Real Health Care Reform

“Real” Healthcare Reform
By Jim Thompson,
Exec. Dir. Oregon State Pharmacy Association

With another session of the Oregon Legislature complete, major emphasis was on healthcare where results showed the more effort government puts into healthcare reform the more the pattern stays the same. As we tilt at windmills in moving toward universal healthcare, one pattern stands out above all others””the continuous and disproportionate rise in healthcare costs as compared to the overall economy. Perhaps it is time to look at healthcare reform in a more analytical light.

The one “accomplishment” in many years of “reforming” healthcare has been to build a monstrous pile of bureaucratic red tape interfering with the doctor patient relationship and continuously driving costs higher.

We have instituted a complex of third party payers and process managers who interfere in every area of healthcare delivery resulting in higher costs everywhere and tremendous profit to the outside players. Health insurance premiums and drug costs keep increasing while the infrastructure of delivery is eroding. The third party elements of healthcare are breaking the back of the system.

There is only one approach to sorting out the problem that has any hope of working and, in a business adverse government climate, it is the least likely to be applied. We need a thorough audit of the flow of healthcare dollars to establish where they are going and how much is going outside the patient/physician/pharmacist direct delivery network.
For instance, at a time when drug costs to the consumer are soaring we are increasingly implementing at system of outside pharmacy benefit managers whose job it is to coordinate the drug delivery system at the expense of the patient and pharmacist while siphoning off huge profits to be invested in new Mercedes. These organizations have little or no transparency but it is increasingly apparent that they are very good at negotiating price reductions from pharmaceutical companies, which they keep. They work the system for drug company kick-backs, which they keep. They restrict the reimbursements to pharmacies which are forcing many of our smaller and rural pharmacies out of business. And they restrict patient access to medications which interferes in the patient/physician relationship and often results in poorer quality care. After all of these “efficiencies” are added up they trot off to the bank with the cash they have scooped out of the healthcare system. This is not about healthcare reform””it is about cost shifting and profit taking. Take out the huge profit motive and they would all be gone tomorrow.

In Oregon and nationally we have a shortage of primary care physicians, nurses, pharmacists, and many other healthcare providers with heaviest impact in rural areas. A contributing factor in this shortage is increasingly longer work hours with decrease in pay and/or profit. Restricting access to medical care may well decrease costs overall but it is poor societal policy in the face of discussions about universal healthcare.

With the billions of healthcare dollars going out to third party operations, the new Medicaid reimbursement plan for prescription drugs will reimburse pharmacies at up to 36% less than their acquisition cost for the drugs according to the Congressional Office of Management and Budget. While this will save the government money, it will certainly force pharmacies out of business in communities with high Medicaid populations unless they refuse to fill Medicaid prescriptions. Not many businesses thrive while selling their goods at 36% less than their acquisition costs with no allowance for overhead. You would think that if the government is paying 36% less than acquisition costs for drugs the cost would go down. Government is now involved in roughly two-thirds of all healthcare spending, through Medicare, Medicaid, and other programs.

Maybe the lesson comes from history. I wasn’t that long ago that most Americans paid cash (or chickens) for basic healthcare services and had insurance only for major illnesses and accidents. The whole system was simpler and more direct and had incentives to keep the costs down. At present, most pharmacies and physician’s offices have no patients paying cash for prescription drugs and services.

When government and other parties get involved in healthcare management, the costs spiral out of control. The answer is a simpler, free enterprise system that encourages all of the players to keep the costs down. Whenever there is someone else in line to pay the bill, and outside influences controlling the system, you can be assured that the bill will be too high””especially if the process is over-regulated.

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Posted by at 06:00 | Posted in Measure 37 | 11 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Britt Storkson

    Right now the U.S. health care system exists primarily to benefit the health care providers and the lawyers – not the patients. Until that dynamic is changed we cannot even dream of affordable health care.
    The present system is designed to increase costs (not to mention profits) and it’s doing a great job in that area. And that’s why there is little interest in reforming anything.
    Also how is it ever right, moral or ethical to take money by force from those who earned it (taxes) and give it to those who didn’t earn it even if the recipient has a life threatening condition?

    • David


      Part of the problem is that the “US Healthcare System” is not an unified system, rather it is a group of independent interrelated and overlapping systems established for different reasons and operated for purposes. For example, Employer based health coverage was developed during WW II as a way to increase employee compensation during a wage freeze not to provide health care.

      As to your question:

      “Also how is it ever right, moral or ethical to take money by force from those who earned it (taxes) and give it to those who didn’t earn it even if the recipient has a life threatening condition?”

      Is it moral or ethical to stand by and do nothing while someone dies because they lack the ability to pay for treatment?

  • Jerry

    The entire health care crisis would be adverted immediately if everyone paid their own health care bills with their own money. It is as simple as that.

  • Sybella

    To a point Jerry is right. This happened to me. I take three medications for my high blood pressure. Purchasing through my local pharmacy and using my health insurance which covers my medication because it is mandated to, my costs for these were monthly $59, $15, $13. I thought I could save money so used the Costco online prescription service. I gave them my insurance information, My costs were monthly,$47,$13.50, $12. I took my insurance information out, changed to 90 day refills, Without using the insurance my costs every three months is now: $10.45, $11.25 and $11.50. That is an annual drop in cost of $911.12. WOW, tell me again why the government should mandate coverage


    Many people opt out of their employers health care programs becausde it would cut into their “play money”. If every employee was required by law to purchase the health insurance by their employer, a large portion of the so called uninsured would be eliminated.

    Many people want a socialized health care system because they foolishly think I would be free, nothing could be farther from the truth!

  • Jessica

    Jerry wrote:
    > The entire health care crisis would be adverted immediately if everyone > paid their own health care bills with their own money. It is as simple as > that.

    Sure. And when they are faced with a $300,000 medical bill after a heart attack or stroke or cancer, are they just supposed to declare bankruptcy? And who pays the bill then?

    This is a dumb idea.

  • Jerry

    Jessica –
    You would carry, of course, insurance for catastrophic situations which you would pay for with your very own money.
    It is not a dumb idea…what is dumb is for you to pay for my medical care.

    • David

      Jerry Wrote:
      “You would carry, of course, insurance for catastrophic situations which you would pay for with your very own money.”

      It is the insurance company that is paying for your health care not you. What you have done by taking out the insurance is make a bet with the insurance company that you will get sick before the policy expires, the Insurance company is betting that the cost of paying the claims will be less then the premiums collected. Since your care costs more then your premiums other healthy people, through their premiums, have paid for your care.

      • CRAWDUDE

        Sometimes the insurance companies bet pays off and sometimes not………..I’m not sure where you get the inference that others are paying, they all pay the same rates ( it’s a pooling of people who make the sacrifice to pay for their healthcare). Someone who is driving has a boat, quad and condo but has no insurance gets no sympathy from me.

        • David


          You are right insurance is a pool of people sharing risk, but then so is a national health care system. There are two major differences is the size of the pool of people doing the sharing, which should result in lower costs for all. And second, because everyone would be in the pool the current situation of those having insurance paying for the health care of those that do not would be eliminated, which should also reduce costs for all as well as giving everyone full access to our health care system. And if the program was administered by a government agency, as Medicare is, there should be substantial savings over private insurance programs (Medicare overhead 2-4%, private insurance overhead 20-40% ). And lastly, providing on going care, and catching health problems early, costs less in the long run then providing treatment at the last minute through an emergency room, which should also result in cost savings.

          I have no expectation that a national health care system would be free, only that it should be much more affordable, for all concerned, then our current methods of providing health care.

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