Seeing Through Health Care Reform

February 6, 2009

There is a lot of talk in health care these days about transparency and the need for business practices to be transparent. According to my well-worn Webster’s, the definition of transparent includes: “sheer enough to be seen through; free from pretense or deceit; readily understood; obvious.” We need more transparency in health care, especially as we consider changes in how health care is delivered and paid for. PBMs and pharmaceutical companies are already moving toward greater transparency.

There is a lot of talk in health care these days about transparency and the need for business practices to be transparent. According to my well-worn Webster’s, the definition of transparent includes: “sheer enough to be seen through; free from pretense or deceit; readily understood; obvious.” We need more transparency in health care, especially as we consider changes in how health care is delivered and paid for. PBMs and pharmaceutical companies are already moving toward greater transparency.

In this issue’s Trend of the Month, employers make it clear that they favor having a transparent relationship with their PBM. Employers are significantly more satisfied with the services and performance of those PBMs that are perceived to do business in a transparent way. This includes full disclosure of any rebates from pharmaceutical manufacturers and the per prescription fees actually paid to pharmacies in the PBM’s network. Having a transparent relationship means that an employer can feel confident that its PBM is acting in the employer’s best interest rather than pursuing its own agenda, for example, by setting formularies to maximize rebate revenues rather than driving members to choose low-cost therapies.

Pharmaceutical manufacturers, too, are embracing transparency in a variety of ways. Eli Lilly said in September 2008 that it would disclose payments to US physicians beginning in the second half of 2009. Lilly began reporting its grants publicly in May 2007. Lilly and Pfizer already make public their clinical trials data. Pfizer began disclosing grant information in May 2008. AstraZeneca said it would publish grant information biannually. Merck said it would expand its disclosures of grants this year.

GlaxoSmithKline (GSK) plans to disclose payments to US physicians and impose a $150,000 per year, per physician cap. GSK said it will publish quarterly reports on educational grants to MCOs, CME companies, and other entities beginning this month. GSK has also discontinued corporate political donations.

More transparency is also needed to transform health care through greater sharing of information. A January 23 article, “Lessons for Obama’s Health Care Team,“ in BusinessWeek points out that information transparency in health care-often lacking-is vital to an optimally functioning market because it allows for rational decision making by all stakeholders. Authors Clayton M. Christensen of Harvard Business School and Jason Hwang continue: “We need corresponding changes in the system, such as proliferation in health savings accounts and personal electronic health records that put more control of the dollars, data, and decision making into the hands of patients who want it.”

Health care reform needs to be pursued in a transparent way with proposed changes clearly presented and debated. We need to know the impact of any changes on costs and patients’ ability to make choices. Efforts undertaken so far by Congress and the Obama administration are disappointing in this regard. Buried in the massive $819 billion “economic stimulus” bill are several proposals with the potential to dramatically increase health care costs and change how health care is delivered. The bill would expand Medicaid ($11 billion) and COBRA insurance ($30.3 billion), designate the federal government as national coordinator for electronic health records, and create the Federal Coordinating Council for Comparative Effectiveness Research ($1.1 billion). These proposals deserve to be widely discussed and debated on their own merits and own timetable.

We need health care reform that empowers patients and other payers to seek the best value for their health care dollars, rather than more bureaucracy that expands the reach of government and limits individual choice. -Janice L. Zoeller