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Drug Addiction
In my last column I talked about the new Medicare drug benefit and the fact that inflation in drug prices may have eroded any of the potential discounts available under the new plan. Of course, finding a way that seniors can get reimbursed, at least partially, for their prescription medications is a good idea.
One of the challenges of providing a drug benefit for Medicare recipients is to try to estimate the cost of such a benefit. I decided to take a look at what Johns Hopkins pays its employees who have health insurance coverage under one of our plans, and I was absolutely shocked at the results.
We are all aware that the costs of health care have been rising over the past decade. Many of us surmised this escalation was due to rising costs of hospitalization and, in particular, to new technologies such as drug-coated stents and the like. So what, in fact, is happening to health care costs for Johns Hopkins University employees? The envelope please.
The numbers are nothing less than staggering. From 1999 to2003 (the past four years for which data have been compiled), total health care costs per enrollee have risen 64 percent. During that same period, per capita prescription drug costs went up 167 percent (yes, that is one-hundred sixty seven!). Comparatively speaking, all other enrolle health care costs have been a bargain, rising only 45 percent in the same period.
Per capita prescription drugs cost Johns Hopkins health plans $1,768 per enrolled employee in 2003 compared with $661 in 1999. What is driving this increase? Certainly some of it may represent inflation in individual drug costs, as I described in my last column. But the advent of newer and more costly drugs, coupled with the tendency to prescribe them, are most likely driving up costs the most.
Now in some—and perhaps in many—cases, these new drugs are providing superior results. Witness, for example, the recent study linking certain statin drugs with improved morbidity and mortality from coronary heart disease, not to mention other potential benefits of these lipid-lowering drugs.
On the other hand, the overuse of antibiotics, or the substitution of a newly introduced branded drug when a generic will suffice, no doubt is contributing to the hyper-escalation of drug costs. Prescription pharmaceuticals represent about 25 percent of the total of all health care costs covered under the Johns Hopkins University health benefit plans.
We used to worry about drug addiction in the context of cocaine, heroin and the like. No more: We have become a society addicted to legal, prescription pharmaceuticals. Is there any way we can kick the habit?
