Wednesday, April 06, 2011

Texas Medicaid cuts will result in thousands of job losses and pharmacy closures

The Texas Legislature's intention to cut the state's share of Medicaid expenses will -- as with every other measure they are considering to fill a $27 billion hole without raising taxes -- result in thousands of lost jobs. It will also result in the closure of many (mostly rural) pharmacies across the state, limiting access to medications for everyone. From Pharmacy Choice and Access Now's press release:

Lawmakers are planning to introduce a large, bureaucratic middleman known as a “Pharmacy Benefit Manager” to administer 80 percent of Medicaid’s prescription drugs through a restricted managed network. In addition, they are proposing extreme cuts to Medicaid reimbursement rates paid to pharmacies. These cuts would take the form of significant reductions to dispensing fees, which are used to cover the overhead of pharmacies already operating on razor-thin margins. Without open access networks and adequate reimbursement levels as the cornerstones of Texas' pharmacy Medicaid program, community pharmacies could find themselves no longer able to serve Medicaid patients or even to stay in business.

Faced with a grave budget scenario, rising numbers of Medicaid patients, and the always-increasing costs of medicine, Texas Republicans are squeezed in a vise of their own making. And when they close and bar the door to any tax increases or revenue enhancements, that leaves only one bad choice.

Dr. Ray Perryman has an executive summary (.pdf) focusing on the economic implications of the proposed legislation. It lays out three scenarios based on various cost-reduction proposals. Each scenario shows that a large numbers of community-based pharmacies will be forced to close, consequently leading to decreased access to service not just for Medicaid patients, but for all those needing medicine.

"While it is easy to claim superficial efficiencies now, our analysis indicates that this proposal will ultimately hurt patients, taxpayers, community pharmacies and, ultimately, the economy of Texas."

"If these proposals become law, our state’s neediest patients will not be able to get their medications from their local pharmacy -- from the people they know and trust,” explained Tammy Gray, owner of Buda Drugstore and PCAN spokesperson. “Local pharmacies have been the cornerstone of communities for generations, and local pharmacists know their customers the best. We can’t let bureaucracy get in the way of patient care. And this isn’t just about Medicaid recipients. If the local pharmacy shuts down, it will impact the entire community."

Dr. Perryman's analysis found that the economic impact was severe: the worst case scenario estimated $4.7 billion in lost revenues and over 64,000 permanent job losses if dispensing fees and Medicaid 'carve-in' proposals are adopted.

"This proposal is being falsely promoted as a cost-saving measure, yet as presently structured, it represents a new bureaucratic layer that will mean duplicated efforts and actually increase costs,” said Dr. Perryman.

Even a Republican objects.

Rep. Fred Brown (R-College Station) echoed concerns that the cuts are too drastic and will hurt patient access and harm the local and state economies.

"The Texas legislature should reject short-sighted proposals that will reduce patients’ access to prescription drugs and will increase costs long-term when access to Medicaid services is restricted,” said Rep. Brown. "Current proposals to move Medicaid to pharmacy benefit managers unnecessarily adds waste and bureaucracy. We already have a Medicaid pharmacy vendor program that works. The pharmacy benefit managers and their allies, the big pharmaceutical companies, have a long history of acting against the best interests of the State of Texas. Since 2000, the Texas Attorney General has sued “big pharma” for overcharges in Medicaid, for over $420 million. We've had a hard time keeping them out of the state's cookie jar, and now we're just going to hand it to them? Texans deserve better."

Contact your elected officials and tell them that cuts to Medicaid are unacceptable.

(cross-posted at PCAN)

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