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Pipes will be a part of Vator's Healthcare in Politics salon on Sept 9 and October 7
With the election right around the corner Vator and HP will be hosting their latest salon on October 7, called Healthcare in Politics (register for the event here!) where multiple panels of experts, policy makers and lawmakers who will be on hand to discuss topics related to healthcare policy and decision making.
One of the panels will center specifically around the healthcare policies of the two candidates, Donald Trump and Joe Biden, particularly how they will help underserved communities, who have been hit the hardest by the COVID-19 pandemic.
On hand will be Sally Pipes, President and CEO at the Pacific Research Institute. I spoke to her about the healthcare policies of both Biden and Trump to understand which would benefit the country, particularly during this crisis.
VatorNews: Tell me a bit about yourself and about the Pacific Research Institute.
Sally Pipes: I'm the President and CEO of the Pacific Research Institute, and a Thomas W. Smith Fellow in Health Care Policy. I've been running the PRI since October 1, 1991, and my area of specialty is healthcare. I worked at the Fraser Institute in Vancouver, Canada; I was the assistant director of the Institute, and we started a project called Waiting Your Turn: A Guide To Hospital Waiting Lists back in the late 80s because the government was slowly taking over the healthcare system and we noticed that people were starting to have to wait for care. Currently, I focus most of my time educating the American people on the dangers of single-payer health care, including giving speeches, debating, writing weekly columns for Fox News, Forbes, and the Washington Examiner and a number of other newspapers around the country including the Wall Street Journal. I also am invited to be interviewed on national radio and TV shows.
My passion in life is trying to keep the federal government from fully taking over our healthcare system as Senator Bernie Sanders, Rep. Alexandria Ocasio-Cortez (NY), Rep. Pramila Jayapal (WA), and the Biden-Harris ticket want to ultimately do. They want to reach that goal but support a slower process of getting there—including building on Obamacare by adding a public option and reducing the age of Medicare eligibility from 65 to 60. Senator Kamala Harris, now the Democratic VP nominee, signed on to both of Senator Sanders’s single payer bills in 2017 and 2019.
The Pacific Research Institute, a free market think tank, is now 41 years old and our primary focus is building a society based on personal responsibility and free markets. Our areas of research include healthcare, education, the environment, and tax reform issues. We have a Center for California Reform, where we are undertaking significant work on the homeless situation in California, and on AB-5, the legislation that was signed by Governor Newsom earlier this year that would force firms in the gig economy like Uber and Lyft to move their drivers to be employees rather than independent contractors. Overturning this legislation will be on the November 3rd ballot in the state.
VN: Obviously the big question is: from a health policy standpoint, how would you grade this administration with regards to COVID? Biden and Trump seem to want to do similar things going forward, like free COVID treatment and developing a vaccine, but how has he performed up to now?
SP: I would give the administration a B+. Trump signed an Executive Order in September 2019 that allowed for public-private partnerships between the federal government and the drug industry. This idea had been included in the report prepared by the U.S. Council of Economic Advisers’ under its former chairman, Tomas Philipson, University of Chicago professor of economics. This EO allows drug companies to receive financial support from the federal government to assist in the development of safe and effective vaccines and anti-virals under Operation Warp Speed that are key in the search for a timely cure for the Covid-19 pandemic.
The economy was doing very, very well up until COVID—solid GDP growth, a booming stock market and low unemployment. Democratic presidential nominee Joe Biden is a staunch critic of President Trump and his handling of the virus. But, he was not successful in his handling of the much smaller Ebola and H1NI viruses that happened under President Obama. It is my hope that we will have a vaccine by the end of the year that will prove to be safe and effective. There are many vaccines now in clinical trials and it is likely that there will be more than one vaccine that is approved for use in this country and around the world. What we don’t know right now is how long it will be effective. President Trump approved FDA fast tracking of the convalescent plasma because it is proving to be quite effective with people hospitalized with Covid-19. And I was pleased that the FDA gave emergency approval for Remdesivir, a drug developed by Gilead Sciences which is showing remarkable success with hospitalized Covid patients. I support a number of the other EOs that the President has signed: price transparency, short-term limited duration health plans, and Health Reimbursement Accounts, to name a few.
VN: What are some of the ways you think he could have done better?
SP: I am very concerned with President Trump’s July 24th EOs that relate to his desire to lower drug prices under Medicare Part B. They include importing drugs from Canada and setting up an International Pricing Index, which would tie prices of 250 popular drugs under Medicare Part B to the average price in six countries including Canada, the UK, France, Germany, Australia, and Japan. These countries all have price controls on pharmaceuticals and that is why their prices are lower. But the latest drugs and biologics that provide effective treatments for many diseases are not developed in those countries because there is no financial incentive for doing so. Most of the R&D takes place in the U.S because we don’t currently have price controls on drugs. These countries “free ride” off our innovation.
If these EOs are implemented, it will effectively introduce price controls in the U.S. pharmaceutical/biotech industry thereby leading to the collapse of the industry as we know it. Whether Sanofi in France, Roche in Switzerland, or GSK in the UK, these companies and others, while headquartered in these countries, undertake their R&D in America, precisely because we don't have price controls on pharmaceuticals. It costs $2.6 billion from an idea to getting a drug through all the clinical trials and to market and access by patients. Only 12 percent of prospective new drugs actually make it to market. Setting up an IPI (International Pricing Index) on the most popular drugs under Medicare Part B is really a stepping stone approach to introducing national price controls on all drugs that make it to market. House Speaker Pelosi, Vice President Biden, and Senator Kamala Harris, of course, also support the idea of the federal government being able to negotiate the price of all drugs with the drug manufacturers under Medicare Part D, the federal drug programs for seniors. Government negotiating prices was not part of the Medicare Part D legislation signed into law by then President Bush but they are campaigning on this concept and, if successful, would be a disaster for seniors and their access to the latest treatments.
VN: So how do we lower drug prices?
SP: As I have pointed out, most pharmaceutical R&D is done in the U.S. Today, about 90 percent of drugs consumed in this country are generic—an actual copy of the brand name drug. Generics are a fraction of the price of the original drug. Drugs are protected under intellectual property laws for 12 years so that the developers can recoup their costs of development. When the patent protection of a brand name drug expires, it is possible for firms to develop generic versions of the brand drugs. If one looks at very expensive drugs and therapies under patent protection like Remdesivir for hospitalized Covid patients and the latest immunotherapies for cancer patients, the majority of these treatments are developed in the U.S. However, not every patient needs to be on the latest and most expensive drug or therapy. Doctors can try older, less expensive generic drugs to see if they are effective. If not, then newer treatments can be tried until a cure is found. It would be a major mistake for the federal government to interfere in this very successful and innovative industry. If price controls are introduced, just like in Canada, England, and France, it will be the ruination of this industry in the U.S.
U.S. drug companies offer the latest new drugs and treatments to countries with price controls at discounted prices. In Canada, for example, in many cases the federal government’s Patented Medicine Prices Review Board will reject the drug as too expensive even at the discounted price. As a result, Canadians do not have access to the latest treatment that those in America do.
VN: Healthcare is more than just going to the doctor, and many are not taking a more holistic approach, where the social determinants are just as important. Do you see any policies from Joe Biden or Donald Trump that would help move in that direction?
SP: I have been promoting the concept of telehealth for many, many years and, until now, it never became a reality. It took a pandemic to change this. Under the pandemic, telehealth was approved for emergency use and payment has been approved by most insurers and those on Medicare. Many people feared going to their doctor’s office or a hospital for diagnosis and treatment because of the pandemic so they delayed care. President Trump signed an Executive Order that will allow telehealth to continue after the pandemic is over. This is very positive news because telehealth reduces the cost of healthcare. Patients can deal with their doctor over the phone or the internet. For many medical issues, it is so convenient. No travel to an office or hospital is required, and no long waits in a waiting room where one is exposed to other patients. In many cases, it is not necessary to go to the doctor’s office. It is particularly good for older people especially, because many of them have several medical issues but often do not have access to transportation. Telehealth also gives patients access to the top medical specialists. And, their doctors can use the advice to assist in treating their patients. This is very good news, particularly for patients who live in rural communities where they would not have access to top specialists. Under telehealth, they do.
I also like the fact that President Trump signed orders allowing nurse practitioners and physician's assistants to do certain procedures that, in the past, had to be done by medical doctors. There is also an effort in the U.S. to reduce the number of years of medical school from four down to three. Duke University is piloting this idea as has UNC Chapel Hill, and Ohio State. Under the pandemic and lockdowns, even Harvard Medical School allowed its medical students to graduate early. So, those are some of the things that I am very excited about and are instrumental in reforming our healthcare system while bringing down costs.
Democratic presidential nominee Joe Biden is not supporting Medicare for All but for building on Obamacare through introducing a “public option”, a government insurance plan that would compete against private insurers. His concept is a stepping-stone approach to Medicare for All. The public option would be priced cheaper than private plans. Ultimately, private insurers would be crowded out of the market and we would have a total government takeover of our healthcare system. He also supports reducing the Medicare eligibility age from 65 down to 60. Such a move, if he were elected and it was adopted, would add 22 million people to Medicare at a cost of an additional $100 billion a year. The Medicare Trustees recently reported in their annual report that Medicare Part A, the hospital part of Medicare, will be bankrupt within six years. And, that is before reducing the age of eligibility. So, that is a problem for patients and their timely access to care.
As I pointed out earlier, Senator Kamala Harris signed onto both of Senator Sanders’ 2017 and 2019 single-payer bills. In the early debates for the Democratic presidential nominee, she said she was for Medicare for All and was one of the two potential candidates to put up her hand in support. But the next day she said she didn't understand the question. As she had signed on to Sanders’s bills she definitely understands Medicare for All and is supportive of the concept. Remember, she said, “Let's get rid of insurance companies, let’s get rid of all of that”.
If Biden is elected, ultimately the U.S. will end up just like Canada with a single payer system—no private insurance allowed for anything considered “Medically Necessary”. The provincial government in Saskatchewan started taking over the health care system in the 40s and the task was finally completed by the federal government in 1984 under the Canada Health Act. It will be a stepping-stone approach just like in Canada. The U.S. will also face long waiting lists, rationed care, and a doctor shortage. The average wait in Canada last year from seeing a general practitioner to treatment by a specialist was just over five months. 323,000 Canadian went abroad last year to get timely treatment. Under M4A in the U.S., doctors would be paid Medicare rates which are 40 percent below what they are paid for treating private patients. Because of the controls placed on doctors by the federal government, many will retire early and it is likely that the best and brightest will not go into medicine as they will not be able to practice as they see fit.
Charles Blahous, Ph.D, an economist at the Mercatus Center at George Mason University, has pointed out that the increase in federal spending under Sanders’s plan would be between $30 and $40 trillion over 10 years. The liberal Urban Institute has come up with a similar estimate. Under Medicare for All there would have to be new taxes and higher rates on existing taxes. Senator Sanders has confirmed this. His plan would include a new 7.5 percent payroll tax, a new 4 percent income tax on anyone earning over $29,000, new taxes on the wealthy, and on large financial institutions. Even if, as Blahous has pointed out, you doubled all of the personal income taxes and the corporate taxes, it wouldn't be enough to cover the cost of a single payer system. have happened in our healthcare system. We have the best five year survival rates of cancer of any of the main countries in the OECD, including the UK and Canada.
VN: In regards to uninsured people, what is Trump’s answer to that?
SP: It is interesting because, of those with employer-sponsored coverage, according to the Commonwealth Fund, only 3 million out of 170 million with employer insurance have actually lost their coverage when they lost their job under the pandemic. And, if you lose your coverage you can sign up for COBRA to continue your coverage for a certain amount of time. It is expensive, because you have to pay the same premium as your employer was paying for coverage for you and your family. Others can sign up for short term-limited duration plans that provide coverage for 12 months and are renewable up to three years. The 10 Essential Health Benefits mandated under Obamacare are not included in a STLD plan. The average plan is $113 a month. These plans are very suitable to younger people. You can also sign up for Obamacare coverage on one of the exchanges because, if you lose your job, you can sign up immediately. You are not subject to buying coverage in the open enrollment period.
The whole idea of Obamacare, that turned 10 on March 23rd, 2020, was to allow individuals and families who do not have employer coverage to purchase coverage on the federal or state exchanges. However, only 10 million are enrolled on the exchanges because the premiums are very high: $457/month for an individual and a deductible of over $5,000. If you earn between 138 and 400 percent of the Federal Poverty Level, you are eligible for a subsidy on a sliding scale based on income. About 85 percent of the 10 million Obamacare enrollees receive subsidies to purchase coverage. As I mentioned earlier, Joe Biden wants to build on Obamacare, but it is not a solution to eliminating the roughly 27 million who are uninsured in the U.S. because of costs associated with it. According to the U.S. Census Bureau, 6.8 million were eligible for Medicaid but did not enroll; 8.2 million were eligible for Obamacare subsidies and did not enroll on the exchanges; 3.8 million declined employer-sponsored coverage; 1.9 million were not eligible because their income was above 400 percent of the FPL; and 4.1 were ineligible because they were not lawful U.S. residents. In the U.S., we need to put doctors and patients in charge of their health care and give patients a variety of options that fit their needs and those of their families. A one-size-fits-all is not the American way and it would be a disaster for all Americans.
VN: Biden says he would institute mandatory lockdown/shut down, but this could have negative effects to our mental and financial health. If the scientists say we should lock down the entire country, should we do it?
SP: Well, I am against that idea and I think it probably will hurt Biden in the election. People are fed up with being locked down. Over 80 percent of the deaths from Covid are people over 65 and the bulk of them are in nursing homes. Many had other medical conditions that make them vulnerable to the virus. The young and healthy are a small percentage of those infected and most recover very quickly. Many younger people who may test positive for the virus did not even know they had it because they had no symptoms. The economy is in a disastrous state and it is time for people to go back to work and get the country back on track. Many businesses, and small businesses like restaurants and small retail shops, in particular, are already out of business and more are going to go out of business every day. We do not need another lockdown. Things such as social distancing and wearing masks have proved effective. Many public health officials keep changing their mind on how to handle the pandemic. The economists say that it is time to get the economy up and moving. We cannot continue to be in a long-term lockdown. It is also not good for our personal health. The statistics on suicide, mental health issues, domestic violence, divorce are out of control. I do not think Biden’s statement was good for his campaign. The thought of another lockdown scared a lot of people.
We have also seen that, under the lockdown, there are a lot of people who have not been able to get timely cancer screenings, biopsies, or treatment for early warning signs related to heart and stroke issues. The number of people that are getting treated for these conditions is way down because of the pandemic. Many people are afraid to go to the doctor or go to the hospital. This is going to have a very negative impact on cancer survival rates. The U.S. has the best five-year cancer survival rates for the most common cancers of any country in the industrialized world.
VN: Do you believe that Trump could or should institute a national policy around COVID? If there was one, what would it be?
SP: Trump signed the Executive Order last year allowing for private-public partnerships between drug companies and federal government’s agencies like the NIH as they search for a vaccine to eradicate Covid-19. It was President Trump who early on in the pandemic stopped people traveling to and from China. Many of the top public health officials went against him but he was right to have done that. He has done and continues to do what he can and what he thinks is the right path for the country.
I do not think we need a national policy on COVID. States should have the right to make decisions specific to their state. We need to encourage people to socially distance and to wear their masks. A lot of young people don't want to do either, but it is the right thing to do if we are going to get the pandemic under control and our society back on track. We don’t need a national policy, but we do need to continue the debate and discussion about best practices for the economy, our health, and for the future growth of our country.
VN: Should achieving herd immunity be a policy goal? Could that be a national goal?
SP: There's so much that we need to learn about the virus, but what we do know is that in New York Cuomo made a mistake in putting all those people into nursing homes, because 80 percent of the deaths from COVID around the country, particularly in New York and New Jersey, are people over the age of 65. We have to focus on the population of people who are more likely to get COVID and who are more likely to not or who will get over it quickly. So many young people either had it and didn’t know they had it or they had it and they got over it very quickly, within a week or so, like they had a mild form of the flu. So, I don't know. The real issue is how you deal with the elderly, who are so susceptible to pandemics. If you put them into, say, nursing homes or assisted living facilities, that's where the real problem was.
VN: Education is another part of the social determinants of health. What are your thoughts on charter schools? Do they help bridge inequality?
SP: Absolutely. Economist and author Thomas Sowell at Stanford’s Hoover Institution, who I absolutely adore, has a terrific new book out Charter Schools and Their Enemies. Sowell, an African-American, explains how charter schools have helped so many young people get a quality education—one that suits their needs. Yet, the teachers’ unions are trying to destroy charter schools. The legislature in California, backed by the powerful teachers’ union in the state is doing everything it can to destroy charter schools. The union members do not like parents having the choice as to what kind of school their children attend and what kind of education they are going to get. I have been a major supporter of charter schools and school choice for many years. And the President and his family have spoken out in favor of school choice. It will be a significant part of his agenda on the campaign trail.
VN: Education ties into COVID as well, with many states struggling with the idea of whether or not to reopen schools. If schools remain closed, does that disproportionately hurt underserved communities? Which candidate is best addressing that issue?
SP: I’m very much in favor of schools reopening and the President has made that very clear. We’ve got examples of schools that reopened in Denmark and in Germany and they have had no problems. As we have seen in the COVID stats, the rate of getting COVID among young people, in K-12, is very low. In a lot of the underserved communities, parents work in jobs where they have to go to work, they cannot telecommute, they cannot afford daycare, and they don't have the kind of WiFi and equipment at home that is needed for their children’s education. We have a problem with the quality of our K-12 education system. The U.S. needs to have well educated students to fill our jobs and to compete with students in other countries like China and India where their test scores are much better, particularly in the STEM subjects. We want schools to be focusing on the issues that are going to prepare them for the 21st century labor force.
The one size fits all model has not worked and it will not work. We saw in the 2018 gubernatorial election in Florida Republican Ron DeSantis, a supporter of school choice, won against Andrew Gillum, the Democratic mayor of Tallahassee who was against school choice and charters. Many African American and Latino voters supported DeSantis because he was offering better education options.
VN: Which of the two candidates do you see as being better for underserved communities, especially those hardest hit by the pandemic?
SP: Trump has said in many speeches, and Betsy De Vos, his Secretary of Education, is very much in favor of charter schools and school choice. They want to give parents the opportunity to give their children the best education that meets their needs. Joe Biden wants to give into the teacher unions and eliminate choice options. We have seen in California, under the pandemic, that the unions are very much against opening up the schools, when the scientific evidence supporting continued school closures is not there. Many European countries opened up the schools and the results have been very positive. We need to get our kids in K-12 and in college to get a good education to be prepared for this 21st century workforce.
(Image source: therealdeal.com)
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