Tag Archives: Medicare

Medicare’s funding well to dry up in 2030

titanic-sinking

Washington Examiner: The fund Medicare uses to pay hospitals will run out in the next 15 years, and experts say there are no easy answers to solve it.

The independent Board of Trustees for Medicare found the trust fund used for Medicare payments to hospitals would become insolvent in 2030 unless something is done. The board issued its annual report to Congress on the entitlement program’s finances on Wednesday.

As in prior years, the trustees found that the fund isn’t properly financed over the next decade. Last year’s report also pegged 2030 as the date the fund will become insolvent.

However, the fund could run dry as early as 2022 if spending is higher than estimated, the report said.

The fund covers hospital insurance benefits. It doesn’t affect Medicare Part B, which covers payments to physicians, or Medicare Part C, which is commonly known as Medicare Advantage.

The verdict is still out on how to solve the problem, said Juliette Cubanski, associate director of Medicare policy for the Kaiser Family Foundation. One answer to increase funding is to raise payroll taxes, she said.

The insolvency of the trust fund basically means Medicare payments will be higher than the money coming in, “which is basically the payroll tax for Part A,” she said.  But raising taxes is not the “easiest thing to do in the current political environment,” Cubanski conceded.

The report exuded a sense of urgency for Congress and the Obama administration to get together and find a solution. “The sooner solutions are enacted, the more flexible and gradual they can be,” the trustees said.

Whether that can happen is another story. After the report was released, some Republicans blamed Obamacare for the problem. “Rather than ignoring the problem and raiding Medicare to pay for the president’s health care law, we need a willing partner in Washington to take thoughtful and prompt steps forward in strengthening the program,” said a statement from Reps. Fred Upton, R-Mich., and Joe Pitts, R-Pa. Upton is head of the House Energy and Commerce Committee and Pitts leads the panel’s health subcommittee.

Blame the republicans...

Blame the republicans…

Rep. Steny Hoyer, D-Md., countered that it is Republicans who have contributed to the problem. “Instead of trying relentlessly and irresponsibly to repeal the Affordable Care Act, Republicans should work with Democrats to make sure that Medicare is protected for the next generation,” said the House minority whip.

But some lawmakers pointed to the year’s biggest bipartisan success as evidence that they can find a solution. The two parties permanently repealed an unsustainable Medicare payment formula for physicians and reauthorized a children’s insurance program.

“Reforming the way Medicare pays local doctors has had positive effects for our nation’s seniors, providers and the program itself,” said Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee’s health subcommittee. “Now we must take the next step and pursue other important payment system reforms.”

DCG

Feds: Social Security Disability Fund Goes Broke Next Year

We warned you. (December 18, 2013.)

July 13, 2015: Obama says Medicare and Social Security “are not in crisis”.

obama-finger

Free Beacon (July 22, 2015): Social Security’s disability trust fund will run out of money next year, administrators said on Wednesday, forcing steep benefit cuts for the entitlement’s beneficiaries unless Congress acts to shore up the program.

The program’s trustees said in a report on the fund’s financial state that its fiscal reckoning, which is expected to come in late 2016, will automatically slash benefits by nearly a fifth, the Associated Press reported.

The report said the fund faces “an urgent threat” that requires prompt action by Congress.

There is an easy fix available: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.

President Barack Obama supports the move. But Republicans say they want changes in the program to reduce fraud and to encourage disabled workers to re-enter the work force.

The date that the fund will be exhausted is unchanged from last year’s report. But as the deadline gets closer, advocates say the need to act becomes more urgent.

titanic-sinking

I’d say it needs to become urgent NOW.

See also:

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CBO: Debt Headed to 103% of GDP; ‘No Way to Predict Whether or When’ Fiscal Crisis Might Occur Here

CBO Director Keith Hall has a dire warning...

CBO Director Keith Hall has a dire warning…

CNSNews: Testifying in the U.S Senate on Thursday, Congressional Budget Office Director Keith Hall warned that the publicly held debt of the U.S. government, when measured as a percentage of Gross Domestic Product, is headed toward a level the United States has seen only once in its history—at the end of World War II.

To simply contain the debt at the high historical level where it currently sits—74 percent of GDP–would require either significant increases in federal tax revenue or decreases in non-interest federal spending (or a combination of the two).

Historically, U.S. government debt held by the public, measured as a percentage of GDP, hit its peak in 1945 and 1946, when it was 104 percent and 106 percent of GDP respectively.

In 2015, the CBO estimates that the U.S. government debt held by the public will be 74 percent of GDP. That is higher than the 69-percent-of-GDP debt the U.S. government had in 1943—the second year after Pearl Harbor.

By 2039, CBO projects, the debt held by the public will increase to 101 percent of GDP and by 2040 to 103 percent GDP. At that point, Hall told the Senate Homeland Security and Governmental Affairs Committee, the “debt would still be on an upward path relative to the size of the economy.”

The U.S. Treasury divides the federal debt into two main parts: debt held by the public and intragovernmental debt. The debt held by the public includes Treasury securities such as Treasury bills, notes and bonds that are owned by individuals, domestic and foreign corporations, private banks, the Federal Reserve Bank, and foreign governments. The Treasury pays interest on this debt to those who own it. The intragovernmental debt is money the Treasury owes to government trust funds–such as the Social Security trust funds–because the government has spent money belonging to those trust funds (i.e. Social Security payroll taxes) on things other than what the trust fund was created to fund (i.e. Social Security).

As of July 9, according to the Treasury, the debt held by the public was $13,102,609,587,775 and the intragovernmental debt was $5,049,321,696,720. That equaled a total debt of $18,151,931,284,495 (and counting).

While the run up in debt held by the public as a percentage of GDP in the 1940s financed a global war against Nazi Germany and Japan that ended with an allied victory, the current run toward unprecedented debt is based on projected increases in mandatory federal spending for entitlement programs. These include Social Security, Medicare, Medicaid and Obamacare subsidies.

“Mainly because of the aging of the population and rising health care costs, the extended baseline projections show revenues that fall well short of spending over the long term, producing a substantial imbalance in the federal budget,” Hall said in his written testimony.

“As a result, budget deficits are projected to rise steadily and, by 2040, to raise federal debt held by the public to a percentage of GDP seen at only one previous time in U.S. history—the final year of World War II and the following year,” he said.

“Moreover,” he said, “debt would still be on an upward path relative to the size of the economy. Consequently, the policy changes needed to reduce debt to any given amount would become larger and larger over time. The rising debt could not be sustained indefinitely; the government’s creditors would eventually begin to doubt its ability to cut spending or raise revenues by enough to pay its debt obligations, forcing the government to pay much higher interest rates to borrow money.”

Eventually, the nation would face a crisis—with wary investors demanding “much higher interest” rates to buy U.S. government debt.

“How long the nation could sustain such growth in federal debt is impossible to predict with any confidence,’ testified Hall. “At some point, investors would begin to doubt the government’s willingness or ability to meet its debt obligations, requiring it to pay much higher interest costs in order to continue borrowing money. “Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country,” he said.

federal debt

“Unfortunately, there is no way to predict confidently whether or when such a fiscal crisis might occur in the United States,” he said. “In particular, as the debt-to-GDP ratio rises, there is no identifiable point indicating that a crisis is likely or imminent. But all else being equal, the larger a government’s debt, the greater the risk of a fiscal crisis.”

Simply keeping the debt in check would require significant changes in federal policy that would hit Americans in the pocketbook. “Just holding federal debt at its current high level of 74 percent of GDP in 2040 would require significant changes in tax and spending policies,” Hall testified. “The combinations of increases in federal tax revenues and cuts in non-interest federal spending relative to current law of about 1.1% of GDP in each year for 25 years would be needed.

“In 2016, this would be a spending and/or a tax revenue increase totaling about $210 billion dollars–and then more than that in each year after that,” said Hall. “If those changes came from increases of equal percentage in all types of revenues they would represent an increase of 6 percent relative to current law for each year between 2016 and 2040,” Hall testified.

“In 2016, for example, an average middle-income household would have to pay $750 more in taxes and more than that in each year afterwards,” he said. “Or if the changes came from cuts of equal percentage in all types of non-interest spending, that spending each year would have to be 5.5 percent less than projected,” he said. “If the reduction was applied across the board to all types of non-interest spending, an average 65 years old in the middle of the earnings income who retires in 2016 would see a reduction of about $1,050 in his or her initial annual Social Security benefits—more than that in each year afterwards.”

“The more ambitious goal of returning public debt by 2040 to its average level over the past half century, which is 38 percent of GDP, would require more than that,” Hall said. “This would require a revenue increase and/or non-interest spending decrease totaling 2.6 percent of GDP every years.

“This means an average middle income household would have to pay $1,700 more in federal taxes in 2016 and larger amounts in subsequent years,” he said. “Or by cutting non-interest spending across the board, average Social Security benefits for a 65-year-old in the middle of the earnings distribution would have to drop by $2,400 in 2016 and by larger amounts in later years.”

my work here is done

DCG

Transgender surgery now covered by bankrupt Medicare

Medicare will go broke in two years, by 2016 — and Obama is working hard at bankrupting Medicare even sooner.

Transgenders are people who identify with a gender other than their biological sex that, according to transgenders, they were “assigned” at birth.

The cover for the June 9, 2014 issue of Time magazine, sporting a pic of transgender “Orange Is the New Black” actor Laverne Cox, proclaims:

The Transgender Tipping Point: America’s Next Civil Rights Frontier

Time transgender coverWhen I first saw the Time cover, I was quite baffled. Don’t transgenders in the United States already have the same civil rights as the rest of us? What civil rights are denied to transgenders? Are they excluded from the guarantees and protections of the U.S. Constitution?

Another view of the she-man Cox

Another view of the she-man Cox

How naïve of me.

In her Time cover story, Katy Steinmetz writes that transgenders “are emerging from the margins to fight for an equal place in society” and that “trans people live in a world largely built on a fixed and binary definition of gender. In many places, they are unwelcome in the men’s bathroom and the women’s. The effect is a constant reminder that they don’t belong.”

Blah. Blah. Blah.

It turns out transgenders’ “next civil rights frontier” is all about money, i.e., money from your pocket into theirs.

On May 30, 2014, Obama the POS ended a 33-year ban on Medicare coverage for gender reassignment surgery.

Washington Post reporter Ariana Cha calls the lifting of the 1981 ban “a major victory for transgender rights and a decision that is likely to put pressure on more insurers to provide coverage for such services.”

Gosh, silly me! I never knew it’s a civil “right” not only to have a “gender reassignment” surgery, but to have other people pay for chopping off one’s penis and gouging out a wound as a pretend vagina.

The May 30 ruling by a Department of Health and Human Services (HHS) board was in response to a lawsuit filed last year by the ACLU, Gay & Lesbian Advocates & Defenders, and the National Center for Lesbian Rights, on behalf of Denee Mallon, 74, a transgender woman and army veteran from Albuquerque.

Obama administration officials originally had sought to overturn the ban in 2013, but the attempt prompted a backlash among social conservatives and religious groups who oppose taxpayer funding for such procedures. Now, HHS says medical studies published over the past three decades showed that the grounds for exclusion of coverage are “not reasonable” anymore and lifted the ban.

Although Medicare coverage is only for people 65 and older, and the transgender population makes up only about 0.3% of the U.S. adult population, private insurance plans often take their cues from Medicare on what should be considered a medically necessary covered treatment. As a result, the ruling is likely to open up more options for transgender individuals.

The ruling does not (yet) apply to Medicaid, the health program administered by states for low-income individuals and families.

Even before the federal government’s lifting of the ban, California, Colorado, Connecticut, Oregon and Vermont already affirmed the idea that transition care for transgender individuals should be considered an essential part of medical coverage. In February, D.C. Mayor Vincent C. Gray (D) said the city would recognize gender dysphoria as a medical condition — effectively forcing insurers to cover gender-reassignment surgery.

Jamison Green, president of the World Professional Association for Transgender Health, a nonprofit “educational” group that works with doctors, said that while the March 30th ruling was a step in the right direction in ending discrimination in insurance coverage, there is still more work to be done. He explained, for example, that some transgender men have had trouble getting coverage for mammograms or hysterectomies when they developed fibroids or even cancer.

All of which means the cost of the “gender reassignment” surgery is just the beginning because of a myriad of post-surgery “upkeep,” like life-time hormonal treatments that, no doubt, will also be paid for by Medicare and private medical insurers.

Remember this pic for FOTM’s 73rd Caption Contest?

Harald Glööckler and Amanda LeporeSeated on the right is the transgender named Amanda Lepore. Born Armand Lepore and genetically a male, 46-year-old Lepore is a transgender model, “nightlife and fashion icon, performance artist and recording artist.”

Lepore said “her” sex change from male to female at age 19 was the most painful procedure “she’s” had done: “It didn’t hurt when I got it done at the hospital. But they give you a dilator as part of the healing process, which you have to keep in for extended periods of time to stretch the vaginal opening. It felt like a knife. It was the most painful thing I had ever experienced.”

In an interview with a fawning reporter for the online magazine XoJane, one of the top 10 “lifestyle” websites for women, Lepore enumerated her post-op upkeep, including:

  • “Perpetual hormones”.
  • Three breast augmentations “over the years” to acquire “that Jessica Rabbit thing.”
  • Buttock implants.
  • Getting her bottom ribs broken for a smaller waist.
  • Dermatology and plastic surgery (look at “her” lips!) with a Dr. Warfel.
  • Rophynol “once in a while” because it’s “painful to have sex.” Rophynol, popularly known as a date rape drug, is a powerful benzodiazepine, ± 10-fold more potent than Valium, which is illegal in the US but is used elsewhere as a hypnotic and in anesthesia. Lepore explains [Language Warning!]: “I wasn’t a pig or anything where I would be fucking every five minutes, but once in a while there would be a guy that I couldn’t resist — and I would take a rohypnol and it would work! But since then I’ve learned to dilate and stretch my pussy and I know how to have really good sex. Oh yeah. Premarin vaginal cream. It’s a whole process. Like I said, it was really painful for me to have sex, especially if the guy was really well endowed, so a transsexual friend of mine said that when you get up in the morning, use a numbing cream and then put a small dildo in your pussy in a girdle! And then have breakfast and clean your house and whatever, and then you stretch it with a bigger one and then use Premarin vaginal cream. This all makes the pussy walls stretch like a natural woman’s.”

Beneath the façade, the life of a post-op transgender is a life of ingesting never-ending very-powerful hormones and painkillers, the side effects of which are not publicized.

And although the surgery is called “gender reassignment,” in truth the surgery does no such thing. After all the torturous body mutilations — excising the penis or breasts; gouging a pretend-vagina that must be “dilated” until the wound eventually scars over; shaving off the Adam’s Apple — the transgender’s body is still genetically and chromosomally what God had made.

That is why psychiatrist Joseph Berger, M.D., board certified as a specialist by both the American Board of Psychiatry and Neurology and the Royal College of Physicians and Surgeons of Canada, has stated there is no scientific basis for transgender.

In a statement against the Canadian federal government’s Bill C-279 (popularly known as the “bathroom bill”) giving special protection to transgenders, Dr. Berger stated that from a medical and scientific perspective there is no such thing as a “transgendered” person, and that terms such as “gender expression” and “gender identity” used in the bill are at the very least ambiguous, and are more an emotional appeal than a statement of objective scientific fact.

“I have read the brief put forward by those advocating special rights, and I find nothing of scientific value in it,” Dr. Berger said in his statement. “Words and phrases, such as ‘the inner space,’ are used that have no objective scientific basis. There seems to me to be no medical or scientific reason to grant any special rights or considerations to people who are unhappy with the sex they were born into, or to people who wish to dress in the clothes of the opposite sex. The so-called ‘confusion’ about their sexuality that a teenager or adult has is purely psychological. As a psychiatrist, I see no reason for people who identify themselves in these ways to have any rights or privileges different from everyone else in Canada.”

In other words, transgenderism is a psychological, not biological, disorder, which would explain why gender dysphoria (aka gender identity disorder) fluctuates over time.

Toronto specialist Ken Zucker, who opposes the use of sex change therapies, claims that only about 12% of boys and girls with gender dysphoria will still have persistent dysphoria as adults.

This fact alone should lead even the most committed supporters of early intervention to err strongly on the side of caution.

H/t FOTM’s Lola

See also:

~Eowyn

Scooter Store scammed $108m from U.S. taxpayers

Scooter Store You’ve seen those ubiquitous ads on TV of a seemingly good-hearted store that promised elderly and disabled Americans a motorized scooter FOR FREE! Because, the ad assures its viewers, Medicare will pay for it!!!!

I’ve seen those ads too, and had wondered how the Scooter Store could be so 100% confident that *ANYONE* who wanted a scooter was assured one — FOR FREE!

To quote the eminently sensible Judge Judy: “If it doesn’t make sense, it’s not true.”

When was the last time you’ve seen a Scooter Store commercial? At least many months, if not a year or two.

Here’s why . . . .

Founded in 1991 by Doug and Susanna Harrison, the privately-owned Scooter Store is headquartered in New Braunfels, Texas, and serve 48 states. It is the largest supplier of mobility vehicles in the United States.

In February 2013 the company Store filed for Chapter 11 bankruptcy and ceased all cash sales to the public, after a raid by more than 150 FBI agents and local cops for Medicare-Medicaid fraud of as much as $108 million.

During its heyday, the Scooter Store had employed more than 2,400 people and was New Braunfels’ largest private employer. On September 13, 2013, the company entered liquidation and terminated its remaining 370 employees. Effective October 26, the Scooter Store lost its federal contract with Medicare eliminating the ability to sell assets in a Chapter 11 bankruptcy. So the company’s board of directors made the decision to essentially liquidate the business.

Medicare has accounted for about three-quarters of the Scooter Store’s business, a company representative told a U.S. Senate committee last year. But an independent auditor found The Scooter Store had received between $46.8 million and $87.7 million in Medicare overpayments.

The company is accused by the Justice Department of harassing doctors with constant phone calls and surgery visits in order to wear them down to prescribe scooters to patients who do not need them.

A damning exposé by CBS This Morning in January alleged that the company over-billed Medicare by $108 million between 2009-2012.

Former Scooter Store employee Brian Setzer told CBS that company’s main goal was to use pressure to get doctors to prescribe their vehicles. Setzer described the company’s policy was to “Bulldoze and get them to get the paperwork done.” He said his bosses would order him to annoy doctors into prescribing the scooters: “I’d get a call, ‘Well, can you go in to get him to do this? Could you get him to do this.’ I couldn’t feel right in my heart to do that.”

Here’s the extent of Scooter Store’s scam:

  • The company had a specialized department devoted to getting the scooters for patients who had already been ruled ineligible by Medicare.
  • About 80% of all claims for scooters were found to be medically unnecessary.
  • 61% of claims that were approved should not have been, totaling $95 million.
  • What Medicare paid the Scooter Store was FOUR TIMES the average amount spent by suppliers for standard power wheelchairs.
  • The federal government taxpayers spent $723 million for the scooters in Medicare reimbursements for 2009 alone.

Sources: Wikipedia; San Antonio Express-News; Daily Mail.

Doug HarrisonTom Wilson of The CareGiver Partnerships: wants us to hold the owners of The Scooter Store responsible. He writes:

Doug and Susanna Harrison are the the ‘faces’ behind The Scooter Store.  They founded The Scooter Store and were personally responsible for its operations, policies and procedures – until they jumped ship in 2012. […]

They spent years greasing the palms of politicians.  Through The Scooter Store, they gave $86,273 to federal politicians and were a top source of funds for 19 members of Congress. Since 2007, they have given $473,000 to politicians.

They also spent nearly $4 million on lobbying since 2004 trying to kill laws to curb waste, fraud, and abuse in the Medicare and Medicaid programs.  […]

After being charged with fraud, the company said it would only repay $20 million of the $88 million defrauded from Medicare.  They actually had the audacity to file a lawsuit against the government (really all of us as consumers) for not approving their claims.

Doug and Susanna must be held accountable.  They continue to live the life of luxury. People must be held accountable for fraud, not a company which has no soul or conscience… and now, no assets. […]

Doug Harrison is quoted as saying he’s proud what he and the Scooter Store did.  During March 2012, he jumped ship just before the company began to implode and the majority of its employees suddenly lost their livelihood and creditors lost their money.  He also left the city of New Brunfels high and dry after they gave into pressure from him to relocate the company.  They provided massive tax incentives to stay, which they are now unlikely to ever recoup. 

People, Not Companies Must Be Held Accountable For Stealing From Medicare. ‘We the people’ are out a great deal of money.  In my opinion, the Harrisons must be brought to trial and made an example of if we are to curb fraud of our health care system.  Since no bankers were ever tried, this is sadly, unlikely.

 

H/t FOTM’s CSM

~Eowyn

6 of 10 doctors say many will leave profession because of Obamacare

doctors against obamacareA recent survey by top research firm Deloitte Center for Health Solutions finds that 6 in 10 physicians say in the next 1 to 3 years, many doctors will retire earlier than planned because of the implementation of the Affordable Health Care for America Act, better known as Obamacare. Doctors are abandoning their profession and their patients because Obamacare means they are losing control of their clinics and compensation.

Bob Unruh reports for WND that Dr. Jane Orient, a spokeswoman for the Association of American Physicians and Surgeons, told WND that doctors already have started leaving the profession through early retirement. Among those who remain, some will seek alternatives to what they see coming in the federal government’s takeover of health care.

“I think it’s a disaster for patients,” she said. “They may lose the doctor they relied on all their lives.”

The survey by Deloitte  found that the “future of the medical profession may be in jeopardy as it loses clinical autonomy and compensation.”

Further, it found the health insurance exchanges required by Obamacare this year probably won’t be reality. Many doctors are starting to limit their participation in Medicaid and Medicare because of low reimbursement rates. Some doctors even close off their practices to such patients.

Dr. Orient confirmed that many doctors are unable to continue a private practice because of increasing government demands and intervention, which “amounts to busy work.” Those physicians will end up working for a corporation hospital where the profits are distributed to shareholders. Such scenarios often end up giving the feeling of an assembly line, where a patient sees a doctor briefly, is given a diagnosis and shown the door.

She said doctors in that system will be punished if they spend too much time on a patient, or possibly if they provide too much treatment. The frustration that comes from such scenarios actually is creating the incentive for a counter-trend in which doctors cut ties to the behemoth insurance companies and simply charge a fee to patients.

The survey found physicians are pessimistic about the future of medicine. “The majority worry about the profession’s erosion of clinical autonomy and income, and its inability to achieve medical liability reform.”

While many doctors are satisfied with practicing medicine, most of their satisfaction is in their interaction with patients. But nearly one in four said that even now they are not allowed to spend enough time with each patient. And one in five was distressed by the developing government regulations.

The Deloitte report paints a bleak picture of how U.S. doctors regard the future of their profession:

  • Nearly three-quarters of physicians (higher among surgical specialists at 81%) think the best and brightest may not consider a career in medicine. That’s an increase of 12% from the 69% of had thought so just two years ago, in 2011.
  • More than half surveyed believe physicians will retire (62%) or scale back practice hours (55%) due to how their profession is changing.
  • 4 in 10 physicians had reductions in their take-home pay from 2011 to 2012. Of those, 4 in 10 believe their reduced pay was a result of Obamacare.
  • Fully half expect their incomes to “fall dramatically in the next one to three years.”
  • Overall, doctors are critical of the U.S. health care system, blaming problems on a defensive mode that influences treatment and results.
  • Only 2 in 10 doctors believe the Obamacare government exchanges will be ready to go.
  • 25% say they’ll limit their work on Medicare patients if the government funding program continues as it is.
  • Most doctors believe unhealthy lifestyles influence the health care system costs. (Duh!)

America, meet your new primary care physician!

Meet your new primary physician

~Eowyn

Big Pharma made $711 bln overcharging seniors and disabled

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AFP Photo / Justin Sullivan

The 11 largest drug companies have made $711 billion in profits in just a decade, largely due to overcharging Medicare, which does not seek out competitive prices and uses taxpayer funds to support Big Pharma.

Since Medicare is prohibited from purchasing drugs based on their cost, its prescription drug program has been making large payouts to drug companies that have overcharged the program for years, according to an analysis by Health Care for America Now (HCAN).

“There is nothing wrong with a company making profits – that’s what their supposed to do. But the drug industry’s profits are excessive as a result of overcharging American consumers and taxpayers,” writes Ethan Rome, executive director of HCAN, for the Huffington Post. “We pay significantly more than any other country for the exact same drugs.”

Rome notes that per capita drug spending in the US is 40 percent higher than in Canada, 75 percent greater than in Japan, and nearly 300 percent greater than Denmark.

The 11 largest global prescription drug companies have skyrocketed since the Medicare Part D prescription drug program was launched in 2006. The government health program enables seniors and the disabled to buy taxpayer-subsidized coverage for many of the most widely disseminated medicines. But Medicare is prohibited from negotiating prices with pharmaceutical companies or seeking out more cost-effective drugs, thereby costing seniors, the disabled and American taxpayers billions of dollars more than some argue the drugs are worth.

Some lawmakers have recently urged Congress to consider changing the law, for the sake of cutting unnecessarily high costs. Wisconsin Democratic State Senator Jon Erpenbach told Wisconsin Public Radio that his state could save $1.2 billion over ten years if Congress were to allow Medicare to partake in prescription drug negotiations.

“I understand that pharmaceutical companies are for-profit companies,” he told the station last week. “I understand there’s a lot of research and development that goes into the products that they produce. All of that being said, it shouldn’t cost us more to get that kind of pharmaceuticals we need to have.”

But according to the HCAN analysis, Big Pharma spends very little on research and development. Even though pharmaceuticals cite research as a costly part of its operations, the money spent on this is exaggerated, Rome claims. Drug companies spend 19 times more on marketing than on research and development – another reason why the industry reaps so much in profits each year, he adds.

US President Barack Obama has long promised to repeal the prohibition on Medicare negotiations with drug companies, but has so far failed to do so. The Veterans Administration currently negotiates drug prices, and manufacturers argue that letting Medicare take over the negotiations would make no difference to the industry. Supporters of drug manufacturers also continue to emphasize the high costs of research and development.

But the Congressional Budget Office found that if Medicare were to receive the same bulk-purchasing discounts on prescription drugs that state Medicaid programs receive, the federal government would cut its spending by $137 billion over 10 years.

“Our politicians give all kinds of tax breaks and subsidies to big corporations that don’t need them: Big Oil. Wall Street. Companies that ship our jobs overseas,” Rome writes. “Every gift to a special interest, including allowing Big Pharma to overcharge Medicare, is an expenditure of scarce tax dollars. That’s called wasteful spending.”

KJLN