Despite enactment of Medicare prescription drug legislation last year, healthcare coverage and cost remain prime concerns
for the nation. Proposals to expand medical care for the growing number of uninsured Americans are attracting more attention,
along with initiatives to curb the high cost of prescription drugs. Despite protests from manufacturers and FDA, calls for
less expensive medicines from Canada persist. However, the agency considers new drug development a better way to improve public
access to needed treatments.
The campaign to cover the uninsured has gained impetus from an Institute of Medicine (IOM) report urging policy makers to
establish a universal health insurance system by 2010. IOM announced in January that current incremental efforts are failing
to reduce the number of uninsured, resulting in inadequate care and catastrophic costs for millions of Americans. Instead
of backing specific policy changes, though, the report evaluates all the usual proposals for extending care: a single-payer
system, expansion of existing government health programs, increased tax credits for purchasing or providing coverage, and
individual and employer coverage mandates.
Rising Expenditures
Total outlays on healthcare products and services hit $1.6 trillion in 2002 — nearly 15% of the nation's total economic output.
The main factor behind these outlays is rising hospital bills — although increased expenditures for prescription drugs are
the prime culprit in the public's eye, mainly because many people must pay for medicines out of pocket.
Spending on drugs and biotech therapies rose 15.3% from 2001 to 2002, slightly slower than in the previous two years — but
still greater than for other healthcare components — according to a Department of Health and Human Services report published
in the January/February 2004 issue of Health Affairs. The HHS analysts note that, while demand for pharmaceuticals rose in
2002, it was offset by:- greater use of preferred drug lists and prior authorization policies for state Medicaid and pharmacy assistance programs
- a drop in new drugs entering the market
- a slight decline in direct-to-consumer advertising
- a rise in generic drug prescribing
- an increase in tiered copayment plans by health plans and payers.
This last trend is important in the political arena. Although only about 10% of US healthcare spending involves prescription
drugs, consumers now shoulder a larger share of the bill. Drugs accounted for 23% of what Americans had to pay for healthcare
themselves — and for more than half of the total increase in out-of-pocket healthcare spending in 2002.
Modest Bush Proposals
In his January State of the Union speech, President George W. Bush declared the rising cost of healthcare a "critical issue"
but offered only a modest program to expand coverage and control healthcare costs. The Bush plan calls for additional tax
credits and tax deductions, limits on damage awards in malpractice suits, and computerized healthcare records to reduce medical
errors and improve care.
Democratic candidates for the White House back more ambitious plans to expand government programs and to use market incentives
to expand coverage for the uninsured. Most Democratic proposals also include measures to control pharmaceutical costs in order
to hold down healthcare spending. Their cost-containment proposals include increased regulation of direct-to-consumer advertising,
more generic drug prescribing, expanded use of formularies and comparative drug efficacy information, added penalties on companies
that overcharge the government, and stronger state drug cost control efforts. The candidates also emphasize the importance
of supporting biomedical research, and some have stated that canceling the Bush administration's curbs on stem cell research
would be one of their first actions if elected president.
The challengers aim to keep healthcare at the top of the political agenda and also prevent Republicans from taking all the
credit for healthcare reform following the adoption of Medicare prescription drug legislation. With elections looming, though,
Congress is unlikely to approve any major health initiatives, although legislators will likely hold hearings on proposals
for covering the uninsured.
