MEDICARE DRUG BENEFITS: Policymakers Take Sides
Prominent lawmakers and policymakers weigh in today on the contentious issue of whether to expand Medicare to include prescription drug coverage.
Writing in the Washington Post Health Section, Rep. Pete Stark (D-CA) argues that providing drug coverage for seniors as a preventive tool will allow society to avoid "paying for acute heart attack care because cholesterol didn't get reduced, for instance, or for amputations because of uncontrolled diabetic complications." He notes that while the government "pay[s] a fair price," it "generally do[es] not get as good a deal as some of the managed care plans do."
In an opposing column on the same page, Robert Helms, director of health policy studies at the American Enterprise Institute, calls efforts to provide more benefits "absurd" at a time when Medicare is financially strained. He advocates expanding Medicare through "a defined-contribution approach in which Medicare sets spending levels for individuals, who could then use the money to purchase a plan." The competition might spur health plans to offer drug benefits, he says, noting that "when all drugs are available without control, some are used much more than needed. A defined- contribution approach would give health plans and consumers incentives to use drugs only when they are most beneficial" (1/26).
Writing in an op-ed article in the Boston Globe today, Alan Sager and Deborah Socolar of Boston University School of Public Health argue that a viable approach would be to "unify the roughly $2.5 billion in statewide outpatient prescription drug buying power to help everyone." They contend that the state could pool its purchasing power and negotiate discounted prices. Noting that "health spending in Massachusetts is twice Sweden's and equals Australia's," the authors argue that "the entire state's drug purchasing power is enough to win deep discounts." In addition, they propose that drugmakers "pay rebates into a new state trust fund, used to buy prescription drugs for people who can't afford them. Almost all rebated money will recycle back to the manufacturers." Adding that "one-sixth of drug companies' revenue is profit -- three times the average profitability for the 36 other Fortune 500 industries," they warn that "[w]e must worry more about patients' health and less about drug companies' health" (1/26).