In a recent Bloomberg Business report, there is a doozy of an opening line that really sums up everything that has to do with health care and “insurance” happening today:
With most products, you’d expect a flood of new supply to quickly drive back down a price spike caused by a temporary shortage. Not so in the topsy-turvy world of hospital pharmaceuticals.
Indeed. In this article titled “Broken Market for Old Drugs Means Price Spikes Are Here to Stay“, there are two other pretty distributing, counter-intuitive, and downright baffling points:
- Prices for 50 hospital drugs have risen 10-fold over eight years
- Generic injection meds in short supply as producers drop out.
The article tells the story of glycopyrrolate, a simple, common injectable every day drug that is used to dry up secretions before surgery. Because of one of two makers closed shop for a while for quality control issues, the price was hiked 800 percent. Can you image that happening in any other industry? One of two toner makers for that printer on your desk shuts down for a bit and suddenly to print that report you need for your client it costs $42,000?!?
This is not an isolated case either, I’m afraid. But I’ll tell you what it the root cause: the lack of accountability. That is something we do at ECCHIC, we bring consumer and wholesalers together and cut out the middleman completely. But more than that, there is a level of advocacy that is needed, especially for small business owners.
“It’s a broken market,” said Stephen Schondelmeyer, a pharmacist and economist at the University of Minnesota who has studied drug prices. “Drug companies know there is going to be an end to this blank check era and they are pushing for whatever they can get.”
This “blank check era” refers to what insurance companies do – or don’t do. They don’t provide value. The do provide a lot of costs – overhead, their high profit margins, etc. – that you actually pay for with the typical premium your average insurance broker offers (which is really just calling around once a year and getting quotes from these insurance companies). You might be wondering how big companies do it – well, they get a discount. They get a discount on this madness that is not available to you typically.
But ECCHIC gets these discounts for their clients.
With Obamacare, the mergers, the constant changes in the market, this is an area that is always going to be as volatile as an abandoned Pacific Island volcano. Please read the whole article, and if you have any questions about anything, or want to learn how ECCHIC can help you avoid this mess, contact us.