Twenty seven million individuals were enrolled in Medicare Part D as of December 2009. The government spent $51 billion to subsidize Medicare Part D in 2009. The $51 billion spent is in addition to seniors’ premiums and co-pays. The government subsidy was $1,889 per individual subscriber.
Who is making the money?
“A provision in the Medicare Modernization Act (MMA), known as the “noninterference” provision, expressly prohibits the Medicare program (the government) from directly negotiating lower prescription drug prices with pharmaceutical manufacturers.”
This was a gift to the healthcare insurance industry by the government as a result of intense lobbying efforts.
Over 300 private plans (Medicare Plan D sponsors) enter into negotiations with pharmaceutical manufacturers separately to deliver Medicare Part D benefits.
Medicare Part D eligible seniors are forced to deal with Read more »
*This blog post was originally published at Repairing the Healthcare System*
Take medical uncertainty. Add financial incentive to treat. Voila! Increased utilization. Now take away financial incentive to treat. Guess what you get?
MedPageToday explains, in the case of hormone therapy for prostate cancer:
Medicare accomplished what clinical guidelines and evidence-based medicine couldn’t: it reduced unnecessary use of androgen deprivation therapy (ADT) in prostate cancer.
Inappropriate use decreased by almost 30% from 2003 to 2005, following enactment of the Medicare Modernization Act, which lowered physician reimbursement for ADT. Appropriate use of ADT did not change during the same time period, according to an article in the Nov. 4 issue of the New England Journal of Medicine.
“Our findings suggest that reductions in reimbursement may influence the delivery of care in a potentially beneficial way, with even the modest [reimbursement] changes in 2004 associated with a substantial decrease in the use of inappropriate therapy,” Vahakn B. Shahinian, MD, of the University of Michigan in Ann Arbor, and co-authors wrote in conclusion.
“The corollary is that reimbursement policies should be carefully considered to avoid providing incentives for care for which no clear benefit has been established. The extreme profitability of the use of gonadotropin-releasing hormone (GnRH) agonists during the 1990s probably contributed to the rapid growth in the use of ADT for indications that were not evidence-based.”
*This blog post was originally published at Gary Schwitzer's HealthNewsReview Blog*