HMOs restrict doctors’ prescribing
As part of the ongoing effort to cut costs, HMOs are now restricting what drugs they cover or are increasing patients’ copayments for drugs, according to a story in the May 22 edition of The Wall Street Journal.
Also, many HMOs are placing physicians on a monthly drug budget, penalizing them if they exceed it and sharing the savings with them if they stay below it.
The HMOs say the new policies motivate the physicians to consider the cost-effectiveness of the drugs prescribed. The HMOs argue that without such policies, physicians won’t take the time to "research whether costlier drugs are worth the extra money," according to the article.
Critics complain, however, that the system threatens the doctors’ role as the patient’s advocate. The article reports that one California physician group "must get by on a mere $8 per month per patient."
Physicians on drug budgets say they have not denied any patients needed medications. But critics contend that, "The systems invite abuse because doctors can earn more by writing fewer or less costly prescriptions."
Drugs have become a major target for HMO cost cutters because they were the leading contributor in 1996 to declining earnings." The drugs accounted for 10% of HMOs’ medical budgets last year but for 50% of their cost increases."
Medi-Span Inc., an Indianapolis-based research firm, said the reasons for the increase include costly treatments for AIDS and rising costs of older drugs.
The shift in policy contradicts one of the early advantages of participating in an HMO. HMOs initially touted the benefits of encouraging patients to use drugs to prevent more serious illnesses and hospital stays, according to The Journal.
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