Shifting Drug Costs to Consumers Is Bad Medicine for Drug Makers
Issue #17, Date: July 17, 2008.
For many Americans who are self employed or work for small businesses,insurance is prohibitively expensive. What's the best way to make insurance affordable for small businesses?
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Week's Top Trends:
1. Consumers facing larger share of costs are cutting back on prescriptions.
2. Congress, states seek health care coverage solutions for small businesses.
New to www.reformplans.com is a look at the health care system in Switzerland. Compare the Swiss system with other national approaches in our Plan Comparison Grid and Country Plan profiles.
1. Pharmaceutical sales -- traditionally immune to economic downturns -- are taking a hit. General economic pressures are one reason for the drop in the number of prescriptions; another is the shift in health care costs to consumers. Average copays grew 67% from 2000 to 2007, for example, and 20% of people polled in 2007 reported delaying or skipping medical treatment, compared with 14% in 2003. As overall health care costs and coverage options continue to be debated, this trend is one to watch. "We don't have a real track record for understanding how the health-care system will respond to this new economic model where people are exposed significantly to the cost of care," notes Health Futures president Jeff Goldsmith. (WSJ 07/16/08).
2. Some 20 million of the nation's 47 million uninsured people are self-employed or employed by small businesses. Currently, small businesses seeking to provide coverage for employees face high premiums and restricted coverage because they lack the scale to spread cost and risk; consequently, many do not offer coverage. State and federal efforts are seeking to remedy the situation. Tax credits, interstate purchasing pools, participation in state pools, and controls over insurance industry premiums are among the potential solutions. (NYT 07/10/08).
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BY THE NUMBERS
- Among the goals of health care reform is to address the fact that 47 million Americans are uninsured. A Commonweath Fund survey points to another problem: an additional 25 million Americans were underinsured in 2007, up from 16 million in 2003. The underinsured have health insurance but nonetheless face large medical expenses relative to their income. The problem is particularly acute for middle- and higher-income families, for whom the rate of underinsurance tripled. Further, 53% of the underinsured reported going without care, compared with 68% of the uninsured and 31% of the insured. And 45% of the underinsured said they had trouble paying bills, had unpaid bills referred to collection agencies, or were forced to make lifestyle changes because of medical bills; this was the case for 51% of the uninsured and 21% of the insured. (06/10/08 Health Affairs)
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Experts Comment
As one of the 13 members of the Commonwealth of Mass Quality and Cost Council (I sit in the IHI seat), I can say without question, it is highly successful to date. Just look at the improved access, the resolve to make it work, the innovation, the absolute alignment around a set of quality and cost goals, the sense of possibility it is giving others More...