Wednesday, June 29, 2005
Alternatives to co-pays sought
[Barbara Martinez, "Drug Co-Pays Hit $100," The Wall Street Journal, 28 June 2005.]
Third party payment has led to a situation where consumers lack basic awareness of actual prices for prescription drugs. Some are now trying desperate measures to control rising costs and utilization, but the result may be worse health outcomes. Rather than just jacking up prices, a better way to restrain rising costs is to more fully incorporate the consumer into the purchasing process:
Get ready for the $100 co-pay. That is how much state workers in Georgia will soon pay for certain brand-name drugs, in what may be the highest drug co-payment anywhere in the country.
It is the starkest demonstration yet of employers' aggressive efforts to rein in the rising cost of prescription-drug benefits by driving employees to lower-cost medicines. Employer drug costs rose 83.4% over the past five years, an average of 16.7% each year, according to Mercer Human Resource Consulting, New York. And some estimates predict these costs will continue to rise at an 11% to 12% annual pace over the next several years.
As a result, consumers are seeing a variety of changes in their prescription-drug benefits. The most popular is tinkering with co-pays -- a set portion of the pharmacy bill that patients pay out of their own pockets -- to give patients a financial stake in what drugs they and their doctors choose. Just a few years ago, co-pays were rarely higher than $30, and most were much lower. Now, raising co-pays is a commonly used stick to discourage high-cost drug use. There also is a new carrot: making generic drugs free to patients by eliminating the co-pays altogether.
Another increasingly popular approach to making patients more aware of drug costs has been to require "co-insurance," where a patient would pay 10% or 20%, even 50% of a drug's cost rather than a flat co-pay.
[John McClaughry, "Patient Power: A Health Care Reform Agenda for Kansas," The Flint Hills Center, May 2004.]
[Barbara Martinez, "Drug Co-Pays Hit $100," The Wall Street Journal, 28 June 2005.]
Third party payment has led to a situation where consumers lack basic awareness of actual prices for prescription drugs. Some are now trying desperate measures to control rising costs and utilization, but the result may be worse health outcomes. Rather than just jacking up prices, a better way to restrain rising costs is to more fully incorporate the consumer into the purchasing process:
Get ready for the $100 co-pay. That is how much state workers in Georgia will soon pay for certain brand-name drugs, in what may be the highest drug co-payment anywhere in the country.
It is the starkest demonstration yet of employers' aggressive efforts to rein in the rising cost of prescription-drug benefits by driving employees to lower-cost medicines. Employer drug costs rose 83.4% over the past five years, an average of 16.7% each year, according to Mercer Human Resource Consulting, New York. And some estimates predict these costs will continue to rise at an 11% to 12% annual pace over the next several years.
As a result, consumers are seeing a variety of changes in their prescription-drug benefits. The most popular is tinkering with co-pays -- a set portion of the pharmacy bill that patients pay out of their own pockets -- to give patients a financial stake in what drugs they and their doctors choose. Just a few years ago, co-pays were rarely higher than $30, and most were much lower. Now, raising co-pays is a commonly used stick to discourage high-cost drug use. There also is a new carrot: making generic drugs free to patients by eliminating the co-pays altogether.
Another increasingly popular approach to making patients more aware of drug costs has been to require "co-insurance," where a patient would pay 10% or 20%, even 50% of a drug's cost rather than a flat co-pay.
[John McClaughry, "Patient Power: A Health Care Reform Agenda for Kansas," The Flint Hills Center, May 2004.]
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