I was going to put several responses to my previous Tier 4 pricing post within the comments section, but they were getting unwieldy. I also think that the issue is important enough that the discussion should be more prominent. Hence, this follow up post. I’d really like everyone’s input on this topic.
In short, I disagree with the decision by CMS and several insurers to institute Tier 4 pricing schemes on selected medications that are usually used by patients with chronic health problems. I think the decision amounts to discrimination against the members of society who are the sickest.
Several commenters raised valid points and I wanted to respond to them and seek further comments.
Peter stated that if insurers are not allowed to set risk adjusted premiums, those who use more than their “fair share” will use up the finite amount of insurance assets – to the detriment of those who utilize less than their fair share.
My response to this logic is that it is similar to creating car insurance that pays for flat tires and lock outs, but does not pay for major accidents.
It is entirely appropriate to charge higher premiums to higher risk individuals. If you smoke, you should pay more. If your BMI is more than 1 standard deviation above the national average, you should pay more. If you don’t control your blood pressure, you should pay more. Make it well known that people with these risk factors will be charged more for coverage. That incentivizes people to stop those behaviors. We have to learn that there are consequences to our unhealthy actions. If we sit on our lard butts eating Bacon McBypass burgers with extra cheese, shooting up drugs and chain smoking while watching the latest reruns of Desperate Housewives and we can’t afford insurance premiums based on those risk taking behaviors, we deserve what’s coming to us. Once insureds control these and similar “risk factors,” then their premiums should be reduced to roughly the same level as the general population.
Think of life insurance – they can’t just raise your premiums because more people died during a given time period than their actuarial data suggested.
By insinuating that insurers should only pay for those who use less than their “fair share” of resources, the assumption is that only healthy or minimally ill patients are worthy of coverage. I pay into the program all my life and use little if any resources then when I develop cancer 20 years from now, suddenly I get discriminated against because I have become an “overutilizer.” That’s a bunch of horsepuckey.
Scalpel noted that Medicare needs to cut costs and that Tier 4 pricing is one in a series of steps to do so. He also hinted that rationing dialysis and limiting end of life care could be next.
I agree that Medicare has to cut costs, but think that it needs to do so in an equitable manner. Here are just a few ideas:
- Stop reimbursing antibiotic prescriptions unless there is a documented bacterial infection. Those prescriptions provide no benefit to anyone and substantial harm to society as a whole.
- If there is not a demonstrable benefit of one medication over a generic alternative, reimburse the “designer” medication at $4/month which is what it would cost to purchase the generic alternative at WalMart.
- Have a national repository of patient information that can be accessed by healthcare providers so that we don’t perform repeat testing or write repeat prescriptions for the same patient.
- Set prices that Medicare will pay to pharmaceutical companies for their medications. Either the companies meet the price or they don’t sell their medications to any of the Medicare participants. Sound extreme? That’s what’s been happening to doctors and hospitals for years now. They’re going to cut prices by 10% in a few months. What’s good for us should also be good for the pharmaceutical industry. Single payer, baby. Look out.
Taking medications with no alternative and a substantial benefit to patients and making them unaffordable to most patients is the wrong way to go about things.
If we start rationing dialysis, we will exponentially increase the number of emergency visits for hyperkalemia. That is an experiment that will horribly backfire. Have to treat emergencies. Hyperkalemia is an emergency. Not every hospital has a dialysis unit. Paying for all the emergency transfers to dialysis centers and middle of the night dialysis sessions in addition to lab tests, helicopter flights, repeat lab tests, continuing care – this will all add up to way more than the cost of dialysis sessions. Thus goes the law of unintended consequences when dealing with the little statute called EMTALA.
On the other hand, I think futile care should be rationed. Once a patient’s condition has been labeled as “futile” by two or more physicians (or an ethics panel), then the patient/family should be given adequate time to either arrange for transport to another facility or to make payment arrangements for continuing care. After the time has come and gone, only comfort measures should be taken.
End of life care in this country is woefully inadequate. We spend billions of health care dollars “rearranging the deck chairs on the Titanic,” while causing more pain and suffering and only delaying the inevitable. We can’t sustain a system of “the best medical care someone else can pay for.”
Finally, LindaTC suggested that institution of Tier 4 pricing may cause drug companies to stop developing new treatments for disease.
The pharmaceutical industry has used this response before and I don’t think it holds much water.
If the costs of medications are brought down to a level where everyone can afford them, drug companies won’t just fold up their multibillion dollar development centers and go home. If more people can afford them, guess what … more people will purchase the medications. There will always be a financial incentive to find more medications to patent, not to sit back and continue pumping out hoards of generic medications hoping to eek out a profit every year.
If anything, a decrease in pricing (or payments) for medications will encourage the same types of economic innovations that clinicians have had to come up with for years when faced with declining reimbursements.
The World Trade Organization has a mechanism by which countries can break a drug company’s patent on a medication if drug companies engage in “abusive pricing.” Brazil broke a patent on one of Merck’s HIV drugs for this reason last year.
Why should our own citizens suffer from abusive pricing?