Killing Patients and Bilking Taxpayers

I blogged a few days ago about kidney dialysis and how companies like Amgen are ripping off the health care system (see this post for an interesting though tangential response by Bill Peckham, who has lobbied for the bill I criticized.)  The AP is out with a story that fleshes out some of the details, discussing a new study about the drug Epogen which is made by biotech giant Amgen and sold through for-profit dialysis companies Fresenius and DaVita.  Epogen is a costly anti-anemia drug that treats kidney problems, but it's risky and can kill people if the dose level is too high.  The drug even carries a "black box warning", which is the highest warning level a prescription drug can have.  It's also very expensive, and the incentives in Medicare are apparently designed around killing patients and making money for Amgen, Fresenius Medical Care and DaVita.  Medicare pays around $2 billion a year for the drug, and the drug accounts for about a quarter of the revenue for the distribution centers.

The new study found that patients in chain-operated, for-profit dialysis centers consistently are given the highest doses of Epogen, regardless of their anemia status. The for-profit centers increased the drug dose even when patients already had recommended levels of red blood cells. The nonprofit centers did not.

"Patients are at risk here. They need to be reassured that the right thing is being done for them," said study co-author Dennis Cotter of the Medical Technology and Practice Patterns Institute, a nonprofit research group in Bethesda, Md.

Overuse of the drug causes "deaths, strokes and heart attacks".  You can see the list of members who are sponsoring the bill to give these companies even more money here for the House and here for the Senate. The sponsors and cosponsors are as follows:

   * Rep. John Lewis [D, GA-5]:
    * Rep. Shelley Berkley [D, NV-1]
    * Rep. Sanford Bishop [D, GA-2]
    * Rep. Frederick Boucher [D, VA-9]
    * Rep. Dan Burton [R, IN-5]
    * Rep. George Butterfield [D, NC-1]
    * Rep. David Camp [R, MI-4]
    * Rep. Elijah Cummings [D, MD-7]
    * Rep. Barton Gordon [D, TN-6]
    * Rep. Raul Grijalva [D, AZ-7]
    * Rep. Maurice Hinchey [D, NY-22]
    * Rep. Carolyn Kilpatrick [D, MI-13]
    * Rep. Steven LaTourette [R, OH-14]
    * Rep. Thaddeus McCotter [R, MI-11]
    * Rep. James McDermott [D, WA-7]
    * Rep. Michael McNulty [D, NY-21]
    * Rep. Silvestre Reyes [D, TX-16]
    * Rep. Adam Schiff [D, CA-29]
    * Rep. Ellen Tauscher [D, CA-10]
    * Rep. Lee Terry [R, NE-2]
    * Rep. Gerald Weller [R, IL-11]
    * Rep. Albert Wynn [D, MD-4]

   * Sen. Kent Conrad [D, ND]
    * Sen. Barbara Boxer [D, CA]
    * Sen. C. Saxby Chambliss [R, GA]
    * Sen. Thad Cochran [R, MS]
    * Sen. Norm Coleman [R, MN]
    * Sen. Susan Collins [R, ME]
    * Sen. Blanche Lincoln [D, AR]
    * Sen. Patty Murray [D, WA]

The lobbying and funding efforts by the industry groups are impressive. I don't think that all of these members are motivated by a craven pursuit of campaign donations, but it's pretty clear that the general push is coming from those who profit from the bill not from those who need real and honest treatment.  There is no one on the other side who thinks that fixing the dialysis program and cutting the illicit profit out of the system is worth organizing around.  That's a huge problem.

The cost here is in the billions, and there's a real trade-off between this and, say, providing health care to all the kids that don't have it.  We have to go through the medical system and root this stuff out, because it's corrupt and it's killing people.  Which maybe the executives of Amgen, Fresenius, and DaVita don't care about.  But I have a feeling that the research scientists who work in biotech aren't doing their job to produce drugs that are administered inappropriately and harmfully because of bribery.

I'll also point out that the President, CEO, and Chairman of the Board of Amgen is Kevin Sharer, and here's his bio.

From October 1992 to May 2000, Sharer was Amgen's president and chief operating officer. He has been a director of Amgen since November 1992. Before joining Amgen, Sharer was president of the Business Markets Division of MCI Communications. Prior to MCI, Sharer served in a variety of executive capacities at General Electric and was a consultant for McKinsey & Company. Sharer serves on the Board of Directors of Northrop Grumman Corporation, Chevron, and the U.S. Naval Academy Foundation.

So a guy on the board of a major defense contractor and who worked in a senior capacity in a company that turned out to be one of the biggest corporate fraud cases in recent years is leading one of our biggest biotech companies.  And he's a heck of a political donor, pushing tens of thousands to different candidates in 2006 alone.

I guess it's no wonder that he thinks nothing of killing the patients Amgen is ostensibly supposed to serve.  But I don't think that the people at Amgen are on board or even necessarily know about this arrangement.  In fact, there's a lot of ignorance around this whole scheme, which is why it's allowed to happen.

Update [2007-4-28 5:4:9 by Matt Stoller]:: I see Pete Stark has been on the Epogem issue.

There's more...

Budget Bribery and Medical Costs

Now that the Congress has switched sides, we're beginning to see the outline of the centrists who are running economic policy.  The reality is that the progressive movement's real enemies are not the Republicans in Congress, or the DLC, but the business coalitions that fund and control them.  And we're seeing as the switchover of power occurs that these coalitions are changing tactics, moving away from reliable Republicans to Democrats who will do their bidding either unwittingly or on purpose.  And this corruption is behind the spiraling costs in medical care and ultimate it's going to ruin our ability to implement any policies.

Let's take a small example: kidney dialysis.  Kidneys clean your body.  Sometimes they stop working, and when your kidneys stop working, you need to get your body cleaned out in a process called dialysis.  Kidneys fail in lots of people.  Of course, this happens more often to poor people because our society puts them closer to pollution and provides incentives towards a horrible diet.  My doctor friends call it a 'toxic environment' and just leaves it at that.  Anyway, Medicare pays for dialysis, which is a good thing.  What's weird is that Medicare's payment for this social service has a lot of support from a strange coalition - corporate members of the CBC, like Al Wynn, and New Democrats from suburban districts, like Ellen Tauscher, and various Republicans, like Indiana's own Dan Burton.

In fact, John Lewis (D-GA) and Dave Camp (R-MI) in the house and Kent Conrad (D-ND) in the Senate introduced a bill called the Kidney Care Quality and Education Act of 2007.  This bill increases the amount Medicare pays for dialysis, and while it's not supposed to pass, the increase in payments will be tucked into the overall budget process in some unnoticeable legislative corner.

It's strange who's backing this legislation to get more funding for dialysis to poor people: industry groups that usually aren't particularly concerned about matters of social justice.  And of course, this legislation assumes that dialysis is underfunded.  Lots of government services are underfunded, but it's not at all clear that dialysis is one of them.  In fact, the two companies that dominate the field, Fresenius Medical Care and DaVita, are wildly profitable.  For the five years 2002-2006, Fresenius and DaVita generated $1.16 billion and $1.1 billion in net income, respectively.  Operating profit margins are in the mid-teens, and return on equity and assets is significantly higher than the median in health care, and even the median public company.  

More directly, the claims of the sector - that kidney dialysis is unprofitable - are disputed by MedPAC, the government arm set up to make recommendations on Medicare issues.  The 'who's who' pushing the bill through a front group called the Kidney Care Partners are impressive:

Abbott Laboratories, American Kidney Fund, American Nephrology Nurses' Association, American Regent, Inc., American Renal Associates, Inc., American Society of Nephrology American Society of Pediatric Nephrology, Amgen, Baxter Healthcare Corporation, California Dialysis Council, Centers for Dialysis Care, DaVita, Inc., DaVita Patient Citizens, Fresenius Medical Care North America, Genzyme, Medical Education Institute, National Kidney Foundation, National Renal Administrators Association, Northwest Kidney Centers, Renal Advantage Inc., Renal Physician's Association, Renal Support Network, Roche Laboratories, Satellite Health Care, U.S. Renal Care, Watson Pharma, Inc.

What's really going on here is that the biotech companies that make medicine for dialysis want to sell more of it at a higher price, the clinics that make money offering the service want to stiff the government for more money, and doctors want to get paid more as well.  This should be called the 'Doctors and companies that want to be paid more' Association.  And since 2000, lobbyists associated with these groups have spent around $48M for kidney dialysis.  And there's more in campaign contributions - just as an example, Max Baucus got $15K from these people, Kent Conrad got $37K, Republican Dave Camp got $35K, and John Lewis got $18K.  Go through FEC.gov or OpenSecrets and just scroll through donations by the medical sector.  It'll astonish you.

So where's the media on this?  Well, if you look at Open Congress and HR 1193, what you'll see is that there is literally no coverage of this issue except for a few laudatory press releases.  Press releases.  Billions go out the door with little scrutiny except for lobbyists, trade associations, and members of Congress.  Fortunately, these trade associations can be easily caught engaging in this kind of behavior.

The medical system is full of waste, fraud, and abuse.  The for-profit incentive model just doesn't work, because it creates incentives for lobbying and corruption, with no one in control and these coalitions pushing taxpayers for more money.  We have the money for universal health care, it's just sitting in the bank accounts of Amgen, Fresenius Medical Care, and DaVita executives.

There's more...

Guess Who Wants to "Micromanage" the President's Policy on Iran?

I know, I know. Accusing Members of Congress of being inconsistent is kind of like telling a rock that it needs to get more exercise. A knowledgeable Congressional staffer once said: "The first rule of Congress is that if Members have the opportunity to vote opposite ways on the same issue, they will."

Still: a key argument being deployed by Republicans against the Democratic effort to compel the President to accept a timetable for the withdrawal of U.S. forces from Iraq is that Democrats want to "micromanage" the President's policy in Iraq.

These same Republicans - and some Democrats - have opposed or failed to support a provision reaffirming that the President needs explicit Congressional authorization if he wants to attack Iran. They don't want to "tie the President's hands."

Now the American Israel Public Affairs Committee - the same folks who lobbied to remove the provision against an illegal attack on Iran from the supplemental - is pushing to strengthen unilateral U.S. sanctions against Iran. Guess what their proposed legislation - H.R. 1400 and S. 970 - would do? It would micromanage the President and tie his hands.

There's more...

Draft John Lewis for Majority Leader

After looking into the records of both Steny Hoyer and Jack Murtha, I believe that neither of them should be the Majority Leader of the 110th Congress.

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Pelosi is safe - CBC not so much - in leadership stakes

There's been fair amount of imaginative talk (as here, for instance) based on the Chuck Todd morning line on the Dem leadership-to-be.

Let's leave aside the clearly delusional notion that, under his Scenario II, a narrow Dem House win, the netroots will step forth to champion a Rahmbo bid for the Speakership. (That he put forward the notion might be thought to invalidate everything else he says. But, like I said...)

Shorn of the netroots nonsense, Todd's offering is this:

Will, say, 220 House Democrats stay united and elect Pelosi speaker, or will enough conservative House Democrats break and elect a compromise Democrat as speaker? Even the threat of Democrats peeling off and working in collaboration with the Republicans to do so might be enough to encourage a serious challenge to Pelosi inside the Democratic caucus.

There's more...

Diaries

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