Navigating a Complex System
By Scott Culver
Communications Specialist
WEA Trust
October 2001
When thinking about auto insurance, many people understand how they can
directly affect their premiums. They can lower their insurance costs by
purchasing specific vehicles, driving defensively, and avoiding citations.
When thinking about health insurance, however, people often don’t
see the same link. They may not realize the correlation between their
health care decisions and the premiums required for their health plans.
They may not realize that by focusing on preventive care, quitting a smoking
habit, or choosing a generic drug, they can lower costs for themselves
as well as for their health plan.
Of course, even the most determined individuals can encounter roadblocks
in the health care system, and they’re not always as evident as the
speed limit signs on the interstate. The complexities of our system make
it difficult to decide which path is the right one to follow.
Prescription drugs, for instance, account to a large extent for the recent
jumps in health care costs. Last year, about one-fifth of all health care
dollars paid by the WEA Trust went toward prescription drugs.
Individuals can help control drug costs by choosing generic drugs over
brand-name drugs. However, pharmaceutical companies that develop brand-name
drugs sometimes cloud this message. They want patients to choose the more
expensive name brand, and the industry uses its marketing muscle to reinforce
this point.
For example, the patent on Prozac – one of the most widely prescribed
drugs – expired in August this year, opening the market for generic
equivalents. Eli Lilly & Co., the maker of this popular anti-depressant,
is pushing hard for patients to continue with Prozac, which netted $2.7
billion in sales last year. The company’s Web site advises, “if
you take a prescription to the pharmacy expecting Prozac, but the pharmacist
switches you to a generic equivalent, ask the pharmacist for Prozac by
name.”
The drug industry, one of the most profitable in the country, pumped
$2.5 billion into marketing its products last year – a nearly 40%
increase over 1999. To maximize their profits, some drug companies actively
work to delay the introduction of generics to the market. Even a couple
of additional months of exclusive rights to a brand-name drug can net
millions of dollars for the company.
As an example, The Wall Street Journal recently reported that drug maker
Bristol-Myers Squibb has delayed generic competition for its lucrative
diabetes drug, Glucophage. The Bristol-Myers legal team, according to
the paper, has secured at least two extra months of exclusivity. According
to the paper, each week the generic is held up nets more than $40 million
in sales for the company.
Of course, confusion about health care is not limited to prescription
drugs. Many times when it comes to our own care, we are not aware of all
the options available to us – some of these options could improve
our health and reduce costs.
In looking at how health care dollars are spent, we found that a small
percentage of people will end up using most of the health care dollars.
In 1999, for instance, according to a report by the Agency for Health
Care Policy and Research, 10% of the U.S. population accounted for 73%
of the total dollars spent on health care.
Our goal at the Trust is to develop programs and services that can impact
that number. For example, it is widely known that tobacco use and obesity
can lead to a variety of health problems. So, we offer programs to help
members quit tobacco use and manage obesity.
Furthermore, many people with chronic conditions such as diabetes and
heart disease need help in managing their ailments more effectively. There
are nationally accepted guidelines to manage many chronic conditions but,
for one reason or another, individuals do not always receive this information.
The Trust is identifying members who have chronic ailments and educating
them about managing their conditions. We do not intend these programs
to replace the care and advice members receive from their own specialist
or primary care physician. We believe the information that we provide
will allow members to become wiser consumers of health care and enhance
the relationship they have with their physicians.
In the long run, the decisions we all make as consumers of health care
can help lower costs and improve our own well-being.
Posted October 9, 2001