Well credit the Kaiser Family Foundation for getting (some of) the guilty into one room to talk about the Rough Start to the Medicare Drug Benefit. There’s actually a video of the whole thing here and a transcript if like me you’d rather buzz through the transcript than take 90 minutes to watch the video. But watch the whole thing is what I did last weekend (before the transcript was up)  and the quick overview from the (all female) panel is that it’s more or less a complete disaster. 

Kate has the word on the exact numbers from Kaiser, but still 45% don’t have any drug coverage, with only some 3 million new enrollees plus the 5 million who were moved in automatically being in Part D as of now.

There are two main areas that I want to highlight. The first is that as was reported earlier this week, the people who are poor (or in wonk-speak “near-poor”) and didn’t have coverage aren’t signing up. They are the ones who ought to be in the new program as there are many of them who would actually benefit from it.

Meanwhile the complexity over formularies is immense, and many of the dual eligibles who were put into plans basically got formularies that didn’t work for them and switched. Their new information never got into the computer system.

But there was plenty more grist for the mill:

Leslie Norwalk, the #2 at CMS and a former OMB staffer under Bush I,  tried to put some gloss on the good news side, but quickly got to the bad news. Many dual eligibles who were automatically enrolled later switched because they didn’t like the formulary, and the new plans didn’t have the information they needed about the subsidy that these people should have had--so they were all asked for the $250 deductible that they couldn't pay (being inconventiently very poor n'all). This is a computing database screw-up exacerbated by the plan design and implemenation.

Her second issue is that beneficiaries show up without cards (possibly because getting the cards out has been tough especially for those that signed up late in December) and that meant that pharmacies didn’t know which plans they were in. And of course she has hundred of newspaper headlines from 1966 about what a screw-up Medicare was the first time around (which I’d like to see, as that system was basically an extension of the then current Blue Cross/Blue Shield system and the conventional wisdom is that the new program went off without too many problems).

Next up was Karen Ignagni, the head of the health plans trade association AHIP. Disclosure: While I actually have a lot of respect for many people working in health plans as a whole, I  believe that Ignagni only rarely opens her mouth without lying or  at least stretching the truth beyond snapping point.  And sure enough she starts with a huge whopper. Her first words are that “no one could have foreseen that one month in 55% of Medicare beneficiaries are in the program. That’s of course not effing true. 55% have some type of drug coverage mostly because they already have it from employers or by being dual eligible, and there’s been very little take up of the new benefit by those who didn’t have it before. Suggesting that half the Medicare population has rushed into this plan and that's why it's been so tough to get it right is really something you'd expect to see on Fox News only.

She then said that when it all shakes out that plans will reimburse the states and beneficiaries, and that the data transition issues will be resolved in the near future. She’s obviously never been close to a real IT systems meltdown before, but she has a lot of confidence in health plans and their IT capabilities. Then again, this is something that AHIP has shouted about before, oblivious to the fact of how weak many health plans are in the IT offerings compared to similar sized corporations.

Ignagni also says that lots of enrollment was in a few plans, and the market is going to shake out very soon. I think that suggests that  Leif Hase’s conspiracy theory is true — the health insurers are using this to get people into their Medicare Advantage plans (where they are far more profitable).

Next up was Barbara Coulter, ex-director of Ohio Medicaid. She was not quite so nice about Part D, although she tried to be polite. She said that the problems were predictable. “Moving 6 million people on a holiday weekend was not a good idea. The states’ best advice was that this kind of a change was best done in a planned phased-in program”. Advice that was predictably ignored, and concerns that in retrospect (as the GAO and Jonathan Cohn have pointed out) CMS was incredibly arrogant about.

Coulter also noted that the current transaction data systems are not set up to do retrospective matching. In other words payments that were made by either individuals or states now need to be reconciled so that the plans that should have paid them at the time, do so. (This will keep many IT consultants in work, by the way) AND then there’s the mess of having to get the reimbursement back to those who paid for their drugs when they shouldn’t have done.

She also pointed out a key issue which I’m going to expand upon a little. It has to be realized that the formularies and the benefits between different plans are different. This is like the individual health insurance market when there is a moving target of premiums and benefits, so that it’s impossible to compare and contrast different services at different prices. And of course formularies can be changed to become more or less attractive at a month's notice, while the beneficiaries (with the exception of those automatically allocated) have to wait one year before they can change plan.

Vicki Gottleib, a Medicare beneficiaries advocate, built on that point. 60% of the dual eligibles are in plans with the wrong drugs for them. These people are going to change plans and so the mess over their data not being in the right place is going to get worse. There is actually an exception process that could be used here instead — i.e. a patient could request that an exception to the formulary could be made so that they get their proper drug — but the information about that is not getting out. Prior authorization forms to request this are hard to get, and plans still don’t have the information about what the co-payments are for which drugs easily available to patients and their advocates.

Then there are problems for people who are becoming Medicare eligible (i.e. turning 65 every day) who were previously on Medicaid, but should now be becoming dual eligible. They don’t seem to be being automatically enrolled in the system.

Debra Garza from Walgreens (Pharmacy) says that they depend on cards in the patients hands and many haven’t got them. Even if they have the card. The info needs to be in the system to back up the technology. But if the info isn't there, the pharmacist has to call the plan, and spends hours on hold. Hence the pharmacists are not happy (as no one’s paying them to be on hold during all this!)

That’s about enough to give you a flavor of the gazillion complexities of Part D. Some of it is forgivable; some of it is inevitable, but much of it was designed in at the start. In particular, the absence of a mandate national formulary and mandated benefit package meant that it’s very hard to compare plans. The rational managed competition advocates (e.g. Alain Enthoven and me) have always maintained that insurers should compete on price and service, not on benefits offered. But of course that would be way more transparent than the bills many authors want the system to be. I could comment more on the politics of it, but I already did that over at Spot-on.