|
Mail-Order Prescription Mandates To Cost State 3,000 Jobs, $117 Million in Wages
Study shows impact of nearly $2 billion in prescriptions being forced outside of Michigan |
| Tuesday, March 16, 2004 News Release |
Click here for the full report LANSING, MI. March 15, 2004 – Michigan’s economy will lose 3,000 jobs and $117 million in wages this year because of health plan requirements that drug prescriptions be filled by mail from out-of-state companies, concludes a study released today by a leading healthcare research firm. “Mandatory mail order requirements will have significant economic consequences,” says the report by Health Management Associates (HMA) of Lansing. “The immediate impact in 2004 will be to move 4.3 million prescriptions from Michigan pharmacies to out-of-state mail order facilities,” according to the report, which projects that revenues for community drugstores around the state will drop by more than $268 million this year. Such a shift will cause the loss of at least 167 full-time pharmacist and pharmacy technician jobs, the study calculates. The ripple effect of these losses at the state’s 2,000 pharmacies will spread far beyond that business sector, said study director Vernon K. Smith, Ph.D., former director of Michigan’s Medicaid program. “A lower level of overall economic activity and employment (is seen) in the state because of multiplier effects,” explains his report, referring to pharmacy closures, reduced construction of drugstores, spending cuts in Michigan by the industry and its suppliers, and the reduced buying power of those who are laid off. This year alone, HMA forecasts: • Nearly $340 million in lost business activity statewide. This is in addition to the $1.9 billion the state lost in 2003 through out-of-state mail order prescription purchases. • Elimination of 3,000 jobs. • More than $117 million cut from Michigan payrolls Smith noted that more than $1.5 billion left Michigan for out-of-state mail order companies in 2003. That figure is expected to approach $2 billion by the end of this year. Moreover, falling state income tax revenues and rising unemployment claims will worsen the budget squeeze in Lansing, the consulting firm says. That covers just the immediate effect of this year’s switch from a voluntary mail order option for maintenance medications to a mandatory policy for 856,000 people covered by UAW contracts at General Motors, Ford, DaimlerChrysler, Delphi and Visteon. In coming weeks, this mail requirement will affect nearly all bargained-for employees and retirees at those firms. HMA also examined the long-term impacts if every Michigan employer adopted health plans that minimize reliance on community retailers, which are blocked by insurers from offering 90-day supplies of prescription drugs for one co-payment. “Losses could amount to 1,128 full-time-equivalent pharmacists and pharmacy technicians being laid off and more than 27 million prescriptions a year being filled outside of Michigan,” Smith and his fellow researchers conclude. The study did not calculate the indirect effects of those losses. The comprehensive analysis was released as state House Health Policy Committee members continue to review a five-bill package aimed at letting community pharmacies compete evenly with mail warehouses without adding costs for employers or patients. The legislation, known as the Consumer Prescription Protection Act, would let local pharmacies offer the same low prices, terms and co-payments as out-of-state mail providers owned by pharmacy benefit managers – which currently block Michigan retailers from matching the discounts offered by the mail order pharmacies they own. “This study shows the urgency of letting all Michigan pharmacies compete under the same rules,” said Rep. Stephen Ehardt, R-Lexington, Health Policy Committee chair. “These bills will let workers and their families, rather than distant insurance managers, decide where to buy their medicines – while still holding down healthcare costs.” HMA has provided nationwide consulting services to government agencies and the private sector for nearly 20 years. Its economic research was commissioned by the Coalition for Quality Healthcare, a not-for-profit business and consumer group that supports the pending legislation. |
 |
| Welcome
| Latest News | Your
Legislator | Mail Order
| Questions Contact Us | Petition | Links Coalition for Quality Healthcare "Upholding high standards of personal service, assuring full access to consumer options and preserving the traditional contributions of local pharmacies to the state's economy" © Copyright 2004 Coalition for Quality Healthcare. All rights reserved. |
Medco's Clash With Clarity