Niagara Gazette

February 23, 2014

HIGH COST OF HEALTH CARE: As health care costs level, pharmaceuticals take a wild jump

By Michele DeLuca
Niagara Gazette

LEWISTON — Standing behind the counter, filling prescriptions for drugs that many of his customers’ lives depend on, pharmacist Charles Barone has a microscopic view of just who the nation’s health care programs are serving — and right now, it’s not him.

Because, while health care costs seem to be finally stabilizing, prices for some generic prescription drugs have increased by thousands of dollars since last year. Worse, he says health insurance companies don’t seem to want to pay the difference.

“It’s unbelievable,” said Barone, a Grand Island resident and owner of Ivylea Pharmacy in Kenmore. “I’ve never seen anything like this in my 12 years doing business.”

Barone said he’s seen some drug prices rise a hundredfold since last year. For example, he cites a heart drug called Digoxin, which was $84 a bottle in September and now is selling for $862 a bottle.

And while some generic drug manufacturers are raising their prices prohibitively, insurance companies are slow to update their computers and often refuse to pay the increased prices, paying instead the much lower price in their computer database, he said. 

“The drug industry is broken,” Barone said. “The system is not working.”

Dennis Galluzzo, executive director of the Pharmacist’s Association of WNY, is leading efforts to stem the rising tide of generic drug prices and help get pharmacists to correct reimbursements. He feels the burdens of his members from his pharmacy in Amherst.

“Last year, I was able to purchase doxecyline, a very common antibiotic, for $30 for a bottle of 500,” he said. “I am now paying $1,390.75 for 500 capsules.”

He said his fellow pharmacists are frustrated by industry reimbursements measures by unregulated decision makers using outdated price lists. “They’ll tell me I can get a drug for ten bucks when in reality I’m paying twenty times the cost ... you can’t run a business when you’re getting reimbursed below your costs. It just doesn’t happen.”

Answers from the Food and Drug Administration are not satisfying, Galluzzo said. The FDA is blaming drug company consolidations and import bans on the extraordinary increases in certain products, but appears helpless in the face of unregulated increases. Some pharmacists worry that manufacturers have hiked their prices in preparation for price regulations they expect to come from the Affordable Care Act, known widely as Obamacare.

Galluzzo is leading efforts to find state legislators who would agree to sponsor a bill that would regulate reimbursement and require decision makers to work off updated lists. The proposal would also provide for a faster turnaround when pharmacies want to protest the reimbursements, he said. 

But while some prescription drug prices appear out of control, medical costs throughout the nation have been stabilizing over the past several years, likely due to the recent recession and reduced expendable income, according to Dr. David Sandman, spokesperson for the New York State Health Foundation, a nonprofit, private, statewide foundation. The Affordable Care Act is expected to stabilize prices even further, he said, adding that  “there are also a lot of cost containment initiatives in the law.” 

Sandman underscores what proponents continue to say about the benefits of the Affordable Care Act — that when the uninsured receive care in hospital emergency rooms, the costs they incur raises health care expenses for everyone. “The reality is we all pay for that in one way or another,” he said.  

The good news, he said, is that the state has emerged as a national leader in implementing the act. Of the 18 million residents who were uninsured, about 2 million New Yorkers were previously uninsured. About 1.1 million are expected to gain care through the exchange over the next few years. “New York is off to a very strong start,” he added. “Our goal is to see every New Yorker gain coverage in one way other another.”  

As the Affordable Care Act continues to reconstruct health care in America, area hospitals are undertaking cost-cutting measures that are savings millions in an effort to curb their own costs and costs passed down to consumers. 

Locally, officials at both Niagara Falls Memorial Medical Center and Mount St. Mary’s Hospital say they are saving millions by trying to keep and maintain the health of those in the communities they serve. 

Both hospitals have put social workers in their emergency rooms to see to the needs of their most chronically ill patients, to make sure the patient understands the follow-up medications and procedures and to decrease the possibility of re-admissions.

At Mount St. Mary’s Hospital, according to chief Judith Maness, cost-cutting measures also include creating a new culture to reduce error and waste as well as a variety of collaborations to address primary care needs of the hospitals most vulnerable patients, which include neighborhood health centers.  

Memorial Medical Center recently opened a community Wellness Center for their behavioral health clients which links individuals to community-based services including housing, food, clothing, outpatient mental health, addiction treatment. It will help avoid costly and often unnecessary hospital admissions, according to Shiela Kees, the hospital’s chief operating officer. 

“I really believe a huge part of essential cost savings can be determined by two worlds — care management,” Kee said. “Care management is designed to do a couple of things. It takes a patient by the hand ... and makes sure they connect with the services they need and that they stay connected.”

She said people often get discharged from the hospital and don’t follow through on their care, which leads to expensive re-admissions, at thousands of dollars per stay. Keeping people well and out of the hospital is key. 

“To me, it’s the answer to a lot of issues, it really is,” she said.  



HEALING HEALTH CARE This is the second installment in our series examining the nation's health care as it impacts the lives of residents of the Niagara region. Look for part one on our website, • FEB. 16: Patients and their families deal with steep health care increases • TODAY: Pharmacists, doctors cope with rising costs