On August 24, the Yes on Issue 2 campaign released a report by Professor Max Mehlman of the Case Western Reserve University School of Law that claimed passing Issue 2 could save Ohio’s state government as much as $536 million per year.
The evidence for Prof. Mehlman’s claim consisted of a single footnote, which referenced a different study done by Patrick Murray, a medical doctor also affiliated with Case Western, who has no discernible expertise in either state budgeting or procurement. Moreover, Dr. Murray’s analysis concluded that the “most likely” savings would be $350 million per year, not only far less than the amount touted by Prof. Mehlman, but also $50 million less than the $400 million still routinely claimed by the Yes campaign.
A panel of experts—including a former state budget director and three former Ohio Medicaid Directors who administered that program under the last four Ohio governors and have extensive experience in state budgeting and procurement—have examined Dr. Murray’s study in depth, along with his estimated savings.
In brief, they conclude:
• Dr. Murray’s methodology is “extremely flawed,” and his savings estimates are entirely dependent on a host of assumptions that are either unjustified, unexplained, or in some cases, patently false.Dr. Murray’s insistence that Issue 2 could be implemented is based on his unsupported belief that the precise discount and rebate amounts obtained by the VA are publicly disclosed, despite a clear statement to the contrary by one of the sources cited in his own study.
• Dr. Murray’s analysis does not acknowledge that two-thirds of the Medicaid “savings” he envisions would go to the federal government, not the state of Ohio.
• Dr. Murray does not consider or even mention the hardship, as well as the significant personal and financial costs, that enactment of Issue 2 would inevitably impose on actual Ohio consumers, such as higher co-pays for state employees, cost shifting to pharmacies and privately insured Ohioans or that certain drugs might have to be dropped from coverage altogether.
• Perhaps most damning of all, Dr. Murray’s “savings” estimate does not accurately take into account the federally mandated and voluntarily negotiated discounts and rebates that Ohio already receives, which in many cases match or are extremely close to those enjoyed by the VA.
After all, even the Yes campaign now concedes that Issue 2 would NOT reduce drug costs for the nearly two out of every three Ohioans who have private insurance or employer-provided insurance, rely on Medicare or otherwise do not obtain their drugs through state programs. So, if as the experts conducting this study suggest, Issue 2 is also unworkable, would harm Ohioans who rely on state pharmacy programs and would not achieve the savings touted by its proponents, the rationale for its passage entirely evaporates.
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