Health Care

Free Market Friday: Mandate ill-advised

October 24, 2015

Michael Carnuccio

During the 2015 legislative session, Oklahoma policymakers pursued pro-patient and pro-growth health care reforms. The reforms removed bureaucratic barriers for state and education employee health care and protected the rights of doctors and patients. Adopted changes will reward employees for choosing low-cost and high-quality health care options, embracing transparency and competition. Lawmakers also set in motion Medicaid reforms designed to improve provision of health care for the most vulnerable Oklahomans. These reforms will result in better care for patients and lower costs for both patients and taxpayers.

Arkansas lawmakers have done just the opposite. Succumbing to special interests, they created a new mandate requiring that consumers, patients and employers pay a markup for pharmaceutical care at drugstores, regardless of the actual cost of the drug.

Arkansas Act 900, the first of its kind, will actually make the pricing of drugs less transparent to patients and consumers. The law’s effect is that even though a drugstore may acquire drugs at a discount or receive rebates that result in a lower cost, employee health plans will be prohibited from negotiating reimbursements to pharmacies that reflect the actual cost. This special interest law will now set an arbitrary floor for prices of drugs. The law is already being challenged in federal court.

We all know what happens when government intervenes in health care and implements pricing mandates; this mandate lines the pockets of some pharmacists at the expense of consumers who need affordable drugs.

Regarding pharmaceuticals, Oklahoma lawmakers are showing a better way. A few years ago in Oklahoma, the health care plan offered by the state of Oklahoma initiated an effort to better provide pharmaceutical care to state and education employees. The state’s health plan, which covers about 183,000 lives, is called Health Choice. As lawmakers and the state health plan endeavored to expand options and increase savings, some special interests tried to force mandates similar to those just implemented in Arkansas. Fortunately in Oklahoma, both providers and the state plan came up with a solution that resulted in savings to patients, consumers and taxpayers of $33 million.

Oklahoma lawmakers should continue to reject special interest provisions like Arkansas Act 900 and pursue health care reforms based on free market principles.