Skip to main content

Blame Season in the Healthcare Sector

 |  By John Commins  
   December 03, 2012

It's blame season in the healthcare sector.

As millions of American consumers re-enroll for healthcare coverage in 2013 and grimace over interminably rising costs, provider associations, retailers, drug makers, and health plans are trying their best to deflect responsibility onto one another.

By various estimates, the nation's workers may receive compensation increases averaging between 2% and 3% in 2013. However, health insurance costs are projected to increase by 5% –6%.

Although that is the lowest increase in premiums in six years, it's a decades-long trend, and rising healthcare costs have been blamed as a key factor in wage stagnation. As the discontent among consumers grows, the major players in the healthcare sector have become increasingly adept at making sure they don't get pegged as the bad guys.

The Express Scripts 2012 Q3 Drug Trend Quarterly issued last week stated that prices in a market basket of the most highly used brand-name medications increased 13.3% over the year ending September 2012, far outpacing the 2% inflation in the larger economy. At the same time, generic drug prices fell 21.9%. Express Scripts says the 35.2% point net inflationary effect is the largest widening of brand and generic prices since it began tracking in 2008.

"The patent cliff has fueled a growing price disparity between brand-name and generic medications," Express Scripts CMO Steve Miller, MD, said in a media release. "The trend emphasizes the nation's continued need for the tools we employ to help patients make better decisions, including generic use when appropriate."

America's Health Insurance Plans flagged the Express Scripts report and issued its own press release.

"To make healthcare coverage more affordable, the nation must address the soaring cost of medical care, including prescription drug prices, which continues to increase at an unsustainable rate. Health plans are working with providers and consumers to help control rising costs through a variety of innovative ways, such as increased utilization of lower-cost generic drugs," AHIP said.

These attacks on drug prices prompted a quick response from the Pharmaceutical Research and Manufacturers of America.

"By cherry-picking a subset of specialty medicines used by a small number of patients, Express Scripts gives a misleading impression of prescription drug spending," the drug makers' lobby said. "While representing a small share of overall health spending, some of these medicines represent the newest and most innovative therapies, giving hope to patients who previously had few treatment options."

Earlier last week, the American Medical Association issued its annual report detailing what it says is a widespread lack of competition among health insurers across the nation.

"The new data demonstrate that most areas of the country have a single health insurer with an anticompetitive share of the market," AMA President Jeremy A. Lazarus, MD, said in a media release.

The lack of competition among insurers, AMA says, has resulted in increased premiums, watered-down benefits, and increased insurers' profitability, which the physicians' association says demonstrates that highly concentrated markets harm patients and physicians.

AHIP immediately fired back with its own counter-claim that consolidations among hospitals and physician groups were the main culprit driving higher costs.

"Families and employers in every state have multiple choices of both insurance plans and types of coverage. Moreover, research clearly demonstrates that provider consolidation—not concentration of health plan markets—is driving up healthcare costs for consumers and employers," AHIP said in the statement.

Last week was particularly busy for AHIP. In addition to glomming onto the Express Scripts report and calling out as "fatally flawed" the AMA report, AHIP made public its November 21 amicus brief filed in the Court of Appeals for the Sixth Circuit in support of the Federal Trade Commission, which had challenged the merger of two hospitals in Ohio.

"Anticompetitive hospital mergers harm consumers by leading to higher prices and diminishing hospitals' incentives to innovate and improve quality," AHIP wrote in the brief. "Health insurance plans bring a unique and important perspective to the antitrust review of hospital mergers. They represent millions of individual consumers of healthcare and as such are a relevant customer whose insights and experiences are important to the antitrust review. Health plans have been directly affected by anticompetitive hospital mergers. It is the health plans who may be forced to accept higher prices and who may lose their ability to implement innovative approaches to improving quality."

"And of course," AHIP continued, "anticompetitive hospital mergers have also affected health plans' members. The individuals and employers who receive insurance from health plans, or who self-insure with their assistance, have seen tremendous increases in prices without corresponding increases in quality as a result of anticompetitive hospital mergers."

The federal appeals court has yet to assess blame.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.