January 22, 2005 - On Friday the Bush Administration reinforced the trend transferring medical decisions managing chronic illnesses from patients and their doctors to the insurance and pharmaceutical industries. It did so when it published the final rules that will govern the 41 million people covered by Medicare when the new drug benefit goes into effect on January 1, 2006. Under the rules insurers providing coverage under the plan will establish a list – called a formulary – of preferred drugs and may refuse to pay for medicines not on the list. Insurers are required to provide what the rules call “adequate coverage” for drugs treating the chronic conditions of age including high blood pressure, heart disease, cancer, diabetes, osteoporosis, and Alzheimer’s disease. A formulary must include at least two drugs for each condition. The rules do not designate specific drugs that must be includes in the formulary but Medicare officials say that the rules do permit the bureaucrats to designate specific drugs that will be identified in the future.

Minimum standards tend to become norms as they sink to the lowest common denominator. The minimum of two drugs will naturally become the maximum available. Doctors and their patients will be restricted in their choice of treatments to selecting between the two covered medicines included on the formulary. Nothing in the rules provides that the list include the most effective medication or mandates that alternatives be provided for patients whose overall medical condition makes them vulnerable to dangerous side effects. The rules mandate a one size fits all medical system in which cost and not medical efficacy is the determining factor.

A doctor may certify that a drug not covered in the formulary may certify that it is medically necessary for the patient and the insurer must then make a determination whether that particular drug is medically necessary for that particular patient. The insurer is directed but not required to accept the doctor’s judgment on the subject. The patient must wait while the insurance company processes the application for an exception and then while an appeal runs its course. The patient has the choice, of course, to buy the medicine outside of the system. For the one third of beneficiaries for whom Social Security benefit represents 90% or more of their income that is no choice at all.

We can look for the Pharmaceutical manufacturers to lobby hard to have their most profitable concoctions included in the formularies pressing the bureaucracy to specify their inclusion in the formularies. We can expect the insurance industry to insure that the cost of drugs contains a profit margin to plump up their bottom line through the subsidies extracted from the Medicare dollar. And we can expect that medical decisions will be driven by a regard for healthy profits rather than for healthy patients.