By Shannon M. Rotolo, PharmD, BCPS; Clinical Pharmacy Specialist; U Chicago Medicine and Randall W. Knoebel, PharmD, BCOP; Senior Manager, PHarmacy Health Analytics, Drug Policy & High Reliability; UChicago Medicine
Illinois Council of Health-System Pharmacists, KeePosted, May 1, 2020
What is single-payer?
Single-payer national health insurance describes a system in which one public agency is responsible for health care coverage, but the delivery of health care services continue to be provided by mostly private businesses.1 This means all payments health care services would come from one agency, but physicians’ offices, hospitals, and pharmacies would continue to be owned and operated by organizations or individuals, as they are in the current system. The two proposed bills for single-payer in the United States are commonly known as Medicare for All. While there are differences between the House bill2 and the Senate bill3, both endeavor to provide robust health care coverage – medical, pharmacy, dental, vision, etc. – for everyone living in the US and to eliminate the private insurance industry’s role in covering health care services included in this legislation. Projected costs vary between analyses4, but most show the overall cost of health care services remaining about the same or decreasing, due to minor increases in utilization as more uninsured or underinsured people can afford to seek the care they need, coupled with major decreases in overhead – Medicare spends about 2% on administrative costs compared to private insurers spending up to 18%5 – and decreased cost of health care services, including drug pricing.
How would it impact pharmacy?
Perhaps the most obvious change that would impact pharmacy is in drug pricing. Brand name drug prices have increased dramatically in the last decade.6 Based on data from Australia and New Zealand, some experts estimate the cost of brand name drugs would drop as much as 50%. While the generic market is less likely to see dramatic price changes, there is greater opportunity for rapid intervention and improved access during drug shortages and for negotiation on prices with both brand and generic manufacturers of “me too” drugs if there is one national formulary.7 This is a role some argue pharmacy benefit managers (PBMs) can play, but again, drug prices continue to climb. In scenarios where savings are achieved by a PBM this is often to the benefit of their shareholders or partnering businesses, rather than to taxpayers or patients.8 By consolidating negotiating power with a single-payer, there would be greater leverage over drug companies’ asking prices.
Additionally, with a single-payer and the eradication of the PBM model, the idea of “preferred pharmacies” would no longer exist. Patients would be free to fill their prescriptions at the pharmacy that best meets their needs, at no cost. This would mean simplified billing and predictable reimbursement. What would you do with the time you previously spent on the phone trying to understand why an override wasn’t working, or trying to help a patient or physician determine the covered “preferred formulary alternative” when you get a rejection? What if you could spend more time focusing on ensuring therapy is safe and effective, instead of on whether or not your patient could afford it? Would you expand clinical pharmacy services? Would you open your own independent pharmacy, perhaps in an underserved rural area, or in the pharmacy deserts on the south or west sides of Chicago?
We have plenty of evidence from other countries to suggest how patients would respond to a single-payer system. The United States currently has the highest rates of cost-related medication non-adherence (CRMN).9 In places where patients don’t need to worry about copays and deductibles, the overall rate of cost-related medication non-adherence is < 3%. Even in Canada, which does not fully cover prescriptions with their single-payer system, rates of CRMN are about half of what they are in the United States. This example highlights the importance of thoughtful inclusion of pharmacy benefits in a single-payer health care coverage plan.
Why do pharmacists need to be involved?
Currently proposed Medicare for All bills in the House and Senate differ in their plans for prescription coverage. The House bill calls for no deductibles and no copays at any point. The Senate bill would allow for up to $200 per year in out-of-pocket prescription costs. This may sound like a small distinction, but has the potential to disproportionately impact low income patients.10 Pharmacists who have worked with patients with high-deductible prescription plans will immediately recognize this issue. Physicians may not, but they are the primary health care professionals advocating for Medicare for All.11 Most physicians have a limited understanding of the intricacies of pharmacy billing and reimbursement.12 We don’t know if single-payer will move forward in the next few years, or if it will take several decades, but we do know pharmacists will need to have a seat at the table when the time comes to ensure the changes made are appropriate and sustainable. The best way to guarantee that seat at the table is to get involved in the conversations happening around single-payer now.
To our knowledge, there are less than a dozen pharmacists actively involved in the single-payer movement right now, as compared to the over 23,000 physicians and 1,200 medical students who are members of Physicians for a National Health Plan (PNHP). We know pharmacists are extraordinarily effective advocates when we work for change to improve the lives of our patients and to advance our profession.13 We continue to rank among the top professions year after year for honesty and ethical standards.14 We are trusted experts, and we have the authority to speak on issues facing our broken health care system, particularly when it comes to medications. It’s time to put our expertise to use in advocating for structural change, and to make sure the plans behind it support our patients and align with our goals as a profession.
For those looking to get involved, two Illinois based organizations that focus on this issue are IL Single Payer Coalition (http://ilsinglepayer.org) and PNHP Illinois (https://pnhp.org/chapter/illinois). Other ways to take action include contacting your state and federal legislators to ask them to support single payer legislation, writing op-eds or letters to the editor in local newspapers, public speaking, lobbying, and organizing.
- Physicians for a National Health Program. About Single Payer. https://pnhp.org/what-is-single-payer (accessed 2019 Nov 22).
- Medicare for All Act of 2019, H.R.1384, 116th Cong. (2019). https://www.congress.gov… (accessed 2019 Nov 22).
- Medicare for All Act of 2019, D.1129, 116th Cong. (2019). https://www.congress.gov… (accessed 2019 Nov 22).
- The New York Times. Would ‘Medicare for All’ Save Billions or Cost Billions? https://www.nytimes.com… (accessed 2019 Nov 22).
- Center for Economic and Policy Research. Overhead Costs for Private Health Insurance Keep Rising, Even as Costs Fall for Other Types of Insurance. http://cepr.net… (accessed 2019 Nov 22).
- Wineinger NE, Zhang Y, Topol EJ. Trends in Prices of Popular Brand-Name Prescription Drugs in the United States. JAMA Netw Open. 2019 May 3;2(5):e194791.
- Gaffney A, Lexchin J; US; Canadian Pharmaceutical Policy Reform Working Group. Healing an ailing pharmaceutical system: prescription for reform for United States and Canada. BMJ. 2018 May 17;361:k1039.
- The Commonwealth Fund. Pharmacy Benefit Managers and Their Role in Drug Spending. https://www.commonwealthfund.org… (accessed 2019 Nov 22).
- Heidari P, Cross W, Weller C, Nazarinia M, Crawford K. Medication adherence and cost-related medication non-adherence in patients with rheumatoid arthritis: A cross-sectional study. Int J Rheum Dis. 2019 Apr;22(4):555-566.
- Kaiser Family Fund. Medicaid. The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings. https://www.kff.org… (accessed 2019 Nov 22).
- TIME. A New Generation of Activist Doctors Is Fighting for Medicare for All. https://time.com… (accessed 2019 Nov 22).
- Tseng, C., Lin, G.A., Davis, J. et al. Giving formulary and drug cost information to providers and impact on medication cost and use: a longitudinal non-randomized study. BMC Health Serv Res. 2016 Sep 21;16(1):499.
- Little J, Ortega M, Powell M, Hamm M. ASHP Statement on Advocacy as a Professional Obligation. Am J Health Syst Pharm. 2019 Feb 1;76(4):251-253.
- Forbes. America’s Most & Least Trusted Professions. https://www.forbes.com… (accessed 2019 Nov 22).