare and Medicaid Services lended legitimacy to ICER last year when CMS attempted to formalize Medicare’s use of the organization’s drug evaluations in determining treatment effectiveness. That proposal didn’t go very far, but it is likely to come back in the new Congress, with a new president and the promise of changes on the horizon.
Of course, the result of CMS adoption of ICER’s reports would be to save money for the federal government by avoiding high-cost drugs. That sounds good, until you consider that the money saved comes from separating Medicare and Medicaid patients from the decisions of their doctors.
It’s the same outcome that private insurers seek when they fund ICER. It’s one that will have a drastically negative impact on the patient-physician relationship and likely health outcomes as well, while lining the pockets of private insurers and the federal government. Before we take ICER’s recommendations as gospel, as President Obama’s CMS has asked us to do, we should consider the group’s incentives and its masters and evaluate its opinions accordingly.
The government should stay outside of the patient-physician relationship. We should stop assuming that doctors are criminals and start assuming their higher degrees and years of education might just mean they know what is best for the patient. The best way to do this is by giving more power to the patient by allowing them to control more of the money. Then, if the patient thinks the doctor is prescribing medication that’s too expensive, they can change doctors.
Thankfully some of the potential Obamacare replacements, like the “World’s Greatest Healthcare Plan,” restore the power to the patient that is necessary if the healthcare market is going to function correctly.
Until then, it’s time to start convincing some bureaucrats they might need to give up some of their power. Patient-physician relationships have to be a top priority for any healthcare policies, public or private. Insurance companies would do well to remember that.
Charles Sauer is a contributer to the Washington Examiner’s Beltway Confidential blog. He is president of the Market Institute and previously worked on Capitol Hill, for a governor and for an academic think tank. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
