Magazine article Drug Topics

Two Wrongs Don't Make a Right

Magazine article Drug Topics

Two Wrongs Don't Make a Right

Article excerpt

Prior to 1980, health-care coverage was based primarily on a fee-for-service reimbursement through indemnity plans. During the past 13 years, the system has undergone a two-stage revolution.

The first stage was free-market competitive expansion. As a result, the use of services increased. The second stage was managed care, DRAMATICALLY DECREASING USAGE. The engine for both sets of changes was not innovative treatment or outcome studies; on the contrary, it was profit that utilized services in the eighties, and it is profit that is cutting back services in the nineties. THIS PROFIT is eroding the traditional covenant between physician/pharmacist and patient .

The first wrong was to encourage market forces that promoted the most expensive treatment (pharmaceutical manufacturers). It turned pharmacists into providers and patients into consumers. Competition did not lower cost; instead, it inflated capacity and utilization. The second wrong serves as a window to the future of medicine. When fee for service was replaced by managed care, every dollar not spent on dispensing (AWP-minus plans) was used by managed care companies to pay for administrative costs and marketing to make premiums more competitive and BOOST PROFITS. Pharmacy was asked to validate existing approaches, while managed care implemented dramatic changes without proof of efficacy or savings!

Antitrust laws permit managed care companies to set discounted rates and cite concerted responses by local providers as anticompetitive and in restraint of trade. Moreover, in contrast to business corporations, pharmacy lacks the resources or the legal sanctions to organize effectively. …

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