Healthcare Advocacy - PBMs What Are Those?
DECEMBER 22, 2022
Good Day Healthcare Advocates
Every day that we learn, grow and advocate for better healthcare for all of us is a good day. Thank you to Jessica Cravens, author of “Chop Wood, Carry Water”, for talking about healthcare advocacy and this newsletter yesterday. Thank you also to all of you advocates who have recently subscribed.
If there are specific healthcare topics you’d like to see addressed please send me a comment using the comment button.
Mission
The Healthcare delivery system in the United States is a patchwork that leaves much to be desired. It is the most expensive system among the top 35 industrial countries and covers far fewer participants delivering lower levels of quality care than many of our peer nations. This blog will provide:
· Current problems in healthcare
· Actions you can take
· References.
Current State of Affairs – Pharmacy Benefit Managers (PBM)
Recall that there are about 900 private healthcare insurance companies in the US. Many of those policies cover prescription drugs. A way for insurers to increase their profit is to outsource the management of the prescription portion of the insurance policy to a separate company. That company is called a pharmacy benefit manager.
They define what prescriptions are covered for each policy and determine what the copay for each drug will be and do not necessarily operate in the best interest of the patient.
There are several problems with their business model from the patient point of view. These are: Vertical Integration, Consolidation, and Conflict of Interest.
Vertical Integration – The biggest PBMs own health insurance companies as well as the pharmacies where you purchase the prescriptions. For example, CVS owns Caremark and Aetna. They can increase profits on each piece of that supply chain.
Consolidation – The top 3 PBMs in the US, Caremark, Express Scripts and OptumRx manage 80% of all drug claims. In other worlds, that starts to look like a monopoly and there are indications that some of them behave that way with respect to pharmacy reimbursements.
Conflict of Interest - PBMs are just rife for self-dealing. Their job is to make sure that you pay your copay and that they pay as little as possible reimbursing pharmacies for drugs. The PBMs maintain formularies (prioritized lists of drugs for insurance companies). Good placement on a formulary is important for drug manufacturers and they can offer rebates to the PBMs to be placed well on the list (ensuring more sales). None of this is necessarily in the patient’s best interest.
Some PBMs also have non-disclosure agreements with pharmacies. That is, even though the pharmacist knows that the drug is cheaper without insurance they are obligated to NOT TELL YOU unless you ask.
Good news – they will tell you if you ask!
Try this experiment (I learned this from my doctor). Look at a pharmacy discount website like goodrx.com. Choose a prescription you take and let them know your zipcode. They will offer you a discount at pharmacies near you. There are many such systems similar to GoodRx and you can find them with a quick web search. Note that if you use a discount system it does not help with any insurance policy deductible you may have. Keep in mind that most generics are in the penny range and companies like GoodRx while offering discounts still make a good profit.
Worse still an analysis of drug spending at the retail level by healthaffairs has shown that of every $100 spent at the retail level for drugs $41 goes to PBMs
Long and sort of it is this is another example of systems put in place to stand between the patient, doctor and pharmacist who operate in their own interest and not that of the patient.
The resource section has sources that provide additional data.
What You Can Do
See resources below for your senator/representative
You can call or email your Senators and Representative and say
My name is _________, I am a constituent and live in zipcode ________.
We can all agree that we need better healthcare for everyone. Until we get Universal healthcare I want you as my (senator/representative) to work for more transparency in drug prices by
1. Support the bi-partisan S.4293 - Pharmacy Benefit Manager Transparency Act of 2022 proposed by Senators Cantwell and Grassley
2. Work to enact legislation to passes 90% of the rebates pharmacy benefit managers receive on to consumers
EXTRA CREDIT –Medicare4all, https://medicare4all.org/ managed by National Nurses United, a nurses union. Periodically, they have had national days of action to protest egregious PBM behavior at CVS stores. If you’re on their email list you are sure to hear of the next one.
Thank you – you are making healthcare better for all of us.
References
Contact elected officials
Senate email/phone
https://www.senate.gov/senators/senators-contact.htm
House of Representatives email/phone
https://www.house.gov/representatives/find-your-representative
Pharmacy Benefit Managers
Commonwealth Fund
Economic Liberties
Quality of Care in the US
Kaiser Family Foundation –a good source of current data and problems with healthcare.
Physicians for a National Health Plan (PNHP) has a number of good background presentations and often describes actions you can take.
The Commonwealth Fund, a good source of healthcare research.
Hi Marion - this is a serious situation. One that many of my friends in Pasadena have had.
One thing that matters is the kind of Medicare you have (Advantage - PPO, HMO, , straight Medicare etc). Another, as you identify, is the location. Have you tried asking Medicare for help?
https://www.medicare.gov/care-compare/?guidedSearch=Physician
is their site to try and find doctors for you.
I will send you an email outside of substack to further discuss. I will also research how this is handled elsewhere and may wind up with a newsletter addressing it...Be well...Alan
I have recently returned from living in the San Francisco Bay Area for 10 years to an area on the central coast of California where I previously lived for 40+ years. I was covered by Kaiser Permanente in the Bay Area and was extremely satisfied with their excellent & efficient medical care. Here on the central coast I have found it nearly impossible to get an appointment with a primary care physician in less than a 5 to 6 (or longer) month wait because hundreds of doctors have left the area or have gone concierge. Where have all the doctors gone? They have moved on to more lucrative areas where the private insurance and Medicare rates of reimbursement are higher. That’s because the governmental powers that be have designated our area as “rural” (which is low) and the cost of living here has skyrocketed. They cannot afford to live here. My only recourse for a medical situation is the emergency room or an urgent care facility. If you have a chronic condition requiring care, you are out of luck. The situation for seniors is dire and no one knows how to remedy it. Local political representatives have tried for years to get the rate of reimbursement raised to no avail. Are there any suggestions out there?