Medicare “Wasting Billions of Dollars”, Says Study

Poorer people are being prescribed more expensive branded drugs. Is that bad? According to a new investigation it is.  And it is costing the taxpayers a shovel-load of money.  Furthermore,  it’s unnecessary.

The failure of the government to track doctors who prescribe cheaper generics for their patients in low-income neighborhoods racks up Medicare waste by billions of dollars that is spent on prescribing name-brand drugs instead, reports the latest investigation on Medicare Part D by ProPublica Communication.

The failure to track doctors who shun cheaper generics in favor of the branded drugs for their patients is a burden and hugely costly for taxpayers in Medicare Part D, which fills one of every four US  prescriptions.

In the ProPublica investigation  the prescribing habits of 1.6 million  practitioners nationwide were analyzed and though the number may be tiny, they are having a huge impact on spending in Medicare’s drug program.

Just 913 doctors could have saved taxpayers $300 million in 2011 by prescribing more generics like their peers.

Plus, there’s the implication (though not proven) that these doctors could be influenced by the drug companies to prescribe their costly Brand.  Nearly half of the big name-brand prescribers have accepted thousands of dollars in promotional or consulting fees from drug makers in recent years.

The culprit
So what’s behind all of this? A well-meaning benefit written into the drug program, known as Part D which allows low-income patients to pay less than $7 per prescription regardless of a medication’s cost. The unintended consequence is that doctors can dole out name brands with little fear of pushback from patients about price, which in turn exacerbates waste.

Should Medicare then do away with the low-income subsidy to people who need it? But isn’t that punishing the wrong party? Why not round up the 913 suspected doctors, instead?

Over all, the program has received favorable points. While lawmakers may bitterly disagree about the Affordable Care Act, the Medicare’s drug program has gotten high marks and has been held up as a success for government health care.  In addition, it has come in below cost estimates while providing access to needed medicines for 36 million seniors and the disabled.

Taxpayers spent $62 billion last year on Part D - more than a third of it on this low-income subsidy.

The report points to what they believe is the more effective program for the U.S. military, the VA and some private insurance plans, which  put limits on name-brand prescribing. Medicare still hasn’t.