Wednesday, November 26, 2003

Changes affect all aspects of health care



By James Pilcher
The Cincinnati Enquirer

Determining just who within the Tristate health care community will be helped and hurt by the Medicare bill passed Tuesday is about as difficult as translating the new foot-thick law that includes a controversial new prescription drug benefit.

Just about everyone in the health industry - from insurance providers to drug makers to companies with health plans to actual end users - will be somehow touched by the changes.

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For example, downtown-based Kendle International Inc., which provides drug testing and clinical trial services to large drug makers, saw its stock rise 11 percent on the news of the bill's passage Tuesday. Company officials would not comment on the bill or on the sudden jump in stock price.

Even those who aren't even eligible for the federal health care benefit are affected, especially because taxpayers will foot the $400 billion bill over the next 10 years.

"There is a lot of dark area where public knowledge is concerned with this bill," Chad Morz, founder of Delhi Township-based pharmacy consulting agency Generations Rx, which counsels seniors and other companies on drug use. "For a lot of people and businesses, it is going to come down to a case-by-case basis whether this will be good for them."

When it comes to users of Medicare, there is much debate as to how much of a benefit the drug program will be.

Some studies suggest the program it will lower costs for the average Medicare user. Yet there is a gap in coverage called "the doughnut hole," which exists between the lowest level of benefits and the highest. Retirees will have to pay all their drug costs in that gap.

Others point out that while drugs may now be covered, other benefits such as physical therapy and lab tests may become more expensive. Yet some say that health costs overall may be driven lower, with drugs helping treat more people as a cheaper alternative to hospitalization.

Also up in the air: whether employers will drop retirees on private plans and not using Medicare. Under the new law, companies will get a tax break for providing separate coverage to retirees. But even so, it could become cheaper for those companies to just drop coverage altogether because Medicare will now have a drug benefit.

Yet Steve Browne, president of the 650-member Greater Cincinnati Human Resources Association, said the drug plan will relieve worries for many seniors.

"One of the most difficult things to do as a HR person is to tell an older employee about Medicare and that they no longer have prescription coverage," said Browne, also director of human resources at engineering and architectural consulting firm CDS Associates Inc. "Retirees want to know why something is not covered. All we can say is, 'Sorry.'"

Drug makers unscathed

Drug companies avoided a possible hit, because the final version of the reform did not include price controls on prescription drugs, as some had hoped for. The benefit could also drive some sales, with drugs becoming more affordable to seniors.

Procter & Gamble Pharmaceuticals, based in Mason, could be among those companies to benefit. Its biggest drug is Actonel, which treats osteoporosis, with a target market of women age 60 and over.

Beginning in January 2005, all Medicare enrollees will be given preventive exams that include height and bone mass, which could lead to earlier detection of osteoporosis.

"This bill will enable better access to medications and increased adherence, resulting in healthier patients and appropriate incentives for companies like P&G Pharmaceuticals to continue the search for important new cures," P&G spokeswoman Ellen Bowman said.

Hospital operators said that the reforms would help them, with the Ohio Hospital Association welcoming the new changes Tuesday.

The OHA said that the bill would provide "hundreds of millions of dollars to Ohio hospitals over the next 10 years." Doctors also welcomed the changes, especially because there were no cuts in Medicare reimbursements.

Another clear winner would appear to be the health insurance industry, because the nation's HMOs and PPOs will be administering the new program on behalf of the government.

That could be fraught with potential pitfalls, however, especially because the geriatric drug market can be very complicated and could come with high initial startup costs.

The health insurance company that administers the Medicare Plus program to 100,000 users in Ohio and Kentucky, Indianapolis-based Anthem Blue Cross and Blue Shield, said it has not yet determined how it would participate.

"We support the idea of making health care accessible and affordable, and seniors still need to analyze it before we can commit to taking any course of action," said company spokesman Joe Bobbey.

Nursing homes waiting

Even those further down the line in the pharmaceutical field have yet to determine the impact. Covington-based Omnicare Inc. manages pharmacies for nursing homes that house nearly 1 million patients nationally.

But company officials said that the new benefit was designed for the noninstitutional patient, and that Congress ordered a study to be conducted within 18 months to determine the impact on nursing home patients.

Even though the new program could give a break to Ohio's Medicaid system, and thereby to stressed state coffers, others seem to feel the big losers are taxpayers everywhere, including here.

"This is a huge new entitlement," said Robert Bixby, executive director of the Arlington, Va.- based Concord Coalition, a nonpartisan group advocating federal fiscal responsibility. "It adds up to an irresponsible fiscal policy."

The bill's nearly half-trillion dollar price tag is likely to be much higher, Bixby said.

Yet Ohio state officials say that it will help the state save millions by switching prescription drug costs from Medicaid, partially funded by the state, to Medicare, which is paid for entirely by federal funds.

"If we achieve this reform, it will help all states with their budgets," said Orest Holubec, spokesman for Ohio Gov. Bob Taft. "The current Medicaid rate of increase and the state share of Medicaid spending threatens all parts of the budget here in Ohio."

Enquirer staff writers Tim Bonfield, Cliff Peale, John Eckberg, John Byczkowski and Jim Siegel contributed. E-mail jpilcher@enquirer.com




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