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Feb 26, 2009

Biotech Industry Gears Up for Health Reform Push

Don’t let innovation be forgotten, they urge.

  • Given the current economic crisis, healthcare reform might seem like an issue for the “someday” pile. The President and congressional leaders, however, say they are determined to do something about the perennial issue this year. 

    “We can no longer afford to put health care reform on hold,” President Obama told a joint session of Congress on Tuesday night. Today he is releasing a budget plan that, according to early reports, calls for tax increases for the nation’s wealthiest to help finance that reform. 

    About 62% of Americans say the country’s economic problems make it more important than ever to reform the health system, according to a Kaiser Family Foundation poll released Wednesday.  Also, 72% trust the president to “do or recommend the right thing for healthcare reform.”  

    The timing for bold action has never been better. U.S. health spending ballooned to $2.4 trillion in 2008, according to economists at the Centers for Medicare and Medicaid.  Their report in Health Affairs projects spending will outpace GDP growth over the next decade, reaching $4.4 trillion by 2018, or 20% of the national economy.  Meanwhile, some 47 million Americans are sidelined from the system because they lack insurance, and these numbers are growing in tandem with unemployment. 

    “Clearly health reform including universal access was essential to candidate Obama’s platform,” says Jim Greenwood, president and CEO of the Biotechnology Industry Organization (BIO).  “The Democratic party wants to fulfill its commitment.” 

    Companies developing new biotechnology and medical device products support reform that provides greater access to those products—after all, 47 million uninsured Americans represents a large market—but only if market-based incentives, i.e., pricing flexibility, remain as an incentive for R&D.  The key word is innovation; expect to hear it often this year from the biotech industry’s advocates in Washington.

    “Every time I speak about healthcare reform,” says Greenwood, “I talk about the iron rectangle of healthcare.  We all want access; we want quality, cost efficiency, and innovation. But innovation is often forgotten” once the debate over controlling costs starts.  

    “We want to avoid an innovation blind spot in the coming debate,” agrees Stephen Ubl, president and CEO of AdvaMed, which represents biotechnology and medical device companies. 

    Both BIO and AdvaMed have done studies to demonstrate the value of innovation, which, they argue, can provide savings by reducing the rate and impact of chronic disease, in addition to the obvious benefits of saving lives and reducing disability.  AdvaMed has even proffered its own healthcare plan. 

    The Question of Affordability

    Despite clear momentum for change, the healthcare reform debate will be contentious.  “The counterargument is that, given the money spent on the stimulus and bailout, we just can’t afford it,” notes Greenwood. Moreover, the proposed tax hike on the wealthy to finance expanded coverage likely will draw opposition. 

    The president is seeking to build a consensus, however, announcing the creation of a bipartisan reform study group that will include representatives of business, workers, and other stakeholders. 

    “The Democrats remember 1993–94, when President Clinton’s broad healthcare plan failed and left the party with political problems,” Greenwood points out.  The Clinton plan was developed in a closed process that was widely criticized.

    “Obama wants to avoid that mistake,” Greenwood adds, “and in my view the best way to avoid that is to get all stakeholders around the table.  If he’s sincere about doing that, it could lead to very positive results.”

    Even the Insured Have a Stake

    Other groups are weighing in as well, with an onslaught of studies timed to influence the debate.  A new Institute of Medicine study released this week documents the growing problem of uninsurance, even for those who have insurance.

    In communities with large uninsured populations, “insured people report worse access” to medical care, says one of the studies authors, Kathleen Baicker, a health economics researcher at Harvard. The study also affirmed that the safety net for the uninsured—emergency rooms and public clinics—are “clearly not adequate.” 

    “Addressing the problem of the rising wave of uninsured would benefit not just the uninsured but other people in communities where they live,” says Baicker.  “We shouldn’t wait for a perfect solution.”

    One of her coauthors is optimistic. “The approach is remarkably different from previous rounds,” says Christine Ferguson, J.D., a research professor in the School of Public Health and Health Services at George Washington University. 

    “Instead of starting specifically with the uninsured, the president is starting with the issue of cost,” she observes.  “They have a very clear perspective in this administration that the cost of healthcare is a significant problem, and it appears they believe universal coverage is a key component of dealing with those costs. That’s going to make the debate this time a little different.”

     

     


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