According to the Capital Research Center (CRC), Obamacare is pitting various sectors of the medical industry against each other by creating a culture in which each sector is attempting to shift policies in its favor at the expense of other sectors and consumers.
The CRC recently published a paper, entitled “Insuring Crony Capitalism,” which discusses the problems created when this type of wrestling for benefits goes on in the health care system.
“If Americans want both innovation and incentives for lower prices, they will have to substitute competition in the marketplace for government-run health care,” David Hogberg said in the paper.
Obamacare was enacted both to increase the quality of health insurance and reduce the cost of health care for individuals and the government. But Scott Walter, president of CRC, told Patient Daily that placing health care in the hands of the government spells trouble.
“Obamacare puts the entire health care sector largely under government control,” Walter said. “Although, of course, there are still private companies who still supply all kinds of health care things, medical devices, drugs, insurance, etc. And the problem is when you put government in control that way -- and, by the way, Obamacare was only able to pass with all kinds of payoffs essentially to sub-sectors in health care -- so, promising insurers this, and promising drug makers that, and device makers, the other.”
Walker said this kind of bargaining and negotiating in order to get Obamacare passed created a level of “crony corruption of buying off the groups” to support the bill, which was the first stage.
“In stage two of crony capitalism -- now that government is controlling a lot of the levers -- the different subsections will go to war against each other and try to hurt each other for their own bottom line benefit with ... consumers, in general, losing out,” he said.
Walker believes insurance agencies are trying to use the government to place price controls on the pharmaceutical industry because drugs are a big cost for insurance companies.
“So, one of the central ways the insurance industry has tried to hurt the drug makers for the benefit of the insurers is by backing a 'nonpartisan' think thank which is discussed in the article -- The Institute for Clinical and Economic Review (ICER),” Walker said.
ICER was founded with about a half million dollars from Blue Shield of California Foundation, and Blue Shield Foundation of California continues to be one of ICER’s largest funders, along with other entities in the health care sector.
“But clearly, if you look at the (funding) for the entity, you see it is mostly getting it from the insurance world -- insurance companies, trade groups and the rest,” Walker said. “And the think tank is helping to argue to the public that these new drugs that are coming out are just too expensive and people are spending too much money on drugs, and it is not really worth it on a cost-benefit basis.”
But the cost benefit basis that is being looked at is usually pretty short-term, Walker said, using the example of Solvadi, a drug used to treat Hepatitis C. Solvadi can cost up to $84,000, which is expensive for a short-term treatment. If the drug prevented liver failure and liver cancer, which require a liver transplant, it would easily be six to eight times more expensive -- and a long-term solution, Walker said.
“That is more reasonable cost-benefit analysis looking at the long-term,” he said. “But (ICER) typically doesn’t pay much attention to those sorts of long-term considerations.”
There doesn’t seem to be an enormous movement towards price control on drugs yet, which Walker said is a good sign.
Walker said as long as people are mindful of the problems price controls on drugs cause and continue to closely monitor what is going on in the health care industry, major problems should remain at bay.
“We aren’t in terrible shape yet, but we need to be vigilant,” he said. “The country needs to be vigilant and resist the siren call of price controls because that is just going to mean fewer drugs and lower quality.”