Health Care Pie-in-the-Sky meets Reality: Walgreens in WA won't accept Medicaid

[AZRedhawk44]

http://seattletimes.nwsource.com/html/localnews/2011367936_walgreens18m.html

Effective April 16, Walgreens drugstores across the state won't take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

The company, which operates 121 stores in the state, will continue filling Medicaid prescriptions for current patients.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a "continued reduction in reimbursement" under the state's Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

Walgreens follows Bartell Drugs, which stopped taking new Medicaid patients last month at all 57 of its stores in Washington, though it still fills Medicaid prescriptions for existing customers at all but 15 of those stores.

Doug Porter, the state's director of Medicaid, said Medicaid recipients should be able to readily find another pharmacy because "we have many more pharmacy providers in our network than we need" for the state's 1 million Medicaid clients.

He said those who can't can contact the state's Medical Assistance Customer Service Center at 1-800-562-3022 for help in locating one.

Along with Walgreens and Bartell, the Ritzville Drug Company in Adams County announced in November that it would stop participating in Medicaid.

Fred Meyer and Safeway said their pharmacies would continue to serve existing Medicaid patients and to take new ones, though both expressed concern that the reimbursement rate is too low for pharmacies to make a profit.

The amount private insurers and Medicaid pay pharmacies for prescriptions isn't the actual cost of those drugs but rather is based on what's called the drug's estimated average wholesale price. But that figure is more like the sticker price on a car than its actual wholesale cost.

Washington was reimbursing pharmacies 86 percent of a drug's average wholesale price until July, when it began paying them just 84 percent. While pharmacies weren't happy about the reimbursement reduction, the Department of Social and Health Services said that move was expected to save the state about $10 million.

Then in September came another blow. The average wholesale price is calculated by a private company, which was accused in a Massachusetts lawsuit of fraudulently inflating its figures. The company did not admit wrongdoing but agreed in a court settlement to ratchet its figures down by about 4 percent.

That agreement took effect in September — and prompted a lawsuit by a group of pharmacies and trade associations that said Washington state didn't follow federal law in setting its reimbursement rate, and that that rate is too low. The lawsuit is pending.

"Washington state Medicaid is now reimbursing pharmacies less than their cost of participation," said Jeff Rochon, CEO of the Washington State Pharmacy Association.

Pharmacies that continue to fill Medicaid prescriptions at the current state reimbursement rate are "at risk of putting themselves out of business altogether," he said.

I've been waiting for more of this to happen.

We'll start seeing it with Medicare, next.  I already know doctors that ration the number of Medicare patients they allow their practice to see, since the reimbursement fee schedule is so low compared to real insurance.  Basically, real insurance subsidizes Medicare, much like real insurance subsidizes ER visits of illegal aliens and other uninsured who skip out on their bills:  If the money is not made available to run the clinic/ER somehow, it then comes from the payments of other patrons, just like shoplifting or vandalism. 

I know of one practice that flat-out refuses to see Medicare patients at all.

[MillCreek]

http://seattletimes.nwsource.com/html/localnews/2011367936_walgreens18m.html

I've been waiting for more of this to happen.

We'll start seeing it with Medicare, next.  I already know doctors that ration the number of Medicare patients they allow their practice to see, since the reimbursement fee schedule is so low compared to real insurance.  Basically, real insurance subsidizes Medicare, much like real insurance subsidizes ER visits of illegal aliens and other uninsured who skip out on their bills:  If the money is not made available to run the clinic/ER somehow, it then comes from the payments of other patrons, just like shoplifting or vandalism. 

I know of one practice that flat-out refuses to see Medicare patients at all.

I work in healthcare administration here in the Seattle area.  There are ever-growing numbers of practices, here and nationally, that already ration the number of Medicare/Medicaid/welfare patients.  For large practices (more than 50 physicians), there is pretty good data showing that if you have more than 30% of your patients on Medicare/Medicaid/welfare, your long-term financial viability is in doubt.  Most practices will keep seeing their existing patients but will not take any new ones.

The NYT did a good article on this just a few days ago: http://www.nytimes.com/2010/03/16/health/policy/16medicaid.html?ref=health

Especially in primary care, you can expect to see more and more access problems, even if you have gold-plated insurance.  Depending on where you live, there are just not enough of them, and not enough medical students are choosing primary care as a specialty.  It doesn't pay especially well, and there are easier ways to make a living with a medical degree, such as going into various specialties. 

[Monkeyleg]

...we have many more pharmacy providers in our network than we need" for the state's 1 million Medicaid clients.

To paraphrase Margaret Thatcher, the problem with socialized medicine is that you eventually run out of rich pharmacies and doctors.

[taurusowner]

Especially in primary care, you can expect to see more and more access problems, even if you have gold-plated insurance.  Depending on where you live, there are just not enough of them, and not enough medical students are choosing primary care as a specialty.  It doesn't pay especially well, and there are easier ways to make a living with a medical degree, such as going into various specialties.

And there you have yet another problem of "health care is a right".  Who fulfills your right to health care when the people who provide it don't want to anymore?

[Fjolnirsson]

We'll start seeing it with Medicare, next.

Already seeing it in Oregon. Lots of doctors here are refusing new Medicare patients, and in some cases, dropping existing ones. And it will get worse.

[MechAg94]

And there you have yet another problem of "health care is a right".  Who fulfills your right to health care when the people who provide it don't want to anymore?

That is the rub when you start making someone's hard work into a right for someone else. 

[Tallpine]

Well, the solution is easy - just pass a law that providers must accept medicare/aid patients 

[Waitone]

Exquisite timing.  Couldn't have been executed any better. 

[lupinus]

I'm surprised it hasn't happened sooner. Lots of people see the sticker price and assume the pharmacy is making a killing. Forget the retail price, the price the pharmacy itself pays would make most people want to puke.

And don't get me started on the labor to sort the crap some RX suppliers send out, the man hour cost can be huge.

[AmbulanceDriver]

Well, the solution is easy - just pass a law that providers must accept medicare/aid patients 

Well, I've got some first hand knowledge on the EMS side here in OR....   First, we're not allowed to refuse patients based on insurance/lack thereof (which is a good thing).  Second, we're also not allowed to bill Medicare/Medicaid patients for what their insurance doesn't cover, unlike every other patient out there.  And finally, Medicare/Medicaid only pays about 10-15% of what we bill out.  I.E., on $1000 ambulance transport, we might (repeat, MIGHT) get between $100-$150...  Hence why we have to charge $1000 for a transport in the first place.  This is what people really don't get.  You wanna look at healthcare costs?  You wanna know why a simple IV start costs $150-$200 in the ER?  It's because the three Medicare patients in the rooms next to yours will only net the hospital 30% or so of what it actually costs to do a procedure.  So the cost for the same procedure for everyone else gets jacked up.

[Inor]

Well, the solution is easy - just pass a law that providers must accept medicare/aid patients  

That does seem to be the goal.  Force all providers to accept all Medicaid, Medicare, Obamacare, etc., patients.  Then when they all go broke, we'll have to nationalize them because "they are just too big to fail".

[Headless Thompson Gunner]

Yep.  Regulate 'em into the ground and then use that as "proof" that they can't stand on their own and need to be nationalized.

[taurusowner]

Yep.  Regulate 'em into the ground and then use that as "proof" that they can't stand on their own and need to be nationalized.

It worked for Wesley Mouch.

[Monkeyleg]

Wasn't it Reagan who said of government interference, "If it moves, tax it. If it keeps moving, regulate it. When it stops moving, subsidize it to get it moving again."

[kgbsquirrel]

Wasn't it Reagan who said of government interference, "If it moves, tax it. If it keeps moving, regulate it. When it stops moving, subsidize it to get it moving again."

Darn, you beat me to it!    Well since you snagged that one before I could here be another...

"Back in 1927, an American socialist, Norman Thomas, six times candidate for President on the Socialist Party ticket, said that the American people would never vote for socialism but he said under the name of liberalism the American people would adopt every fragment of the socialist program." - Ronald Reagan Speaks Out Against Socialized Medicine, 1961

Not bad for a 83 year prediction echoed again 49 years ago.

[sanglant]

Well, I've got some first hand knowledge on the EMS side here in OR....   First, we're not allowed to refuse patients based on insurance/lack thereof (which is a good thing).  Second, we're also not allowed to bill Medicare/Medicaid patients for what their insurance doesn't cover, unlike every other patient out there.  And finally, Medicare/Medicaid only pays about 10-15% of what we bill out.  I.E., on $1000 ambulance transport, we might (repeat, MIGHT) get between $100-$150...  Hence why we have to charge $1000 for a transport in the first place.  This is what people really don't get.  You wanna look at healthcare costs?  You wanna know why a simple IV start costs $150-$200 in the ER?  It's because the three Medicare patients in the rooms next to yours will only net the hospital 30% or so of what it actually costs to do a procedure.  So the cost for the same procedure for everyone else gets jacked up.

good luck, i have been saying something like this(on 3 or 4 forums ) since THE obama started this train. i don't think anyone has understood it yet. (that didn't already know it ) i am glad to have someone taking over, hopefully you'll do better.

[PTK]

Well, I've got some first hand knowledge on the EMS side here in OR....   First, we're not allowed to refuse patients based on insurance/lack thereof (which is a good thing).  Second, we're also not allowed to bill Medicare/Medicaid patients for what their insurance doesn't cover, unlike every other patient out there.  And finally, Medicare/Medicaid only pays about 10-15% of what we bill out.  I.E., on $1000 ambulance transport, we might (repeat, MIGHT) get between $100-$150...  Hence why we have to charge $1000 for a transport in the first place.  This is what people really don't get.  You wanna look at healthcare costs?  You wanna know why a simple IV start costs $150-$200 in the ER?  It's because the three Medicare patients in the rooms next to yours will only net the hospital 30% or so of what it actually costs to do a procedure.  So the cost for the same procedure for everyone else gets jacked up.

This really hits home for me - I just got a bill from the hospital, and it's a whopping 35% off if I pay within 14 days. They couldn't be more clear if they had sent someone to my home saying "Please, for the love of God, don't stiff us as 90% of the others do. Please."

[MillCreek]

In the interests of accuracy, I must point out that the current Medicare/Medicaid/welfare medical reimbursement system has been going on for many administrations, Republican and Democratic.  The current state of affairs can by no means by laid at the feet of the current administration.

[AmbulanceDriver]

MillCreek, I hope I didn't come across as laying that down at the feet of the current administration.  Yes, Medicare/Medicaid has been broken for decades...  Since it was started....  It's a system that just cannot work.  My concern is that ObamaCare is pretty much nothing but Medicare writ large.  As broken as Medicare is, making it the de facto national health insurance would cause the total collapse of our healthcare system. 

[HankB]

Yep.  Regulate 'em into the ground and then use that as "proof" that they can't stand on their own and need to be nationalized.

IIRC, Belgium had a problem with their socialized medicine system some years back . . . doctors went on strike nationwide.

Government reacted by drafting doctors into the army and ordering them to serve.

Many fled the country. Those remaining demanded that the army provide them with all the tools necessary to continue practicing medicine - everything from transportation to their little black bag.

Ugly situation.

[Tallpine]

Well, I've got some first hand knowledge on the EMS side here in OR....   First, we're not allowed to refuse patients based on insurance/lack thereof (which is a good thing).  Second, we're also not allowed to bill Medicare/Medicaid patients for what their insurance doesn't cover, unlike every other patient out there.  And finally, Medicare/Medicaid only pays about 10-15% of what we bill out.  I.E., on $1000 ambulance transport, we might (repeat, MIGHT) get between $100-$150...  Hence why we have to charge $1000 for a transport in the first place.  This is what people really don't get.  You wanna look at healthcare costs?  You wanna know why a simple IV start costs $150-$200 in the ER?  It's because the three Medicare patients in the rooms next to yours will only net the hospital 30% or so of what it actually costs to do a procedure.  So the cost for the same procedure for everyone else gets jacked up.

Sorry you missed my sarcasm ... 

[De Selby]

Medicaid/Medicare doesn't explain:

1. Why the price is insanely high for many services;

2. Why there are shortages of doctors; or

3. Why quality isn't measurably higher than in socialist systems.

As has been noted here, it isn't mandatory for docs to take medicare.  So why isn't the private system stepping up to the plate and supplying GPs, and other services, at a price that most people can actually afford?

It's easy to bag out the socialist medicine systems around the world, but they tend to be more efficient by every measure, and the health outcomes for populations that live with those systems are measurably better than in the United States. 

Some folks like to blame McDonald's.  Others like to pretend like insurance companies don't make you wait or are responsive to your needs as a consumer (ha!).  But the numbers are what they are.

[taurusowner]

And yet when people really want quality health care, and fast, they leave whatever worker's paradise they live in, and come see and American doctor.

[De Selby]

And yet when people really want quality health care, and fast, they leave whatever worker's paradise they live in, and come see and American doctor.

No, they generally do not.  And the numbers suggest it's not very smart for people in "worker's paradises" to do that, since the health outcomes, negligence, and error rates are (for most people) measurably better in socialist medicine systems.   

Saudi billionaires do go to the US, along with various other billionaires - that's because money is meaningless to them, and if you have an income of several million dollars plus, there is indeed very good care available in America.  Probably even the best in the world. 

But how relevant to 99 percent of the population is that?  You need to be on the Forbes 100 richest list to get that kind of care, literally.  Any income bracket below that, and you're dealing with a medical system that delivers poorer service at higher prices than most socialist systems.

[Jamisjockey]

No, they generally do not.  And the numbers suggest it's not very smart for people in "worker's paradises" to do that, since the health outcomes, negligence, and error rates are (for most people) measurably better in socialist medicine systems.   

Where's your proof?  Show us some numbers that those rates are lower?


http://en.wikipedia.org/wiki/Medical_tourism#United_States

Although much attention has been given to the growing trend of uninsured Americans traveling to foreign countries, a report from 2008 found that a plurality of an estimated 60,000 to 85,000 medical tourists were traveling to the United States for the purpose of receiving in-patient medical care.

http://www.forbes.com/2008/05/25/health-hospitals-care-forbeslife-cx_avd_outsourcing08_0529healthoutsourcing.html

My, I didn't know there were 60,000-85,000 Saudi Billionaires making the trek to the US for health care every year!  Amazing!