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Trisha Torrey

Doctors Collecting Money from Insurers for Prescribing Generic Drugs

By November 19, 2008

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We've heard for a long time about pharmaceutical companies and medical manufacturers paying doctors, in a variety of forms, to prescribe certain brands of drugs or implant certain devices. From coffee mugs, pens and note pads, to thousands of dollars for attending a dinner, doctors are brib -- I mean -- incented to help those companies sell their drugs.

Here's a new twist, and this time it comes from the insurance side of the equation.

Because generic drugs cost the insurance companies so much less than the branded drugs, the insurers are now paying doctors for prescribing those generics.

Here's an example:

Independent Health, a Buffalo, N.Y.-based insurer, offered doctors who prescribe 70 percent or more generic prescriptions in a month a bonus of 50 cents per patient per month. A doctor seeing 500 patients per month who meets the 70 percent minimum can collect $3,000 a year.

Now, for a doctor, that $3,000 a year may not be much. But multiply that by each one of the insurers that doctor works with, and it begins to add up. A plus for the doctors.

Generics cost patients less money, too, so when they are the right choice, then it's win win for everyone but the maker of the original branded drug.

So, is encouraging the prescription of generics really a problem to patients? It raises eyebrows, and a few questions at least:

  • Is the health insurer coming between the doctor and his patient? Certainly, if the doctor decides to prescribe a generic instead of a branded drug, just because of the incentive, then yes, the insurer middle-man affected the care.
  • One of the reasons this incentive works as well as it does is because doctors have been stripped of so much of their income by the negotiations that take place between the insurers and the doctors anyway. They are always on the lookout for ways to increase their income. Is this a fair way for them to do it?
  • Negotiations and incentives continue to work to prevent the costs of healthcare and insurance from going up anymore than they already have for us individual patients. That's definitely a plus. But somehow this continues to strike me as shady....

What do you think? Should anyone -- health insurers, medical manufacturers, pharmaceutical companies -- be paying doctors to influence the choices they make in patient treatment?

Why not share your opinion in the forum?

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Photo iStockphoto.com

November 19, 2008 at 11:34 am
(1) Greg Katz says:

It’s amazing how the medical community now resembles the political community. We’re talking about insurers lobbying in the private sector as well as the public sector. Are we really focusing on the right culprit?

It seems to me that the insurance companies are playing both ends of the spectrum. The amazing thing is that no matter what they do whether it be to cut costs or increase sales, the patient doesn’t seem to reap any benefits or rewards.

As far as the doctors, it would be nice that if they are going to be in private practice that they begin to think as entrepreneurs and not hang the patient out to dry. Why aren’t the doctors working harder collectively to keep their reimbursements at a sustainable level?

I feel like the patient is always in the middle of the tug-o-war. I’m just waiting for the patient to be pulled apart…what happens then?

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