A Tale of Two Cities

Here’s a quick lesson on statistics for you. After all, if you are concerned with health care and health insurance, you have to be concerned with statistics….Right?

Here we go:

Let’s take two fictional American cities. Each one has an identical demographic profile. Each city has 50 million residents (They are BIG Cities!).

Statistically speaking, because of the huge sample set and identical demographics, the population’s health profile should be identical as well. For example, if one city has 2.1% of it’s population needing knee surgery, the other city should have 2.1% of it’s population needing knee surgery…it’s called the law of large numbers … Casinos and Insurance companies rely on this law to govern their businesses.

So, if you were to offer health insurance to the residents of city ‘A’ at a certain rate, you could be assured that the rate for city ‘B’ (who have IDENTICAL demographics and therefore identical risk) would be the same, right? Actually, the answer is no.

You see, the citizens of city 'A' all work for major corporations while the citizens of city 'B' are all self employed.

According to the latest Census Bureau report, the health insurance policy for individuals and small groups has increased by a whopping 47% since 2005. However, the rates for large groups has increased by only 20% in the same time frame.

According to insiders at health insurance carriers, this disparity is because small groups play games with their health insurance plans. For example, a small group might pretend to hire poor Aunt Sally who has health problems and couldn’t get coverage otherwise. They assume that Aunt Sally could never get a job on her own working for a big company (Note to Self: Then who are those people greeting me whenever I walk into Wal-Mart – independent contractors?). Because of this perceived risk, your health insurance carrier justifies their MUCH higher rates for small groups.

Here in America, there is a very succinct term for this type of justification – it’s called Bullshit.



The REAL REASON why health insurance carriers charge small groups more is because THEY CAN. All across America, small groups are getting screwed by health insurance carriers.

If ABC Tool Company of Poughkeepsie with their 12 employees threatens to leave their health insurance plan unless they get better rates, their carrier will most likely respond ‘don’t let the door hit you on your way out’ – the gain or loss of this small group will do nothing for their bottom line. However, if MegaTool Works of Montana, who has 25,000 employees, makes the same threat, you can bet that their carrier will sharpen their pencils to make sure that they don’t lose that fat account. This leads, of course, to the disparity in rates between small and large groups.

To make matters worse, there are laws that prevent small groups from banding together and buying their insurance as a large group. After all, this would be bad for business – the health insurance carriers business.

One possible solution is to force carriers to have the same rates across the board – whether you work for a gigantic corporation or for a small company. This would ensure that everyone would enjoy the lower rates that come from true competition between health insurance carriers.

Now, this would not solve the health insurance crisis all by itself, but it would be a good start – especially for folks like me whose health insurance premiums are going up 2 and one half times faster then my neighbor, just because I happen to be self employed.

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Time of the Season

Yes, it’s that time of year once again.

The beaches are empty. The kid’s are back at school. The days are getting shorter. Fall is here.

You can tell it’s fall by what’s in the air – or, more precisely, what’s ON the air. I am referring to, of course, political commercials.

I must admit that I find it amazing that, after spending so much time creating commercials bashing each other, our leaders have any time left to actually legislate. This probably explains why so little actually gets done in Washington. Maybe it’s a good thing.




While watching these commercials, It’s usually pretty simple to determine what party a candidate belongs to by observing what issues they are attacking. For example, anything mentioning George Bush is, surprisingly, usually a commercial for a Democrat. Well, maybe, this really isn’t so surprising. It doesn’t look like George’s likeness is going to be added to Mt. Rushmore any time soon. Of course, any commercial that attacks national healthcare is undoubtedly the work of a Republican candidate.


I was recently taken in by the message in a recent commercial for a local Republican candidate that attacked ‘Obamacare’. It said something along the lines of ‘don’t let a government bureaucrat make decisions about your health’.

A powerful message. If we learned anything over the past ten years in this country, we’ve learned that important health decisions should be made by your health insurance carrier and their bureaucrats. Where does the government get off in thinking that their bureaucrats should have dibs on deciding my health? If I am going to be denied a treatment, let the denial come from some faceless individual who works for my insurance company and not from some faceless individual who works for my government! This whole debate is, as the lawyers are apt to say, a ‘slippery slope’. If we let the government get away with taking over health care decisions, where will it all end? Can you imagine a future where important health care decisions are made by the patient? Or, horror of horrors, by a DOCTOR?

God forbid!

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The Late, Great American Male

I’m a child of the 60’s. As such, many of my ideals were shaped by the boob tube that used to sit in the corner of my parent’s living room.

Many images were presented to me in my formative years. The mighty television told me what candy to eat, what toys to buy, and what cartoons to watch. It also taught me what I should strive to be when I was all grown up: A pure-blooded American Male. Strong Willed. Independent. A Macho Man. A rugged individualist. A lover of the simple life and the great outdoors.

TV provided me with the ideal role model that exemplified all of these great American traits.

I’m talking, of course, about the Marlboro Man.

Sadly, this great American icon mounted his steed and rode off my TV screen and into the sunset way back in 1971. New laws prohibited advertising cigarettes on television, and the Marlboro Man was never seen on the small screen again (at least in this country).

This leads me to wonder: Who will the next generation of American boys adopt as a role model of the ideal American Male? Unfortunately, only one present day icon comes to mind – the Cialis Man.




I always dreamed of riding the open range on my trusty steed, roping, wrangling, and branding steer. Spending evenings ‘round a blazing campfire.

Today’s boys will probably grow up, dreaming of sitting in a claw-dooted bathtub, holding hands with some middle-aged woman.

May God have mercy on the USA.

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Seinfeld Economics

According to the US Census Bureau, in 2009 the average annual cost of a health insurance plan for a family of four was $14,000.00

This is not as bad as it might seem…given the proper perspective.

I recall George Costanza’s dismissive remark in the “Stock Tip” episode of the classic Seinfeld series.

“I don't know, what? Fourteen thousand? It's a Hyundai.”

When it comes from George’s lips, it doesn’t sound so bad.

Perhaps Jason Alexander should become a spokesperson for the health insurance industry,




(PS: Note to Seinfeld fans. I know that the original quote was ‘eight thousand’ but, hey, we gotta allow for inflation!)




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Expiration Dates

Watch that expiration date – your friendly pharmaceutical company certainly is!

By expiration date, I am not referring to the date when that $350 bottle of pills will lose their effectiveness or become unsafe – I a referring to a much more significant date – the date when the patent expires on that designer drug.

When a drug is first released, there are days of wine and roses for the drug company. Because they are the only company who can manufacture that particular drug, they exploit the consumers who rely on it and they peddle the drugs at hundreds of times what they are worth. Think of that bottle of ibuprofen that you can buy at Wal-Mart. From a technical standpoint, that drug shouldn’t be any more difficult to manufacture then many patent medicines. So how come the Wal-Mart ibuprofen costs only 2 cents a tablet while that name brand pharmaceutical costs $6.00 for the same dose?

One big reason is that the pharmaceutical company realizes that the drug has a limited life before the patent expires – and they need to recoup their considerable R&D costs during that time period. So they are certainly within their rights to charge a significantly higher price for that in-patent drug. The problem is that, as time went by, the drug companies have gotten overly-greedy with this practice. Someone at a pharmaceutical company realized that, if they could over charge for that pill, why not REALLY overcharge for it? After all, they had a captive audience, so what were the consumers going to do about it? Especially of there wasn’t another effective drug on the market that did the same thing.

One problem that they faced was overcoming the initial resistance to these over-priced drugs. To combat this, they employ a two-pronged approach. First, they brainwash the doctors who write the prescriptions that their particular drug is the only viable and effective treatment for a particular ailment. In the old days, this was done at ‘seminars’ for the doctor and their spouse. In exchange for an hour of the doctor’s undivided attention, the drug company would put them up – often with their office staff – in a 4 star hotel for a weekend, with free meals, transportation, and show tickets. Thankfully, this practice is no longer permitted. Today, drugs are promoted by high-priced drug reps buying $300 lunches for a doctor and their staff, in the hopes of speaking with the doctor for a few moments. The second prong is advertising to the consumer with expensive television commercials and print ad campaigns.

Of course, some one has to pay for all of this expensive promotion, so they just roll this cost into the price of the drug. And that, boys and girls, is how that 2 cent pill (that should cost 60 cents so that the drug company can recoup their R&D costs) becomes a $3.00 pill.

However, like a Monday morning after a weekend of binge drinking, there is going to be hell to pay.

Some of the larger drug companies, like Merck and Pfizer, have several top-selling drugs that have had their patents expire over the last few years. To make matters worse, even more of their high-profit drugs will have their patents expire over the next decade. Once the patent expires, the name brand drugs will have to compete with generic versions that will be sold at a much more realistic price. Plus, the companies can’t come out with new patentable formulations fast enough to replace the drugs with expired patents.

In an effort to tighten their belts, these companies have executed a series of cost-cutting layoffs. Over the past few years, Pfizer has laid off some 30,000 employees, and Merck has cut some 25,000 jobs, and even more layoffs are forecasted for the future.

Even more importantly, they have adopted an even more frightening strategy to cope with this downturn. Like a binge drinker that hears ‘last call’ they are backing up their still full glasses by ordering another round.






Which is how, boys and girls, that $3.00 pill has now become a $6.00 pill.

Drink up.


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The Turnover

Interception!

Remember my posting about the Panini Parade? How I spilled the beans on how Pharmaceutical reps spend hundreds of dollars everyday buying lunch for an entire medical office just so they might have a few moments of the doctor’s time?

Well, many people remarked that they did not believe that this actually happens like I described it – and they may be right – the practice of free lunches might be even worse then what I described a few months back.

Witness, for example, my experience of just last week. I was in an office where, for whatever reason, they did not arrange for a pharmacy rep to bring them a free lunch that day. Everyone resigned to do the unthinkable – they were going to order and pay for their own lunch. Gadzooks! Could this really be true?

Well, as it turned out, it was getting close to 1:00 and everyone was starving. Desperate times called for desperate measures. Someone gathered up everyone’s order and called it in to a local deli. For once, they were going to pay for lunch like the rest of us – or so I thought.

As it happened, a drug rep who was waiting to see the doctor overheard the phone call. She came charging in like the Cavalry in a bad western, telling everyone to wait. Snatching the phone from the office managers hand, she identified herself (first name only) to the deli man (apparently they were well acquainted) and asked him to charge the entire order to her corporate card. By the way, she did not have to give him her card number – he either had it on file or perhaps he had memorized it. In any event, the day was saved, and no one had to pay for their own lunch that day.

No one, that is, except for the poor schmucks who have to pay $350.00 for a one month prescription of that drug rep’s medication.

Think about this the next time you have to pay for your lunch – or your prescription at the pharmacy.



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The Devil's Advocate

'better the devil you know than the devil you don't'

– Old English Proverb


Wiser words are rarely spoken. It is often better to deal with someone or something you are familiar with, even if they are not ideal, than take a chance with an unknown person or thing that could very well turn out to be even worse. Those folks back in the olden days sure knew a thing or two about life.

The folks running our pharmaceutical industry don’t take much stock in this old proverb. Witness, for example, the latest commercials for the prescription drug Nasonex.

You’ve probably seen this commercial, which features a cute cartoon bee with a Spanish accent (at first, I thought it was a commercial for a Mexican soap opera). The drug is designed to alleviate allergy symptoms which affect so many people this time of year. Specifically, Nasonex treats the following symptoms:

- Congestion
- Runny Nose
- Itchy Nose
- Sneezing


Now for an allergy sufferer, this sounds like a good deal…until the end of the commercial. According to the ad, Nasonex users might expect to have the following adverse side effects when using this drug:

- Viral Infection
- Sore Throat
- Coughs
- Nose Bleeds

Makes you wonder if it’s worth the trade off. Ask yourself ‘Am I willing to trade Congestion for a Sore Throat? An Itchy Nose for a Viral Infection? Sneezing for coughing? Or, my favorite, a Runny Nose for a Bleeding Nose?

My guess is hat I am in the minority in my opinion: locally, Nasonex is the 58th most prescribed drug. Plus, at retail, it costs a whopping $8.00 eash time you squirt it up your schnoz. Of course, the manufacturer of Nasonex, Schering Corporation, wants to help. They’ll give you a coupon so that you’ll only pay a $15 copay to purchase this drug with your prescription plan – significant savings – until you get your next premium increase for your health insurance.

Now I realize that some prescription medicines are worth the outrageous prices and the adverse side affects – if that wonder drug is going to cure someone’s cancer or make little Billy walk again. As for me, when it comes to seasonal allergies, I think I’ll just stick with the $2.00 generic nose spray that I get at Wal-Mart. After all, it has always worked for me, it costs hundreds of dollars less, and it never gave me a viral infection or a bloody nose.


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