In the wake of the news

Wherein I opine on the debt deal and food stamps; a registry for Alzheimer's drugs; and the continued slower growth in health care spending

I hesitated writing about the debt ceiling apocalypse because we’ve seen this horror flick before. In fact, we’ve seen it 78 times over the past six decades without the debt ceiling ever being breached. Why participate in the journalism parlor game of worst-case-scenario scaremongering when you know the hero (financial markets) will always escape unscathed at the last minute?

Federal budget standoffs are another matter. They usually take place in the fall as the October 1 start of the federal fiscal year approaches and follow a different plot line. Government employees and the people who depend on government services (i.e., almost everyone if they’re being honest) have suffered through 22 full or partial shutdowns since 1976. Why? It happens whenever Congress fails to pass a budget or legislation authorizing continued spending based on the previous year’s budget.

The most infamous and prolonged budget shutdowns occurred in 1995 and 2011, each time after conservative Republicans won control of both houses of Congress. But last year, in a reversal of the pattern of the out-party winning big in a new president’s first mid-term election, the GOP failed to win the Senate and won only a narrow majority in the House. While that all but guaranteed a happy ending to this year’s “debt ceiling crisis” sequel from Hollywood on the Potomac, which frustrated its producers on the rightwing side of the aisle, they no doubt are already planning to roll out a fall “budget crisis” blockbuster.

Media reports have mostly called the final deal a victory for the Biden administration. The president won accolades for his savvy negotiating skills borne of decades of service on Capitol Hill. The health care sector can easily absorb its minor cuts, largely in the form of clawbacks of unspent COVID-19 emergency funds. Democrats rejected any compromise on universal Medicaid work requirements, a big win for low-income advocates.

However, the deal did include a requirement that Congress pass legislation imposing cuts on discretionary spending programs like low-income housing subsidies and child care. Failure to pass that bill would result in an imposition of a 1% across-the-board cut in all federal programs, including the military, thereby establishing the plotline for the fall production.

The big “loss” for liberals came in the supplemental nutrition assistance program, colloquially known as food stamps. Unemployed single adults between the ages of 49 and 54 were expelled from the program. Yet, as the twitter-verse is now reporting, that will only affect about 200,000 people nationwide. Meanwhile, about a half million homeless people under age 49 are now eligible for food stamps. In other words, the Biden administration succeeded in expanding the program for the neediest among us, albeit at the expense of a smaller number of older adults.

Registries for Alzheimer drugs

In recent years, the Food and Drug Administration has approved several new Alzheimer drugs after clinical trials showed they had at best a marginal effect on slowing patients’ descent into dementia. Despite those paltry results, their drug company sponsors slapped exorbitant prices on those products — around $25,000 a year. Given that there are 5 million Americans suffering from dementia, most of them over 65, the FDA’s liberalized approval policy threatened to impose a huge surtax on every senior’s Medicare Part D drug policy to pay for the drugs.

That’s why it was heartening to see the Center for Medicare and Medicaid Services’ Evidence Development and Coverage Advisory Committee (MEDCAC) on Thurday require that physicians collect data on their patients’ outcomes on Alzheimer’s drugs and report them to a registry as a condition of reimbursement. After a few years of collecting results, researchers will be able to mine the registry to determine how well these drugs are working. Did they actually make a clinically meaningful improvement in patients’ lives?

The latest drug in this category is Leqembi, made by Eisai and Biogen, which received the FDA’s accelerated approval designation in January. Under accelerated approval, which usually relies on preliminary clinical trial data, CMS only authorizes payment for the drug if the patient is enrolled in a clinical trial. But if FDA gives full approval, CMS automatically authorizes payment for the drug. An advisory panel is expected to give its blessing for Leqembi’s full approval next week.

Eli Lilly also has a drug that clears brain plaque that is nearing approval. Biogen’s Aduhelm, which works in a similar manner, was given accelerated approval last year, but has not been widely prescribed after extensive publicity was given to its limited benefits.

The trials for all these drugs measure efficacy by calculating a score based on a person’s response to questions designed to measure cognitive ability. A typical question requires remembering five words in order. (Remember Donald Trump bragging how he “aced it” with “person, woman, man, camera, TV”?)

As Reshma Ramachandran, an assistant professor at Yale School of Medicine, told Axios last month when questioned about Eli Lilly’s new drug: "When we look at a trial and we see this slightly different increase or slowing down in the clinical score ... it's hard to tell what that means for a patient. For a patient who has early Alzheimer's, it's very difficult to understand how that minor change in score correlates with their function."

The design of the new CMS registry must not only be easy for prescribing physicians to use, it needs to collect data that are meaningful measures of cognitive abilities for patients and their families. Based on my own family’s experience, I would include behavioral measures like whether someone can still drive, perform daily tasks on their own or remember their children’s or siblings names. It also should require frequent updates so researchers can accurately measure the pace of cognitive decline for people on the drug compared to a matched cohort who took similar tests but didn’t take the drug.

Two cheers for slower spending

The non-profit Altarum think tank reported last week that health care spending in the U.S. continued to fall as a share of the overall economy, reaching its lowest level since 2014. While health care spending in non-inflation-adjusted dollars grew at 5.4%, that was nearly a full percentage point less than the overall economy. It now stands 17.3% of all economic activity, which is where it’s been for most of the past decade except for the two worst years of the pandemic.

So much for the good news. The bad news is that many health care prices have been rising just as fast or faster than prices elsewhere in the economy. The consumer price index in April rose 4.9%. The health care price index calculated by Altarum rose just 3.4% overall.

But the price increases wasn’t spread evenly. The price of private health insurance rose 4.1%. Medicaid prices rose 4.9%. Only Medicare prices, which are subject to federal price controls, held steady, rising by only 1.1% year over year.

Category spending within health care shows that not every provider is posting higher prices. The biggest price increases were in nursing home care, up 7.1%, and dental care, up 7.1%. What do they have in common? Both sectors have been heavily penetrated by private equity firms in recent years.

Drug and hospital prices rose slightly faster than overall health care prices while physician and clinical service prices rose at less than 1%, the 15th straight month that physician prices have risen at that meager rate. Given the levels of burnout being reported by physicians, one has to wonder how long price constraint for physician services will persist.