Employers who self insure pay a pharmacy benefit manager separately for their drug plans and the cost to the employer plus the employee is lower than employers with another arrangement. Since the self-insured employer has no incentive to skimp on health insurance costs or on drugs, but is attempting to minimize total cost, the described scenario with people skimping on drugs doesn't happen.
When Obamacare declared drug coverage was an essential service, insurers, generally, covered drugs by hiring a pharmacy benefit manager and paying them per person charges. The capitation charges include 30% profit to the PBM, and the insurer gets to claim the total charge as services provided to patients and gets to add another 20% for profit and overhead.
Once a person has drug coverage, they become somewhat insulated from the cost of drugs, and sensitive only to their co-payments.
When Medicare part D was established, there was not abnormal inflation in generic drug costs, which comprise 70% of US prescription drug consumption.
It is only since the inception of Obamacare that drug companies have been introducing huge increases on generic drugs, which is encouraged by the way Obamacare is designed.
Prescription drugs consume something like 12% of total medical spending. For that proportion, Obamacare rules added 30% for profit and overhead for the PBMs with an additional 15-20% of profits and overhead added by insurers, for-profit and non-profit insurers.
The insurers used to claim that their wellness and disease management (DM) programs helped reduce spending by making patients healthier. Apparently they've given up the ghost on that fiction. Too easily disproven. One major group cut its DM spending from $100/member/year (including incentives to buy more drugs) to $0, and there was quite literally no difference in hospitalizations.
2
This shows why a simpler, comprehensive Medicare, that includes drug benefits would be better for everyone except for profit making. This could happen if our Congress had not prohibited Medicare from negotiating drug prices.
8
@kagni
Medicare part D insurers negotiate prices with drug companies, and several of the insurers, including United Heath Care, have more participants than the entire Medicare population, so have superior bargaining position than Medicare would have if it was "negotiating" all drug prices for Medicare.
Hospitals have an antitrust exemption that allows them to outsource their purchasing to group purchasing organizations. Four GPOs control 80% of hospital spending on drugs and supplies. But hospitals do not pass along their negotiated savings on drugs and supplies to consumers or to insurers who pay bills on behalf of consumers and their employers. The GPOs and hospitals split the "savings" and add them to their profits thru a complicated and legal system of rebates and kickbacks.
Drug companies are paid one penny for a Tylenol tablet [you can buy them at Walmart for two cents for tablet, so surely GPOs are paying less.] When someone spends a few days in the hospital, in addition to a minimum of a $2,000 per day charge, they are billed $30 per Tylenol tablet. The plastic cup, water pitcher and spit tray is billed at $20 [GPO cost $2]. The small box of 1950's Russian quality facial tissues is billed out at $20 [GPO cost $0.25]. The bag of intravenous sterile saline is billed at $150 [GPO cost $0.50].
High US medical costs are caused by government designed cost opacity that creates opportunities for big medicine to game the system to get excess profit.
Part of the problem with prescription drugs lies with the consumer. My doctor and I have an agreement - old drugs are the best drugs. They have been around for decades, not just years. The problems or contraindications are well known, and if there are real, life-threatening contraindications, the doctor will know it and prescribe something else. My husband and I laugh at commercials where the benefits are touted in about 30 seconds and then you have to listen to a minute or more of all the ways these drugs can kill or maim you. If patients did not request the newest (and therefore most dangerous) and also most expensive drugs, the costs of these drugs would come down. The problem with something that is "brand new," is that it is brand new, i.e., untested by usage and time. This goes for everything in medicine. Ask all the women who had plastic mesh inserted into the bodies over the last decade for incontinence, etc. Any easy operation compared to a true surgical repair, but those women are paying for it now. Everything old is new again would solve a lot of our medicinal drug problems.
7
We are being bilked by Drug Discovers, Drug Manufactures, Drug Distributors, Drug "benefit" Managers, Part-D plans, Medicare Advantage plans, BIG PHARMA, little pharma, the turing terds...etc facilitated by politicians who do not really give a darn because they are on the Drug Dole.
5
Many medications have bad side effects are not necessarily needed but are marketed by drug companies on the nightly news (I counted 17 ads for drugs during a 30 minute news program recently). Then we have for profit insurance companies, hospitals (and even universities and researchers) all contributing a piece to consumers' medical costs. I wonder if the current capitalistic practice of 'medicine' is anything more than a competition between various big business interests for our hard earned dollars? Real "healthcare" is hard if not impossible to find. We need universal healthcare.
9
To Kathleen:
Next time you see a commercial for a drug on TV, google the price. It is amazing. For example, Prolia, prescribed for osteoporosis, primarily for post menopausal women, costs $2,000 for an injection needed two times per year, plus two office visits, since it has to be administered in the doctor's office. That's $4,000 per year. The substitute, a generic pill that has to be taken once weekly, costs $52 per year. Generic Fosamax has the same warnings and risks as Prolia.
When insurance is covering the bulk of the cost, people will go for convenience.
The manufacturer of Ambien in spray form just increased its price times to $859 for a 7,7 ml bottle, to much outrage. Its advantage is that it takes 15 minutes to put you to sleep instead of 30 minutes for the pill. A month supply of tablets is $8. It is lovely that someone who values 15 minutes of extra sleep per night has the option of paying $851 for the luxury. Insurance should not cover it.
If needed medications cost more and people reduce their consumption of these meds, how is that supposed to improve health?
Why are there repeated studies that show that people reduce their use of needed medications due to cost concerns? Shouldn't the fact that studies show that this kind of "cost-sharing" harms people's health be enough to bring a screeching stop to use of cost-sharing?
Why are there repeated studies that show that people reduce their use of needed medications due to cost concerns? Shouldn't the fact that studies show that this kind of "cost-sharing" harms people's health be enough to bring a screeching stop to use of cost-sharing?
5
Only G7 country without Universal health care. Ours remains so so complicated, for those who must maneuver the system.
10
Is anyone else a bit perplexed about the pill bottle with googly eyes graphic accompanying this article?
16
Interesting article.
However, a good study must look at the demographics and disease burden of enrollees in traditional Medicare vs. Advantage plans. Advantage enrollees get a broader choice of coverage but lose choice of providers. That works well for the healthier and younger Medicare participants, and the lower drug costs are an additional inducement for those folks.
A well run study should look at these variables and also assess differential health and cost outcomes. That will not be easy.
However, a good study must look at the demographics and disease burden of enrollees in traditional Medicare vs. Advantage plans. Advantage enrollees get a broader choice of coverage but lose choice of providers. That works well for the healthier and younger Medicare participants, and the lower drug costs are an additional inducement for those folks.
A well run study should look at these variables and also assess differential health and cost outcomes. That will not be easy.
7
@Pat
Adjusted for health, Medicare Advantage participants cost less than traditional Medicare participants, even though MA insurers incur overhead not incurred by traditional Medicare and also extract profit. Well designed studies have proven this.
The problem with traditional Medicare is that the reported low overhead of 3% is what Medicare pays contractors to process bills, with no controls. Medicare admits that 30% of what it pays out is for services that are unnecessary, duplicative, not rendered or overbilled. Medicare will pay for treatments that are impossible, like surgeries for women that can only be performed on men and vice versa, three cataract surgeries within 60 days, etc.
HHS actively investigates Medicare Advantage processes and reports out how they game the system to get abnormal profits. It is politically easy to attack insurers for undeserved profit, and it is entirely appropriate for HHS to seek out cost reductions.
In traditional Medicare there is no political will to examine the services on demand model, because it would result in political blowback. We occasionally read about major fraud cases where the Justice Department prosecutes a multimillion dollar case, but they only do so in when the fraud is so egregious that a brief perusal by the WSJ detects it. A provider billing an extra 10 or 20% gets away with it. Pigs get fat, hogs get slaughtered.
The average consumer does not understand Medicare does not pay 100% of their health care costs, nor do they understand that advantage plans still may have co-pays and/or deductibles. Then there is the coverage gap or donut hole that throws many in to a tail spin when they are paying 100% of the cost of their medication which can be staggering.
6
Or, drug benefits can be offered through Medicare Supplement plans. I have such a plan (offered by my last employer, who is self-insured). The supplement plans generally cover costs Medicare does not including Medicare copays and deductibles (usually 80% of those costs). So, supplements do have a vested interest of keeping folks healthy and out of the hospital.
4
Medicare is NOT single payer. Medicare pays 80% and you have to pay ever increasing premiums for part B. Then you have to buy a supplemental plan for the other 20% and a prescription plan with high deductibles and limited formularies. The supplemental Plans often have significant deductibles and copays. Insurance companies never lose. At one time Medicare did pay full freight, but under Bush there was a "Medicare is going broke scare" and they decided to have patients pay 20%. This was the first step in the Republicans attempt to privatize Medicare. Insurance companies are cashing in at the expense of the nation's seniors and taxpayers.
23
Jan Newman MD is using the phrase "single-payer" in a nonstandard way.
The phrase "single-payer" refers to the number of health insurance companies available to all citizens in a single state; it does not refer to the availability of supplemental health insurance provided by a second company because of co-payment provisions.
The phrase "single-payer" refers to the number of health insurance companies available to all citizens in a single state; it does not refer to the availability of supplemental health insurance provided by a second company because of co-payment provisions.
1
Medicare Supplement plans - the ones most people buy - do NOT have "significant deductibles and copays". The most frequently purchased options are designed to pay most or all of the deductibles and coinsurance that original Medicare does NOT pay - hence, Medicare "supplement".
misinformation does not help any of us move in the direction of thinking more clearly about what effective health coverage reform might look like.
misinformation does not help any of us move in the direction of thinking more clearly about what effective health coverage reform might look like.
5
There is something immoral and unethical with profiteering for people's suffering. That is what big pharma and Advantage policies as well as prescription drug plans do. Advantage plans not only have restricted networks but often high deductibles and copays that seniors don't understand until they get hit with big bills. Patients go without essential drugs like insulin whose price goes out the roof. Then they end up with severe high blood sugar or complications from diabetes like heart disease or end stage renal disease which ravage their lives, savings and wellbeing not to mention the extreme cost to Medicare. The answer is a single payer system with drug price regulation as exists in many other countries.
19
Get rid of PROFIT in health care! We have billions for billionaires but not for hardworking overburdened Americans ? Insane.
Stop paying the middleman. He's not doing a darn bit of work.
Stop paying the middleman. He's not doing a darn bit of work.
30
My Senior Advantage Plan, a non-profit, charges $52 for 90 tablets of the generic for Cardizem. Walmart charges $10. Someone who doesn't price shop might end up doing without their vitally needed drugs. And many sick folks would just take the price at their plan pharmacy
16
Price-shopping isn't always possible. Many doctors nowadays don't give you a written prescription that you can take to the pharmacy, or to several pharmacies before you find the least-expensive one. You may find that your doctor will only fax your prescription to "your" pharmacy, and you are stuck with whatever that pharmacy charges. It is great to have one pharmacy know all your medications, but it may cost you.
8
These Medicare "Advantage" plans are a real moneymaker for the insurers and insurance agents.
A couple years ago, our supposedly helpful 'senior insurance agent' almost had my husband signing on the dotted line for an Advantage plan.
This jogged something in my memory, that he had been on one some years prior, and with an unexpected health crisis (now thankfully resolved), had gone back to 'traditional' Medicare for wider networks, etc.
So, at the last second, I asked the guy, what if this Advantage plan isn't all that great? Come next year's open enrollment, can husband switch back to traditional Medicare?
The answer was NO. As he had already been on, off, and back on again, if he switched out again, there was NO going back to regular Medicare. You get a one-time jump option/exclusion.
I/we stopped that train right there.
And really, why deal with a single insurance company, and all their jerking around?
After 65, 70, 75 and up, health and health needs can change. Quickly.
The major, best, sanest reason to stay on traditional Medicare, as long as it is allowed to remain in existence, is the global nature of it.
It may not be perfect, but it's a heck of a lot better than spending one's latter years fighting with stand-alone insurance cos. on the vagaries of their very specific coverages and non-coverages.
Oh, and btw, the insurance agent was not real happy. No commission for him on that day. Or any future day.
A couple years ago, our supposedly helpful 'senior insurance agent' almost had my husband signing on the dotted line for an Advantage plan.
This jogged something in my memory, that he had been on one some years prior, and with an unexpected health crisis (now thankfully resolved), had gone back to 'traditional' Medicare for wider networks, etc.
So, at the last second, I asked the guy, what if this Advantage plan isn't all that great? Come next year's open enrollment, can husband switch back to traditional Medicare?
The answer was NO. As he had already been on, off, and back on again, if he switched out again, there was NO going back to regular Medicare. You get a one-time jump option/exclusion.
I/we stopped that train right there.
And really, why deal with a single insurance company, and all their jerking around?
After 65, 70, 75 and up, health and health needs can change. Quickly.
The major, best, sanest reason to stay on traditional Medicare, as long as it is allowed to remain in existence, is the global nature of it.
It may not be perfect, but it's a heck of a lot better than spending one's latter years fighting with stand-alone insurance cos. on the vagaries of their very specific coverages and non-coverages.
Oh, and btw, the insurance agent was not real happy. No commission for him on that day. Or any future day.
26
Actually, I really love my Senior Advantage Plan. Except for watching the prices of certain drugs, I have no real problems at all. I would hate to have to go back to traditional medicare. It's Kaiser.
6
Kaiser is the exception that proves the rule.
3
A Medicare Advantage (MA) enrollee can always disenroll during the annual enrollment period (October 15 to December 7), and either switch to a different MA plan or return to original fee-for-service Medicare and get a standalone drug policy. The change will take effect January 1. MA enrollees can also disenroll from January 1 to Feb. 14, and return to original Medicare (but not switch to a different MA plan); the change will take effect on the first of the next month. The one-time-only right that the commenter's insurance agent referred to was the special access rights for Medigap supplementary insurance after disenrolling from an MA plan within the first 12 months of enrolling. For more details, consult Medicare publications about enrolling/disenrolling, and talk to a SHIP counselor.
2
I'd be willing to be that most of the drugs these studies refer to are off patent and should cost pennies instead of hundreds of dollars. The fix is not to force people into Advantage Plans, which always stick you in a network and often won't cover you for a doctor or hospital in your area because they aren't part of the network. And often it's the hospital you want to be in if you're really sick.
The answer is to control runaway drug prices, especially those that are off-patent and should cost next to nothing. Or, here's a thought -- how about a single-payer system. For everyone.
The answer is to control runaway drug prices, especially those that are off-patent and should cost next to nothing. Or, here's a thought -- how about a single-payer system. For everyone.
20
Single-payer is a slogan. It's not a solution. I'm saying this as someone who feels Rx prices are an incipient scandal, and substantive health system reform is long overdue.
Unfortunately, imagining that there is A magical "single payer" system that will enable us to pay some or all of all desired treatment bills in some affordable fashion is not fruitful thinking. In fact, it's not thinking at all. It's sloganeering.
Unfortunately, imagining that there is A magical "single payer" system that will enable us to pay some or all of all desired treatment bills in some affordable fashion is not fruitful thinking. In fact, it's not thinking at all. It's sloganeering.
You neglect to mention drug "exclusions" which don't even count toward deductibles.
Recently, I was prescribed a topical pain killer for rotator cuff syndrome. My appeal was rejected because the drug was "not on the formulary for this condition." The rejection noted that "it was not because of medical necessity."! What else should determine this formerly?!! I cannot take oral NSAIDS because of kidney problems. Medicare would have paid for all the opioids my doctor would prescribe! The only alternative is a very expensive and dangerous cortisone shot. Medicare would ay for that.
In one year, I had $700 of excluded prescriptions, most of them improperly excluded, but because of technicalities (I used a discount card) I couldn't get reimbursed.
Medicare is riddled with rules that make it cost more for worse health.
We need Single payer WITHOUT INSURANCE companies now. And we need to import drugs and fire administrators and agencies.
Recently, I was prescribed a topical pain killer for rotator cuff syndrome. My appeal was rejected because the drug was "not on the formulary for this condition." The rejection noted that "it was not because of medical necessity."! What else should determine this formerly?!! I cannot take oral NSAIDS because of kidney problems. Medicare would have paid for all the opioids my doctor would prescribe! The only alternative is a very expensive and dangerous cortisone shot. Medicare would ay for that.
In one year, I had $700 of excluded prescriptions, most of them improperly excluded, but because of technicalities (I used a discount card) I couldn't get reimbursed.
Medicare is riddled with rules that make it cost more for worse health.
We need Single payer WITHOUT INSURANCE companies now. And we need to import drugs and fire administrators and agencies.
36
MEDICARE IS SINGLE PAYER. It literally IS single payer. That is what single payer IS.
If you don't like Medicare, I have no idea what would "please you".
If you don't like Medicare, I have no idea what would "please you".
7
There are rules to every program. Unfortunately, the insurance companies can change formularies anytime they want. But using a discount card does make those purchases ineligible for your deductible.
2
Concerned Citizen, you seem to be implying that if people don't like any aspect of Medicare, they would not like any single payer healthcare system. There are many ways to implement single payer systems, and many rules within any piece of legislation. The key is to analyze how a system is working and make improvements that improve cost-effectiveness over time.
1
Why not provide unlimited free health care to the entire world?
All we have to do is tax anyone making more than 75k at least 50%.
Rough calculation, but seems reasonable and doable!
All we have to do is tax anyone making more than 75k at least 50%.
Rough calculation, but seems reasonable and doable!
4
We're providing a bonanza for Pharma, pharmacy benefit managers and hospital execs - why not cut those costs first? Ditto non-profit hospitals that act like for-profit hospitals.
7
The problem is that everyone wants it and no one wants to pay for it. VT and CO both tried to get it and the voters said no in CO due to cost. And in VT they saw that the numbers were so high that there was no way ever to get it passed. Just saying, the cost of Single Payer is going to be VERY high and the "rich" alone can't pay for it. Every single one of us is going to have to pay for it. And it won't be cheap.
1
We will get single payer when voters show up at town hall meetings and hold our representatives accountable, just as they are now holding Republicans accountable for voting to abolish Obamacare and Medicaid.
And if they don't support single payer, we should run a candidate who does against them in every primary and general election.
And if they don't support single payer, we should run a candidate who does against them in every primary and general election.
25
Yes. The thyroid drug (the oldest drug in the pharmacopeia) Armour Thyroid has increased in price from $13/month to $90/month since 2009 for someone who takes two pills a day. Why wouldn't you try to reduce your intake of an expensive drug to the absolute minimum?
Profiteering by Allergan.
Profiteering by Allergan.
28
I take levothyroxin--$3.53 a month. No desiccated animals.
4
Levothyroxin does not work for many people. Armour has T1, T2, T3, and T4 hormones in it. Levothyroxin has only T4. For people who do not convert T4 to T3 efficiently, it is not an effective answer.
6
So many articles and studies about the problems with our health care "system" that could be avoided if we followed the model of every other wealthy nation and provided government run single payer not for profit health insurance. We would still need to know how best to spend the money, but at least everyone would be covered including drugs and their prices (which the government would have the power to regulate and negotiate).
I bet if you polled everyone in the country and compared side-by-side the current but ineffective for profit model versus single payer it wouldn't be close. Not many people would prefer to pay a hospital CEO millions instead of getting life-saving treatment and medications.
I bet if you polled everyone in the country and compared side-by-side the current but ineffective for profit model versus single payer it wouldn't be close. Not many people would prefer to pay a hospital CEO millions instead of getting life-saving treatment and medications.
23
This article is about MEDICARE (for seniors, as it now exists).
Medicare IS SINGLE PAYER. That is what single payer IS.
If you don't like Medicare....why do you think you'd like single payer?
MEDICARE IS SINGLE PAYER.
Medicare IS SINGLE PAYER. That is what single payer IS.
If you don't like Medicare....why do you think you'd like single payer?
MEDICARE IS SINGLE PAYER.
1
Using that reasoning, you could say the same about ANY single payer.
You can't say that "the system for a small group that can opt in or out" = single payer. The entire *system* would have to have one payer. What's the difference? Insurance companies gaming the margins for one; exactly the topic of this article.
You can't say that "the system for a small group that can opt in or out" = single payer. The entire *system* would have to have one payer. What's the difference? Insurance companies gaming the margins for one; exactly the topic of this article.
1
I have a stand alone plan. To get the lowest cost each year, I compare the plans on medicare's site, which allows me to input the drugs I use. The site then shows you which is the least expensive plan overall, including cost of drugs and premiums. I am amazed that many people I know don't know about this. They just stick with the same plan year after year, even as the costs go up.
7
I stick with the medicare supplement plan I have because it is a good one, but has been "discontinued" by the insurance company. (Guess it was too good).
I am "grandfathered in" as long as I pay the premiums on time, but if I switch out of it to another supplementary plan, I will not be allowed to switch back in.
I am "grandfathered in" as long as I pay the premiums on time, but if I switch out of it to another supplementary plan, I will not be allowed to switch back in.
This article substantially misrepresents Medicare. It sounds like the underlying finding by someone at Harvard is that if people don’t take their meds, they are more likely to have to go to the hospital. It’s kind of hard to dispute that (it's actually kind of hard to know why that was even studied?). Not mentioned in this article is that the obverse has also been proven; adding public drug coverage to Medicare 10 years ago has saved the trust funds $B on hospitalizations and services.
As for the effect of Medicare on why or why not people would not take their meds
-- The idea of higher co-pays for higher priced brandname drugs is not all unique to Medicare. And within Medicare it is not unique to public standalone Medicare Part D drug plans. Such a co-pay structure is also part of Public Part C and private group retiree insurance plans that supplement Medicare Parts A and B. The idea is associated with managed step therapy and doctors, economists and healthcare advocates almost all think that’s good (try simvastatin before Crestor)
-- The whole distinction between public Part D and Part C and private supplements in this article is totally wrong vis a vis why one Part would have higher co-pays… and not the other. It is not even true. Basically all the same insurance companies are involved and they could care less which approach the beneficiary chooses (that choice almost totally depends on what your provider accepts anyways and has nothing to do with drug plan benefits)
As for the effect of Medicare on why or why not people would not take their meds
-- The idea of higher co-pays for higher priced brandname drugs is not all unique to Medicare. And within Medicare it is not unique to public standalone Medicare Part D drug plans. Such a co-pay structure is also part of Public Part C and private group retiree insurance plans that supplement Medicare Parts A and B. The idea is associated with managed step therapy and doctors, economists and healthcare advocates almost all think that’s good (try simvastatin before Crestor)
-- The whole distinction between public Part D and Part C and private supplements in this article is totally wrong vis a vis why one Part would have higher co-pays… and not the other. It is not even true. Basically all the same insurance companies are involved and they could care less which approach the beneficiary chooses (that choice almost totally depends on what your provider accepts anyways and has nothing to do with drug plan benefits)
2
Why are health insurance companies allowed to get away with this travesty of forcing patients to pay high co-pays for medications they need to live? Why does every plan that is affordable in terms of the premium not provide the coverage we truly need if we're ill or on medication? If we're paying a premium there ought to be guarantees that we can receive the medications we need when we need them, that the network isn't so narrow or exceptions so hard to get that we can't see the doctors we may need to see, and that our claims are not going to be denied on a routine basis.
Our current system, even for Medicare, doesn't meet our needs. America needs a universal access single payor system that doesn't have people feeling their wallets before they decide to go for treatment or debating how long they can put off treatment in order to save money. Most of the time the money saved is lost if the patient takes a sudden turn for the worse.
The motto here is less expensive or high deductible is not the answer. Health care is not buying a car or a house. Health care is an item we all need at some point in our lives. It shouldn't be easier to purchase a gun than it is to get the health care we need when and where we need it.
Our current system, even for Medicare, doesn't meet our needs. America needs a universal access single payor system that doesn't have people feeling their wallets before they decide to go for treatment or debating how long they can put off treatment in order to save money. Most of the time the money saved is lost if the patient takes a sudden turn for the worse.
The motto here is less expensive or high deductible is not the answer. Health care is not buying a car or a house. Health care is an item we all need at some point in our lives. It shouldn't be easier to purchase a gun than it is to get the health care we need when and where we need it.
16
An individual does not need health care if he dies suddenly.
2
He does if he takes a sudden turn for the worse. Worse doesn't always mean dying.
1
Think what you like; most people are not going to want to pay what it will cost to implement single payer for everyone for everything imaginable (they won't mind the 'rich' people paying, tho). Hard questions have to be asked and those of us with sick relatives don't want to answer. When do you stop treating an 85 year old with cancer? How many heart surgeries does a 90 year old need? Who gets the knee replacement if there's rationing - the 30 year who still contributes to the workforce or the retired granny?
1
The choice between an Advantage plan and staying in regular Medicare plus a Part D drug plan was easy. I chose the latter combination because NOT ONE of the Advantage plans available in my area included even one of my current doctors. One didn't even include the excellent hospital that is within a mile of my home. The insurance companies have a stranglehold on Americans' healthcare. Single-payer insurance, Medicare for All, is the only fair answer.
41
Underlying this perverse dynamic is the out-of-control harvesting of long-established medications by venture capitalist firms. Controlling gout and gouty arthritis, for example, was dirt-cheap using the drug colchicine (extract of strawberry). When a venture firm bought it from the last manufacturer, altered the formula slightly, and applied iron-clad patent protections to the "new" product, they now had a prescription that sold for over $5 a pill.
Seniors afflicted with conditions needing this treatment now are presented with high co-pays or medical reviews, or else given a course of prednisone (challenging and a bit dangerous for the immune system) as an alternative. This does not promote a high quality of life, even if a few partners or shareholders are seeing healthy profits.
Seniors afflicted with conditions needing this treatment now are presented with high co-pays or medical reviews, or else given a course of prednisone (challenging and a bit dangerous for the immune system) as an alternative. This does not promote a high quality of life, even if a few partners or shareholders are seeing healthy profits.
28
Medicare Advantage plans are not always available. There are none in the area of Silicon Valley I live in. The same insurer offers it in adjacent counties, so there has to be some financial issue involved.
This is an area known for high cost of living and a shortage of housing which drives up health care costs for medical services. There is a relative oversupply of Doctors for the population, but most won't take Medicare patients.
This is an area known for high cost of living and a shortage of housing which drives up health care costs for medical services. There is a relative oversupply of Doctors for the population, but most won't take Medicare patients.
7
OSS Architect
You answered your question in the last phrase. There is a "financial issue involved." It's from the provider side, not the payer side.
You answered your question in the last phrase. There is a "financial issue involved." It's from the provider side, not the payer side.
3
Where is the list of approved medications prescribed for Medicare beneficiaries that should not be taken? Of course, there is no such list. There is a legitimate medical reason for each prescription. So why do we need co-payments to discourage patients from filling their prescriptions? The simple answer is we don”t; they should be filled.
Pricing is a problem, but rather than pretending that the market will control prices - it doesn’t - we need to get serious about government-administered pricing. An Improved Medicare for All would remove financial barriers to appropriate care while taxpayers would receive greater value for their health care investment by ensuring that Medicare is paying fair prices for our drugs and for the rest of our health care as well.
Pricing is a problem, but rather than pretending that the market will control prices - it doesn’t - we need to get serious about government-administered pricing. An Improved Medicare for All would remove financial barriers to appropriate care while taxpayers would receive greater value for their health care investment by ensuring that Medicare is paying fair prices for our drugs and for the rest of our health care as well.
22
Those who have selected a stand-alone drug plan, as opposed to a Medicare Advantage plan, have done so voluntarily. Why do some make this choice?
--
It is very simple
The endless $50 here and $100 there fixed dollar copays of Medicare Advantage plans are MORE than the 20% copays under regular Medicare
For example, the Advantage plans in this state require a $40 or $50 copay for each physical therapy session. Based upon my bills, the amount allowed by Medicare is around $93 -100. That means a copay of $18+ to $20 --- NOT $40-50!
I broke a wrist last fall - needed outpatient surgery. Under regular Medicare B, the 20% copays would have been $942. The Advantage plans would have hit me for $1400 -1600.
Why? Based upon basic arthimetic
--
It is very simple
The endless $50 here and $100 there fixed dollar copays of Medicare Advantage plans are MORE than the 20% copays under regular Medicare
For example, the Advantage plans in this state require a $40 or $50 copay for each physical therapy session. Based upon my bills, the amount allowed by Medicare is around $93 -100. That means a copay of $18+ to $20 --- NOT $40-50!
I broke a wrist last fall - needed outpatient surgery. Under regular Medicare B, the 20% copays would have been $942. The Advantage plans would have hit me for $1400 -1600.
Why? Based upon basic arthimetic
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I should add that maybe Advantage plans have more extensive drug coverage with LOWER copays BUT they are making it up on the copays for medical care which are higher than regular Part
Advantage insurers are just cost shifting - give them a break on drug copays and nail them with huge copays for medical care
Advantage insurers are just cost shifting - give them a break on drug copays and nail them with huge copays for medical care
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And for many of public Part C the math works the other way. Choice is good
1
Why have all these arcane rules in the first place? Cover everybody, then no worry about preexisting issues or gaming the system. Cover all reasonable prescriptions. Why does Plan A not cover what Plan B does? Do we have any idea about how much time and money is wasted on these games? I'm sure it is a jobs program for the insurance industry, which exists to make money, not provide healthcare.
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The Rand Health Insurance Experiment, a randomized, controlled trial, demonstrated in 1974 that cost sharing reduced the use of inappropriate treatment but also appropriate treatment. https://en.wikipedia.org/wiki/RAND_Health_Insurance_Experiment For example, patients with high blood pressure or asthma were less likely to take drugs to control their condition.
In other words, when you increase the cost of drugs, people take less of them, even when those drugs would save their lives, and even when those drugs are "cost efficient."
The effect is particularly strong for low-income patients, who can't make up the difference.
These results have been confirmed in medical journals like NEJM ever since.
Chandra et al cite the Rand experiment. However, they conveniently omit the fact that it was not powered to measure clinical outcomes.
The only reason for cost-sharing drug costs is to discourage patients to spend less of the insurance company's money, justified or not. It's not a health policy, it's a business policy, to prevent low-income people from getting needed care.
You can control spending at the doctor level, or the management level. Patients are in the worst position to make decisions. Doctors are in a better position. The best is expert panels, as they use in the Canadian or UK health care system.
Patient choice in the free market is a demonstrated failure.
In other words, when you increase the cost of drugs, people take less of them, even when those drugs would save their lives, and even when those drugs are "cost efficient."
The effect is particularly strong for low-income patients, who can't make up the difference.
These results have been confirmed in medical journals like NEJM ever since.
Chandra et al cite the Rand experiment. However, they conveniently omit the fact that it was not powered to measure clinical outcomes.
The only reason for cost-sharing drug costs is to discourage patients to spend less of the insurance company's money, justified or not. It's not a health policy, it's a business policy, to prevent low-income people from getting needed care.
You can control spending at the doctor level, or the management level. Patients are in the worst position to make decisions. Doctors are in a better position. The best is expert panels, as they use in the Canadian or UK health care system.
Patient choice in the free market is a demonstrated failure.
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Or in ALL of the Nordic countries.
2
What about just lowering drugs costs like the rest of the world seems able to do? Problem solved.
34
If the costs were lowered the CEOs wouldn't be able to take home such big paychecks, as many stock options, and some, heaven forbid, might to have live around the great unwashed from whom they make most of their money. That wouldn't do at all.
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This is the best explanation I've read to date on the topic.
As a consumer healthcare advocate, I've seen first hand the harm stand alone drug programs and even those sold by for-profit insurers have done to Medicare patients. Drug formularies, or the list of drugs covered by a plan, change with the wind every year. Prices increase, benefits decrease, and it's up to the patient to know to carefully check their drugs against the list and compare prices. We saved one Medicare recipient $2400 in 2014 just by switching her from one plan to another, all while staying with the same insurance company.
The government needs to regulate drug pricing for Medicare recipients, but Congress gets far too much money from the big pharmaceutical lobby to want to do it.
As a consumer healthcare advocate, I've seen first hand the harm stand alone drug programs and even those sold by for-profit insurers have done to Medicare patients. Drug formularies, or the list of drugs covered by a plan, change with the wind every year. Prices increase, benefits decrease, and it's up to the patient to know to carefully check their drugs against the list and compare prices. We saved one Medicare recipient $2400 in 2014 just by switching her from one plan to another, all while staying with the same insurance company.
The government needs to regulate drug pricing for Medicare recipients, but Congress gets far too much money from the big pharmaceutical lobby to want to do it.
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Sarah O'Leary writes "As a consumer healthcare advocate, I've seen first hand the harm stand alone drug programs and even those sold by for-profit insurers have done to Medicare patients."
Perhaps he or she could explain the distinction being made with the word "even." In all four Parts of Medicare and in its private supplemental market, there are a wide mix of for-profit shareholder-owned insurers, for-profit policy-holder-owned insurers, non-profit charity insurers, non-profit insuers owned by integrated health systems, religious organization insurers, union-related insurers, and minor other types. Almost all types are involved in all four Parts of Medicare. Six administer Parts A and B in different regions of the U.S.. Those six plus maybe 100 more administer Part C in over 3000 U.S. counties. Those 100 and a few more (drugstore chains primarily) also administer Part D. Many of that group and others also administer group retiree insurance and sell individual supplement insurance.
The profit margin on average for administering the four Parts of Medicare is about 5%. it is slightly higher for selling the private insurance. In general the group could care less which of these mix of options Medicare beneficiaries choose.
Perhaps he or she could explain the distinction being made with the word "even." In all four Parts of Medicare and in its private supplemental market, there are a wide mix of for-profit shareholder-owned insurers, for-profit policy-holder-owned insurers, non-profit charity insurers, non-profit insuers owned by integrated health systems, religious organization insurers, union-related insurers, and minor other types. Almost all types are involved in all four Parts of Medicare. Six administer Parts A and B in different regions of the U.S.. Those six plus maybe 100 more administer Part C in over 3000 U.S. counties. Those 100 and a few more (drugstore chains primarily) also administer Part D. Many of that group and others also administer group retiree insurance and sell individual supplement insurance.
The profit margin on average for administering the four Parts of Medicare is about 5%. it is slightly higher for selling the private insurance. In general the group could care less which of these mix of options Medicare beneficiaries choose.
2
Why is it up to the patient? Most of us aren't doctors. And, while you saved a patient $2400, how much did she have to pay you to find that? We have a system that works against patients best interests because no matter what is done we pay the costs. If we can't afford someone like you Sarah O'Leary, no one will advocate for us or help us. Even better, our government contributes to this by referring to us as consumers instead of the patients we are.
We shouldn't have to switch health insurance plans, worry about a doctor we select leaving a plan we're on, about being "allowed" to take a medication that is prescribed for us, or that being hospitalized will cost us more than we can afford in premiums, deductibles, etc.
We shouldn't have to switch health insurance plans, worry about a doctor we select leaving a plan we're on, about being "allowed" to take a medication that is prescribed for us, or that being hospitalized will cost us more than we can afford in premiums, deductibles, etc.
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I'm not convinced that formularies are so difficult to work with. Fortunately for me, many of the meds I take have gone generic in the last 8 years or so and formulary no longer applies to them. But I still review the formulary every year so that when I visit my doc, I can say that this med has been dropped from the formulary and provide the current list of drugs in that category and we discuss alternatives and the prescription gets changed. Sometimes it's the doc who tells me why it needs to change.
1
In order to neutralize this Medicare disincentive for taking high-cost prescription drugs, Medicare could increase the low-income subsidy
in order to cover enhanced Medicare drug plans. The current Extra Help Program only pays the premium for a basic Medicare Drug Plan, which usually provides skimpy coverage of costly brand-name drugs.
in order to cover enhanced Medicare drug plans. The current Extra Help Program only pays the premium for a basic Medicare Drug Plan, which usually provides skimpy coverage of costly brand-name drugs.
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