The Donut Hole Gets Real

 

Like most people my age I am taking some medications regularly and got the text message today from my pharmacy that I could pick up one of those prescriptions. The medication is a commonly prescribed medication from a group of medicine called  Non-Vitamin K antagonist oral anticoagulants or NOACs.  The medication is apixaban or Eliquis. People commonly take it to prevent blood clots or emboli and the complication including stroke, thrombosis, and pulmonary emboli. I have been taking it for about 2 years.

I usually get a prescription for 180 – 5 mg tabs and the last time I picked it up was on May 25, 2023.  At that time there was a copay of $94.  I am on Medicare A and B and a Medicare Supplemental Policy.

This time as I drove through the line the pharmacist told me the copay was $500. I asked him to clarify what had happened, but he had no idea.  Even though I had all of my previous refills at this pharmacy he had no idea what had happened and advised me to call the insurance company. When I got home that is exactly what I did. They advised me that this was the standard coverage gap for prescription drugs also known as the donut hole.  The insurance company pays for $4660 worth of medication (in my case almost all apixaban) and at that point copays stop and the patient is responsible for a flat 25% of the total cost of the medication or the $500).  When the patient incurs a total of $7,400 in pharmaceutical costs the number falls to 5% of the total, but by then it is probably a new year and the running tally resets. The customer service rep told me that I might be able to apply for assistance through company or state program, but they all had low-income requirements.

The donut hole started in 2006 as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. All Medicare Part D plans have it. It initially required patients to pay 100% of the drug cost during the coverage gap.  That was reduced to the current 25% by the Affordable Care Act (ACA) passed in 2010. By 2025 there will be a cap of $2,000 for costs incurred in the coverage gap. 

It turns out that apixaban is number 10 on the list of 17 most expensive drugs purchased through Medicare programs.  In 2019, the average person taking it spent $7,234 for 12 refills per year and $2,172 in out-of-pocket costs.  A reform of this pricing has been suggested but obviously has not been done since I am paying about the 2019 list price.   The top drugs on this list are easily not affordable for many people. The cost of the top 5 agents are $16,348 to $182,162 per year with out-of-pocket costs ranging from $3,242 to $11,532 due to the coverage gap (1).  Apixaban in the single largest Medicare Part D expenditure at $12.5 billion per year (last filed in 2021).

Flashbacks of my work in acute care. For 22 years, I treated low to no income people in acute care settings. I was lucky to work with excellent social workers who would exhaust every available resource to help them with funding for medical care and housing.  Getting their medications funded was a chronic problem.  People on Social Security Disability do not get a lot of money each month.  At one point the state instituted a spenddown.  That meant if you were hypothetically making $1,000/month in disability payments, the state could demand that you spend a significant portion of your disability on medications before they would add any additional money for that purpose.  It is not possible to live very well – if at all under those financial constraints.

One of our attempts to adapt was to use the company scholarship programs to get them assistance from pharmaceutical companies. With many patients that took a great deal of coordination and filling out forms.  It also required nursing time for both the paperwork and an additional effort to manage free samples of medication. We were often scrambling to find medications in urgent situations or because one of the authorizations had lapsed.  All the samples also had to be catalogued by lot number in case there was a recall of that medication. I did not look forward to dealing with the forms or samples but realized we had to do it or some people would not get the medication they needed.

Today the tables were turned and I was looking at an arbitrary payment or I would not get the medication.  I have also heard this story many times. People unable to pick up a needed medication because of the copay – leading to an abrupt discontinuation or attempting to stretch out an existing medication until the first of the year. You really cannot stretch out an apixaban prescription.  I have read many news stories about people trying to stretch out their expensive forms of insulin resulting in medical compromise and death. I was lucky enough to have savings to cover the $500.

What are the problems with the donut hole?  I can think of at least 4:

1: It kicks the can down the road (also known as cost shifting). When confronted with these large payments, I can imagine a lot of people tell the pharmacist to forget about it and drive away. In the case of this medication that can lead to strokes, pulmonary emboli, thrombosis of large blood vessels, and/or death.  Treatment typically involves hospitalization and possible nursing home placement.  Worst case scenario might involve death, prolonged rehabilitation and the hospital or nursing home eventually seeks all of a patient’s assets to cover the accumulating bills.  All of those events could have been prevented with the prescribed medication.

2:  The structure of this billing is an incentive for pharmaceutical companies to increase prices since that will cause benefits to hit the wall earlier and cause the patient to enter the coverage gap and to pay more cash.  In fact, it is an obvious way to extract the maximum payment from both the insurance company and the patient. 

3:  It is another classic example of how politicians work to subsidize businesses in a non-transparent way.  I know more about medical billing than most people but I had no idea I was turning over $500 today until I was advised by the pharmacist.  

4:  This is a clear example of why the Republican and Libertarian ideas about "free market" healthcare are false.  In other words, we would choose to pay for what we really wanted in a free market and pay those market prices.  Obviously, anyone would pay $500 (or more) to prevent a stroke - but not if it means not eating.  The politicians involved will say: “well yes – but there is no free market.”  Of course, there is no free market. The market is actively manipulated to optimize profits for health care companies and minimize guidance from physicians.  That is the political system in the US. No doctor that I know of wants to prescribe a medication and hear at some point that the patient could not afford to take it. Sometime that news is very slow and the prescribing doctor does not find out until they see the patient back in a couple of months.

Don't ever think that American "free market" capitalism is a big deal in health care.  It is a big deal when politicians work with businesses to give them access to your assets and allows other businesses with more focal products like pharmaceuticals to charge whatever they want. There is no better example than the donut hole.  The cost savings that these companies promised is not from cost containment, but from rationing and that is a big difference. 

 

George Dawson, MD, DFAPA

 

References:

Dusetzina SB. Relief in Sight - Estimated Savings under Medicare Part D Redesign. N Engl J Med. 2021 Dec 23;385(26):e93. doi: 10.1056/NEJMp2116586. Epub 2021 Nov 10. PMID: 34758246.

Supplementary 1:

I downloaded this list of medication arranged by total Medicare Part D expenditure from the CMS web site on 8/26/2023.  The most recent data they have is for 2021.  Medications for psychiatric indications do not appear until # 24 Invega Sustenna and #31 Latuda.  More than a little interesting because psychiatrists have endured medication based attacks for over 20 years - primarily on grossly inflated conflict of interest concerns, pharmaceutical company profits concerns, and drug safety.  Many of those attacks continue today even though most of these medications are inexpensive generics and much of the rhetoric has lost its punch.  These same critics apparently have no similar concerns about significantly more profitable and higher risk medications.  That adds to my commentary in this post. 

Supplementary 2:  The Medicare Part Drugs selected for HHS negotiations with manufacturers include the following.    There is some overlap with the most expensive medication listed above but Farxiga, Entresto, Enbrel, and the list of diabetes mellitus medication are not on that list. For more information on the list click on the link at the bottom of the table. 

Medicare Drugs Selected by HHS for Price Negotiations

Eliquis

Jardiance

Xarelto

Januvia

Farxiga

Entresto

Enbrel

Imbruvica

Stelara

Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

https://www.hhs.gov/about/news/2023/08/29/hhs-selects-the-first-drugs-for-medicare-drug-price-negotiation.html

 

 

Graphic Credit:

Evan-Amos, Glazed Donut Public domain, via Wikimedia Commons"

Link:

https://commons.wikimedia.org/wiki/File:Glazed-Donut.jpgalt="Glazed-Donut

File:

https://upload.wikimedia.org/wikipedia/commons/thumb/a/a5/Glazed-Donut.jpg/512px-Glazed-Donut.jpg

 

 

 

 

 

 

 

 

Accountability - The Last Refuge of a Scoundrel

On April 7, 1775, Samuel Johnson said:  "Patriotism is the last refuge of a scoundrel."  His biographer had to clarify that Dr. Johnson was not talking about love of country but "pretend patriotism which so many have made a cloak for self interest".  We see the rhetorical application in American elections where politicians spend more time on discussions of their military records rather than issues relevant to any kind of plan that they have for the nation or solving any real problems.  Nunberg makes the observation that that the term can also mean an irrational bias favoring one's country and that Americans have applied the term indiscriminately at times. He also points out that it can be a word designed to put people on the defensive.  

If I had to pick a word in the medical field that has similar uses - it would be "accountability".  There has probably been no single word more responsible for facilitating managed care and recent government intrusions into the practice of medicine.  If you think about the premise of physicians being "accountable" to politicians and businesses - it is absurd on the face of it.  Taking a professional who has been trained to be accountable to an individual patient and who operates in a professional environment that specifies behavior toward that person and telling them that they are now going to be monitored by businesses with a goal of maximizing profits or politicians with numerous conflicts of interest and a clear interest in getting re-elected - is an ongoing disaster.  So  how has it happened?  I would suggest that most of it has to do with rhetoric.

Before I point out the medical applications of the accountability rhetoric let me say that I don't consider this to be specifically applied to medicine.  Accountability rhetoric is broadly applied by any person or group seeking some kind of political advantage.  An obvious example is education and teaching.  Politicians everywhere get a lot of mileage out of the idea that they are going to hold teachers accountable usually through standardized test scores.  It has become a pat answer to taxpayers concerns about the money being spent on education and low graduation rates.  In some states, the test scores are marched out every year and used to rank schools and teachers.  Never mind the fact that the school system that produces the top international performance scores does not work that way.  In Finland, a professional teaching culture is by far and away the most significant factor in their academic excellence.  In the book written about this the teachers say they would not tolerate the kinds of intrusions that are common in the United States.  These intrusions are all based on accountability rhetoric.  

In preparing for this post, I searched my e-mails from the past three years and found 1800 e-mails containing the word accountability.  Most of those hits were due to the Health Insurance Portability and Accountability Act (HIPAA).  If you read the long title of this act it was clearly doomed out of the box.  The major impetus for the PPACA (Obamacare) was health insurance portability suggesting that HIPPA was already a failure.  That did not deter legislators from including a Privacy Rule under HIPAA to supposedly crack down on privacy violations.  My read of the bill is that is actually broadens the use of anyone's medical information among all "covered entities" affiliated with your health plan.  In the meantime,  the Privacy Rule was so threatening that it almost immediately made it more difficult for the doctors doing the work to get access to data.  Was it necessary for physicians?  Absolutely not - physicians are trained in medical privacy and all broad breaches of medical privacy have been due to either hacking or business people losing computers with significant amounts of data.  Make no mistake about it - politicians will be there to make the most accountable people accountable and greatly decrease their efficiency.   A great example of the title of this post.

I have recently posted a number of examples of accountability rhetoric being used for political leverage against physicians.   It can be used by medical boards, advocacy organizations, state agencies, federal agencies, and specialty boards in addition to politicians.  I am going to focus on a single example and that is Medicare.  All of the information that follows is public and can be accessed through the Medicare link on the American Psychiatric Association's web site.  I picked it up on my Facebook feed but it disappeared and I had to call APA staff to figure out where it went.  I am very familiar with the history of Medicare quality initiatives because I was one of their quality reviewers for inpatient hospitalizations in Minnesota and Wisconsin in the late 1980s and 1990s.  If you look for inpatient psychiatry measures you will find that many of them (polypharmacy, multiple drugs from the same class, discharge planning) are unchanged from that era, despite the fact that the review organization was disbanded because it did not find enough quality or utilization problems to justify its ongoing existence.

The APA points out that Medicare now has a fee scale that takes into account "quality of care measures instead of just paying a standard fee for every procedure (CPT) code".  They have a Physician Quality Reporting System (PQRS) that requires psychiatrists to report on one measure in order to avoid a 1.5% penalty.  For 2013 that report has to be made on one Medicare patient.  This is described as an "incentive" to report on quality performance measures and of course a "penalty" for those who fail to report.   A managed care company would call it a "holdback" in that it is technically work that has been done, but the no cost way to turn it into an "incentive" is just to take it from the people doing the work and make it seem like they are rewarded with it later.

The document goes on to document "measures identified as pertinent to psychiatrists (along with their designated codes)".  If you are a psychiatrist read through these reporting measures and marvel at the morass of initial codes that I am sure are going to grow as this administrative nightmare continues.  The further problem is that Medicare/CMS clearly has the goal of comparing physicians and holding them accountable based on the fantasy that these measures actually mean something in clinical practice or even the world.  And if this list of measures is not enough, there are also 50+ page guidelines online like: "The American Medical Association-convened Physician Consortium for Performance Improvement - Adult Major Depressive Disorder Performance Measurement Set" that describes an additional set of performance measures.  The AMA is involved and if you click the link 2013 PQRS Quality Measures you can search on Major Depressive Disorder and find the following links.  You can download the 50+ page document from the top link.

Most people realize that physicians currently have some of the highest burnout rates of any group of professionals.  Those burnout rates are directly related to micromanagement even before we get to the level I just described in the above paragraphs.  The paradox that every physician is aware of is that these reportable measures are not valid objective markers and they are being promoted by bureaucrats who not only have no accountability but in the case of the mental health system of care are some of the same people who destroyed it in the first place.  Don't forget that Congress skewed insurance coverage of mental illness and addictions so badly that Senators Wellstone and Domenici had to write legislation in an attempt to correct that.  At this time the final form of their legislation is still pending.

So accountability has become the last refuge of scoundrels.  Be very skeptical of any politician or bureaucrat waving that flag.  It has little to do with reality and more to do with promoting their own self interests while creating a tremendous and unnecessary burden for the doctors they regulate.

George Dawson, MD, DFAPA

Nunberg G.  Going Nucular: language, politics, and culture in confrontational times.  Cambridge: MA Perseus Books Group, 2004.

For a complete analysis of political doublespeak as applied to medicine see:

Robert W. Geist:  Hot Air Index: Political/Commercial Double-speak Lexicon for Medicine