Should prescription drugs be insured
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Transcript of Should prescription drugs be insured
THE PURPOSE OF HEALTH INSURANCE IS TO MANAGE…
As described in the presentation -- http://www.slideshare.net/dholdford/why-insure-health-care
PERSONPAYS A SMALL, CERTAIN
FOR INSURER PROTECTION
FROM POTENTIAL
PERSON PAYS PREMIUM
INSURER WRITES A POLICY
FOR EXAMPLE
GROWING OLD IS NOT USUALLYINSURABLE BECAUSE IT IS NOT…
GROWING OLD IS INEVITABLE AND GRADUAL
AND WE CAN SAVE MONEY, TAKE CARE OF OURSELVES, AND DEVELOP PERSONAL NETWORKS TO HELP US IN OUR OLD AGE
INSURABLE HAZARDS ARE TYPICALLY UNEXPECTED AND/OR SUDDEN
LIKE WITH AN ACCIDENT
AND DIFFICULT TO AVOID OR PREPARE FOR
INSURANCE ONLY WORKS WHEN THE INSURED AND INSURER…
FAIRLY SHARE THE BENEFITS AND RISKS OF AN INSURANCE
AGREEMENT
UNFAIR INSURANCE CONTRACTS ALLOW ONE PARTY TO BENEFIT
AT THE OTHER’S EXPENSE
FOR EXAMPLE
IF I INSURE MY CAR FOR MORE MONEY THAN IT IS WORTH
THEN
I UNFAIRLY BENEFIT AT THE EXPENSE OF THE INSURER
AND IF MY INSURANCE COMPANY TOOK MY PREMIUMS UNTIL I FELL UNEXPECTEDLY ILL
AND THENCANCELED (A.K.A. RESCINDED)
MY CONTRACT…
MY INSURER UNFAIRLY BENEFITS AT MY EXPENSE
GOOD INSURANCE CONTRACTS CAN PROTECT BOTH INSURER
AND INSURED FROM…
A HAZARD BECOMES “INSURABLE” WHEN THE FOLLOWING SIX
ELEMENTS ARE PRESENT
Chapter 14 Private Health Insurance from Introduction to health care delivery: a primer for pharmacists By Robert L. McCarthy, Kenneth W. Schafermeyer Pgs 381-382; 2007.
1. THE PROBABILITY OF A PERIL IN A POPULATION MUST BE ACCURATELY CALCULATED
FOR EXAMPLE: THE PERIL OF A HEART ATTACK IN A 50 YEAR OLD HISPANIC MALE IN THE WESTERN U.S CAN BE ESTIMATED WITH SOME PRECISION
THEREFORE, AN INSURANCE COMPANY CAN CALCULATE THE
RISK TO INSURE INDIVIDUALS
AND WHAT TO CHARGE TO MAKE AN ACCEPTABLE PROFIT
2. THE PERIL IS UNPREDICTABLE FOR ANY SINGLE INDIVIDUAL
ALTHOUGH WE MIGHT KNOW THAT RISK OF HEART ATTACK FOR INDIVIDUALS,
WE CANNOT KNOW WHICH INDIVIDUALS WILL SUFFER ONE OR WHEN
OTHERWISE, INSURERS CAN DROP INSURANCE FOR THE INDIVIDUAL
BEFORE THE PERIL STRIKES
OR THE INDIVIDUAL CAN ADD INSURANCE WHEN THE PERIL IS IMMINENT
3. LOSS ASSOCIATED WITH AN EVENT IS ACCIDENTAL
http://www.flickr.com/photos/greg-palmer/3490903215/sizes/l/in/photostream/
ARSON, MURDER, SUICIDE, AND OPTIONAL COSMETIC SURGERY
ARE EXAMPLES OF NON-ACCIDENTAL EVENTS
4. THE EVENT MUST RESULT IN A SUBSTANTIAL LOSS
LOSSES MUST THREATEN THE FINACIAL HEALTH OF THE
INSURED
SMALL LOSSES ARE NOT WORTH THE TIME AND COST OF
INSURING
FOR EXAMPLE, YOU WOULD NOT INSURE AGAINST A MILD
HEADACHE
5. LOSS MUST BE SPREAD ACROSS LARGE POPULATIONS
THE LARGER THE POPULATION, THE SMALLER THE POTENTIAL
RISK OF LOSS TO INDIVIDUALS IN THE POPULATION
6. ECONOMICALLY FEASIBLE TO COVER
WITH REASONABLE PREMIUMS AND LOW ADMINISTRATIVE COSTS
PREMIUMS MUST BE LOW ENOUGH TO ATTRACT
CUSTOMERS BUT HIGH ENOUGH FOR A FAIR PROFIT TO INSURERS
PREMIUMS ARE KEPT LOW BYREDUCING PAYOUTS FOR
EVENTS & INSURANCE ADMINISTRATION COSTS
1. CAN THE PROBABILITY OF NEED FOR PRESCIPTION DRUGS IN A POPULATION BE ACCURATELY
CALCULATED?
YES!! EPIDEMIOLOGICAL STUDIES CAN IDENTIFY HOW MANY INDIVIDUALS IN A POPULATION NEED
PRESCRIPTION DRUGS.
2. IS THE NEED FOR PRESCRIPTION DRUGS UNPREDICTABLE FOR ANY
SINGLE INDIVIDUAL?
YES!! ALTHOUGH WE MIGHT KNOW THE RISK THAT SOME INDIVIDUALS WILL NEED DRUGS,
WE CANNOT KNOW EXACTLY WHICH INDIVIDUALS OR WHEN
3. IS THE LOSS ASSOCIATED WITH PRESCRIPTION USE ACCIDENTAL
http://www.flickr.com/photos/greg-palmer/3490903215/sizes/l/in/photostream/
YES!! MOST PRESCRIPTION DRUG USE IS UNPLANNED. DRUGS ARE TYPICALLY USED TO
TREAT OR PREVENT AN UNEXPECTED INJURY OR ILLNESS.
4. DOES PRESCRIPTION DRUG USE THREATEN THE FINANCIAL
HEALTH OF THE INSURED?
IN MANY CASES, YES!! THE DRUG BILL FOR THE SERIOUSLY ILL CAN BE
THOUSANDS OF DOLLARS A MONTH.
5. CAN THE COST OF PRESCRIPTION DRUGS BE SPREAD ACROSS LARGE
POPULATIONS?
YES!! PRESCRIPTION DRUG USE IS WIDESPREAD, BUT RELATIVELY FEW PEOPLE
MAKE UP THE BULK OF DRUG COSTS IN A YEAR.
6. IS PRESCRIPTION DRUG COVERAGE ECONOMICALLY
FEASIBLE?YES!! USE OF TECHNOLOGY AND AUTOMATION
CAN ALLOW INSURERS TO OFFER COVERAGE WITH REASONABLE PREMIUMS AND LOW
ADMINISTRATIVE COSTS
6. IS PRESCRIPTION DRUG COVERAGE ECONOMICALLY
FEASIBLE?
WHETHER INSURERS ACTUALLY OFFER COVERAGE WITH REASONABLE PREMIUMS & LOW
ADMINISTRATIVE COSTS IS OPEN TO DEBATE
FOR ANY QUESTIONS…?