Latest news with #SallyPipes
Forbes
30-07-2025
- Health
- Forbes
Medicaid At 60: A Safety Net In Need Of Serious Repair
"The One Big Beautiful Bill Act, signed into law earlier this month, will address some of Medicaid's ... More biggest flaws," writes health policy expert Sally Pipes. "But it's left many others in place." Today, Medicaid turns 60. But this will be no diamond jubilee. What began in 1965 as a modest safety-net program has ballooned into the largest health entitlement in the country, covering nearly 80 million Americans, costing close to $900 billion a year, and delivering poor value for both patients and taxpayers. The One Big Beautiful Bill Act, signed into law earlier this month, will address some of Medicaid's biggest flaws. But it's left many others in place. President Lyndon B. Johnson created Medicaid to provide health coverage for truly needy populations: the disabled, blind, low-income elderly, and destitute children. In the 1980s, Congress added coverage for low-income pregnant women and children. The federal government covers between 50% and 77% of the cost for this 'legacy' population. In 2010, Obamacare expanded Medicaid eligibility further, to millions of able-bodied, working-age adults with incomes up to 138% of the federal poverty level. Tens of millions have enrolled under this provision. The federal government provides nine dollars in matching funds for every one dollar a state spends on this expansion population. The result? Medicaid's price tag has soared. In 2023, the program cost taxpayers $870 billion—up 8% from the year before. At this pace, it will surpass $1 trillion annually before the end of this decade. The millions of people enrolled in Medicaid do not receive quality care. One in three physicians refuses to accept new Medicaid patients, in part because the program pays them less than Medicare—and much less than commercial insurance. One review found that Medicaid enrollees were three times less likely to secure a specialist appointment compared to those with private insurance. These access problems fall hardest on the most vulnerable Medicaid beneficiaries. A 2018 report from the Foundation for Government Accountability found that more than 650,000 disabled Americans were languishing on waiting lists for home and community-based services. Nearly half were in states that expanded Medicaid to able-bodied adults. The program's design actively fuels that inequity. States receive more money from the federal government for expansion enrollees than 'legacy' enrollees. That discrepancy offers states a perverse incentive to prioritize enrolling healthy adults over those most in need. Medicaid's funding formula also encourages states to expand their programs. After all, every dollar they spend attracts at least one more dollar from the federal government—and sometimes as many as nine. And then there are the staggering levels of waste and abuse endemic to Medicaid. The government itself projects that Medicaid's improper payment rate in 2023 was nearly 5.1%—which equates to more than $31 billion in misspent funds. Independent estimates suggest the scope of the problem is much larger. According to the Paragon Health Institute, the program's improper payments reached $1.1 trillion over the last decade—roughly double the government's estimate. There's plenty the federal government can do to restore some sanity to Medicaid. The One Big Beautiful Bill Act represents a start. It put curbs on 'provider taxes,' whereby states extract revenue from hospitals and other providers, send the money back to them in the form of higher reimbursements, and claim matching federal funds in the process. The new law also directs states to perform more frequent eligibility checks. These routine redeterminations would ensure Medicaid benefits go only to those who still qualify—preserving access for the truly needy while reducing waste. Further, OBBBA will require able-bodied adults to work or otherwise contribute to their communities as a condition of receiving Medicaid benefits. This change alone could deliver more than $300 billion in savings over 10 years—and help people transition from dependency to private coverage and greater opportunities. Even with these significant changes, Medicaid spending is still projected to increase by 3% a year through 2034. That's not fiscally sustainable. Consequently, Congress will have to take another run at Medicaid reform soon. Lawmakers should revisit the inequity in Medicaid's funding formula that prioritizes enrolling the able-bodied over the truly needy. Not only is that perverse—it's expensive. Equalizing the federal match rate for all enrollees would save billions. Six decades in, it's time to stop treating Medicaid as untouchable. Through genuine reform, we can preserve the program for those actually in need—and ensure taxpayers are no longer forced to bankroll a failing system.
Forbes
21-07-2025
- Health
- Forbes
The Big Beautiful Bill Fixes One Drug Problem—But Highlights An Even Bigger One
"It's a good thing that the Orphan Cures Act was added to the One Big Beautiful Bill Act," writes ... More health policy expert Sally Pipes. "But it would be better had the legislation not been necessary in the first place." Buried within the One Big Beautiful Bill Act, which President Donald Trump signed into law July 4, is a provision that could improve or even save the lives of the 30 million Americans suffering from rare diseases. That provision is the Orphan Cures Act, which exempts certain drugs that treat rare diseases from the scheme of price controls Democrats established in Medicare as part of the 2022 Inflation Reduction Act. The first round of price controls takes effect on ten medicines dispensed through the Part D drug benefit in January 2026. This exemption is common sense. Why should federal policy discourage companies from investing in drugs that treat rare diseases—defined as those that afflict fewer than 200,000 Americans per year—by threatening them with price controls? But that's exactly what the IRA did. Drugs that were approved for treating just one rare disease were carved out from the law's price controls. But if a manufacturer secured approval for a second indication for a given rare-disease drug, then it lost that exemption. That's obviously not in patients' interests. Shouldn't public policy encourage pharmaceutical companies to investigate whether their drugs have multiple applications? Thousands of rare diseases lack effective therapies of any kind. The IRA, wittingly or not, aimed to keep it that way. It's a good thing that the Orphan Cures Act was added to the One Big Beautiful Bill Act. But it would be better had the legislation not been necessary in the first place. The IRA's price controls stifle pharmaceutical innovation. The Incubate Coalition's Life Sciences Investment Tracker shows that drug companies have discontinued more than 50 research programs and canceled 26 drug projects since the passage of the IRA. And there's evidence that companies have been curtailing their research into orphan drugs, in particular. According to the National Pharmaceutical Council, 'the percentage of drugs with a first orphan designation that later received a second designation decreased by 48.0%' after the Inflation Reduction Act passed. That's especially shocking considering that, over the four years prior to the passage of the bill, the number of orphan drugs that received a second indication had been steadily increasing. Orphan drug research may be an especially risky proposition. But developing more mainstream drugs is hardly a blue-chip process. It costs $2.6 billion and can take more than a decade for companies to bring a single new drug to market. Roughly one in ten drug candidates successfully makes it from phase one clinical trials to the market. Drug development would almost certainly be a money-losing industry more often than not, were it not for the fact that pharmaceutical companies in America have a period of exclusive, market-driven sales during which they can earn a return on their investment. The money they earn from the drugs that do get approved allows them to recoup their losses from failed drugs and earn enough money to invest in future lines of research. Price controls upend that economic calculus. If drug makers know that the government will swoop in and set arbitrarily low prices on the products they manage to bring to market, they'll be discouraged from investing the billions it takes to do so. The IRA's price controls could lead to the development of 135 fewer drugs by 2039, according to one study. That disruption in innovation could cost the United States $18 trillion in 'health losses' in the same window, according to research from University of Chicago economist Tomas Philipson. The inclusion of the Orphan Cures Act in the One Big Beautiful Bill may ward off some of those potential losses. But making a single exemption to the IRA is not enough. Congress must roll back price controls on prescription drugs altogether.
Forbes
07-07-2025
- Health
- Forbes
A Promising New AIDS Drug Highlights The Dangers Of Price Controls
"The progress that science has made against HIV/AIDS is nothing short of remarkable," writes health ... More policy expert Sally Pipes. The U.S. Food and Drug Administration approved a shot last month that effectively prevents HIV. At-risk people simply need to receive the injection every six months. The new drug, called lenacapavir, comes almost exactly 44 years after the first case of AIDS was reported by what's now known as the Centers for Disease Control and Prevention, or CDC. The progress that science has made against HIV/AIDS is nothing short of remarkable. For much of the last four decades, a diagnosis of HIV/AIDS was a death sentence. At the peak of the AIDS crisis in 1995, the death rate for HIV/AIDS was just over 16 for every 100,000 people. By 2019, it had fallen to just over one per 100,000. This progress was due almost entirely to advances in pharmaceutical treatment, which turned AIDS from a deadly plague to a chronic condition. Some 16.5 million lives were saved by AIDS drugs between 2001 and 2021. According to the World Health Organization, in 2023 around 72% of people living with HIV/AIDS had a suppressed viral load—meaning the disease was undetectable and mostly untransmittable, thanks to medication. And now, lenacapavir has been shown to provide 'a near-perfect shield against HIV infection,' as the New York Times put it. But the drug was not invented overnight. It's been in the works for 20 years, the product of countless scientists engaging in costly, high-stakes research. The fact that lenacapavir will soon be available to patients is a testament to the strength of America's biopharmaceutical sector. Unfortunately, lawmakers are working to upend the very system that makes drugs like lenacapavir possible. Democrats have long sought to impose European-style price controls in the United States. Republicans—including President Trump, who has expressed enthusiasm for price controls on prescription drugs—are embracing similar plans in increasing numbers. Researchers first isolated the molecule that would become lenacapavir in 2016. That discovery was itself the end result of two decades of research. It would take another 10 years for researchers to bring that molecule to market. As Dr. William Pao noted in a recent STAT News piece, 'Lenacapavir breaks all of [the] rules' of HIV/AIDS treatment. By the time it was isolated, there were already a number of effective HIV/AIDS treatments on the market. Developing a new, unconventional treatment didn't make much sense. But, as Pao notes, '[E]very challenge can be turned into an opportunity for innovation with some creative thinking, and that is exactly what Gilead did.' Bringing a new drug from the lab to the market—even one less innovative than lenacapavir—is risky and expensive. It takes between 10 and 15 years and costs around $2.6 billion, on average. Of every 100 drugs that enter clinical trials, fewer than eight ever make it to pharmacy shelves. Drug companies use the money from successful drugs to offset the cost of failures. And they're willing to take a chance on new projects precisely because they know that, in the United States, they will have an opportunity to recoup and earn a return on their investments. The economic reality in countries that impose price controls on pharmaceuticals is different. Those price caps limit drug companies' potential return on novel medicines. So they tend to delay entry into those markets. One study found that, as of October 2022, patients in Canada had access to just 45% of drugs launched worldwide between 2012 and 2021. For patients in the United Kingdom, the corresponding figure was just 59%. In the United States, patients had access to 85% of those drugs. Yet American lawmakers are still working to implement price controls here. The Trump administration recently revived the 'most favored nation' policy from 2020, which would link the U.S. prices of drugs to the lowest price paid in other developed countries. If this system had been in place 20, 10, or even five years ago, it's possible that lenacapavir never would have made it to market—to say nothing of the countless other drugs for AIDS and other diseases that have been developed in recent years. For future patients' sake, let's hope lawmakers abandon their plans to impose price controls—and allow a healthy market for pharmaceuticals to flourish.
Forbes
23-06-2025
- Health
- Forbes
Physician-Assisted Suicide Is A Bigger Problem Than We Realize
"We may seem a long way from legalizing physician-assisted suicide in the United States," writes ... More health policy expert Sally Pipes. "But it wasn't very long ago that such a thing seemed unthinkable in Canada, too." Dovie Eisner was born with a rare genetic condition called nemaline myopathy. He requires a wheelchair and has a host of other health problems. Last year at one point, he stopped breathing, passed out on the street, and was taken to the emergency room. 'I was alive—thanks to the determination of law enforcers and local medical personnel to keep me that way,' Eisner wrote recently in UnHerd. But, he warns, a law being considered in his home state of New York 'threatens to undo this presumption in favour of lifesaving' that motivated first responders to keep him alive. The bill, called the Medical Aid in Dying Act, would allow mentally competent adults with six months or less to live 'to obtain a prescription that would put them to sleep and peacefully end their lives.' New York is not alone. Seventeen states—including Florida, Massachusetts, and Pennsylvania—are considering so-called 'death with dignity' laws. Eleven states and the District of Columbia already have them on the books. Advocates say these laws spare the terminally ill from unnecessary suffering. But a closer look at Europe and Canada—where physician-assisted suicide has been legal and common for years—paints a darker picture. Far from providing peace to terminal patients, these laws are often used by government-run healthcare systems to nudge sick patients toward ending their lives. The United States may not have a completely socialized system of medicine yet. But the government covers nearly half of all healthcare expenditures in this country. Over the past 40 years, its share of the nation's health bill has been growing, slowly but surely. At some point, it may have a financial incentive in hastening people toward their demise. Around 8,700 Americans have died by assisted suicide since 1997, when Oregon became the first state to legalize the practice. That's around 300 people annually. For comparison, some 3 million Americans die every year. In other countries, assisted suicide is a much more common cause of death. In the Netherlands—the first country to legalize the process, in 2002—more than 5% of annual deaths are due to medically-assisted suicide. In Canada, more than 15,000 people died by physician-assisted suicide in 2023—4.7% of total deaths. Canada only legalized physician-assisted suicide in 2016. Until last year, the rate of assisted suicide north of the border rose around 31% annually. The majority of Canadians choosing 'medical assistance in dying' are between 65 and 80. But the number of Canadians aged 18 to 45 opting to end their lives by MAiD has been increasing each year. There were just 34 in 2017—but 139 in 2021. Those numbers are likely to grow as Canada continues to expand the pools of people eligible for physician-assisted suicide. The government has already expanded the law to include those who are not terminally ill but living in circumstances they themselves deem 'intolerable.' Now, the United Kingdom is considering similar legislation. Last week, the House of Commons greenlit a bill that would allow terminally ill adults in England and Wales to take their own lives with a physician's help. The legislation is moving on to the House of Lords. Proponents of these policies may characterize them as compassionate. But it's impossible to ignore the Canadian government's financial interest in having one less person who needs government-funded health care. The Canadian government certainly acts on that interest in other ways—most notably by denying access to cutting-edge prescription drugs. Just 45% of new drugs launched worldwide between 2012 and 2021 were available in Canada as of October 2022. Eighty-five percent were available in the United States. The Canadian government's calculus could apply on this side of the border. The federal government already pays for Medicare coverage for 68 million people. That number will grow as the population ages. And Medicare has shown that it will restrict access to some forms of care, through its Coverage with Evidence Development framework. Some 22 devices, services, and therapies are subject to these restrictions, as of 2023. Medicare defends those restrictions by saying it needs more evidence of clinical benefit. But some of those restrictions have been in place for a decade or more. A skeptic might reasonably wonder whether Medicare is holding back because of unspoken concerns about cost. There's no doubt that medical assistance in dying will be effective—if the goal is to save the government money caring for the elderly. We may seem a long way from legalizing physician-assisted suicide in the United States. But it wasn't very long ago that such a thing seemed unthinkable in Canada, too. Let's hope lawmakers stateside change course before it's too late.
Forbes
09-06-2025
- Health
- Forbes
This Groundbreaking Insurance Reform Is Buried In The Big, Beautiful Bill
"The legislative package would codify and expand Individual Coverage Health Reimbursement ... More Arrangements, which the first Trump administration introduced in 2019," writes health policy expert Sally Pipes. There are more than 40 healthcare provisions in the One Big Beautiful Bill Act (OBBBA) that passed the House of Representatives by a one-vote margin last month. One, in particular, deserves more attention than it is getting. The legislative package would codify and expand Individual Coverage Health Reimbursement Arrangements, which the first Trump administration introduced in 2019. ICHRAs allow employers to give workers untaxed dollars, which they can use to purchase health insurance on the individual market. In many ways, ICHRAs are the health insurance equivalent of retirement accounts to which employers make defined contributions. These accounts have the potential to make health insurance more accessible and affordable for not just employees but employers, too. As the Manhattan Institute's Chris Pope notes in a recent study on ICHRAs, 117 million Americans between the ages of 19 and 64 received insurance from employers in 2023. Just 16 million bought insurance on the individual market. In some ways, this makes sense. Employer-sponsored health insurance is familiar. Enrolling in an employer plan spares workers the hassle of having to navigate the individual market. But today, health insurance is actually cheaper on the individual market than when purchased by employers. So employers embracing ICHRAs could save themselves and their employees a lot of money. And by putting individuals in charge of their own health insurance needs, ICHRAs can unleash the kind of market forces that help drive down costs and improve value in every other sector of the economy. People are more responsive to market signals when they are enrolled in individual market plans. One study found that a 1% premium increase leads to a 1.7% drop in individual market plan enrollment. By contrast, a 1% premium increase in the employer market causes enrollment to drop by between 0.2% and 0.8%. This finding reveals one of the main problems with employer-sponsored insurance—it obscures the cost of health coverage. Employees have no incentive to seek out more affordable providers or services when someone else is paying the bill. Providers are aware of this market dynamic, which means they are constantly, as Pope puts it, 'needlessly inflating costs.' That's why, he goes on to note, 'Starbucks spends more on health care for its workers than it does on coffee.' Increased adoption of ICHRAs would disrupt this status quo. Employers' costs would decline. Employees spending their ICHRA money would have a strong incentive to pick a health plan that suits their needs and budget, rather than the one-size-fits-all plan that most employers offer now. And by putting consumers in charge of their own healthcare dollars, ICHRAs could foster the kind of competition among both insurers and providers that drives down costs and improves value over the long term. One study found that expanding the number of plan options for employees can provide benefits equal to 13% of premiums. Decoupling health insurance and employment has a number of downstream benefits for workers of all stripes. For instance, it encourages entrepreneurship by giving people the security to leave their jobs without fear of losing health coverage. And it offers a suitable coverage option for part-time workers, only 26% of whom currently receive health insurance from their employers. ICHRAs could also make it more financially realistic for small businesses to offer health benefits. Just 56% of those who work for firms with fewer than 50 employees get an offer of insurance through their jobs. Cost is typically the chief impediment. ICHRAs would help remove that barrier. These accounts have only been around for five years. But Americans are waking up to their benefits. Around 500,000 people were enrolled in ICHRAs in 2023. The nonpartisan Congressional Budget Office estimates that around 2 million workers will be enrolled in these plans by 2032. And that's if nothing else changes. If the big, beautiful bill passes as written, it will rebrand ICHRAs as CHOICE plans—a less confusing acronym that experts hope will encourage more businesses to adopt them. After codifying Trump's ICHRA rule in law, lawmakers could consider something like Pope's proposal for a Worker's Choice ICHRA, which would allow employers to offer both ICHRAs and traditional insurance plans by guaranteeing coverage parity between the options. Americans deserve more choice in their health benefits. Expanding access to ICHRAs would give it to them.
