Monday, May 15, 2006

A Belated Mother's Day Post

by Ken Houghton

Von Clausewitz Shows the Way--to the 7Ps of the Administration

The New York Times buried the lede, which presents the Scope of the Issue:
"The Medicare drug benefit is the biggest thing that's happened to the health care system and to the pharmaceutical industry in the last three decades," said Sidney Taurel, chairman and chief executive of Eli Lilly & Company. "The government --federal and state -- is becoming a bigger purchaser of drugs, in our case going from 30 percent to 50 percent of our total sales." [emphasis mine]

Readers of this blog know Tom's rational disdain for Medicare Plan D, with its donut, its explicit prevention of competition, and its concomitant high cost. My irrational, passionate argument against it is a simple one: an unfunded mandate with arbitrary deadlines and a lack of planning, training, and education doesn't make a working concept. (This is the bedrock theory of Project Management, which a co-worker accurately describes as "The 7Ps": P*ss-Poor Planning Produces P*ss-Poor Projects.")

Clear signs that Part D has fallen victim of the 7Ps include:
"There seems to be a panic out there right now," said Brian D. Caswell, who runs a pharmacy in rural Baxter Springs, Kan. "Many of the people who waited this long spend only $30 a month on drugs, and they're being asked to spend about $30 a month on premiums for a prescription drug plan. They need help making a decision."

Carol H. Carter, an insurance counselor at LIFE Senior Services in Tulsa, Okla., said today: "It's pretty crazy around here. We are overwhelmed. We can't help everyone who has called. At the end of the day, there will be some people who do not receive individual help because they waited to the last minute." [all emphasis mine]

That last piece of bollocks looks like positioning: "Well, we need to charge all those people even more for even less service because they didn't ask us to help them until it was too late."

Another clear sign of the 7Ps is when FUD is used instead of a rational argument:
The first lady Laura Bush and Michael O. Leavitt, the secretary of health and human services, went to a church in Washington to broadcast a final message. "Even if you are not taking any medications, it's really important to go ahead and sign up now," Mrs. Bush said. "As you age, it's likely that you will add medications to your health care."

So spend money now because you might need to spend it later. This is a standard of insurance, and certainly the premia are designed to cover the expected lifespan of the target group. (This is why insurance companies hire actuaries.)
The [late enrollment] penalty will increase future premiums by 7 percent or more.

In short, it is a punitive, not a necessary, action. So what was the Business Process that was supposed to make the penalty affect only those who truly procrastinated?
For months, the Bush administration has been urging insurers to hire additional telephone service workers to cope with today's expected last-minute surge in enrollment.

Someone more familiar with the actual machinations of the past several months than I needs to examine this statement, which strikes me as P*ss-Poor Planning on so many levels it's not funny.

The most obvious of those is that those extra, untrained, operators don't appear to solve any of the three primary issues:
Sherry Whitman, a state insurance counselor who serves 15 counties in the Upper Peninsula of Michigan, said people had three basic reasons for not enrolling. Some [1] have health insurance from a former employer or other source and do not need Medicare drug benefits, Ms. Whitman said. "Some have [2] no health problems, don't take any prescriptions and want to take their chances," she added. " [3] Others don't want to be bothered. The new program is too complicated for them." [emphasis mine]

People in the first category are not going to sign up no matter what the possible penalty is.* People in the second category can be assumed to have made the rational decision to sign up later, when they might need the program, instead of at the current "discounted" rate.

It's the people in that third category who probably make up most of the 5.5 million recipients estimated not to have coverage. And no matter how glibly one might accuse them of not "want[ing] to be bothered"--a contention rather refuted by Ms. Carter's admission quoted above--the proof of the pudding is in the eating: PPPPPPP.

Good luck, Mom. Hope you guessed right.

UPDATE: Via Mark Thoma, Paul Krugman presents the case with lucidity and temperance. Select highlights (read the Whole Thing):
It appears that millions of Americans, confused by the array of competing plans or simply unaware of the cutoff date, will miss the deadline. This will leave them without drug coverage for the rest of the year, and subject to financial penalties for the rest of their lives....

President Bush refuses to extend the sign-up period. "Deadlines," he said last week, "help people understand there's finality, and people need to get after it, you know?" [except in Iraq, of course - klh] His real objection to extending the deadline is probably that this would be an implicit admission that his administration botched the program's start-up....

Adding drug coverage as part of ordinary Medicare would also have saved a lot of money, both by eliminating the cost of employing private insurance companies as middlemen and by allowing the government to negotiate lower drug prices. This would have made it possible to offer a better benefit at much less cost to taxpayers....

Instead of providing drug coverage directly, Part D is a complex system of subsidies to private insurance companies. The administration's insistence on running the program through these companies, which provide little if any additional value beyond what Medicare could easily have provided directly, is what makes the whole thing so complicated. And that complication, combined with an obvious lack of interest in making the system work, is what led to the disastrous start-up.[emphasis mine]
Comments:
... And then there as those of us who thoughtfully, carefully, positively decided that this program is a SCAM! It would cost me $550 a year MORE than paying for my Diovan and Lipitor IN CASH!! The penalty would be about $32. DO they think I'm STUPID?!?! (Yes, I'm sure they do!)
 
I applaud your blog,i took zyprexa which was ineffective for my condition and gave me diabetes.

{Only 9 percent of adult Americans think the pharmaceutical industry can be trusted right around the same rating as big tobacco}

Zyprexa, which is used for the treatment of psychiatric disorders, such as schizophrenia and bipolar disorder, accounted for 32% of Eli Lilly's $14.6 billion revenue last year.

Zyprexa has been linked to causing diabetes and pancreatitis.

Did you know that Lilly made nearly $3 billion last year on diabetic meds, Actos,Humulin and Byetta?
Yes! They sell a drug that causes diabetes and then turn a profit on the drugs that treat the condition that they caused in the first place!
----
Daniel Haszard http://www.zyprexa-victims.com
 
Refer to Diabetes for
useful information
 
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