LogFAQs > #889941717

The Admiral posted...

Why would you assume it would go in this direction when we have historical examples of just the opposite. Most egregious example:

http://www.slate.com/articles/news_and_politics/the_big_idea/2006/01/drug_addled.html

Healthcare companies will engage in rent-seeking actions even more aggressively once there is only a single entity to negotiate with. As history shows us, hundreds of millions in lobbying dollars usually pays off in their favor, at the expense of the tax payers.

I'm not sure what your point is with this article. Prescription drug prices have been skyrocketing across health systems, which is what pushes the price of Medicare Part D up since they aren't allowed to negotiate drug prices. This is a particular carve-out big pharma has given themselves.

If you look at overall health care spending, it is quite obvious that Medicare and Medicaid are more efficient than private insurance with respect to reimbursement rates. Prescription drugs are significant, but represent only maybe 20% of overall health care costs -- costs we could bring down by negotiating prices among other things. For instance, Medicaid has a drug rebate program which causes net prices of prescription drugs under Medicaid to be less than half of what they are under Medicare Part D!

The real historical example is Medicaid and its cost growth vs. private insurance. It couldn't be more clear -- https://www.texmed.org/June16Journal/

Reimbursement amounts for the same procedures differ among payers, with public payers (Medicare and Medicaid) setting a much lower rate than that which private payers establish in contracts. Therefore, the diverse patient payment mix can have a significant impact on a physician's practice. This impact and need for monitoring patient mix can vary by the type of services, which would serve as an indication of specialty practice differences.
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