Tag Archives: private sector

LIFE COSTS TOO MUCH; BOLD ACTION REQUIRED

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#LowerCosts #socialism #PublicOptionInHealthInsurance #MedicareForAll #PrivateSector #PublicSector
People complain that life costs too much.
But, if the new Congress takes bold action to address it, will those same complainers call such action “socialism,” and oppose it?
So, what might the new Congress do? First, they could address health insurance and health care costs.
Many think a health insurance “public option,” or “Medicare for all” is socialist.
But, the private insurance market will not lower insurance premiums on their own. As we are the only nation who puts health care in the free market, costs here are out of control compared to other countries.
The private insurance sector has no problem socializing risks in health and other types of insurance. If people want government to be more like a private business, why can’t it socialize the risks for more people to bring down premiums?
If the government does that, chances are private policy costs will come down to compete.
Though previous action has allowed the government to negotiate prices with drugmakers and other providers for Medicare recipients, it would really help lower costs if they could do that with a full roster of recipients of all ages under a “public option.”
Of course, the pushback will come not only from the so-called “anti-socialist” crowd, drugmakers will vigorously oppose it. Since the drugmakers earn their profits by selling new blockbuster remedies, perhaps the prices of their older versions of those drugs, or those drugs off patent, could be negotiated.
If you are very wealthy, and paying taxes really doesn’t affect you, why do you care so much about paying taxes?
Taxing the wealthy and high-income earners more to ease the burdens of those barely making a living would seem a logical step. (As an aside, many of those who are barely making a living are working to enrich the wealthy and high-income earners.)
Certainly, there’ll be pushback from the wealthy, but those who are struggling expect their representatives to help ease their pain.
It seems a small price to pay for overall societal gain. Plus, the tax increases on the wealthy do not have to be drastic to make a difference. Unselfish wealthy folks should be willing to make the sacrifice. Those unwilling to do so says a lot about them as people.
In that same vein, what if EVERY earned dollar were taxed for Social Security? That step alone, over time, will make Social Security and Medicare sustainable.
Most of the folks paying the extra taxes will not feel them. But, they could make a world of difference for those who depend on those programs.
The bottom line: Some tinkering with the federal tax structure could make life more affordable for many people. It’s something the new Congress can do to answer their voters’ request. Addressing health insurance is something else the new Congress can do, as well as helping negotiate lower health costs.
Raising the minimum wage to ensure those earning it find going to work worthwhile is another option for the new Congress. Consumers may have to pay more for this to happen, but it may be worth it.
None of these actions is “socialism,” as described in the public discourse. The private sector does much the same thing.
But, if the new Congress acts, the private sector may eventually cooperate and work with them to help lower prices. If the president vetoes such actions, he must accept the consequences down the road. Some in his party could help override such vetoes.
Your vote mattered in this election. Tell your new, willing representatives what they should do. Those not willing to do so should accept their own consequences in the next election.
Peter

PRESCRIPTION DRUGS, THE U.S. SYSTEM AND NEGOTIATIONS

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#PrescriptionDrugs #DrugPriceNegotiations #DrugCompanies #tgovernment #PrivateSector
The United States is the only country in the world that puts medical care in the free market.
That tells the country that you get what you can afford, or, perhaps, you suffer or die.
The large drug companies, as well as academic research institutions, do the research that creates the newest, perhaps blockbuster, drugs, therapies and treatments.
That research, in the case of private companies, is funded largely by the (mostly U.S.) profits it makes from drugs, when they are approved and sold.
These companies want to maximize their profit initially because they know that drugs will eventually come off patent and can be duplicated by rivals.
That will lower the cost of the drug, usually.
Once a drug is developed and approved, the cost of manufacturing usually drops. Some drugs that cost relative pennies per dose to make are sold for up to thousands of dollars because the companies are trying to recover all their research costs.
So, the question becomes: why should a drug that has been prescribed for many years, that costs relative pennies to make, still cost so much long after the companies have recovered most or all of their research costs?
Perhaps it could be argued that the company is trying to pay for current research on drugs not yet approved. (What will they charge for that drug later, if approved?) Perhaps it could be argued that the companies are also trying to recover research costs on drugs that turned out to be busts, and never approved for sale.
Most of the drugs in the initial rollout of Medicare price negotiations with companies are drugs that have been around awhile. The companies by now should have recovered most, if not all, of their research costs on those drugs.
In some cases, companies are spending millions of dollars on television and other advertising to get people to ask their doctors about these drugs.
Perhaps, when Medicare starts negotiating prices it will pay for some of those drugs, the TV ads for those drugs will stop, or be cut back. That’s not good news for the TV networks and other media outlets that depend on such advertising.
In essentially every other country, drug price negotiations are the norm. There is usually only one buyer – the government – for the whole country. That gives those countries leverage to determine how much drugs will cost within their boundaries. (That’s why a lot of Americans buy their drugs from Canada or Mexico).
Because most medical care in the U.S. is in the free market, that hasn’t been possible here. Because of that, people not only had to be concerned whether a drug, or other medical treatment, was going to be the best for their conditions, they had to worry how they were going to pay for it. That’s stress atop stress unnecessarily.
In the U.S. private sector, a large-volume buyer usually negotiates prices. The more one buys, the lower the price per unit. The sellers want to sell lots of product. The buyer wants to pay as little as possible. So, they negotiate. Medicare is a bulk buyer of prescription drugs, and has never been allowed to negotiate prices – until now.
There is no telling yet how much prescription drug price negotiations will bring down the federal deficit, but, very likely, it could be considerable over a few years.
Therefore, there could be a two-part bang for the buck here. Medicare, and, ultimately, patients will pay less for the drugs they need, and the federal deficit could come down a lot. As a bonus, the drug companies will still make plenty of money.
And, over time, as the number of drugs that are subject to price negotiation increases, the difference could be huge, compared to the current situation.
The actual results have not yet been realized, but the whole idea could be a game-changer for the country.
Peter