Tuesday, October 12, 2010

A spoonful of sugar...

Perhaps it's all in one's perspective:

"Growing numbers of Americans with health insurance are walking away from their prescriptions at the pharmacy counter, the latest indication that efforts to contain costs may be curbing health-care consumption."

The Journal's thesis is that, because folks have higher co-pays and/or deductibles, they can't afford to pay as much for their meds.

I think it's something else: when 3rd parties are paying the bulk of your expenses, you have no real incentive to cut back. DTC (Direct to Consumer) advertising also plays a role, increasing demand, regardless of whether or not it's justified. Bob wrote about this some time ago, pointing out that "(s)ome studies suggest that newer, more expensive meds are no more effective than older, less expensive drugs."

So there's an increase in demand, fueled by the fact that someone else is footing the bulk of the bill, but what happens when that equation tilts the other way? People make the conscious choice to take a flyer, perhaps understanding that they don't really need that med, after all (not unlike those who choose to go without health insurance). Seems pretty rational to me.

Supporting this thesis is the fact that "(p)atients are deserting prescriptions for the most expensive drugs most often." That makes sense, although one wonders why they even bothered having them filled in the first place. It's not as if the cost, and one's portion of it, is a surprise: the cash register pretty much tells the story. Simple enough to pull an Emily Litella.

To some extent, ignorance of how health insurance works is a factor:

"After switching employers in April, Ms. Brockway said, she chose a high-deductible plan for herself and her 12-year-old son because it took less out of her paycheck ... when she went to pick up asthma medicine for her son and an antidepressant for herself, the pharmacist told her it would cost more than $335."


How much did she save in premiums, and where did that go? How much is her cable bill (if any)? Just once, I'd really like to see so-called "journalists" ask (and report) about what other choices their subjects are making. We have no idea whether Ms Brockway's son has his own cell-phone, for example, and how much that costs. What other discretionary expenses do people make that tells us about their priorities? Why aren't these part of the story, as well?

And there's this: "She returned later and bought a less-expensive prescription for her son." So she did in fact, make the choice to put her son's health first. Why didn't she ask about less expensive medication in the first place? Why didn't the pharmacist (or her doctor) suggest the lower priced alternative? I submit that it's because, until recently, cost wasn't a factor: someone else was paying for it.

The fact is, her high-deductible plan (apparently) worked exactly as advertised, she just didn’t understand how to use it. Once she had "skin in the game," it was to her advantage to begin asking questions, and looking for ways to lower the cost of her (and her son's) health care.

And that's a good thing.
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