One thing that I hear from time to time during the
debate discussion about healthcare reform legislation goes something like this: “Healthcare is expensive because healthcare consumers are unaware of the true cost of their choices. Patients would pick less expensive care if they knew up front the actual price of the healthcare services and products they use.”*
I’ve always been a bit leery of this argument. It assumes that, if all the information is public, patients will research the costs of providers, even though most patients don’t currently look at the public data about the quality of their doctors or hospitals. Furthermore, it treats healthcare like a bulk commodity, which it isn’t. We patients usually place much more emphasis on on the quality of outcomes doctors provide, how available they are, and the personal relationships we build with them than we do on the cost of their services. Sometimes it may be possible to swap one drug for another; but even then we want the best that we can afford — the one that’s most effective with the fewest side effects — not just the one that’s least expensive. Patients shouldn’t be penalized for choosing a pricier option when the different treatments have different medical outcomes. (Of course, it would be nice if patients were informed when there’s no actual difference in efficacy between two drugs or procedures, especially when one costs a lot more than the other.)
But it occurred to me that I really don’t know the full cost of my healthcare. Maybe the proponents of the “people would pick the least expensive option if they knew better” point-of-view have a point. So I started to uncover these costs today while shopping at CVS, my local pharmacy chain. (Later I’ll post the costs submitted by my doctors to my insurance company.)
I did two things at the pharmacy. First, I bought some over-the-counter items: vitamins, Breathe Right nasal strips, glucose tablets, etc. For them, price absolutely comes into play. A pharmacist had previously confirmed that there’s no actual difference in effect between more expensive name-brand vitamins and the store-branded generic versions. So I bought the bottle of vitamins with the least expensive per-unit price. Ditto for the glucose tablets. (Fortunately the CVS brand tastes pretty good . . . all things considered.) But the generic nasal strips aren’t the same, and I like the Breathe Right versions much better. Since I can afford to pay the 30% price premium, I do.
I also refilled my three prescription medications. The pharmacy tech was nice enough to tell me what the cost would have been if I didn’t have insurance, that is, if I actually had more of my own cash at stake.
- Humalog insulin from Eli Lilly — 2 vials = $242.99
- Freestyle test strips from Abbott Labs — 200 count = $235.98
- Timolol eye drops (generic version) — 15 mL bottle = $31.39
That’s $510.36 for one month of medication. I feel very fortunate that I have good insurance which includes a prescription drug benefit. The monthly cost to me in copays is rather high, about $80, because I somehow manage to hit all three tiers of the benefit ($10 generic, $25 preferred name-brand, and $45 non-preferred drug).
So how about the argument? Now that I know how much my drugs cost — now that it’s no longer hidden behind copays — will I make different choices? For the Humalog insulin, absolutely not. There are less expensive insulins out there, but they either act differently or are no less expensive. And the eye drops are generic, so we’re talking price differences in single-digit dollars . . . billed to my insurance . . . who can use its reimbursement power to negotiate a better price if it so chooses. Those test strips, though. Each costs slightly more than $1. That’s expensive, especially given that I go through 7+ per day.
When my copays on them went from $35 to $45 over the summer, I actually did look at switching to a less expensive option. But I’m very pleased with my meter’s reliability, even if it is a bit long in the tooth. Nevertheless, I check out the Bayer Contour, but the copay was the same, and the full price was comparable, too. What about the “preferred” brands for my insurance? Maybe this sounds like a cop-out, but switching meters is tricky. You have to get the meter — which can be expensive unless you go somewhere where they’re just giving them away to get you hooked — and if you don’t like it you’re stuck with a prescription.
What about using a different vendor? In the abstract, that’s a great idea. At the moment I write this, Wal-Mart is selling 50 count boxes at $39.00, or $156.00 for an equivalent amount to what I get now. (Amazon has even better prices, but this is one of the few times where I’d rather go with Wal-Mart, since they actually have pharmacies, maintain a reliable chain of custody, and would process my insurance.) And I could lower my copay to $90 every three months if I switched to having a 90-day supply mailed to me. So there are options that would lower the cost to me both directly and indirectly (through potentially lower premiums). I think I will try to save myself some money and do that when I exhaust the refills on this prescription.
But I won’t be switching to Wal-Mart as my pharmacy, even though the out-of-pocket price for the same product is one-third less. For one thing, the nearest Wal-Mart is an inconvenient two towns away, while CVS is just down the street. And I don’t like Wal-Mart’s business practices very much, so I try not to shop there. (And, yes, I know that I can afford the luxury of outrage and that many others can’t. Let’s just move along. Nothing to see here.) But most of all, there’s no good reason why I should have to switch pharmacies based on price.
Here I’m getting quite close to validating the point that I started out being leery of. I am insulated from the costs of my medication via copays, so I do possibly make more expensive medical decisions. But I don’t feel that it’s my responsibility to navigate all of the choices of vendors to find the lowest price. The insurance companies should do this, and I’m sure to a certain extent they do. (I’m 90% sure that they can afford to lower copays when you switch from 30-day to 90-day supplies because they work directly with the manufacturers and can negotiate a price.) Medicare has proven that if you say what price you’re willing to reimburse, healthcare providers will go along with that price. One of the benefits of having insurance is to have someone else doing this work for me. No, not “me” . . . “us” . . . the pool of the insured . . . a very large group represented by a company that should be trying to maximize its profits — if you believe in that sort of thing for insurers — by using its market power to drive down prices (just like Wal-Mart does).
But I disagree with the whole “if patients were more aware of the costs, they would spend fewer healthcare dollars” argument from a different angle, too. Everyone without insurance — and even a lot of people with it — are acutely aware of the cost of their healthcare. And they do spend less, but often that’s because they’re forgoing treatment or taking half-doses of medications or skipping checkups or living with chronic, treatable pain or choosing options that cost less but have poorer outcomes.
If we want to control costs, being aware of them is not enough. We should look at actually fixing why costs are high to begin with and why there’s such a large variance between the cost at different stores and for patients with different insurers.
* — Few rarely come out and say it, but there’s usually also the following implied sentiment: “. . . And the way we will make patients aware is by having them pay for their healthcare out-of-pocket before reimbursement or via a healthcare debit card that they’ve paid into via payroll deductions or tax credits.” John McCain lost my vote last year when he laid out a position very similar to this. Seeing these prices today, makes me even happier that this isn’t really a politically viable option.