In April, there was a major defeat for physicians and consumers in the U. S. Senate. Democrats were not able to muster the 60 votes necessary to pass legislation that allows Medicare to negotiate the lowest purchase price for the federal drug plan.

The legislation failed, 55 to 42, even after six Republicans crossed party lines to vote in favor of the law. Democrats vow to revisit this issue in the near future, even under the threat of a veto from President George W. Bush.

The Republican-passed Medicare Prescription Drug Improvement and Modernization Act of 2003 doesn’t allow Medicare to negotiate the best price for the most vulnerable Americans — our sick and elderly. Instead, the drug companies can essentially charge the government whatever they desire, bilking consumers with extremely high drug costs.

For example, the Department of Veterans Affairs has negotiated a price of $214.52 for a month’s supply of Protonix, a gastrointestinal agent. However, under the Medicare drug plan, the same drug costs $1,148.40, according to a report from Families USA issued in January. This system takes us back to the old days when Medicare paid physicians the market rate for their services.

We believe the law is unfair to consumers and the entire medical care community. As physicians, we don’t even get a chance to negotiate our fees with Medicare, much less bill them for whatever amount we think is appropriate. Medicare pays us a flat rate for our services, often below the costs of delivering the care.

Analysts estimate the current set up will cost taxpayers $800 billion to $1.5 trillion a year. Where will Congress get the money to pay for these drugs? Don’t expect legislators to get the funds through raising taxes. Congress is more likely to squeeze more money out of what Medicare pays physicians, hospitals and diagnostic centers to free up money for drugs.
The majority of Americans are in favor of allowing Medicare to negotiate the purchase price of drugs, just like any business in the country has a right to negotiate a contract or service — except for physicians in many cases.

Demand for medical services and drugs will continue to rise, and as we all are squeezed under price pressures, drug companies shouldn’t be an exception. After all, the American way is to get innovative when we have to do more with less.

As we know, there is a limited amount of money in the health care pie, while demand continues to rise. Therefore, it’s imperative for the physician community to get more involved with the overall reform of our health care system. We have plenty to lose financially if we don’t.

Posted on April 23, 2007 11:07 AM