The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Chronic Illness and Rx Expenses Show Difficulty of Reform

Posted by Alan on January 26, 2009


There seems to be a growing consensus that meaningful health care reform needs to address the skyrocketing cost of medical care. This doesn’t mean market reforms won’t be central to whatever evolves in Washington, but unlike past efforts, these efforts won’t be the only game in town. Instead what care is delivered, how it’s delivered, and who pays for it will play a leading role in the upcoming drama.

There are some easy ways to restrain health care costs. According to Peter Orszag, then Director of the Congressional Budget Office and now Director of the Office of Management and Budget, 30 percent of medical spending is on “wasteful or low-value services.” Preventing this misspending would save health care system over $600 billion. That’s a meaningful start. Emphasizing preventive care and wellness would also help. So would increasing adoption rates of medical technology. Once you move past this low hanging fruit, however, the issues get more complex and more contentious.

Consider a post today in The American Conscience blog reporting that chronic illness accounts for 75 percent of overall health care spending. According to the post, chronic illness affects 45 percent of the population. Clearly, reducing the incidence and severity of chronic illness will need to be a part of any reform effort. The posting then goes on to recommend eliminating co-pays and co-insurance on prescription drugs. Citing a Journal of Medical Care study, the blog claims $1 spent on prescription drugs for diabetes and cholesterol saves $7.10 and $5.10, respectively, on other medical services. Yet, in part due to the cost sharing required for prescriptions, the incidence of non-adherence to drug regimens is high. And non-adherence, according to a John Hopkins study cited in the post, “increases national health care costs by $100 billion to $300 billion annually.” Consequently, the author calls for reducing or eliminating cost sharing in connection with prescription drugs.

I have no idea if the studies cited in The American Conscience post are valid — the author of the blog doesn’t identify him or herself and the studies sound like what the pharmacy industry would produce. But the underlying point: too many individuals fail to treat their chronic conditions in a cost effective manner, is a legitimate concern. It also highlights the challenge facing lawmakers.

Prescription cost sharing has been shown to cut down on their overuse. According to this blogger, however, it also reduces the legitimate use of medication. How can patients be encouraged to seek lower cost, proactive solutions to their health problems without providing an incentive for anyone with a head cold from stocking up on expensive drugs? Finding that balance is a multi-billion dollar dilemma. But any meaningful reform plan is going to have to try.

3 Responses to “Chronic Illness and Rx Expenses Show Difficulty of Reform”

  1. Jayla said

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  2. Alan,

    As a health insurance broker in Colorado, I experience these issues as well. I wholeheartedly agree there are substantial issues with the prescription system. While I am not a medical professional by any means, I do feel there are instances in which medications are over marketed and over prescribed. I believe medical providers need to do a better job diagnosing illness and prescribe life style changes more such as diet and exercise rather than prescription medication. I have seen this occur within my family and discuss examples with my clients as well.

    I believe the medical community has a responsibility to improve the way it diagnoses and treats illnesses and that there are cases where their participation with the pharmaceutical companies can be detrimental to society. One way to address the cost and availability of prescriptions would be to create a database that compares the cost and availability of prescriptions under individual and group coverage similar to that available under Part D coverage with Medicare.

  3. jimmy1920 said

    I agree that chronic illness is an issue that needs to be dealt with. And I think President Obama can lead by example.
    Here is my experience. I administer a plan that provides benefits for approximately 25,000 participants Analysis has demonstrated that our population has twice the average rates for diabetes and hypertension. Our prescription drug costs are significantly higher than averages. The problem is not that people are not taking their medications. It is that they place too much faith in the medications. They think that is all they need to do; and that they do not need to change their life style. They think that because it is in their family, there is nothing they can do about it.
    I try to explain that diabetes is degenerative disease. You may not be able to avoid getting it, but you can exercise some control over when you get it. And the difference between a diagnosis at 40 and one at 55 may determine whether you end your life dependent on a dialysis machine or whether you lose a foot to amputation.
    I don’t think raising drug co-pays is the answer. The answer is getting the message out that medications should not be the first answer to every problem. Proper diet, nutrition and exercise should be the primary emphasis.

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