Daily Health Policy Report

Wednesday, April 23, 2014

Last updated: Wed, Apr 23

KHN Original Reporting & Guest Opinion

Administration News

Health Reform

Capitol Hill Watch

Health Care Marketplace

Public Health & Education

State Watch

Editorials and Opinions

KHN Original Reporting & Guest Opinion

Is Bigger Better? Idaho Hospital Battle A Microcosm Of Debate Over Industry Consolidation

Kaiser Health News staff writer Phil Galewitz, working in collaboration with The Washington Post, reports: “When Idaho's largest hospital system bought the state's largest doctor practice in 2012, the groups expressed hope that the deal would spark a revolution in delivering better-quality care. Instead, it ignited a costly legal battle with state and federal regulators and rival hospital systems. Officials at Boise-based St. Luke's Health System thought they had the Obama administration on their side because the federal health law encourages hospitals to collaborate with doctors to improve quality and lower costs” (Galewitz, 4/22). Read the story.

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Florida Blue: Health Law Enrollments 'Exceeded Expectations' But Premiums May Rise In 2015

The Miami Herald's Daniel Chang and Patricia Borns, working in partnership with Kaiser Health News, reports: "Most of the consumers who bought a private health plan from Florida Blue through the Affordable Care Act’s insurance exchanges between October and April were previously uninsured — one of many factors potentially leading to higher premium rates in 2015, according to a senior executive" (Chang and Borns, 4/22). Read the story.

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Health-Care David And Goliath Partner To Open After-Hours Clinic

The Seattle Times Carol M. Ostrom, working in partnership with Kaiser Health News, reports: " At Swedish Medical Center’s Cherry Hill hospital, the 'EMERGENCY' sign glows bright in the dusk above the emergency-room entrance. Some 18,000 people sought help here last year. Right next to the sign, there’s another one on the building: 'After-Hours Clinic.' Operated by Country Doctor Community Health Centers, this clinic — like Swedish’s ER — is open evenings and weekends. This isn’t competition, but a partnership few would have predicted before the Affordable Care Act, also known as Obamacare. Swedish, a huge, specialty-oriented medical center, has plunked down startup money and a cheap lease to help tiny Country Doctor, whose two clinics were started by idealistic community activists in the late 1960s and early ’70s" (Ostrom, 4/22). Read the story.

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Political Cartoon: 'Bill Of Health?'

Kaiser Health News provides a fresh take on health policy developments with "Bill Of Health?" by Mike Luckovich.

Here's today's health policy haiku: 

WHEN BULLETS BECOME WIZARDS

Catch Wizards Fever
It's a contagious disease
And there is no cure.
-Anonymous 

If you have a health policy haiku to share, please send it to us at http://www.kaiserhealthnews.org/ContactUs.aspx and let us know if you want to include your name. Keep in mind that we give extra points if you link back to a KHN original story.

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Administration News

Top CMS Official To Leave Post

Jonathan Blum, the Centers for Medicare & Medicaid Services principal deputy administrator, will leave May 16.  

The Wall Street Journal: Blum To Leave Centers For Medicare And Medicaid Services
Jonathan Blum, a top official at the Centers for Medicare and Medicaid Services, will leave his post on May 16. The departure of Mr. Blum, the agency's principal deputy administrator, was announced Tuesday in an email to staff by CMS Administrator Marilyn Tavenner. He was first appointed as the director for the Center for Medicare in 2009 before becoming a deputy administrator last year (Corbett Dooren, 4/22).

Reuters: U.S. Official Responsible For Reforming Medicare Leaving Post
The Obama administration on Tuesday announced the departure of the top health official responsible for reforming Medicare under President Barack Obama's health care reform law. Jonathan Blum, Medicare director and principal deputy administrator of the U.S. Centers for Medicare & Medicaid Services (CMS), has presided over a range of reform initiatives during a five-year tenure including efforts to move the $635 billion health care program for the elderly and disabled away from costly fee-for-service medicine (Morgan, 4/22).

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Health Reform

Va. Lawmakers Back At Work, But Not Dealing With Medicaid Impasse

Republicans in the General Assembly are opposed to expanding the program for low-income residents, but that could threaten the passage of a state budget. Meanwhile, news outlets look at the issue in North Carolina, Missouri and Arizona.

The Washington Post: Va. Assembly, Reconvening Wednesday, Unlikely To Solve Medicaid, Budget Issues
Virginia legislators return to the Capitol on Wednesday intending to wrap up some unfinished business but with no plans to tackle the budget and Medicaid stalemates that could ultimately shut down the state government. The General Assembly will hold its annual "veto session" to complete work from the regular session that ended March 8. But no action is expected on the biggest issues looming over Richmond: Medicaid expansion and, because that matter was folded into the Senate's two-year, $96 billion state spending plan, the budget (Vozzella, 4/22).

The Associated Press: Burr Supports NC Decisions On Health Care Overhaul
U.S. Sen. Richard Burr says North Carolina leaders were right both to decline expanding Medicaid and creating their own online insurance web site through the federal health care overhaul. Burr made the comments Tuesday before a General Assembly committee looking at the effects of the law on insurance, business and health services. The panel met at UNC-Greensboro (4/22).

The St. Louis Post-Dispatch: Jesse Jackson Implores St. Louis Clergy To 'Go To Jefferson City' For Medicaid Expansion
The Rev. Jesse Jackson met with religious leaders in a St. Louis church basement Tuesday to encourage them to "go to Jefferson City" and fight for Medicaid expansion in Missouri. The Chicago-based civil rights leader and former presidential candidate encouraged a group of several dozen clergy to participate in a scheduled "pray-in" at the Missouri Capitol today. The noon event is being organized by St. Louis activists to pressure state lawmakers to expand Medicaid. Jackson isn’t expected to attend (McDermott, 4/22).

Modern Healthcare: States That Did Not Expand Medicaid May See Higher Premiums, Industry Says
Some industry experts are warning that states that chose not to expand Medicaid coverage under Obamacare could see higher insurance premiums next year as hospitals continue to shift the costs of uncompensated care to private insurers (Dickson, 4/22).

The Arizona Republic: Arizona Appeals Court Keeps Medicaid Challenge Alive
The fight over last year's expansion of the state Medicaid program is still alive, as the state Court of Appeals ruled this morning that lawmakers have standing to dispute the move. The court sent the legal challenge by three-dozen Republican lawmakers who opposed expanding Medicaid back to Maricopa County Superior Court to decide if the lawmakers' argument that the expansion required a two-thirds majority vote is valid. The three-judge panel determined the courts, not lawmakers, are the final arbiters of whether a policy triggers the constitutional requirement for a two-thirds majority to enact any tax or fee increase (Pitzl, 4/22).

Some states that did not expand Medicaid are reporting increases in enrollment.

Pittsburgh Post-Gazette: Medicaid Gets Affordable Care Act Bump In Pennsylvania
Pennsylvania’s Medicaid enrollment is up by more than 18,000 people since the Oct. 1 launch of the Affordable Care Act’s online health plan marketplaces. The state's enrollment bump in the program for low-income families and individuals is small, though it coincides with larger jumps being experienced in other Republican-led states. Supporters of the ACA are crediting the 2010 federal health care overhaul with encouraging more uninsured to examine their health coverage options (Toland, 4/21). 

Idaho Statesman: Idaho Medicaid Enrollment Surges
The number of people on Medicaid in Idaho rose almost 6 percent since the launch of Idaho's health-insurance exchange last fall even though Idaho is one of the states that has not expanded Medicaid eligibility under the Affordable Care Act. The increase is sharper than usual. That's partly because more people discovered they qualified for Medicaid during the process of shopping for health insurance to comply with the Affordable Care Act, which requires all Americans to be insured (Dutton, 4/22). 

One company that provides managed Medicaid services to states is showing increased profits.

The Wall Street Journal: Centene Profit Rises On Expanded Memberships
Centene Corp. said first-quarter profit rose 43% as the Medicaid insurer posted double-digit revenue growth and expanded membership. Shares climbed as earnings beat expectations and the company raised its per-share profit outlook for 2014 by 10 cents, to $3.60 to $3.90. Centene said the sharp 38% growth in its premium and services revenue in the latest quarter primarily was a result of expansions in Florida and Ohio, the additions of the California, New Hampshire and three Centurion contracts, as well as participation in the Health Insurance Marketplaces and acquisitions (Stynes, 4/22).

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Four Insurers Enroll Nearly 95% Of California Sign-Ups

Nonetheless, experts say California's online marketplace increased competition in the state's individual market. Meanwhile, lower-than-expected enrollment in Oregon creates budget issues, and a Democratic congresswoman from Arizona calls on the administration to extend the enrollment deadline past April 15.

Modern Healthcare:  Calif. Health Exchange Promotes Competition, Even With Dominant Players
Four insurers accounted for nearly 95% of the 1.4 million health plans selected by customers on California's insurance exchange during the recently concluded open-enrollment period, but despite that concentration, experts say the exchange increased competition in individual markets around the state (Demko, 4/22).

The Oregonian: Cover Oregon Budget Crunch Overshadows Whether To Fix Bug-Ridden Health Insurance Exchange Or Go Federal
Money could be as important as technology on Friday, when the Cover Oregon board decides whether to give up on its bug-ridden, unfinished health insurance exchange and switch to the federal version instead. On Thursday, an advisory committee will hear from staff the odds that more than two years and $130 million worth of work by Oracle Corp, the lead information-technology vendor, can be salvaged in time for the next open enrollment period, which begins in November. Just as important, however, is the price tag for salvaging Oracle's work. That's because far lower than expected enrollment numbers have Cover Oregon quietly grappling with a budget crisis (Budnick, 4/22).

The Hill:  Dem Calls For Another ObamaCare Enrollment Extension
Rep. Kyrsten Sinema (D-Ariz.) is calling on the Obama administration to allow extra time for people attempting to enroll in health insurance coverage. The Obama administration has already extended the insurance enrollment period to April 15 for people who were "in line" on the federal exchange website by the original March 31 deadline. It has not allowed for more time beyond that date (Marcos, 4/22).

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Survey: Most Americans Favor Health Law's Birth Control Coverage Mandate

Though this health law provision continues to be controversial and is the subject of various legal challenges, a recent survey conducted by University of Michigan researchers found that 69 percent of Americans support the requirement.

Los Angeles Times: Nearly 7 In 10 Americans Say Health Plans Should Cover Birth Control
Among the various provisions of the Affordable Care Act, few are as controversial as the one requiring health insurance providers to include coverage for contraception. A new survey finds that support for this rule is widespread, with 69 percent of Americans in favor of the mandate (Kaplan, 4/22).

NBC News: Most Support Birth Control Mandate, Survey Shows
Most Americans — 69 percent — support the requirement that health insurance plans pay for birth control, a new survey shows. The 2010 Affordable Care Act requires health insurers to pay for contraception as part of 10 essential benefits, including vaccines and cancer screenings. It’s the most controversial requirement, with religious groups, some conservative commentators and some employers objecting (Fox, 4/22).

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Democrats In Tough La., Pa., and Fla. Races Embrace Health Law

Sen. Mary Landrieu of Louisiana, Rep. Allyson Schwartz, who is running for governor of Pennsylvania, and Florida gubernatorial candidate Charlie Crist tout the improvements from the law.

The Washington Post: Landrieu: I'll Put GOP Foe On Defensive On Health Care
Senator Mary Landrieu is one of the most vulnerable of red state Democratic incumbents, and her reelection challenges — like those of other red state Dems — are said to be all about Obamacare. But in an interview today, Landrieu vowed to campaign aggressively against GOP foe Bill Cassidy's opposition to the Medicaid expansion in the state, offered a spirited defense of the law — while acknowledging it has some problems — and even insisted he'd be at a "disadvantage" over the issue (Sargent, 4/22).

The Associated Press: Schwartz Ad Highlights Role In Health Care Law
U.S. Rep. Allyson Schwartz is airing a new TV campaign commercial that aggressively touts her involvement in President Barack Obama's signature health care law. The ad makes Schwartz the only one of Pennsylvania's four Democratic gubernatorial candidates to devote an entire 30-second spot to the politically volatile issue. It was scheduled to begin running Tuesday in the Philadelphia and Pittsburgh markets (4/22).

The Associated Press:  Crist Won't Back Down From Health Care Law Support
Republican-turned-Democrat Charlie Crist set himself up Tuesday for another round of attacks over the president's health overhaul from Republican Gov. Rick Scott's campaign team — repeatedly calling the nation's new insurance system "great" during a lunch speech. Crist appeared at the Capital Tiger Bay Club and almost immediately brought up the attack ads being run by the political committee backing Scott's re-election, which show video of Crist talking about the health care overhaul and saying, "I think it's been great” (Farrington, 4/22).

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Capitol Hill Watch

Lawsuit Challenging Health Law Subsidies Gains Backing Of 38 GOP Lawmakers

The challenge, brought by Sen. Ron Johnson, R-Wis., targets the rule allowing the federal government to pay part of the health insurance premiums for lawmakers and some staffers.

The Washington Post: 38 GOP Lawmakers Join Ron Johnson’s Obamacare Lawsuit
Thirty-eight Republican lawmakers are signaling support for a lawsuit filed by Sen. Ron Johnson (R-Wis.) that challenges a rule by the Obama administration allowing the federal government to subsidize health insurance for lawmakers and some congressional staffers. With the health care law exceeding enrollment expectations and legislative attempts to undo the law failing to advance beyond the GOP-controlled House, Johnson's lawsuit is one of the few other attempts underway to chip away at the law (O’Keefe, 4/22).

CQ:  Lawmakers Back Senator’s Suit Targeting OPM Exchange Rule
Thirty-eight senators and House members have filed a brief backing a legal challenge to an Office of Personnel Management rule that interprets the health law as continuing employer sponsored coverage for members of Congress and their staffs with the start of insurance exchanges last fall. The OPM rule is a part of a series of unlawful actions by the Obama administration revising or ignoring provisions of the overhaul and it’s up to the courts to intervene, states the friend-of-the-court brief signed by a dozen GOP senators including John McCain of Arizona and Ted Cruz of Texas. Twenty-six House Republicans also joined in filing the brief (Reichard, 4/22).

Fox News: 38 GOP Lawmakers Join Lawsuit Against Obamacare Subsidies
Thirty-eight Republican lawmakers are backing a lawsuit filed by Sen. Ron Johnson, R-Wis., challenging health insurance subsidies provided to lawmakers and their staffers who are required to obtain coverage under Obamacare. Johnson filed the lawsuit in January challenging a ruling by the Office of Personnel Management. The agency ruled that lawmakers and their staffs should continue to receive health care benefits covering about 75 percent of their premium costs after leaving the health insurance program for federal workers (4/23).

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Health Care Marketplace

Sales Of Hepatitis Drug Shatter Records

Record sales of the pricey new drug, Sovaldi, pushed first-quarter earnings of Gilead Sciences beyond expectations. Meanwhile, Novartis' recently announced deals with GlaxoSmithKline and Eli Lilly show manufacturers' swing towards specialization, reports The Wall Street Journal.

The New York Times: Gilead Revenue Soars On Hepatitis C Drug
Record sales of a new hepatitis C drug pushed the first-quarter earnings of Gilead Sciences far beyond expectations, the company reported on Tuesday, but could also heighten concerns about the high cost of the drug, known as Sovaldi, and the ability of the health care system to pay for it (Pollack, 4/22).

The Associated Press: Novartis Reshapes Business With GSK, Lilly Deals
The deals unveiled Tuesday are the latest in a string of mergers and acquisitions that have engulfed the industry of late and which, analysts said, could trigger some further activity in the months ahead. (4/22).

The Wall Street Journal: Deal Flurry Shows Drug Makers' Swing Toward Specialization
The companies said the deals aim to focus each firm on specific sectors where it believes it has the size and expertise to generate significant sales growth. But the deals also may leave them more vulnerable to setbacks in their remaining businesses, analysts and industry officials said (Rockoff, Whalen and Falconi, 4/22).

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Public Health & Education

Regulators Vote Against Approving New Painkiller

A new FDA plan, in the meantime, would speed approval of life-saving medical devices.

NPR: FDA Advisers Vote Against Approving New Opioid Painkiller
A key government panel Tuesday voted unanimously against approval of a powerful opioid prescription painkiller intended to provide faster relief with fewer side effects. At the conclusion of a hearing, the Food and Drug Administration advisory committee voted 14-0 against recommending that the agency approve Moxduo, the first drug to combine morphine and oxycodone into one capsule (Stein, 4/22).

The Associated Press: FDA Plan Would Speed Up Medical Device Approvals 
The Food and Drug Administration unveiled a proposal Tuesday designed to speed up development and approval of medical devices that treat life-threatening diseases and debilitating conditions. Under the Expedited Access Program, companies developing devices for critical and unmet medical needs would get earlier access to FDA staff to discuss their products. The agency says the earlier contact with regulators should result in "earlier access to safe and effective medical devices” (4/22).

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State Watch

State Highlights: Ohio Hospital Merger Struck Down; Okla. Abortion Drug Use Limited; Calif. Exchange And Felons

A selection of health policy stories from Ohio, Oklahoma, California, Idaho, Tennessee, Nebraska, Minnesota, Massachusetts, Georgia and Washington state.

The Wall Street Journal: Court Strikes Down Ohio Hospital Merger
A federal appeals court on Tuesday ordered a major health system in northwest Ohio to unwind its merger with a local hospital on antitrust grounds. The unanimous decision by a three-judge panel of the Sixth U.S. Circuit Court of Appeals in Cincinnati comes amid growing concerns about hospital mergers and their effect on prices against the backdrop of America's health care upheaval (Gershman, 4/22).

Modern Healthcare:  FTC Wins Appeal In Hospital Merger Case
The Federal Trade Commission extended its recent winning streak in health care cases Tuesday when a federal appeals court agreed that a 2010 hospital acquisition by Ohio's ProMedica system was illegal. In a 22-page opinion, a unanimous panel of judges at the 6th U.S. Circuit Court of Appeals in Cincinnati wrote that the FTC correctly decided that Toledo-based ProMedica was extremely likely to illegally increase prices after buying the suburban St. Luke's Hospital in Maumee, a well-to-do corner of Lucas County, Ohio (Carlson, 4/22).

The Associated Press: Oklahoma Limits Abortion Drug Use
Gov. Mary Fallin signed a bill on Tuesday to further restrict the use of abortion-inducing drugs in Oklahoma, despite objections from opponents who say it will force more women to have surgical abortions. The bill was written in response to a recent Oklahoma Supreme Court decision that ruled a similar bill signed by Ms. Fallin in 2011 was unconstitutional (4/22).

Los Angeles Times: Measure Barring Covered California From Hiring Certain Felons Fails
A bill barring the state's health insurance exchange from hiring individuals convicted of certain felonies failed to advance Tuesday. Under the proposal by Assemblywoman Connie Conway (R-Tulare), Covered California would not be able to hire people who have been convicted of certain crimes--felonies concerning breach of trust or dishonesty -- for jobs where enrollees' financial or medical data could be accessed (Mason, 4/22).

Kaiser Health News: Is Bigger Better? Idaho Hospital Battle A Microcosm Of Debate Over Industry Consolidation
When Idaho's largest hospital system bought the state's largest doctor practice in 2012, the groups expressed hope that the deal would spark a revolution in delivering better-quality care. Instead, it ignited a costly legal battle with state and federal regulators and rival hospital systems. Officials at Boise-based St. Luke's Health System thought they had the Obama administration on their side because the federal health law encourages hospitals to collaborate with doctors to improve quality and lower costs (Galewitz, 4/22).

Los Angeles Times: UC OKs Paying Surgeon $10 Million In Whistleblower-Retaliation Case
University of California regents agreed to pay $10 million to the former chairman of UCLA's orthopedic surgery department, who had alleged that the well-known medical school allowed doctors to take industry payments that may have compromised patient care (Terhune, 4/22).

Tennessean/USA Today: Change In Tennessee Law Lets Hospitals Drop Patients
The amendment, sponsored by Rep. Andrew Farmer after he was approached by various hospitals, was added to a bill designed to protect those who are placed in the care of conservators. The amendment gave hospitals a way to petition for court approval to discharge patients they say no longer need the costly care of a major health facility. In Nashville the add-on provision has been used a dozen times to try to discharge people, more than half of them listed on court documents as currently or formerly homeless. In nine of the cases, including Gordon's, the petitions were approved by Davidson Probate Judge David "Randy" Kennedy (Roche Jr., 4/22).

The Associated Press:  Nebraska Gov Vetoes Nurse Practitioner Regulation Bill
Nurse practitioners will still need to collaborate with physicians to practice in Nebraska, after the governor vetoed a bill that would have changed state regulations. Gov. Dave Heineman on Tuesday vetoed the bill, which removed the requirement that nurses have an integrated practice agreement with a collaborating physician in order to practice in Nebraska. In the final vote, legislators had approved the measure unanimously (4/22).

The Associated Press:  Minnesota Clinics Offering Food, Seeing Health Gains
Some Minnesota clinics operate their own food banks or offer food deliveries, but programs that use food to try to improve patient health are relatively new. This summer, Lakewood Heath System in Staples will offer free community supported agriculture shares to low-income families with children. Dr. Diana Cutts, a pediatrician at Hennepin County Medical Center who studies the ties between food and health, told Minnesota Public Radio that at any given time at least a quarter of her patients don't have enough food (4/22).

WBUR: Report: Disabled Mass. Residents Face Major Health Disparities
A new report highlights the many ways in which Massachusetts residents with disabilities “fare worse” than those without disabilities when it comes to their own physical and mental health as well as access to quality medical care from doctors sensitive to their needs. This phenomenon isn’t new. Previous research found that many barriers still exist that prevent disabled patients from accessing specialty medical care. And for those with developmental and intellectual disabilities, sometimes finding a doctor willing to treat even common medical conditions can be difficult (Zimmerman, 4/22).

Georgia Health News: ‘Medical Homes’ Appeal To Many Doctors, Patients
Ronald Whitten, a licensed clinical social worker, is excited about the idea of being a patient in a “medical home.’’ A medical home, in this context, is not a residential institution. It’s a physician practice that aims to provide more comprehensive, patient-friendly treatment while also curbing health costs (Miller, 4/22).

Krebs On Security: States: Spike In Tax Fraud Against Doctors
An apparent spike in tax fraud cases against medical professionals is fueling speculation that the crimes may have been prompted by a data breach at some type of national organization that certifies or provides credentials for physicians. … In this increasingly common crime, thieves steal or purchase Social Security numbers and other data on consumers, and then electronically fraudulently file tax returns claiming a large refund. The thieves instruct the IRS to send the refund to a bank account that is tied to a prepaid debit card, which the fraudster can then use to withdraw cash at an ATM (Krebs, 4/22).

The Seattle Times:  Insurers, Hospitals Complain To Kreidler About New Rules
Health insurers and hospitals, usually on opposite sides, lined up together Tuesday to give Insurance Commissioner Mike Kreidler an earful about his proposed new rule for insurance-provider networks. Kreidler proposed the rule after complaints that consumers have been taken by surprise about narrower networks in insurance plans offered in the Affordable Care Act. Those networks exclude some of the region’s prominent hospitals and medical centers, meaning some consumers don’t have access to providers they expected to us (Ostrom, 4/22).

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Editorials and Opinions

Viewpoints: Health Spending Ready To Start Climbing Again; Cruz's 'Nightmare' Comes True

The New York Times: Acceleration Is Forecast For Spending On Health
Standing before a roomful of economists, policy makers and health care experts earlier this month, Amitabh Chandra, director of Health Policy Research at Harvard’s Kennedy School of Government, closed a presentation about the slowdown in health care spending over the last decade by citing an article in The New York Times. "Changes in the way doctors and hospitals are paid — how much and by whom — have begun to curb the steady rise of health care costs in the New York region," the article declared. "Costs are still going up faster than overall inflation, but the annual rate of increase is the lowest in 21 years." Then came the punch line. The article, written by my now-retired colleague Milt Freudenheim, was published in December 1993, when the so-called managed care revolution promised for a few hopeful years to change the way doctors practiced medicine and curb the breakneck rise in health care costs (Eduardo Porter, 4/22). 

Politico: Ted Cruz's Worst Nightmare Is Coming True. Obamacare Is Working.
"President Obama wants to get as many Americans addicted to the subsidies because he knows that in modern times, no major entitlement has ever been implemented and then unwound," [Sen. Ted Cruz, R-Texas] said. The worry, according to Cruz, was that once the ACA went into effect, we'd all be "addicted to the sugar." Then, it would be too late to roll it back. Cruz's nightmare, and the left's long-held dream, has come true. Finally, after years of failed reform efforts, the U.S. government is actually trying to provide affordable health coverage for all. And it’s working, despite Republicans’ relentless attempts to deep-six the law. As a result, the politics of Obamacare will never be the same (Richard Kirsch, 4/22).

Bloomberg: Pharma Mergers Make Sense
A wave of big mergers in the pharmaceutical industry is turning into a tsunami, with more than $100 billion in deals either announced or rumored this week. Oddly, this may be one of the rare cases where merger frenzy actually makes sense. ... One aim of the mergers is to prepare for leaner years. Producing new hits is harder because of increased regulatory scrutiny. It's also costlier: The average cost of developing and launching a new drug has been estimated at $5 billion in 2013, compared with $1.1 billion in the late 1990s. At the same time, expiring patents are driving the industry's revenue down (Leonid Bershidsky, 4/22).

Bloomberg: Pharma Mergers Aren't A Miracle Cure
The pharmaceutical industry, once a reliable source of large profits, is finding it harder and harder to make profitable new drugs. ... Focusing more intently on oncology drugs isn't going to help much if you don’t have promising targets, and if regulators and insurers are pummeling you for lower prices on whatever you do manage to produce. But no one really knows what to do about those problems. Merging and de-merging at least gives a worried management something to do with its time -- other than polishing up the old resume and finally getting serious about nursing school (Megan McArdle, 4/22).

Bloomberg: Sometimes Brand-Name Drugs Really Are Better
When you go to the pharmacy for aspirin, do you buy Bayer or the private-label generic alternative offered by chains such as CVS? The price for Bayer's version is more than twice that of CVS's, yet the active ingredient is exactly the same. The choice may seem trivial, but it provides insight into larger economic and health questions. Research by Matthew Gentzkow of the University of Chicago -- who last week won the prestigious John Bates Clark prize for the best young economist in the U.S. -- and co-authors studied exactly this question. They estimate that U.S. consumers would save $32 billion a year by switching to generic labels for goods (not just aspirin) that are equivalent to their brand-name alternatives (Peter R. Orszag, 4/22).

Detroit News: Michiganians Can't Afford Deep Medicare Cuts
It seems the federal government is often looking to cut spending, a goal many Americans could support. However, sometimes cuts can do more harm than good, or even lead to higher spending instead. One area that lawmakers may look for savings is our country’s health care system in particular is reimbursement for Medicare Part B drugs. But cuts to this essential program, however, will reduce seniors’ access to Part B medications, especially in rural communities (Dr. Amar Majjoo, 4/23).

Reuters: Why Not A War On Child Poverty?
Since 1969, the proportion of children and youth in poverty rose by 56 percent, even as the economic fortunes of the elderly improved under programs like Medicare and Social Security. Today, 32 million American children and youth are confronting poverty — including 7 million suffering utter destitution, another 9 million living in serious poverty and 16 million more in low-income households struggling just above poverty lines (Mike Males, 4/22).

JAMA Pediatrics: Children's Health Care and the Patient Protection And Affordable Care Act: What's At Stake?
The ACA's "essential health benefits" establish a benefits framework for products sold through the exchanges. Because children in low-income families eligible for federal subsidies constitute a new and potentially growing population under this new framework, it will be important to track its effect on children's health care. Notably, the ACA bars Medicaid from acting as a secondary payer to supplement subsidized coverage through the exchanges .... While ACOs are currently focused on achieving short-term cost savings from chronically ill adults, innovators must now pursue the challenging but critical work of forming pediatric ACOs, with children’s hospitals at the helm (Eileen K. Fry-Bowers, William Nicholas and Neal Halfon,, 4/21).

JAMA Internal Medicine: Overcoming Barriers To Discussing Out-of-Pocket Costs With Patients
Increased cost sharing, in the forms of higher copayments, deductibles, and yearly maximums, has been advocated to encourage patients to become smarter consumers and thus to reduce the overall cost of medical care. In our view, physicians have an ethical duty, at a minimum, to discuss out-of-pocket costs with patients in the same way that they would discuss the adverse effects of a treatment. But when physicians actually begin to consider out-of-pocket costs as part of clinical decision making, the challenges can seem over whelming (Drs. Kevin R. Riggs and Peter A. Ubel, 4/21). 

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EDITOR:
Stephanie Stapleton

ASSOCIATE EDITOR:
Andrew Villegas

WRITERS:
Ankita Rao
Marissa Evans

The Kaiser Daily Health Policy Report is published by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. (c) 2012 Kaiser Health News. All rights reserved.