Kentuckians shouldn’t have middlemen raising the price of their healthcare

Op-EdAppeared in Lexington Herald-Leader on March 11, 2021By Dr. Molly Rutherford

The ability to access healthcare has never been more important. With modern medicine, the U.S. was able to avoid the worst-case pandemic scenario. To that point, as the coronavirus lingers, the Biden administration has reopened the enrollment period to sign-up for healthcare coverage via the government-regulated exchanges. Kentuckians have until May 15 to take advantage of the opportunity.

Ensuring that Kentucky residents have access to healthcare is important, but it’s not the only barometer elected leaders should care about. Healthcare and prescription drugs should be affordable. It shouldn’t cost an arm and a leg to take a trip to the clinic or visit the pharmacy counter.

Healthcare prices in the state have been on the rise for years. According to the latest available data, roughly $8,000 is spent annually on healthcare in Kentucky per capita—a figure that has doubled since 2000. The state’s spending metrics are on par with the U.S. average, which reveals it’s a systemic problem across the country.

A complex web of government regulations and middlemen are to blame.

Although well-intentioned, rules associated with the Affordable Care Act created an inefficient system that overly protects beneficiaries. For example, older women don’t need to be covered for maternity care. Likewise, a young healthy twenty-something doesn’t need a fully loaded plan with all the bells and whistles. At the very least, these groups shouldn’t be forced to pay for coverage they don’t need.

Rather than a one-size-fits-most approach, Kentuckians should be given a wide range of options for healthcare so they can pick the one that best fits their unique circumstances.

Meanwhile, injecting transparency into the supply chain of prescription drugs will help make medicine more affordable. Middlemen, known as Pharmacy Benefit Managers (PBMs), currently jack-up the price of drugs for Kentuckians at the pharmacy counter.

PBMs act as gatekeepers between drug companies and the patient market. In order to ensure their products make it to the patients, manufacturers are compelled to provide discounts and rebates alongside the drugs. But, unfortunately, the middlemen and insurance companies pocket the savings rather than passing it along to consumers at the point of sale. In 2018, PBMs collected $166 billion in discounts and rebates. You read that right—billion with a “B.”

While middlemen fill their pockets, the price of prescription drugs has skyrocketed. Last year, Americans forked over $360 billion for pharmaceuticals—triple the amount compared to 2000. I’ve seen firsthand how middlemen drive up costs. At my direct primary care practice where I can largely bypass PBMs, I was able to dispense a drug to a patient for only $5, which would have cost $40 (with insurance) at the pharmacy counter.

The previous administration attempted to improve the system via executive action. The rule, as was proposed by President Trump, would have rerouted the financial savings associated with the discounts already provided by manufacturers to patients at the pharmacy counter. Although the standard, known as the “rebate rule,” would be limited to drugs accessed under Medicare Part D, it’s a structural change that would be mirrored across the board.

Unfortunately, President Biden has essentially nixed the idea by delaying the rule’s implementation date. The extra time will be spent by the middleman lobby pushing for a permanent repeal. Considering the administration is trying to, for the most part, purge the country of any policy connected to Trump, it’s a likely, but heartbreaking, scenario for state residents who are struggling to afford their prescription drugs.

All Kentuckians should be able to access quality, affordable healthcare that addresses their unique circumstances. On the same note, residents shouldn’t be forced to choose between buying groceries and picking-up needed medication. President Biden needs to reverse course and gut the healthcare system of middlemen and regulations. If not, Congress should take action.

Dr. Molly Rutherford is an independent physician practicing in Kentucky and is a member of the Job Creators Network.