Pharma

Learning from New York’s health insurance mistakes: MedCity Morning Read, Feb. 23, 2010

Nearly two decades ago, the state of New York passed health-insurance reforms reminiscent of–but by no means identical to–what President Obama is pushing for. The results of New York’s experiment have been disastrous: the highest premiums in the nation and fewer people covered than before the changes were passed.

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Highlights of the important and the interesting from the world of health care:

Learning from New York’s health insurance mistakes: Nearly two decades ago, the state of New York passed health-insurance reforms reminiscent of what President Obama is pushing for. Insurers in New York must, as a result of the law, accept all applicants and can’t vary individual premiums, the LA. Times reports. So, for example, an insurer in New York would be required to offer insurance to both a healthy 25-year-old and a 65-year-old diabetic smoker–and charge them the same premiums. The results of New York’s experiment have been disastrous–the highest premiums in the nation and fewer people covered than before the law was passed.

To be clear, Obama and Congress are not pushing for the “charge-everyone-the-same-amount” provision that seems to have gotten New York in so much trouble, but universal coverage, or something close, is one of the goals of the federal health overhaul. Contrary to what some may infer, the New York experience actually highlights the wisdom of the Obamacare “individual mandate.” The lack of an individual mandate is likely one of the things that’s gotten New York into trouble. If the young and healthy are required to purchase insurance, in theory that’d bring the cost down to everyone else. But if insurers are required to provide coverage to everyone yet everyone isn’t required to purchase it, it’s not a shock when sick people rush out to buy policies and the young and healthy stay away. So the federal embrace of the individual mandate may actually be a sign that reform efforts are on the right track, as shocking as that may seem.

The nine medicines that cost more than $200,000 per year: If you were looking for a reason to feel good about your prescription drug costs, you’ve found it–unless you’re buying one of “The World’s Most Expensive Drugs,” according to Forbes. Luckily, most of these drugs treat rare genetic diseases that affect fewer than 10,000 patients, but not so lucky if you’re one of those 10,000 or so. Topping the list at $409,500 per year is Alexion Pharmaceutical’s Soliris, which treats a rare disorder in which the immune system destroys red blood cells at night. Despite the drug’s limited market, its sales hit $295 million last year, and Alexion’s stock is up 130 percent since it began selling the drug two years ago. The rare-diseases market is clearly a good one to get into, Forbes reports.

Selling drugs for rare diseases has become immensely profitable. There are so few patients that companies don’t have to invest as heavily in marketing. The medicines usually get paid for by insurers or governments.

Residency programs supported by drug industry: In another sign that separating medicine from industry influence won’t be easy, a new study shows that more than half the nation’s internal medicine residency programs accepted financial support from the drug industry, such as meals, educational materials and office supplies. The study was published in the Archives of Internal Medicine. Residency programs in the South were much more likely to accept industry gifts than those in the Northeast–72 percent vs. 47 percent. Of note, the study found an inverse relationship between programs that accepted money from drug companies and graduates from those programs passing tests from the American Board of Internal Medicine. In other words, the more likely a residency program is to accept drug money, the less likely its graduates are to pass professional exams.

Whatever happened to H1N1? The Centers for Disease Control says it isn’t over, but most Americans’ behavior says it is, or at least they think it is. Doctors who couldn’t get enough H1N1 vaccine a few months ago, now have excess supplies that they can’t give away, American Medical News reports. Regardless of CDC warnings, the illness has simply receded from the public consciousness. No states reported “widespread” H1N1 activity during the five-week period ending Feb. 12, compared with 48 states at the end of October. Still, the CDC continues to warn of a dreaded “third wave” of the virus so it’s not safe to to disregard H1N1 yet.

“None of us knows whether we’re going to have bursts of disease or clusters, or just ongoing transmission, as we’ve seen in the past few weeks. But the virus does continue to spread. And those who haven’t been vaccinated are still vulnerable to harm,” a CDC official says.