Fraud, politics and health-care reform

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Fraud and Bribery: “The California Public Employees’ Retirement System is negotiating a lucrative pharmacy benefits management contract with Caremark Rx Inc., a company being sued for defrauding the pension fund of tens of millions of dollars. …In March, the CalPERS board canceled negotiations with Medco Health Solutions Inc., which had been the front-runner for the contract, after an internal investigation revealed that Medco allegedly had paid more than $4 million in bribes to win a similar three-year, $26-million contract in 2006. … The Caremark lawsuit, a whistle-blower case filed by private attorneys in the name of the state of California, is based partially on evidence from former Caremark employees. … Caremark is accused of endangering CalPERS members by making unauthorized and illegal changes to prescriptions submitted between 2003 and 2006, often by switching patients to cheaper drugs or canceling prescriptions outright,” The Los Angeles Times reports..
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“Caremark spokeswoman Christine K. Cramer said the lawsuit had no merit. … The allegations against Medco and Caremark ‘point to the larger issue of how dysfunctional our healthcare system is that the two top bidders are engaged in alleged acts of bribery and fraud,’ said Kathay Feng, executive director of California Common Cause.”

Mr. Ryan’s Medicare: The Princeton health care economist Uwe Reinhardt, writing on the blog Economix for The New York Times, explains Wisconsin Republican Paul Ryan’s new Medicare proposal. “Mr. Ryan’s plan should be read closely by every voting citizen, as it comes closer than any other legislative proposal I can recall to the libertarian vision for America. … At the same time, I urge readers to study the Congressional Budget Office’s analysis of Mr. Ryan’s plan and a very good summary of the plan by the Henry J. Kaiser Family Foundation. … The specific proposals aside, does the Ryan plan offers anything to control overall health-care spending? No, nor does that appear to have been Mr. Ryan’s objective. As the Congressional Budget Office observed, “Private plans would cost more than traditional Medicare because of the net effect of differences in payment rates for providers, administrative costs and utilization of health services.”

Massachusetts reforms: Massachusetts is again leading the way, debating payment reform as proposed by Governor Deval Patrick. “As the Patrick administration pushes Massachusetts forward toward the cost-cutting phase of health reform, one of its guiding concepts is to shift the state from ‘fee for service’ to ‘global payments.’ That is, instead of being paid for each bit of care they give, health care providers will be put on an overarching ‘global’ budget for each patient. But how do we know that global payments work? And do they really save money? WBUR’s Martha Bebinger asks those important questions today in her report here, and takes a look at the early experience of some local global-payment hotspots: Commonwealth Care Alliance, Harvard Vanguard and Blue Cross Blue Shield, writes Carey Goldberg on Commonhealth, the WBUR health blog.