UPDATE

Focus on Practice

By Joan R. Rose

Medicare fees plummet again

Doctors are hoping history will repeat itself after CMS announced a 4.5 percent decrease in Medicare's physician fees for 2004. Congress overrode 2003's scheduled 4.4 percent drop earlier this year, and it will take similar action to forestall 2004's plunge, says CMS Administrator Tom Scully. Without Congressional intervention, CMS has no option other than to base its fee update on the current law. On the plus side, CMS is changing the base year used to determine the structure of practice costs from 1996 to 2000 and making other technical revisions that should be in physicians' favor. CMS also will increase the weight given to the cost of malpractice coverage.

Doctors aren't the only ones hit. Medicare beneficiaries will pay nearly 14 percent more for Part B coverage next year, while the Part A deductible will rise just over 4 percent.

The new fees take effect Jan. 1.

A closer look at the uninsured numbers

The number of uninsured Americans grew again last year. But the National Center for Policy Analysis says the continuing increase isn't being fueled by people with low incomes. The center examined US Census Bureau data and found that three out of four people who joined the uninsured ranks over the past four years live in households that earn more than $50,000 a year. And almost half have annual incomes of more than $75,000. By contrast, the number of uninsured in households with incomes under $25,000 fell by 17 percent.

Will Canadian Rxs stay available?

If Canadian pharmacies continue to ship prescription drugs to American patients, low cost drugs soon may be as hard to come by in Canada as they are in the US, warns The Fraser Institute, an independent Canadian public policy organization. Canada represents less than 2 percent of the world's pharmaceutical market and contributes negligibly to American drug company profits. Consequently, researchers point out, it makes no sense for manufacturers to continue to supply Canadian pharmacies that divert those products into the US, lowering the companies' profits there.

Indeed, pharmaceutical companies have already begun to limit supplies of drugs to Canadian pharmacies, causing at least two US states to try to keep the pipeline open. Minnesota's attorney general has taken legal steps to compel an investigation of GlaxoSmithKline, the world's second largest drug manufacturer, alleging that the company's recent boycott of Canadian pharmacies and wholesalers may violate state antitrust laws. At the same time, Illinois' AG has been asked to look into whether GSK and three other pharmaceutical companies (AstraZeneca, Pfizer, and Wyeth) are illegally conspiring to limit drug supplies.

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Joan Rose. UPDATE: Focus on practice. Medical Economics Nov. 21, 2003;80:11.