With rising concern over the cost of the new Medicare prescription drug benefit program – going into effect January, 2006 and estimated to cost $593 billion over the next decade – a new UCSF study reveals that a key cost-cutting strategy employed by HMOs for 15 years is simply not working.
Health insurance companies have increasingly sought to limit the amount of expensive drugs doctors prescribe to patients in order to keep drug costs form spiraling, according to the study authors. A major strategy has been to restrain drug costs by assuring that a medical group will make money if member doctors prescribe within the drug budget set by the insurance company, and will lose money if member doctors over-prescribe.
The underlying assumption is that placing doctors at financial risk for their drug prescribing practices will lead them to adopt new practices to control drug costs, the authors explain. These practices include hiring pharmacists for expert advice, using "physician profiling" to compare doctors prescribing patterns, and adhering to professional protocols that specify what each drug should be prescribed for, at what dose and for how long.
As another example of a drug-risk contract considered unfair by physician groups, the authors report that one physician group was penalized for not controlling its costs as well as another group in the HMOs network, even though the other group was in a different health care market.
Under the new Medicare drug benefit, reimbursement for HMOs depends, in part, on their establishing sound drug use management programs to contain drug costs, the authors point out.
"As HMOs establish and modify these programs, we hope the data presented here can help them avoid some of the major pitfalls we found in several large cities across the country," says study co-author Marilyn Stebbins, PharmD, UCSF professor of clinical pharmacy. "And doctors can learn to request fairer contracts and better information sharing."
Wallace Ravven | EurekAlert!
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