Twitter
StumbleUpon
Facebook
Delicious
Digg
Newsvine
Google
Yahoo
TechnoratiDrugs, the Patient, and the Insurance Company
The desire to take medicine is perhaps the greatest feature, which distinguishes man from animals.
— Harvey Cushing, Life of Sir William Osler
Health insurance companies are constantly looking for new ways to make money. Two of the major impediments to their quest are sick people and the drugs they need. Clever, as a good corporation should be, they have figured out how to overcome the second of these obstacles. Two techniques are employed. The first is practicing medicine just the way doctors do even though few, if any, insurance companies have attended medical school.
When a doctor prescribes a specific drug for a patient (whom it has never met) the insurance company may decide that the generic equivalent of that drug is just as good for the patient as the one that the physician prescribed and refuse to pay for the physician prescribed drug. In that event, if the patient wants to use the prescribed drug the patient must pay for the drug out of his or her own pocket. There is, however, a built in appeals process that patient and doctor can go through if they would like to prove that the trained doctor's decision is more medically accurate than the corporation's but it is a somewhat cumbersome process. Why the company insists on substituting its judgment for the doctor's judgment is best known to the insurance company. As creative as this is on the part of the insurance company, it is not the most dramatic example of saving money through creative insuring.
A recent report in The New York Times discloses that some insurance companies have realized increased profits by reducing the amount of money they are willing to pay for certain prescription drugs taken by their insureds. It seems like such an obvious thing to do that the only remarkable thing is that the insurance companies have not thought of it before now.
Before the companies became creative in reimbursing for drug costs, the insured was required to pay a fixed amout (known as a co-pay) for a prescribed drug that that went anywhere from approximately $5.00 to $50 the amount of the co-pay being determined by the company and on whether the drug was a Tier 1, 2 or 3 drug. The insurance company paid the difference between the drug's co-pay and its actual cost to the insurance company. Then, a funny thing happened on the way to the pharmacy. The insurance companies invented Tier 4 into which they placed REALLY expensive drugs.
People taking Tier 4 are the beneficiaries of the new policy. Here is how three randomly selected insurers have made themselves its beneficiaries.
The American Association of Retired Persons (AARP) requires patients taking Tier 4 drugs to pay 30 percent of the cost of the drugs with no limit on how much the insured ultimately has to pay. The drug Sprycel is a tier 4 drug that blocks the growth of cancer cells and eliminates the need for chemical infusions. It costs $13,500 for a 90-day supply. AARP requires the insured to pay $4,500 for each 90-day prescription and AARP pays the balance. First Health Life & Health also charges a flat 30 per cent for Tier 4 drugs without any limit on what the insured pays.
Kaiser Permanente, by contrast, tempers profitability with mercy. It requires its insureds to pay only 25 percent of the cost of Tier 4 drugs and places a $325 limit on how much the insured has to pay for each prescription.
Increasing the insurance companies' profitability is not the only benefit from the new program. For Medicare beneficiaries who have to pay 5 percent of their drug costs after they're through what's known as the doughnut hole, the increased amount they are forced to spend gets them through the doughnut hole more quickly. (Not all Medicare beneficiaries will see the benefit in that.) Another benefit that will, however, be obvious to its beneficiary is the cost savings that inures to the benefit of employers who furnish health insurance to employees.
Karen Ignagni is president of America's Health Insurance Plans, an organization that represents most of the health insurance industry. She pointed out in the New York Times story that lower outlay for prescription drugs means the insurance companies can charge employers lower premiums, thus providing a cost benefit to employers. Adding those benefits to those enjoyed by the insurers makes it obvious that the new policy is a win-win except, of course, for those who can no longer afford to take drugs.
In George Bush's United States 47 million people have no health insurance. In George Bush's United States 9 million children have no health insurance. Thanks to the creation of Tier 4, we will soon have a new class of citizen. It will comprise people who have insurance but are unable to pay for the drugs needed to keep them in or restore them to, good health. In a few years we will know how many people are members of their class. They will join the uninsureds as statistics.
Christopher Brauchli; brauchli.56@post.harvard.edu
For political commentary see his web page http://humanraceandothersports.com
15 Comments so far
Show Allaldente.pirate & treefrog:
Calm down. Save your anger for the pharmaceutical industry and the AMA.
While I trust the scientific method, I'm wary of many "studies" that tend to support a particular industry. Scientific American is not a peer-reviewed scientific journal; it is a mass-market magazine. Granted, its quality may be better than, say, People, but it still relies on advertisers and that threatens integrity. Were the authors connected in any way, overtly or covertly, with those companies that manufacture generics? Because I gotta tell you: I agree with treefrog on this one. Granted, this is purely anecdotal and not the result of any double-blind trial; it's just my own personal experience. But I don't trust generic drugs. The strengths vary and the quality control found in name-brands is obviously lacking. I mean, come on! If company X's drug A can be made by company Y for less than half the price, why isn't the original patent holder using the same techniques?
The real issue - not discussed at all - is how many of these expensive drugs are the result (directly or indirectly) of research and development done by the federal government (NIH, etc.), the results of which are picked up by the pharma industry royalty free! Our tax dollars are being used by drug companies for basic and advanced research, and we're gouged again when we have to buy them.
The health insurance companies need to be put out of business; health care is a right, not a profit-driven enterprise. And if a company wants to sell drugs in this country, they should be subject to strict price control structures. If they don't like the restrictions on their profits, they can take their sorry asses somewhere else!
This is simply the logical and entirely predictable result of a health care system (and government) who's sole and overriding objective isn't the delivery of health care; it's the amassing of gargantuan profits. I guess we should all just be grateful Exxon/Mobil isn't in on it too.
Health care in the United States, like education (and now housing too), is solely a perquisite of the patrician class. The rest of you filthy ignorant corporate serfs can all piss off and die.
Yes, Treefrog, "my" stupid article is wrong, the earth is flat, 6,000 years old, and Adam and Eve walked the Garden of Eden along with dinosaurs.
Btw, considering the lousy state of science education in the land of the sheep I wouldn't be surprised you would take one thing for the other - casual observation in your "Intermediate Care facility" is NOT science.
Controlled double-blind experiments are.
Having trouble with that link to support your theory with scientific evidence?
I thought so.
Science 2, Pseudoscience 0.
A developmentally disabled person in an Intermedicate Care facility licensed by the Department of Health Services is a client.
Pirate
I read your stupid article for scientist by scientist that meet scientific critiera...but still wrong.
Treefrog,
Pharmacist Erik Mogalian and assistant professor Paul Myrdal of the University of Arizona's College of Pharmacy disagree with you. Taking the time to follow the link I provided and read their article at Scientific American was probably too much to expect.
If you have any scientific evidence with a well controlled experiment that proves otherwise please show me the link. I'm open minded. Naturally I'm gonna check who's funding just in case there's a hidden agenda.
Oh, wait a minute, you said "your clients with a seizure disorder"... A patient is a client? Nevermind.
Scientific American 1, Treefrog 0
I remember when all of our clients with a seizure disorder were changed to generic anticonvulsants...the only difference was a hugh increase in seizures.
aldente pirate
Obviously, you have never worked in the medical field or you would not suggest that brand name drugs and generic are bio equivalent or people have not had REAL PROBLEMS because of the disparity.
"the insurance company may decide that the generic equivalent of that drug is just as good for the patient"
Unfortunately this article keeps feeding the myth that brand name drugs are better than generic drugs. It's the propaganda machine brainwashing patients and keeping them uninformed so they would be willing to pay more for a "better" drug.
The author probably didn't mean to do this but he's falling for the trick.
Brand name and generic drugs are bioequivalent, a generic drug... "contains the same active ingredient, in the same amount, in the same form, dissolving at the same rate in equal amounts"
The major different is not of quality nor chemistry but rather legal.
More here at Scientific American
http://www.sciam.com/article.cfm?id=whats-the-difference-betw-2004-12-13
Watch out for those with a vested interest trying to undermine scientific facts.
aldente
Proud Member of the Church of the Flying Spaghetti Monster
http://venganza.org/
The government contributes to funding research and development of these drugs and the pharmaceutical industry profits. That industry should be nationalized along with the insurance industry.
"Tier 4 drugs would ONLY be prescribable for patients paying wholly out-of-pocket with all insurance reimbursement disallowed. This should encourage 1) The prices to go lower, and 2) Most doctors to not prescribe them at all except for people who are very rich."
Daniel David, many of these incredibly expensive drugs have been developed as cancer treatments. For example a "cure" drug is available for chronic myelogenous leukaemia. If only the rich get these drugs the poor will die of their disease. But then that is the nature of US medical care anyway.
Health insurance companies are the epitome of evil and its simply time the government took over the business of health insurance.
Insurance Company P.O.S.'s
JUST TO VENT MY FEELING. HOW ABOUT THE YOUNG LADY THAT DIED IN CALIFORNIA THAT ETNA INSURANCE DENIED THE LIVER TRANSPLANT BECAUSE ETNA SAID IT WAS EXPERMENTAL. WHY DID THEY APPROVE THE PROCUDURE AFTER SHE PASSED AWAY? MANY DOCTORS ASSIGNED TO HER CASE STATED THAT SHE WAS A PRIME CANDIATE FOR THE PROCUDURE. WHY IS THIS NOT IN THE NEWS. DID ETNA PAY OF THE FAMILY OR THE MEDIA? WHY DID SHIVO MAKE THE NEWS SO LONG? SHE HAS BEEN IN A COMA FOR HOW LONG????
WHAT ABOUT KORVORKIN; THEY PUT HIM IN JAIL FOR ASSISTED DEATH OF TERMINALLY ILL PEOPLE. HOW ABOUT THE GREEDY, SLIMY PEOPLE OF ETNA BE TRIED FOR MURDER BY OMISSION?? ETNA INSURANCE, PLEASE RESPONSE. I WOULD LIKE TO HEAR YOUR SIDE OF THE STORY
Here are some approaches to answers for all this. Perhaps "ridiculous", perhaps not. Would require liberals running your government:
Have FDA require that all drugs approved must be classified in one of the four tiers and that every insurance company must abide by that classification. No "switching" of items between tiers by some insurers but not others. Tier 4 drugs would ONLY be prescribable for patients paying wholly out-of-pocket with all insurance reimbursement disallowed. This should encourage 1) The prices to go lower, and 2) Most doctors to not prescribe them at all except for people who are very rich. Doctors would get malpractice "cover" for not prescribing the very best. TRANSLATION: Most of us don't want a doctor who feels bound by a "state-of-the-art" culture (protecting HIM) to prescribe drugs our families cannot afford. If I go to the doctor and he "presribes" bankruptcy, I am wasting my time and money to go at all. I need a "practical" doctor and I need FDA coercing most of them to be so.
Have the FDA and the patent office declare that drugs manufactured for Tier 4 cannot be patented. This should cause most drugs to "need" to be cheap enough for Tier 3.
Or, maybe, replace the Medicare D concept with a national single-payer prescription plan that covers every citizen for drugs in Tiers 1-3. Copays are always a flat 20% of retail. (If citizens can't afford them, and sales lag, prices have to drop.) Finance 80% remainder with excise tax on all forms of advertising by any corporation for anything (billboard, TV, radio, junk mail, internet ads, magazines, newspapers,spam, automated calls, you name it---if an incorporated entity sends a communication unsolicited, it's taxable.)
Outlaw every form of direct-to-consumer prescription drug advertising. Outlaw every form of direct-to-doctor marketing of drugs. If he/she is so smart and so well-paid, he/she can keep up on the latest via accessing the web sites. He/she doesn't need to be "seeing" as many drug reps every day as most doctors now are.
My ideas nutty? Maybe. Even probably. But CITIZEN WILL TRUMPING CORPORATE WILL (via government) is not nutty---it's the only answer.