Several thoughts this morning arose as I was considering the cost of premiums versus the cost of doctors and prescriptions. What if there were regulations and guidelines that set parameters on all of the costs? Premiums increase due to the cost of care, and prescriptions remain high due to pricing set by pharmaceutical companies. It becomes an endless cycle of inflation year after year, but will there every be an end to the vicious increase?
An article posted on the Wall Street Journal offers a solution with a savings bolstered at $16B. The government regulates both Medicaid and Veterans healthcare expenses and price negotiations have minimized the cost on brand name drugs. Although, the cost of Medicare Rx remains high. So high the Wall Street Journal quotes, “27 of 31 countries in the Organization for Economic cooperation and Development have been able to purchase a select group of medication at less that 50% of what is paid in the U.S. they also maintain that U.S. costs per capita for pharmaceuticals are $1,010, which amounts to more than twice the $498 paid, on average, by OECD countries.” Then why are we being price gouged compared to these other OECD countries?
Why haven’t negotiations with pharmaceutical companies taken place to minimize U.S. costs also? The argument is that if negotiations are opened then Medicare Part D sponsors would have fewer incentives to offer favorable rebates and would result in higher premiums. The WSJ later in the article states, “Medicare Part D, even with its rebates, spends 198%, almost twice the median of the amount paid for brand name drugs in the 31 OECD countries.”
The call to action is to simply reduce the cost of brand-name drugs for Medicare to at least the same level as Medicaid or the Veterans Benefits Administration. This is just one proposed change to cut costs in healthcare, and there have to be many more ways that we can regulate spending to make our healthcare in America truly affordable. Do you have any ideas on how we can lower costs in healthcare? Read the full Wall Street Journal article HERE