Pharmacy Costs

Using An Old Opening Joke Line To Illustrate Costs In Healthcare

We have all heard jokes that begin with
“Three guys walk into a bar….”

I thought it might make sense to use that model to explain why “referenced-based pricing” and general consumer awareness in healthcare are important to consider. Here goes:

Three guys walk into a hospital to get the same procedure….

– THE FIRST GUY is covered by MEDICAID and the billed amount to the government is $60.

– THE SECOND GUY is covered by MEDICARE and the billed amount is $100.

– THE THIRD GUY is covered by PRIVATE INSURANCE and the billed amount is $250.

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There are long and complicated reasons why this exists, but it does.  One of the things that many people are talking about but still few are doing is called “reference-based pricing” (RBP).  This is where an employer will agree to only pay a percentage above MEDICARE.  It is still edgy and can create problems for members under this type of program, but it makes sense.  Basically, the employer is saying “I understand that providers charge us more but we will only agree to a certain percentage above what you bill to Medicare.”   The reason it is edgy is that it could pit the provider against the member or the provider may even turn the member away.  Nonetheless, RBP is out there and will likely get more attention.

Although structural programs like referenced-based pricing may be too early to embrace, it is wise to know that better pricing is out there and consumers can take advantage by asking questions and comparing prices.

I know that “three guys walk into a bar” has a much better ring to it than “three guys walk into a hospital”, but it is important to know that you may be able to find a better deal on your costs.

This is something BBG is studying and we are gathering pricing differences for our clients.

CDHC-Comparison-Shopping

 

THE LAW OF DISPROPORTIONATE COSTS: SMALL NUMBER OF EMPLOYEES ACCOUNT FOR LION’S SHARE OF GROUP HEALTH PLAN MEDICAL COSTS

There’s plenty of cost related analytics available to support the disproportionate cost premise that medical expenses are highly concentrated among a very small proportion of enrolled employees.  These highlights, for example, from a Agency for Healthcare Research and Policy (AHRQ) are pretty telling:

  • 1 % of the population accounts for 21.4 % of total health care expenditures nationally
  • 5 % of the population account for 49.9 % of total expenditures
  • 10 % of accounts for 65.6 % of all medical costs

If You Want A Pragmatic Understanding of the Opioid Epidemic You May Want to Listen to This

This post follows up on last week’s primer on how abuse of prescription pain medications has led to what’s now recognized as a true national crisis. The new podcast Embedded provides a riveting inside look at how the use of one particularly powerful prescription painkiller, Opana, impacted life in a small Indiana town.

Pain Meds and The Opioid Epidemic: 10 Things To Know

There’s a lot in the news these days about what’s referred to as the opioid crisis or epidemic.

Just yesterday for instance —  highly respected healthcare consultant (and close friend) Joe Paduda, fresh off of speaking at a national drug summit in Atlanta, wrote an insightful but grave piece on the impact of opioid abuse for Managed Care Matters. Joe nets out the massive increase in the death toll stemming from prescription pain killers (opioids) and how the increased use of heroin has been driven by users who started with prescription opioids .

And, in an article appearing in Thursday’s Wall Street Journal (The Accidental Deadly Drug Prescription) a Baltimore physician writes how doctors and patients alike are unaware of the threat of accidental death posed when opioids interact with other frequently prescribed drugs.

Got me thinking. Despite all the news, despite being in a healthcare related field and working with prescription drug plans, and despite having had family, friends, and colleagues at work touched by this crisis, I realized I don’t really know nearly enough about the overall issue. I wanted to better comprehend the basics and so I dug in a little bit to get a better grasp. Thought I’d share in case you’re in the same boat as me.

Here are 10 things about the growing pain med problem that may help you better understand:

1.) Per the National Institutes for Health (NIH), Opioids are medications that relieve pain. They reduce the intensity of pain signals reaching the brain by diminishing the effects of a painful stimulus. In other words, they reduce the patient’s perception of pain.

2.) Medications in the opioid class include hydrocodone (e.g., Vicodin), oxycodone (e.g., OxyContin, Percocet), morphine (e.g., Kadian, Avinza), codeine, and related drugs.

 3.) Hydrocodone products are the most commonly prescribed for a host of painful conditions, including dental and injury-related pain.

 4.) Morphine is often used before and after surgical procedures to alleviate severe pain.

 5.) Codeine is often prescribed for mild pain. In addition to their pain relieving properties, some of these drugs—codeine and diphenoxylate (Lomotil) for example—can be used to relieve coughs and severe diarrhea. (In other words, just about anyone could have been prescribed an opioid at one time or another.)

 6.) Addiction may develop due to the euphoric response some people experience when taking opioid medications. The drugs affect the brain regions involved in reward. Those who abuse opioids may look to step up and intensify their experience by taking the drug in ways other than those prescribed or switching to heroin after becoming addicted because heroin may be less expensive and or more easily accessible.

 7.) Over the course of almost two decades overprescribing of opioids has led to a huge increase in the frequency of opioid addiction. This in turn has led to the steep rise in overdose deaths and increased heroin use. Use of hydrocodone has more than doubled and consumption of oxycodone has increased by nearly 500%. The number of deaths due to opioid overdose death nearly quadrupled.

 8.) This acceleration in the prescription and use of opioids was fueled in large part by the combination of the introduction of OxyContin in 1995, more aggressive identification and treatment of pain, and, an overall increase in emphasis on Pain Management as a treatment modality.

 9.) The group with the highest death rate from opioid prescription pain meds is the 45-to-54 age group — more than four times the rate for teenagers and young adults. The rate of overdose deaths for adults ages 55 to 64 has soared sevenfold.

 10.) Everyday 46 Americans die from using prescription painkillers.

I guess my take away is for me to tune in more. And, encourage our team and our clients and their employees to tune in more.  Maybe at one time it seemed mostly just on the streets. Not any more. It’s at the office; it’s at home; and it’s over the roads. From classrooms to locker rooms to board rooms, pain med addiction has become a real and costly issue that in some way shape or form has touched most of us.

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