Majority of Drugs Now Subject to Coinsurance in Medicare Part D Plans

By Caroline F. Pearson
Avalere, March 10, 2016

A new analysis from Avalere finds that a majority of prescription drugs covered by standalone Medicare Part D plans (PDPs) are subject to coinsurance, rather than copayments, in 2016. Coinsurance is when a beneficiary pays a percentage of the cost of the drug, rather than a fixed dollar amount, or copayment. Coinsurance often leads to patients paying more out of pocket compared to fixed dollar amount copayments. The average percentage of covered drugs facing coinsurance has risen sharply from 35 percent in 2014 to 58 percent in 2016 among PDPs. While most PDPs have historically applied coinsurance to high-cost drugs on the specialty tier, plans have extended coinsurance to drugs on lower tiers in recent years, including those covered on preferred and non-preferred brand tiers.

“These very high rates of coinsurance have shifted our understanding of Part D formulary coverage,” said Caroline Pearson, senior vice president at Avalere. “It will be important to monitor what drugs are being placed on various coinsurance tiers and how plans are using these tiers to manage cost and utilization in the program.”

http://avalere.com/expertise/managed-care/insights/majority-of-drugs-now-subject-to-coinsurance-in-medicare-part-d-plans

Medicare Part D drug plans are shifting more drugs from a copayment requirement – a fixed dollar amount to be paid for each prescription – to coinsurance – a percentage of the charge for each prescription. This is important because coinsurance payments tend to be higher than copayments – sometimes much higher – especially with the recent increases in drug prices.

Obviously this is simply one more method of shifting the costs of health care to the patient. Many are already finding out-of-pocket costs to be unaffordable, yet it keeps getting worse. This is a one way street. The insurers are not looking for ways to reduce out-of-pocket expenses since they would have to pick up the additional costs which would then make their premiums less affordable, and the last thing that they would want to do is risk losing market share through higher premiums.

Coinsurance is a method of reducing health spending by erecting financial barriers to the care that patients should have. Instead, we should be removing financial barriers to care. That is what an improved Medicare for all with first dollar coverage would do.

Mayo rebuffs Iowa Medicaid managed-care contracts

By Tony Leys
The Des Moines Register, March 24, 2016

Iowans with Medicaid health coverage will not be able to routinely use the Mayo Clinic after the state shifts the $4 billion program to private management next week.

The three managed-care companies that will run Iowa’s Medicaid program told legislators this week they’ve been unable to negotiate contracts with Mayo’s famed hospital system, which is just across the border in Rochester, Minn.

Cheryl Harding, Amerihealth’s top executive in Iowa, told legislators that her managed-care firm has signed contracts with three Mayo-affiliated primary care clinics in Iowa, but not with Mayo’s main medical center in Rochester. The other managed-care companies, UnitedHealth and Amerigroup, also said they have not obtained such contracts.

For the time being, they said, Mayo has agreed to consider single-case contracts for Iowa Medicaid recipients needing specific care that can’t be provided elsewhere.

http://www.desmoinesregister.com/story/news/health/2016/03/24/mayo-rebuffs-iowa-medicaid-managed-care-contracts/82230958/

***

Comment:

By Don McCanne, M.D.

There are so many issues here, but it really boils down to one, which we’ll get to in a moment.

One of primary the goals of health care reform is to provide integrated health care services. The participants in an ideal health care delivery system work together as a team to ensure that the patient receives the right care, at the right time, at the right place. The care pyramid is built on a solid primary care infrastructure that serves, not as a gatekeeper, but as a facilitator.

Examples range from structurally integrated systems such as Kaiser Permanente, to loosely integrated services provided by the various health care resources in a community – hospitals, outpatient centers, community health centers, and independent primary care and specialty practices. In today’s message, Mayo Clinic represents an integrated system with its mothership in Rochester and its affiliated primary care clinics serving patients in its neighboring state of Iowa.

Thus Mayo provides integrated services that would be paid for by private insurers or employer-sponsored plans, either through fee-for-service or capitated payment schedules. Low income patients would be covered by Iowa’s Medicaid program.

But wait a minute. The insurers now profess to provide higher quality and lower costs through their own integrated managed care services. Iowa is following the lead of other states and turning its Medicaid program over to private Medicaid managed care companies. Although they avow quality, early experience with other state Medicaid managed care programs indicate that it is all about saving money, as quality and access deteriorate.

So what is happening to Iowa’s Medicaid patients who are currently obtaining their care from Mayo? It seems that Mayo is no longer in charge of integrating the health care of these patients; the private insurers are instead. For most of the patients, that means they lose access to their current care. One of the insurers will still allow patients to use the Mayo affiliated primary care clinics but not the Mayo mothership in Rochester, except by special arrangement on an individual basis. Instead of integrated care, these managed care companies are providing disintegrated care (double entendre intended).

The obvious conclusion is that integration of health care services should be a function of the health care delivery system based on patient service and not a function of an intermediary payer based on business goals.

A publicly administered and financed single payer monopsony would be designed to incentivize appropriate integration of our health care delivery system so that we really could have a higher quality health care system that brings greater value to all of us.

Mayo rebuffs Iowa Medicaid managed-care contracts

By Tony Leys
The Des Moines Register, March 24, 2016

Iowans with Medicaid health coverage will not be able to routinely use the Mayo Clinic after the state shifts the $4 billion program to private management next week.

The three managed-care companies that will run Iowa’s Medicaid program told legislators this week they’ve been unable to negotiate contracts with Mayo’s famed hospital system, which is just across the border in Rochester, Minn.

Cheryl Harding, Amerihealth’s top executive in Iowa, told legislators that her managed-care firm has signed contracts with three Mayo-affiliated primary care clinics in Iowa, but not with Mayo’s main medical center in Rochester. The other managed-care companies, UnitedHealth and Amerigroup, also said they have not obtained such contracts.

For the time being, they said, Mayo has agreed to consider single-case contracts for Iowa Medicaid recipients needing specific care that can’t be provided elsewhere.

http://www.desmoinesregister.com/story/news/health/2016/03/24/mayo-rebuffs-iowa-medicaid-managed-care-contracts/82230958/

There are so many issues here, but it really boils down to one, which we’ll get to in a moment.

One of primary the goals of health care reform is to provide integrated health care services. The participants in an ideal health care delivery system work together as a team to ensure that the patient receives the right care, at the right time, at the right place. The care pyramid is built on a solid primary care infrastructure that serves, not as a gatekeeper, but as a facilitator.

Examples range from structurally integrated systems such as Kaiser Permanente, to loosely integrated services provided by the various health care resources in a community – hospitals, outpatient centers, community health centers, and independent primary care and specialty practices. In today’s message, Mayo Clinic represents an integrated system with its mothership in Rochester and its affiliated primary care clinics serving patients in its neighboring state of Iowa.

Thus Mayo provides integrated services that would be paid for by private insurers or employer-sponsored plans, either through fee-for-service or capitated payment schedules. Low income patients would be covered by Iowa’s Medicaid program.

But wait a minute. The insurers now profess to provide higher quality and lower costs through their own integrated managed care services. Iowa is following the lead of other states and turning its Medicaid program over to private Medicaid managed care companies. Although they avow quality, early experience with other state Medicaid managed care programs indicate that it is all about saving money, as quality and access deteriorate.

So what is happening to Iowa’s Medicaid patients who are currently obtaining their care from Mayo? It seems that Mayo is no longer in charge of integrating the health care of these patients; the private insurers are instead. For most of the patients, that means they lose access to their current care. One of the insurers will still allow patients to use the Mayo affiliated primary care clinics but not the Mayo mothership in Rochester, except by special arrangement on an individual basis. Instead of integrated care, these managed care companies are providing disintegrated care (double entendre intended).

The obvious conclusion is that integration of health care services should be a function of the health care delivery system based on patient service and not a function of an intermediary payer based on business goals.

A publicly administered and financed single payer monopsony would be designed to incentivize appropriate integration of our health care delivery system so that we really could have a higher quality health care system that brings greater value to all of us.

Pharmaceutical Companies Hiked Price on Aid in Dying Drug

By April Dembosky
KQED, March 22, 2016

When California’s aid-in-dying law takes effect this June, terminally ill patients who decide to end their lives could be faced with a hefty bill for the lethal medication. It retails for more than $3,000.

Valeant Pharmaceuticals, the company that makes the drug most commonly used in physician-assisted suicide, doubled the drug’s price last year, one month after California lawmakers proposed legalizing the practice.

“It’s just pharmaceutical company greed,” said David Grube, a family doctor in Oregon, where physician-assisted death has been legal for 20 years.

The drug is Seconal, or secobarbital, its generic name. Originally developed in the 1930s as a sleeping pill, it fell out of favor when people died from taking too much, or from taking it in combination with alcohol. But when intended as a lethal medication to hasten the death of someone suffering from a terminal disease, Seconal is the drug of choice.

In 2009, Grube remembers the price of a lethal dose of Seconal — 100 capsules — was less than $200. Over the next six years, it shot up to $1,500, according to drug price databases Medi-Span and First Databank. Then Valeant bought Seconal last February and immediately doubled the price to $3,000.

Most drug companies justify such hikes by pointing to high research costs. But Grube says that’s not the case with Seconal. It’s been around for 80 years.

“It’s not a complicated thing to make, there’s no research being done on it, there’s no development,”  he says. “That to me is unconscionable.”

http://ww2.kqed.org/stateofhealth/2016/03/22/pharmaceutical-companies-hiked-price-on-aid-in-dying-drug/

***

Comment:

By Don McCanne, M.D.

One of my father’s favorite phrases was, “There oughta be a law…” Whenever I heard that, I knew a bit of wisdom with a moral message would follow.

Dad’s last three weeks of life was spent in a hospital and could not have been more miserable (this was in the 1970s, before hospice). He had multiple myeloma and had extensive pathological fractures. When the nurses had to turn him, the pain was intolerable. He did not tolerate the narcotics administered as they aggravated his vomiting and obstipation. As a physician, he understood well his status.

At the last relatively rational conversation I had with him, he said, “Don, there oughta be a law. When the tiny bit of good that happens in a day cannot possibly even begin to compensate for the profound, unrelenting pain and suffering, your physician should be able to authorize the placement of a bottle of sleeping pills on the nightstand next to your bed.”

No such bottle appeared. The agony persisted for several more days, without even any fleeting moments of contentment, before he slipped into his final coma. In spite of my reverence for life, I knew this wasn’t right.

Today’s message on Valeant’s price gouging for Seconal – price gouging timed to capitalize on California’s new aid-in-dying law – would normally lead to my usual diatribe on the evils of dysfunctional health market dynamics in the U.S. But this time, it led to tears – mine.

How can we leave our health care system under the control of the rentiers in the medical industrial complex? Dad would have said, “There oughta be a law.” And we know what that law would be – an improved Medicare for all that spends money exclusively for the benefit of patients.

Why am I not out there helping to organize the marches on Washington and our state capitols on behalf of health care justice for all? For that matter, why aren’t you?

Pharmaceutical Companies Hiked Price on Aid in Dying Drug

By April Dembosky
KQED, March 22, 2016

When California’s aid-in-dying law takes effect this June, terminally ill patients who decide to end their lives could be faced with a hefty bill for the lethal medication. It retails for more than $3,000.

Valeant Pharmaceuticals, the company that makes the drug most commonly used in physician-assisted suicide, doubled the drug’s price last year, one month after California lawmakers proposed legalizing the practice.

“It’s just pharmaceutical company greed,” said David Grube, a family doctor in Oregon, where physician-assisted death has been legal for 20 years.

The drug is Seconal, or secobarbital, its generic name. Originally developed in the 1930s as a sleeping pill, it fell out of favor when people died from taking too much, or from taking it in combination with alcohol. But when intended as a lethal medication to hasten the death of someone suffering from a terminal disease, Seconal is the drug of choice.

In 2009, Grube remembers the price of a lethal dose of Seconal — 100 capsules — was less than $200. Over the next six years, it shot up to $1,500, according to drug price databases Medi-Span and First Databank. Then Valeant bought Seconal last February and immediately doubled the price to $3,000.

Most drug companies justify such hikes by pointing to high research costs. But Grube says that’s not the case with Seconal. It’s been around for 80 years.

“It’s not a complicated thing to make, there’s no research being done on it, there’s no development,”  he says. “That to me is unconscionable.”

http://ww2.kqed.org/stateofhealth/2016/03/22/pharmaceutical-companies-hiked-price-on-aid-in-dying-drug/

One of my father’s favorite phrases was, “There oughta be a law…” Whenever I heard that, I knew a bit of wisdom with a moral message would follow.

Dad’s last three weeks of life was spent in a hospital and could not have been more miserable (this was in the 1970s, before hospice). He had multiple myeloma and had extensive pathological fractures. When the nurses had to turn him, the pain was intolerable. He did not tolerate the narcotics administered as they aggravated his vomiting and obstipation. As a physician, he understood well his status.

At the last relatively rational conversation I had with him, he said, “Don, there oughta be a law. When the tiny bit of good that happens in a day cannot possibly even begin to compensate for the profound, unrelenting pain and suffering, your physician should be able to authorize the placement of a bottle of sleeping pills on the nightstand next to your bed.”

No such bottle appeared. The agony persisted for several more days, without even any fleeting moments of contentment, before he slipped into his final coma. In spite of my reverence for life, I knew this wasn’t right.

Today’s message on Valeant’s price gouging for Seconal – price gouging timed to capitalize on California’s new aid-in-dying law – would normally lead to my usual diatribe on the evils of dysfunctional health market dynamics in the U.S. But this time, it led to tears – mine.

How can we leave our health care system under the control of the rentiers in the medical industrial complex? Dad would have said, “There oughta be a law.” And we know what that law would be – an improved Medicare for all that spends money exclusively for the benefit of patients.

Why am I not out there helping to organize the marches on Washington and our state capitols on behalf of health care justice for all? For that matter, why aren’t you?

How to Stop the Bouncing Between Insurance Plans Under Obamacare

By Dhruv Khullar
The New York Times, March 23, 2016

Millions of Americans are finding Obamacare to be unstable ground.

Consider a young construction worker, a patient of mine, whose hours are cut during the winter. His income drops slightly, and now his family no longer qualifies for financial assistance through marketplace subsidies and must sign up for Medicaid. He had finally managed to control his diabetes with his primary care doctor, but when scheduling his next appointment, he is told his doctor doesn’t accept Medicaid.

When the summer rolls around, he picks up more hours, and starts making too much for Medicaid. He has to go back on a marketplace plan, a different one from before. Meanwhile, providers and insurance plans rack up administrative costs as they accommodate these changes.

Because of fluctuations in income, millions of Americans move back and forth between Medicaid and the Affordable Care Act’s insurance marketplace, leading to significant health and financial costs for individuals, states and insurance companies.

This cycling across different forms of insurance is called “churning.” Churning is not a new phenomenon. In the past, people who rolled off Medicaid simply became uninsured. But now many who become ineligible for Medicaid become eligible for marketplace subsidies, and vice versa.

The Affordable Care Act sets the eligibility divide between Medicaid and the insurance marketplace at 138 percent of the federal poverty level, or about $33,000 for a family of four — a threshold at which many people experience substantial income fluctuation. Up to 28 million people may move between plans annually, according to a 2011 study by Benjamin Sommers at Harvard and Sara Rosenbaum at George Washington University. Over the course of four years, only 19 percent of adults will remain continuously eligible for Medicaid and 31 percent continuously eligible for marketplace subsidies. Almost 40 percent will have churned more than four times during this period.

Churning is also costly for taxpayers. Research suggests that average monthly spending on individuals continuously enrolled in Medicaid is two-thirds what it is for those enrolled for just half the year. And the administrative costs can be considerable; one study found that it costs $280 to enroll a child in Medicaid.

What can be done? One option is to require states to guarantee 12 months of continuous eligibility when people sign up for Medicaid. Currently fewer than half of states do this for children and pregnant women, and only New York does it for all adults. An analysis by the Commonwealth Fund found that offering 12 months of continuous Medicaid eligibility would reduce churning by 30 percent. Guaranteeing coverage through the end of the calendar year would reduce churning by nearly 80 percent.

Another approach is to smooth the transition between Medicaid and the marketplace plans by aligning plans, benefits and networks of providers. States are increasingly relying on managed-care companies to provide Medicaid benefits; in 2015, the number of Medicaid beneficiaries using private insurance plans reached 46 million. Making sure people can use similar providers and services — regardless of which insurance they technically qualify for at that time — could help.

Washington is helping insurers in the marketplaces develop Medicaid managed-care plans. A more direct path is simply to allow Medicaid-eligible populations to buy private plans on the marketplaces.

While the patchwork of health care in the United States may make some amount of churning unavoidable, it is possible to create a less wasteful, more unified system that works better for patients and providers.

Dhruv Khullar is a resident physician at Massachusetts General Hospital and Harvard Medical School.

***

Published Comment:

By Don McCanne, M.D.
San Juan Capistrano, CA

Tweaking the alignment of Medicaid and the private ACA exchange plans still leaves in place a fragmented system of incongruous provider networks, and unstable cost sharing depending on plan actuarial values and sliding-scale subsidy qualifications. These efforts result in wasteful administrative excesses, inefficiencies and inequities in care.

A well designed single payer system – an improved Medicare for all – would provide stable health care coverage for life – totally eliminating churning. The savings from the administrative efficiencies would be enough to eliminate current financial barriers faced by the uninsured and the underinsured, while reducing inequities and ensuring access for all.

Tweaking a highly dysfunctional system just won’t get us there.

http://www.nytimes.com/2016/03/24/upshot/how-to-stop-the-bouncing-between-insurance-plans-under-obamacare.html

***

Comment:

By Don McCanne, M.D.

Dhruv Khullar has provided us with an important policy lesson. He seems to be amongst those who believe that we should accept Obamacare (ACA) as a given and build on it through incremental reform. Amongst the multitude of problems with ACA, he has selected as an example the issue of churning in and out of Medicaid and the private ACA exchange plans. What does he propose?

He suggests reducing churning by offering twelve-month eligibility for Medicaid, and he suggests aligning benefits and provider networks between Medicaid managed care and private ACA exchange plans – a proposal with obvious profound administrative complexity. Further, when these anti-churning measures are implemented, he concedes that “the patchwork of health care in the United States may make some amount of churning unavoidable.”

This is the policy lesson. Our fragmented, dysfunctional financing infrastructure is so highly flawed that patches to it will have very little impact in moving us closer to the ideal of a quality health care system that serves all of us well. In contrast, the patches themselves lead to further administrative waste with associated higher costs.

The obvious answer to churning is to have a single, well-designed Medicare for all program in which individuals are enrolled for life. That would also take care of most of the multitude of other health care financing problems that Dhruv Khullar nor I could address here.

How to Stop the Bouncing Between Insurance Plans Under Obamacare

By Dhruv Khullar
The New York Times, March 23, 2016

Millions of Americans are finding Obamacare to be unstable ground.

Consider a young construction worker, a patient of mine, whose hours are cut during the winter. His income drops slightly, and now his family no longer qualifies for financial assistance through marketplace subsidies and must sign up for Medicaid. He had finally managed to control his diabetes with his primary care doctor, but when scheduling his next appointment, he is told his doctor doesn’t accept Medicaid.

When the summer rolls around, he picks up more hours, and starts making too much for Medicaid. He has to go back on a marketplace plan, a different one from before. Meanwhile, providers and insurance plans rack up administrative costs as they accommodate these changes.

Because of fluctuations in income, millions of Americans move back and forth between Medicaid and the Affordable Care Act’s insurance marketplace, leading to significant health and financial costs for individuals, states and insurance companies.

This cycling across different forms of insurance is called “churning.” Churning is not a new phenomenon. In the past, people who rolled off Medicaid simply became uninsured. But now many who become ineligible for Medicaid become eligible for marketplace subsidies, and vice versa.

The Affordable Care Act sets the eligibility divide between Medicaid and the insurance marketplace at 138 percent of the federal poverty level, or about $33,000 for a family of four — a threshold at which many people experience substantial income fluctuation. Up to 28 million people may move between plans annually, according to a 2011 study by Benjamin Sommers at Harvard and Sara Rosenbaum at George Washington University. Over the course of four years, only 19 percent of adults will remain continuously eligible for Medicaid and 31 percent continuously eligible for marketplace subsidies. Almost 40 percent will have churned more than four times during this period.

Churning is also costly for taxpayers. Research suggests that average monthly spending on individuals continuously enrolled in Medicaid is two-thirds what it is for those enrolled for just half the year. And the administrative costs can be considerable; one study found that it costs $280 to enroll a child in Medicaid.

What can be done? One option is to require states to guarantee 12 months of continuous eligibility when people sign up for Medicaid. Currently fewer than half of states do this for children and pregnant women, and only New York does it for all adults. An analysis by the Commonwealth Fund found that offering 12 months of continuous Medicaid eligibility would reduce churning by 30 percent. Guaranteeing coverage through the end of the calendar year would reduce churning by nearly 80 percent.

Another approach is to smooth the transition between Medicaid and the marketplace plans by aligning plans, benefits and networks of providers. States are increasingly relying on managed-care companies to provide Medicaid benefits; in 2015, the number of Medicaid beneficiaries using private insurance plans reached 46 million. Making sure people can use similar providers and services — regardless of which insurance they technically qualify for at that time — could help.

Washington is helping insurers in the marketplaces develop Medicaid managed-care plans. A more direct path is simply to allow Medicaid-eligible populations to buy private plans on the marketplaces.

While the patchwork of health care in the United States may make some amount of churning unavoidable, it is possible to create a less wasteful, more unified system that works better for patients and providers.

Dhruv Khullar is a resident physician at Massachusetts General Hospital and Harvard Medical School.

***

Published Comment:

By Don McCanne, M.D.
San Juan Capistrano, CA

Tweaking the alignment of Medicaid and the private ACA exchange plans still leaves in place a fragmented system of incongruous provider networks, and unstable cost sharing depending on plan actuarial values and sliding-scale subsidy qualifications. These efforts result in wasteful administrative excesses, inefficiencies and inequities in care.

A well designed single payer system – an improved Medicare for all – would provide stable health care coverage for life – totally eliminating churning. The savings from the administrative efficiencies would be enough to eliminate current financial barriers faced by the uninsured and the underinsured, while reducing inequities and ensuring access for all.

Tweaking a highly dysfunctional system just won’t get us there.

http://www.nytimes.com/2016/03/24/upshot/how-to-stop-the-bouncing-between-insurance-plans-under-obamacare.html

Dhruv Khullar has provided us with an important policy lesson. He seems to be amongst those who believe that we should accept Obamacare (ACA) as a given and build on it through incremental reform. Amongst the multitude of problems with ACA, he has selected as an example the issue of churning in and out of Medicaid and the private ACA exchange plans. What does he propose?

He suggests reducing churning by offering twelve-month eligibility for Medicaid, and he suggests aligning benefits and provider networks between Medicaid managed care and private ACA exchange plans – a proposal with obvious profound administrative complexity. Further, when these anti-churning measures are implemented, he concedes that “the patchwork of health care in the United States may make some amount of churning unavoidable.”

This is the policy lesson. Our fragmented, dysfunctional financing infrastructure is so highly flawed that patches to it will have very little impact in moving us closer to the ideal of a quality health care system that serves all of us well. In contrast, the patches themselves lead to further administrative waste with associated higher costs.

The obvious answer to churning is to have a single, well-designed Medicare for all program in which individuals are enrolled for life. That would also take care of most of the multitude of other health care financing problems that Dhruv Khullar nor I could address here.

Secret deals may mean consumers pay more for drugs

By Jayne O’Donnell
USA TODAY, March 21, 2016

Secret deals often prompt drug benefit companies to cover brand-name prescriptions when equally effective generic or even over-the-counter medications are available, several drug pricing experts say.

These companies, known as pharmacy benefit managers (PBMs), negotiate deals with drug makers that include rebates and other compensation to encourage certain drugs and come up with lists of drugs that their insurance plans will cover. Employers and insurance companies then determine which drugs to encourage on these formularies.

The process is so convoluted that even the United States’ largest insurer, Anthem, discovered what it said were $3 billion in overcharges by Express Scripts and filed suit Monday against the PBM for damages.

In their deals with drugmakers, PBMs agree to favor the high-cost drugs on the PBMs’ formularies and agree that they won’t place quantity limits — or prior authorization programs — on the drugs, even though doing so would help health plans save money and make medical sense, says Linda Cahn, founder and president of Pharmacy Benefit Consultants, which audits PBM contracts.

“What really gets me started is when PBMs sell their clients on programs that increase costs by encouraging brands so that the PBM can collect rebates,” says Susan Hayes, a principal in Pharmacy Outcomes Specialists, which represents plan sponsors and audits their PBM contracts.  “And many clients do not know the cost implications when they sign off on these programs.”

http://www.usatoday.com/story/news/nation/2016/03/21/pharmacy-benefit-firms-can-raise-drug-costs-despite-cheaper-choices/81767978/

***

Comment:

By Don McCanne, M.D.

Pharmacy benefit managers (PBMs) are yet one more example of how effective our policymakers have been in taking care of the medical industrial complex while perpetuating the highest level of health care spending of all nations. PBMs are superfluous pharmaceutical middlemen who further compound our uniquely-American, highly wasteful administrative excesses as a necessity to gain reward for their own rent-seeking behavior.

Rent-seeking is the use of a company, organization or individual’s resources to obtain economic gain from others without reciprocating any benefits to society through wealth creation. (Investopedia)

Rent-seeking is a creature of the medical-industrial complex. It should have no place in our health care system. If we established a single, universal, publicly-funded and publicly-administered health care financing infrastructure, it would function as a monopsony, representing the people, that would work for us to dramatically reduce administrative waste while preventing clandestine rent-seeking gains.

In the words of Nobel laureate Kenneth Arrow – the leading authority in markets and health care – single payer is “better than any other system.”