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Highlights of the important and the interesting from the world of health care:
The best way to control health spending: Sadly, it’s a recession. U.S. health spending grew at the slowest rate on record in 2008, a period that stretches nearly 50 years, according to a report from Reuters. Health spending rose 4.4 percent in ’08, down from a 6 percent rate the previous year. Nonetheless, it totaled a somewhat obscene $2.3 trillion and “devoured” 16.2 percent of our economy, up from 15.9 percent the prior. That translates to about $7,700 per person. The numbers, published in the journal Health Affairs, come from the Centers for Medicare and Medicaid Services, the part of the U.S. Department of Health and Human Services responsible for the government health programs.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Federal health spending rose significantly higher, however, at a rate of 10.4 percent, which brings us to a completely idiotic quote from the U.S. Chamber of Commerce.
“Interestingly enough, it (the report) shows that while Americans were tightening their belts and conserving their funds, the federal government was spending more and more money,” James Gelfand, the chamber’s senior manager of health policy, said in a telephone interview.
One would’ve hoped such a blatantly hyperbolic piece of anti-health-overhaul propaganda (not that there’s anything wrong with opposing the problem-filled proposal) designed to get people to think “Government bad! Americans good!” was below the chamber, but apparently not. Of course, government spending on health care grew, Mr. Gelfand. As the population ages, more and more people will go on Medicare. Further, as people lost their jobs in the worst economic climate since the Great Depression, they lost health insurance and had to receive care from Medicaid, a state-federal health program for low-income people because, you know, they had nowhere else to turn. The alternative to increased federal health spending, Mr. Gelfand, was allowing seniors, the poor and Americans who lost their jobs to go without care and possibly die. Where does the chamber stand on that?
Who needs conference committee? Just when we thought (maybe), we’d get a little relief from Congress’ near-daily back-and-forth on the health overhaul and things would be quiet until next month, we learn that Democrats are considering bypassing conference committee altogether as they seek to reconcile differences between the House and Senate bills, according to this “exclusive” from The New Republic. In an attempt to do an end-run around Republican stall tactics, Democrats are “almost certain” exclude Republicans via a move the report calls “ping pong.” That means that the House and Senate will simply send legislation back and forth until they have an agreed-upon bill, according to the report.
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And that, according to Washington Post blogger Ezra Klein, is a shame for the legislative process. “That means some potentially useful objections will fall by the wayside,” Klein writes. “The obstruction won’t mean health care doesn’t get done. It will just mean it gets done worse.”
NPR details a little more behind the how and why of skipping conference here.
Praying for another bubble: That’s what VentureBeat is doing, after data from National Venture Capital Association and Thomson Reuters reveled that 2008-09 was the slowest market for venture-backed initial public offerings in any two-year period since 1974-75. Last year there were 13 venture-backed IPOs, up from 2008, but still far, far fewer than the 94 from 2004, for a little perspective. The good news is that things likely can’t help but pick in 2010, though it’s highly unlikely the market will be as hot as the halcyon days of the mid-2000s. Who knows, maybe biotech could lead the way.
As for the mergers and acquisitions market, Xconomy finds a “ray of hope” from the end of 2009. Venture-backed firms raised $7.5 billion through mergers and acquisitions and IPOs in the fourth quarter of 2009, the highest total since the first quarter of 2008.
“The fourth quarter has set the stage for an active year in M&As in 2010,” said Jessica Canning, Dow Jones VentureSource’s global research director, in a statement. “As the economy improves, acquirers are gaining confidence in their own financial situation and returning to strategic acquisitions.”
Further severing ties between industry and academia: The company that owns two hospitals affiliated with Harvard Medical School has gone farther than any other academic medical center in restricting outside compensation to doctors from drug companies, the New York Times reports. Yet one doctor affiliated with Harvard says the rules still don’t go all that far. Doctors and other senior hospital officials must limit their daily compensation as directors of drug and biotech firms to no more than $5,000 per and they are also prohibited from accepting company stock for their work. Sounds like a good start, and kudos to Iowa Sen. Charles Grassley for ratcheting up the pressure by looking into the influence of corporate money in medicine. Still, it appears that Harvard’s moves are just baby steps, so let’s not get too excited:
“We’re the first to go in this deep, and we’re still into it only up to our knees,” said Dr. Eugene Braunwald, a Harvard professor and former Partners chief academic officer who was chairman of the policy-writing group.
