All Things in Moderation

I’ve been promising lmsinca a post on MedPAC for quite some time. They’re meeting again next week and will have a session (benefit redesign) that I think will be of more interest. So I’m going to combine the two meetings into one post.

Until then, a little nugget:

Just like the rest of the program, a small percentage of Part D (the drug benefit) beneficiaries account for the majority of program spending. For Part D, 8 percent account for 40 percent of total spending and 20 percent of the total prescriptions. In 2009, on average the “high-cost” beneficiary filled 111 prescriptions over the year. Each prescription cost an average cost of $110. The lower-cost beneficiaries, by comparison, filled 41 prescriptions at a cost of $42 each during the same time period. “High cost” tended to use more brand-name drugs (as opposed to generics).

It’s the same story over and over. There’s a small percentage of beneficiaries who are the cost drivers. Until we figure out how to control costs in this area the rest is rearranging the deck chairs.

Also, Medicare is estimated to reach six percent of GDP by 2040, and the Hospital Insurance Trust Fund will be unable to pay full benefits after 2024. That’s 13 years from now. The growth in expenses means that a beneficiary’s average out-of-pocket costs will increase faster than Social Security benefits.

Update: Slight edit to answer lms’ clarifying question.

Update II: A lot of criticism regarding Part D is directed at the non-interference clause, which prohibits the government from direct negotiation. Repealing this would have a negligible effect, according to CBO. Part of the reason is that it would not be a true negotiation, because the biggest tool the government could use, a restrictive formulary, is left off the table because it’s a political nonstarter. Also, before the MMA was enacted various prescription drug bills were kicking around congress for many years. The vast majority of them — republican and democratic — included this provision. As it stands, drug manufacturer negotiate with the prescription drug plans, who have every incentive to get a good deal. But again, they’re hamstrung by the requirement to have very inclusive formularies. In some class of drugs they’re required by law to include the vast majority of the available prescriptions — in every therapeutic category its at least 2 drugs.

Regarding re-importation, the law gives HHS the authority to do it, provided that the department can certify it can be done safely. FDA is worried about counterfeit drugs, tampered drugs, etc. There’s also the R&D argument. Haven’t spent too much time on this issue, but the NIH looked at it a few years back. Personally, I think it’s a band-aid approach to more systemic problems in the overall health care system.

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I don’t know how many of you have been following the “Occupy Wall Street” protests but I thought this was a decent historical perspective of the movement. There’s a great tradition of populist anger against the economic elite. The protesters don’t seem to have any real leadership or defined goals, they appear to want it that way, but they are reflecting similar complaints going all the way back to the Shay and Whiskey Rebellions.

It is my possibly vain hope that reading up on such historical matters might inspire efforts like Occupy Wall Street to greater cogency and a deeper, more solid foundation in longstanding (if embattled and problematic) American values than they now seem to possess. You don’t have to look as late as the 19th-century Populists and the 1930′s labor movement, for example, to find an American left deeply immersed in both economic issues and an ambitious vision of a better country. Those things were present at the creation.

Occupy Wall Street probably doesn’t, when you shake it down, want to secede from the union like the whiskey rebels — happily enough. But those rebels didn’t start out by wanting to secede, either; they’d fought in the awful front lines of the Revolution in hopes that those sacrifices might lead to something for them and their families; it didn’t. Occupy Wall Street does seem to want to secede, somehow, from the hopeless-feeling regurgitation, through the two political parties, of elite finance theories and policies that never seem sincerely dedicated to any fundamental improvement of opportunity for what they call, not wrongly, “the 99%.”
But a lot of efforts to state a goal for the protest itself devolve in sloganeering about the economic situation and self-admiring paeans to the virtues of protesting. Wouldn’t galvanizing this stuff require… leadership? Our founding democratic-finance activists weren’t such communitarians that they refused to have leaders and set achievable goals. They were used to being rank-and-file — even though as miltiamen, they elected their leaders.

And they knew where they’d succeeded and failed. This thing in Zuccotti Park is open-ended. It has no declared closing date. How can it ever declare victory, get the hell out, build its organization, and come back to fight another day? (lms)

Here’s a story that people have been waiting for:

SANAA, Yemen (AP) — Anwar al-Awlaki, a U.S.-born Islamic militant cleric who became a prominent figure in al-Qaida’s most active branch, using his fluent English and Internet savvy to draw recruits to carry out attacks in the United States, was killed Friday in the mountains of Yemen, American and Yemeni officials said. (lms)

From the department of who didn’t see this coming:

Most Bank of America customers will soon see a new charge on their statements — $5 for any month in which they use a BofA debit card to make a purchase.

The new Bank of America fee will be phased in early next year, said Anne Pace, a spokeswoman for BofA, the nation’s largest retail bank.

Customers will still be able to use their cards at the bank’s automated teller machines without being charged, the bank said Thursday.

Bank of America and other big banks have said they will compensate by charging customers. “The economics of offering debit cards have changed,” Pace said in interview. (lms)
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Texas was a “weak Governor” state until the decade of Perry. Perry has assiduously turned perhaps thousands of appointments into crony opportunities, shaping the bureaucracy in a way no other governor ever tried to do on a grand scale. This is not insidious in itself, but there are so many instances of barely qualified “friends” replacing experienced technocrats that it hurts Texas, while it benefits Perry. Today’s big story in Austin involves the biggest money bureaucracy in state government – the Texas Department of Transportation, or “TXDOT”. Big $$ for crony

From the story:enempany lobbyist and former top aide to Gov. Rick Perry was chosen Thursday 


An energy company lobbyist and former top aide to Gov. Rick Perry was chosen Thursday to lead the 12,000-employee Texas Department of Transportation and will be paid at least $100,000 more annually than the career engineer he succeeds. lpartment of Transportation and will be paid at least -…$1more annually than the career engineer he succeeds.
The former

Note from me: This new salary is the max allowed for a state employee, but they are going to try to gain an exemption to pay Wilson even more.

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If you’ve never seen the Star Wars Gangsta Rap, you should.

Because it’s fun, and fun is good. Speaking of fun, you should also watch Muppet Bohemian Rhapsody, if you haven’t. Of course, it helps if you’re familiar with Queen’s original. It’s really well done.

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