A Shanda, A Shame

In Yiddish, the word “shanda” means “shame” or “scandal.”

Here’s the latest surprise. It seems that health insurers are creating a “Tier 4” to cover very expensive drugs. These drugs, according to an article in the New York Times, are typically for chronic diseases and are very expensive, costing thousands of dollars per month. Rather than paying $40-50 that a branded, newer drug might cost, insurers have taken certain very high cost drugs and put them in a new class by themselves, charging perhaps 25% of cost as the co-payment.

Health insurance, unfortunately, has been less about sharing risk and more about managing the employer paying for care, albeit at negotiated rates. Not too far from the infamous Clinton plan, is it? Maybe the Clinton plan from 1994 wasn’t such as crazy idea?

Meanwhile, the result has been that the sickest are least able to afford the care that will actually help. We have enough people who don’t fill prescriptions, who take less than the needed dose to be of value, all because of cost? If insured, as least you can get the discounted rate. Uninsured? You pay retail.

Several companies have gone to a zero copay for drugs, on the theory that this is the best preventive medicine. Back in the good old days, HMOs were front loaded to preventive care. Today, most insurers don’t pay for preventive care. The investment they would make in preventive care is unlikely to pay off several years down the road, as the employer can readily bolt to a competitor with a low ball premium.

In the short term, physicians need to be aware of the cost of prescription drugs. Writing a prescription that will never be filled is pointless. Having no other options should make you livid. Yep, this is where I’m going – a universal insurance scheme, covering everyone in the country. There are a lot of ways to run the details (regional buying groups, offering competing plans and different benefit packages above the minimum, and so on) but this is the only way to end this….this…”shanda.”