Guest Essays, Opinion

Guest essay: Savings should be passed to patients

Funds shouldn’t be used for climate change

By Elliot Simon

Sen. Joe Manchin spent much of last year battling the Democrats’ multi-trillion-dollar “Build Back Better” package. Thankfully that monstrosity of a bill is largely behind us.

But now, Manchin is putting forward his ideas for what a slimmed-down alternative could look like. And it’s not much better than the original. His proposal would green-light flagrant Washington spending, while failing to help West Virginians in the ways we need most.

For instance, Manchin says one of his top priorities is to lower the price of medicine for patients — a worthy goal. More than a quarter of Americans find it difficult to afford their treatments, according to the Kaiser Family Foundation, and that figure is higher for people with multiple or chronic conditions.

But Manchin’s new proposal would actually undermine his goal of helping patients. He wants to impose government price controls — which Democrats euphemistically call “negotiated” prices — on what Medicare pays companies for prescription medicine.

This proposal could and probably would inadvertently put many of West Virginia’s doctor’s offices and clinics out of business. It’s important to note that medical professionals don’t have to accept Medicare patients at all. If reimbursement rates are cut once again, it just gives one more reason for a practice to stop serving the Medicare population, thus making it tougher for people in that already vulnerable group to receive needed and necessary care.

The “negotiated” prices that Medicare would pay would mean  the administrative fees  doctors receive would plummet as well. For example, a clinic that dispenses a $10,000, state-of-the-art cancer treatment currently receives $600. Under the new proposal, administrative fees could be cut by as much as 40%, so the clinic’s fee would be reduced to $360.

Clinics have high fixed costs, from rent to labor. A 40% drop in revenue would, at best, necessitate mass layoffs and a reduction in services. At worst, many clinics would close altogether — that’s exactly what has happened in the past when Medicare cut reimbursement rates.

And it’s not as if taxpayers would at least benefit at patients’ expense. The proposal reallocates revenue generated from Medicare savings to offset government spending on addressing climate change.

If we really want to lower drug costs for patients, there are policies that would accomplish the goal directly. For example, when drug-industry middlemen — specifically pharmacy benefit managers and insurers — receive discounts from drug makers, there should be a way to ensure that most of those discounts are passed on to consumers.

Last year, West Virginia became the first state to require this for PBMs and private insurers in the state. A federal law requiring the same thing would save Americans millions at the pharmacy counter.

Another smart reform would be a cap on patients’ annual out-of-pocket costs. This would be a benefit for the more than one-third of West Virginia adults who suffer from chronic conditions.

More federal spending on anything right now would make inflation worse. So it’s particularly senseless to spend billions of dollars on wasteful Green New Deal-style programs — while jeopardizing patients’ access to doctors and doing little to reduce what they actually pay at the pharmacy.

Elliot Simon is the president of the Eastern Panhandle Business Association.