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The Business of
Health Care Report These days, everyone seems to be talking about the escalating costs of prescription drugs. President Bush has announced that a prescription drug plan for seniors is a top priority for his administration. Business owners have sometimes experienced health insurance premiums in double digit increases over the past two to three years. Predictions are that this trend will continue for the foreseeable future. Insurers point to the spiraling costs of drugs as a primary reason for these increases. Although overall spending for prescription drugs in the U.S. has more than doubled since 1990, rate increases are not due only to increasing prices. The fact is we are taking more pills -- not to just get well, but to stay well and to prevent disease. Annual usage of prescription medicines was up 32 percent between 1992 and 1998 - to 10 prescriptions per person. More than 80 percent of the cost increase was due to greater use of drugs and a shift to newer medicines, not to the rising cost of existing drugs. Companies are taking unusual approaches to address the cost of prescription drugs. In addition to increasing employee co-pays, many are adopting an annual pharmacy maximum, and others are implementing three-tier pharmacy benefit plans. These pay differently for generics, brand name and drugs not covered under a plan's formulary. Yet without newer drugs, the cost to businesses in increased absenteeism and lost productivity likely would be more than the cost of increased utilization and rising prices of the drugs themselves. Pharmaceutical items keep employees on the job and out of expensive hospital care. If you have questions about health care or suggestions for topics on this program, e-mail me at DougHawthorne@TexasHealth.org. Tune in to News Radio 1080 KRLD and here at TexasHealth.org for more on the Business of Health Care. ©
2001 Texas Health Resources |
