Purchasing Medicare prescription drug benefits: a new proposal.
Medicare policymakers are considering using private-sector firms to offer and manage a prescription drug benefit. In such arrangements Medicare and its potential contractors will need to consider four major areas of risk: selection risk, cost management risk, risks of government as a business partner, and risks that new Medicare benefits will change competitive advantages. This paper considers these risk factors and suggests a model for Medicare prescription drug coverage. By adapting private-sector purchasing practices and using competitive markets, Medicare could offer prescription drug benefits--at affordable premiums for beneficiaries--without resorting to national price controls for pharmaceutical products.
Etheredge
L
L
George Washington University, USA.
D003362:Cost-Benefit Analysis; D016527:Drug Costs / Q000331:legislation & jurisprudence*; D017754:Group Purchasing / Q000191:economics* / Q000331:legislation & jurisprudence; D006801:Humans; D019458:Insurance Coverage / Q000191:economics / Q000331:legislation & jurisprudence; D007356:Insurance, Pharmaceutical Services / Q000191:economics* / Q000331:legislation & jurisprudence; D006278:Medicare / Q000191:economics* / Q000331:legislation & jurisprudence; D017149:Private Sector / Q000191:economics / Q000331:legislation & jurisprudence; D012308:Risk Management / Q000191:economics; D014481:United States