Scamming The Medical System and Increasing Costs - Drug and Insurance Companies

The recent unsuccessful attempt to repeal Obamacare (probably due to having no viable alternative) has once again put some focus on medical costs.

Two recent reports show how easy it has been to squeeze more money out of an already bloated system.

In the first, the New York Times reported how UnitedHealth Group and other insurance companies stand accused of "systematically bilking" Medicare Advantage of billions of dollars annually. The accusation comes from a whistle-blower, a former finance director at UnitedHealth. He told the Times that the company uses data-mining to find ways to increase the apparent seriousness of patients' illnesses — and thus Medicare's payments to the insurer. UnitedHealth denies the allegation.

Medicare pays these insurance companies a fixed amount every month to take care of patients; but the amount varies depending on how sick the patient is.

https://www.nytimes.com/2017/05/15/business/dealbook/a-whistle-blower-tells-of-health-insurers-bilking-medicare.html?_r=0

I can tell you that when I worked with the HMOs in Florida, they did not hide the fact that they wanted me to use certain codes; and indeed would send a representative periodically to try and get me to up-code my patients. My only reward was that I was less likely to be dropped from their panel - which, under current laws they can do for no reason.

Drug Prices

As the use of generic drugs has grown substantially to >85% of dispensed U.S. prescriptions, prices of some commonly prescribed generic drugs have also risen dramatically, such as the Epi-Pen! Researchers found increases in generic drug prices were inversely proportional to competition level: 64% for low-competition drugs, 44% for medium-competition drugs, and 10% for high-competition drugs. Some low-competition drugs rose in price by >1000% in <6 years!! (Ann Intern Med 2017 Jul 4)

Regulatory policies that encourage competition or limit monopoly manufacturers of generic drugs may be necessary — and vital — to achieve reasonable drug costs.

The insurance companies and drug manufacturers have had a free ride under to current system. This needs to be addressed!