Blue Cross
- Under our nation’s fee-for-service system, physicians, hospitals and other health care providers are paid for each service they provide and are often not incentivized to avoid unnecessary care. That financial incentive, combined with possible concerns about the reputational and malpractice risks of not providing a service, can lead to low-value, inappropriate care.
- Drug manufacturers exploit regulatory and patent loopholes to avoid competition and continue to charge high prices for drugs that have been on the market for years. This behavior is well documented in a 2022 report citing manufacturer gaming of the patent system for the 10 top selling drugs in the United States.14 These strategies block more affordable generics and biosimilars from coming to the market by building “patent thickets,” often comprised of hundreds of patents that are filed late in a drug’s exclusivity period—keeping prices high and driving soaring manufacturer profits.
- The increase in government regulation of health insurance can limit or restrict cost containment tools, provider network management and benefit designs that make it harder for insurers to encourage the best care at a lower cost.
Blue Cross has several recommendations. Here is one of my favorites.
Limit Drug Manufacturer Direct-to-Consumer (DTC) Marketing.
The United States is one of just two countries in the world—the other is New Zealand—that allows prescription drug advertising aimed directly at the general public. This advertising may lead to the overuse of high-cost prescription medicines, even when highly effective, lower-cost alternatives are available. One study found that the “expansions in broadcast [DTC advertising] account for 19% of the overall growth in drug expenditures, two-thirds of this impact being driven by higher demand and the remainder due to higher prices.”16 BCBSA encourages policymakers to enact federal legislation to limit DTC advertising including:
AFFORDABILITY SOLUTIONS
FOR THE HEALTH OF AMERICA
JANUARY 2023
Have you ever thought of this?
The trend of big hospitals and health systems acquiring physician practices often results in gaming reimbursement to maximize revenue. In 2021, nearly 70% of physician practices were owned by hospitals, health systems, private-equity firms, and other corporate entities—a 12% increase in just two years. When big hospitals and health systems acquire these practices, the prices they charge grow by an average of 14%. This is often a result of how hospitals bill for their services; specifically, they bill hospital outpatient rates for the same services that were previously billed at the rate for a physician office—rates that are two to three times higher. These actions result in higher insurance premiums and higher cost-sharing for consumers.
QUINNSCOMMENTARY 
I would need a two hour appointment with my doctor to ask her about all the drugs I am supposed to ask about from TV. What a waste of money.
The ideal that insurance companies are the reason medical costs are so high is so wrong. Can somebody explain to me why doctors, hospitals, and drug companies are willing to accept pennies on the dollar for billed services? It is clearly that they over charge or they would go out of business.
My wife used to work in a cardiologist office. Yesterday she said that the doctors lost their profession when the hospital bought them out. It used to be that the doctors would fight the insurance companies for the proper care. Now it is just a job working for another big corporation. The doctors have loans to pay and they are not willing to fight their bosses, non-doctor MBAs, and lose their jobs.
My doctor has not sold out yet but I noticed a changed during covid. I don’t know about NJ, but in other parts of the country, if doctors went against the covid narrative, their licenses were threaten.
It was also clear that hospitals were making money for every patient that they could claim having covid because they got extra reimbursement rates for covid patients. I often wonder how many people would not have treatments if there wasn’t a financial gain for the providers. In my area a young man died because the hospital kept treating him for covid when his liver failed and the covid treatment only made things worse. I hope his family gets lots of money. Paying by the band-aid and the pill is just wrong.
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Agree with your points. Healthcare has been been heading this way, C-19 she’d light on this. I’m only a dentist, however I performed early treatment on about 25 patients/friends that weren’t being helped. None had to go to the hospital or had ‘long Covid”. Even my elderly dad
Did amazingly well.
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Good article, unfortunately most physicians have lost their independent autonomy and have sold out to corporations/hospitals. I’m seeing a similar situation in my dental field. The bottom line is first and foremost.
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