The Value Of Drugs
Just as the price of a Rolex watch is not solely determined by the cost of its materials, the price of a prescription drug is not simply the cost of its ingredients.
Like other products resulting from research, medicines are really made of knowledge--a kind of intellectual property capable of preventing and curing diseases as well as relieving the pain of a headache.
For every 5,000 medicines developed, only five make it to clinical trials. Only one of those is eventually approved for use. Revenues from the one successful medicine must cover the research and development cost of the 4,999 that don’t make it. The average cost of R and D is close to $1 billion, and it takes between 12 and 17 years--much of that time is spent complying with government regulations.
The time a brand-name drug has to recoup the cost is shrinking. The patent protection clock starts ticking when a drug first goes into R and D. For a drug taking 12 years to develop during a 15-year patent agreement, the pharmaceutical company has just three years to recoup its investment. As the population ages the costs of caring for more people will escalate.
This article was published in
It's Your Health by Conrad Meier, senior fellow in health policy at the Heartland Institute.
Analysts Predict Future Growth Of HSAs
The Center for Studying Health System Change said on July 13th that HSAs could capture between 15 and 50 percent of the health care market by 2010.
In the same report, the Center predicted that health care costs will level off and would probably increase 8% annually.
Ted Shannon, equity reasearch analyst for Janus, claimed that HSAs will "dominate the health care market" over the next few years. He also stated that the biggest roadblock to implementing HSAs is the difficulty in employers educating employees about them.
Other studies predict the same massive upswing in HSA participation, but on a slightly lower scale, ranging from 15 to 20 percent of market by 2010.
By removing the first dollar coverage, supporters hope that HSAs will help curb health care costs by giving patients a better view of the health care market.
Blues Plans Use Variety Of Methods To Boost Use Of Generic Rx Drugs
With a slew of medications losing patent protection over the next year and a half, Blue Cross and Blue Shield plans say they will use a variety of methods to move members to generic prescription drugs.
Those strategies include both "tried-and-true" approaches such as member and physician education, as well as more innovative models such as ATM-style generic drug vending machines and pay-for-performance programs that reward physicians for prescribing generics where appropriate.
News this month that two generic drug makers are teaming to launch a generic version of allergy medication Allegra kicks off what will be a very busy year for generic launches.
Even though brand-name drug manufacturers have become increasingly savvy about finding ways to extend brand-name dominance — often by creating a new version of the drug about to lose protection — Blues plans and other managed care organizations have seen success in raising their generic prescribing rates, which now hover around 50% to 60% for the most successful commercial plans.
To Find A Doctor, Mine The Data
Now that millions of consumers are surfing the Web to research their own medical symptoms, many are taking the next step: comparison-shopping online for hospitals and doctors.
As their out-of-pocket health care expenses continue to grow - through rising medical costs, higher insurance premiums and heftier co-payments - many people are using consumer skills well honed by online research on everything from digital cameras to S.U.V.'s.
And their employers and insurers, intent on getting the best value from their own health spending, are arming those consumers with increasingly detailed searchable databases.
The data comes from medical records that insurers are pressing doctors and hospitals to provide, and in some cases from patient surveys.
"We've got terrific measurements information in some areas, but in other areas we don't have good measurements at all," said Dr. Carolyn Clancy, director of the federal Agency for Healthcare Research and Quality, which is working to standardize the way health care data are reported.
To read this article in its entirety, click on
The New York Times.
Being Healthy May Be its Own Reward, But a Little Cash Can Also Help Keep Workers Fit
Facing escalating medical costs, firms use incentives to target employees who normally do not participate in wellness programs: the ones who need them most.
Two years ago Sprint found itself at a loss about what to do to stem rising health care costs. After aggressively trying to control the expenses through cost-sharing and changes in its benefits, the company, which has 59,000 employees, had thought it was ahead of the curve.
Sprint’s benefits team discovered that the company was still facing a $45 million to $50 million annual increase in health care costs if it didn’t do more.
"If we did nothing, it would have meant that our salespeople were going to have to come up with $500 million more in revenue," benefits manager Collier Case says.
The problem with merely offering wellness programs is that the employees who typically participate are those who are already healthy, says Bruce Kelley, a senior consultant at Watson Wyatt Worldwide. Employees who are obese or who smoke often do not want to get a health risk assessment only to be told that they have to change their lifestyles.
But these are the very employees that companies most want to reach. They are key to reducing the company’s health care costs. And that’s where the incentives come in, Kelley says.
By offering incentives, employers hope that more of the smokers, the overweight and the chronically ill employees will participate in their wellness programs. "These programs have completely changed in nature," Kelley says. "They now are more focused on targeting the higher-risk population and bringing effective solutions to those groups."
For more on this article, click on
Incentives.
Health Plans Expect Generics To Reduce Drug Costs in 2006
Insurers are likely to see pharmacy cost trends fall significantly by the end of 2006, driven down by several generic-drug switches, say managed care organizations (MCOs) and analysts.
But one health plan warns that it expects pharmacy costs for Allegra, the popular allergy medication, to rise in the short term as a result of the generic launch.
CIBC World Markets equity analyst Carl McDonald estimates that the overall pharmacy trend — which already has slowed to a range of 9% to 10% in 2005 from high double-digit rates several years ago — could fall to 6% to 7% by the end of 2006.
To read this article in its entirety click on
Managed Care Week.
Young People And Exercise
The thought of exercise doesn't make everyone jump with joy. But don't believe that you were just born with a rubbish-at-sport gene - there's an activity out there to suit everyone. It's time to stop making excuses.
The excuses:
"It's not cool." Try telling David Beckham, Tiger Woods and Ellen MacArthur. All right, we can't all reach the very top, but we can get a lot out of being fitter. People who tell you it's not cool are usually the ones who couldn't run to catch a bus if their lives depended on it.
"None of my friends or family do it." Be a trail blazer! They might be inspired by your example and take it up themselves. If your friends and family make offhand remarks about fit folk it might be because they're jealous.
"It's a boy thing." It's true more boys than girls take exercise, but that's not because girls are rubbish at sport. Many girls don't find the activities at school suit them but there are things to try outside school, such as dance or martial arts.
"It's sore/uncomfortable/sweaty." It should never be sore for long or uncomfortable, and feeling a bit stiff after activity is natural. Yes, activity does make you sweat, but if you're enjoying yourself you probably won't notice - and everyone else is sweaty too.
"I don't want muscles." Being fit and having bulgy muscles don't necessarily go together. To get big muscles you would have to do a programme of specific exercises.
"I'm overweight/skinny/disabled." Don't worry about what you think you look like - get in there and enjoy yourself. If you're genuinely very overweight, not just a stone or less, talk to your doctor and tell them what you want to do. If you're disabled don't let yourself be cut out of the action - getting fit benefits everyone.
"I don't like joining in/teams." Fine. If teams leave you cold, check out activities you can do by yourself or with a friend.
"I'd rather play with the computer/watch TV/talk to my mates." It doesn't have to be either/or. You can do both.
What's in it for you?It's an opportunity to meet up with friends or make new ones.
Better general fitness, and stronger bones and muscles.
It stops you putting on weight.
You'll feel a sense of achievement.
Taking exercise is fun - really.
Just give it a try!
This article can be viewed in its entirety at
Healthy Kids
The Scientific Principles Of Exercise
To understand how much, or little, exercise you need to do to meet your own health or fitness goals, it may be helpful to consider the following scientific principles behind most tailored exercise programmes.
FrequencyThis relates to how many times a week you need to exercise in order to become fitter or improve or maintain your health. To be healthy, experts recommend being physically active on at least five days out of seven.
IntensityThe intensity at which you work can be described as either strenuous, moderate or mild. What constitutes a strenuous, moderate or mild exercise workload for you will depend on your current state of health and fitness.
DurationThis is the length of time you need to spend being physically active in any one session. According to much of the research conducted over the past 20 years, you need to be active for up to 30 minutes, five days a week in order to benefit your health.
Putting it all togetherThe recommended physical activity guidelines from a range of expert bodies (including the Health Development Agency in the UK and the American College of Sports Medicine) suggest that to improve your health you should build up to being physically active at a moderate intensity for 30 minutes, five days a week.
A little goes a long way. The key message to take home is that any physical activity, no matter how small, is better than none.
To read this article in its entirety click on:
Health
Proposed HSA Changes Could Boost Adoption, White House Advisor Says
HSAs are "a high priority for President Bush," and the White House has urged members of Congress to consider ways to make them even more attractive to employers and health care consumers, according to Roy Ramthun, senior health policy advisor to the White House National Economic Council.
Recent proposals from the Bush administration, he said, would allow individuals who don't get health insurance through an employer to take a tax deduction for high-deductible health plan (HDHP) premiums.
The White House also has urged members of Congress to boost the maximum HSA contribution limit so that it parallels the maximum out-of-pocket limit for the HDHP.
Annual HSA contributions currently cannot exceed the HDHP deductible. "Those very simple changes would make this market take off even faster," he told attendees at HSA 2005, a conference hosted by Business Capital Edge in Chicago.
Ramthun said that "he could envision" that Congress might some day allow a one-time conversion of notional health reimbursement arrangement (HRA) dollars into real HSA dollars.
For a closer look at other topics that Ramthun addressed, click on
Consumer Directed Care.
Health Savings Accounts (HSA) - How Do They Work?
An HSA is comprised of two parts:
A Qualified High Deductible Health Plan & A Health Savings Account
1. A Qualified High Deductible Health Plan (QHDHP) is a comprehensive major medical plan with no co-pays. The idea is to have an inexpensive health insurance plan that doesn't pay for the first several thousand dollars of health expenses. This is where the Health Savings Account comes into play. A QHDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account.
2. The Health Savings Account (HSA) is a tax-deferred savings vehicle. The funds accumulating in this account can be used for Medical Expenses ONLY! (e.g. Deductible, Coinsurance, Prescriptions & other qualified medical expenses.) This savings account is the property of the insured & it is controlled solely by the insured. The HSA is a portable product & accumulates tax free until retirement age is reached. To be eligible for an HSA you must use a QHDHP.
A Healthy Bottom Line: Companies Push Wellness Programs
Desperate to find something -- anything -- to control rising health-care costs, companies in Pittsburgh and across the country are dusting off a tool that's been around for more than two decades but always raised some doubts: wellness programs.
Ranging from nutrition and smoking cessation classes to the distribution of pedometers so that employees can count their steps per day, the current wellness resurgence features an increase in the number of both wellness programs and firms offering financial incentives to encourage worker participation.
For more information on this article, click on
Business News.
Tool Company Switches Health Plans, Saves Thousands
Like most companies, Perfection Tool and Mold Corp, was shelling out more money every year for employee health benefits.
But unlike most companies, the small tool shop saw its health care costs decrease for the first time in a decade last year. In fact, the company saved more than $100,000, or 48 percent, under a new benefits plan compared with what it would have spent with its usual plan, which would have jumped another 46 percent upon renewal.
By changing the way it funded employee benefits, Perfection was able to save money without passing on more of the cost to its 15 employees and without cutting its benefit package, said Chris Ross, vice president of engineering. "It's helped us a lot," Ross said.
Perfection bought a high-deductible plan from Anthem Blue Cross and Blue Shield, which was less expensive than the no-deductible plan the company had traditionally purchased.
The employees' premium contribution and co-pays remained the same.
The above article was published by the Dayton Business Journal, August 26,2005.
