Bernstein's number one threat to the US

[brewer12345]

Originally Posted by maddythebeagle

and I think shifts in costs to others as is going on now, but I guess that is a hidden tax. Isnt there already starting to be an issue of some doctors not taking medicare patients? due to low reimbursements? I guess that is just another form of rationing.

This is definately going on. *Look at the 10Q of any Medicare and Medicaid supplier (LNCR, PLMD, CURE to name a few) and you will see voluminous discussions of reimbursement rate cutting. *This is squeeezing some suppliers and putting others out of business. *I've no doubt the same thing is going on at Drs offices all over the place.

[maddythebeagle]

SteveR:

are you a long-term investor in pharma? what do you like?

[modhatter]

There was a WONDERFUL segment by 60 Minutes on Medicare several years back. *In fact *it was the best one they ever did, I think. *They actually got a face to face interviiew with the guy who runs Medicare and *approves pricing limits for what the government will *pay for items billed to Medicare. *It was the most outragous thing you ever saw.

A (one) bandaid *$3.65
Box of Kleanex * *$27.00
Tung suppresser *2.90
Two Asprin * * * *$18.00
Paper Toilet seat covers $19.00

As the items got more expensive, the cost was mind boggeling. I remember one. *A new toilet seat $396.00 *Some items had 3000% markups. *The interviewer just kept asking WHY? *WHY? *WHY??

And we wonder why the system is going broke. *Why can't we as citizens do something? Why do we have to sit here helpless and continue to let this waist and greed go on. *I have always been proud to say I was an American, but the neglect in providing for basic health care in one way or another is absolutely shamefull. *It certainly takes priority over a lot of un-necessary spending today. No one in this country should be deprived of food or medical treatment, period. *That should take presidence over all else.

(Back to the interview - I got a little carried away) The guy just couldn't give him a straight answer. *He was sweating profusely, and looked like he was going to have a heart attact, if they didn't stop with the questions.

I just couldn't believe this guy agreed to be interviewed on camera. *I came away from that show so disgusted. *I sometimes think, that it is mostly Medicare paying for and supporting our Hospitols today.

How do other countries do it. *Many third world countries have wonderful medical hospitols and care for their people dispite their low standard of living.

[SteveR]

Originally Posted by maddythebeagle

SteveR:

are you a long-term investor in pharma? what do you like?

Maddy,

I think the whole industry will be moving sideways for some time. *Look at India drug index funds (have not researched it yet) as that is where the growth will come from for a while since they are the current low cost producer. *The problem is US distribution. *Once they have a major player in the US these companies will be very competitive. *

Otherwise, this sector will stay pretty flat for a while as the market learns that 60% margins are a thing of the past. *Lower profits are a reality not a management failure. *It will take a while for the market to believe this. *

I have no insider information that I can share so you are on your own for the most part. *Research piplelines but be aware that even good drugs can cause major legal issues (i.e., Vioxx). *

[MasterBlaster]

Those Medicare prices are indeed outrageous.

$18 for two aspirin is not just the price for the two aspirin though. It's the price for someone to administer two aspirin to a patient in a hospital environment. There's a big difference. Consider what a high-end restaurant charges for a glass of Iced tea compared to it's cost. The tea is cheap but it's really great to have someone else bring it to you.

Still the $18 aspirin price strikes me as very high.

As someone else posted, it's just another form of unbudgeted cost shifting from the haves to the havenots.

Funny though how the hospitals are still going bankrupt even when they charge those high fees.

[brewer12345]

Originally Posted by modhatter

As the items got more expensive, the cost was mind boggeling. I remember one. *A new toilet seat $396.00 *Some items had 3000% markups. *The interviewer just kept asking WHY? *WHY? *WHY??

Part of this is clearly gummint waste, but a lot of it is not. *I have owned sharres of PLMD for several years now. *They are in a couple of businesses, but basically they supply diabetes testing materials and pharmaceuticals to Medicare beneficiaries via mail-order. *They have to comply iwth over 100,000 pages (!) of regulations. *Guess how much that costs? *Then there are "qui tam" lawsuits to deal with. *These are based on a Civil War era law that allows anyone to sue a contractor to the gummint (even without the gummint having anything to do with the suit) and if they win, the initiator of the suit gets part of the payout. *This stuff is expensive and makes the business far more risky than it needs to be. *As a result, suppliers price their products appropriately. *The toilet seat probably costs $18. *Complying with the useless regulations and dealing with lawsuit risk costs another $380.

[mikew]

A lot of doctors won't accept Medicare patients

Originally Posted by modhatter

How do other countries do it. *Many third world countries have wonderful medical hospitols and care for their people dispite their low standard of living.

One way is to let Americans pay for development of new drugs then demand discounts.

Another is that the average health care is good but difficult diseases are not treated as well as in the US.

[SteveR]

Originally Posted by brewer12345

*Complying with the useless regulations and dealing with lawsuit risk costs another $380.

One reason for health care costs going up so fast for so long is litigation costs. *FDA recently said that they may have been a bit premature in ordering a recall of Vioxx. *That has not stopped the ambulance chasers going after Merk. *4000 lawsuits are pending so far. *

The approval process for drugs takes 12-14 months and requires tons of clinical data to support the safety of the drug. *However, no matter how carefully done they are there is always a chance of some condition or drug combination that can cause a problem that is not seen until the drug is used in the general public. *That is why FDA requires reporting of additional experience data for the first several years after a drug is approved. *

[justin]

Originally Posted by MasterBlaster

Still the $18 aspirin price strikes me as very high.

I know I've been to the doctor for back pain on one occasion, and he said "take some Advil, and stretch a little". I paid $15 to have him tell me to take 2 advil? Of course the ins. co. paid another $50 or so. The $18 for aspirin doesn't seem that high, since a doctor probably recommended it (his time is valuable). That was probably his standard charge for a 0.1 hour unit of time.

[wabmester]

Originally Posted by SteveR

The spread of generic drugs replacing inovator drugs is a huge cost savings for consumers but will eventually be seen in the reduction of new and inovative drugs.* The easy ones have already been discovered and the costs to develp and manufacture new drugs is huge.

Perhaps this is naive of me, but don't you think the genome map will basically create a new inflection point in drug creation? I have no idea what drug development entails, but I imagine it is currently extremely hit and miss. For many of the current crop of drugs, they have no idea what the mechanism of action is. In theory at least, mapping the human genome should allow researchers to directly compare genes of sick vs well people for a wide variety of maladies, and then target very specific expression control, protein synthesis control, etc.

I'm not sure when it'll happen, but personally I look forward to a new wave of drugs in which the mechanism of action is actually known. I was never a big fan of the current sledge hammer approach to medicine.

[SteveR]

Originally Posted by justin

I know I've been to the doctor for back pain on one occasion, and he said "take some Advil, and stretch a little".* I paid $15 to have him tell me to take 2 advil?* Of course the ins. co. paid another $50 or so.* The $18 for aspirin doesn't seem that high, since a doctor probably recommended it (his time is valuable).* That was probably his standard charge for a 0.1 hour unit of time.*

I believe the poster was talking about hospital charges and not individual Dr. office visit charges. *The $18 aspirin includes a ton of mark up for Dr., nurses, and overhead. *The medical products industry sells their wares to most hospitals through buying groups where they may represent 100s of hospitals. *The prices are lock by contract for all members of the buying group for the specified duration of the contract. *So, prices are frozen for the hospital and the lowest rate possible. *That gives them a lot of room for mark up. *That $18 aspirin actually cost the hospital less than a penny each.

The next time you get an IV remember that the manufacturer sold that to the hospital for less than you can get a liter of Coca Cola at the grocery store. *