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Entrepreneurs Taking Advantage Of The Healthcare System: Part 2

Stanley Feld M.D.,FACP,MACE

Another example of the government trying to improve the healthcare system is Medicare Part D. The Medicare Part D benefit was created to help senior citizens pay for their medication90% of the Medicare healthcare dollar is spent on the complications of chronic diseases.

The goal was to enable the senior patients to buy their necessary medication at affordable prices. If a person has an illness that needs medication that person has to be able to afford the medication. Taking the medication is important to prevent the complications of chronic diseases. It is well established that

I believe the government’s intentions were good. However, after vested interests manipulated the rules and regulations, Medicare Part D has turned out to be less effective and more costly than anticipated.

Medicare Part D was created to enable free market competition to regulate the pharmaceutical sector of the healthcare system. The government could have opted for a single party payer system for drugs for Medicare recipients. The structure of Medicare Part D created opportunities for innovations and entrepreneurship on the part of the healthcare insurance companies and large pharmacy chains. They could have been creative and proven that a free market economy works to the advantage of all. However, they have figured out how to manipulate the system to their advantage and the disadvantage of the consumer.

The government program created specific pricing rules. These companies figured out how to get around the pricing rules. The government has recognized the defects. Yet it has been slow to act to repair them. Slow reparative action is not unusual in a hierarchical bureaucracy.

In the most affordable Medicare Part D policy the premium is Humana basic costing $24 per month. It started at $14 per month. The premium provides coverage until patients reach $2510 in drug costs. After $2510 the patient pays 100% of the drug cost until the drug cost reaches $4050. Thereafter patients pay 5% of the drug costs. The co pays varies depending on the drug and the healthcare carrier. At Humana, generic drugs co pay is $4, branded drugs $25, and non healthcare insurance company’s preferred drugs have a co pay of $54.

The $87 Humana Medicare Part D per month plan only improves the generic drug payments.

The $2510 doughnut hole (coverage gap) had been inserted after much lobbying by the healthcare insurance carriers. This is a loophole. It created a great disadvantage for the patient. The doughnut hole (coverage gap) is to the advantage of the healthcare insurance companies.

Humana had a “My Annual Cost Calculator” posted on their web site at one time. From that calculator you could figure out how much they charged your account for each drug. When I used the calculator it looked as if they were charging the patient’s account the retail price for the generic and brand name drugs. You can be certain that Humana was not paying the pharmacy the retail price. This served to get the patient into the doughnut rapidly. At that point patients pay 100% of the price for the medication. The details of the program are complicated and aggravating.

When faced with a complicated issue the consumer would look for help from a consumer advocate. AARP would be the natural consumer advocate for senior citizens. Mr. Richard Jellicoe’s comment about AARP suggested that AARP was not as dedicated a consumer advocate as we thought. “What amazes me is that AARP endorsed this company when it was time for 2007 Medicare sign up and it was not till many months later that AARP acknowledged that it’s endorsement of UnitedHealth care was a paid endorsement. They offer drugs with co-pay almost twice what you can get the same drug via cash. I guess that is how they can pay it’s fired CEO $5 million in retirement. And AARP is supposed to help the seniors.”

Dennis Kucinich said. “According to published reports, the American Association of Retired Persons (AARP) “will net AARP $4.4 billion over seven years from the insurance giants United Healthcare and Aetna” with whom the organization signed agreements earlier this year. Under the AARP brand name, the organization will promote Aetna insurance policies to its members between the ages of 50 and 64 and United Healthcare policies for Medicare-eligible members”.

Kucinich, the only Democratic candidate proposing a national, not-for-profit health insurance plan that would eliminate for-profit insurers from the health care system (HR 676), was specifically excluded from tomorrow’s forum by AARP.

“It’s clear that they didn’t want me upsetting their multi-billion dollar applecart,” Kucinich said. “The health care plans of the invited candidates preserve and promote the interests of for-profit insurance and pharmaceutical companies at the expense of tens of millions of everyday Americans who either can’t afford coverage or are being over-charged for the inadequate coverage they struggle to afford.”

Kucinich said AARP’s sponsorship of the Presidential forum “is like having Haliburton or Blackwater sponsor a Presidential forum on doing away with no-bid government contracts to private contractors; or an oil company sponsoring a forum on reducing the world’s dependence on oil.”

Kucinich emphasized that he was not taking issue with the 38 million members of AARP. “Millions of trusting AARP members has bought Medicare-supplemental and prescription drug insurance plans from AARP, believing that they were getting a good deal. The ‘AARP name’ was like the ‘Good Housekeeping Seal of Approval.’ It turns out, however, that AARP is taking a $4 billion cut by steering its members to profiteering private insurance companies trying to capitalize on fear and confusion.”

Wal-Mart four dollar pricing of generic drugs promises to put a big hole in the Medicare Part D shame. Physician will be more than willing to co-operate if the generic substitute is equally effective as a brand drug.

If the Medicare Part D healthcare insurance policy was driven by the patients’ vested interest and not the secondary stakeholders’ vested interest, Medicare Part D would be a great thing. It would go a long way to help repair the healthcare system. It would serve to decrease the money spent on the complications of chronic disease. (Medicare part A and Medicare Part B). I would say the healthcare insurance industry was entrepreneurial in its influence over the construction of Medicare Part D. I suspect that both the administration and much of congress had difficulty understanding the complexity and possible defects in the plan. Now the key is to force the administration and congress to fix Medicare Part D.

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