Hospital Pharmaceutical Formularies differ from Insurance Company Formularies

[magical thyme]

And they exist for a very different reason than cited in Mineral Man's thread, which is actually about Insurance Company formularies, not hospital and pharma formularies.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=4691362

From the NIH:

"...the most important purpose of a hospital formulary: listing the drugs of choice, as determined by their clinical efficacy and their relative safety, including adverse drug reactions, side effects, interactions, the potential for errors, and the risk of patient harm.

...Ideally, a carefully selected formulary guides clinicians in choosing the safest, most effective agents for treating specific medical problems."

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2730104/

Note that it does not include "Insurance Companies." In fact, it doesn't even mention insurance companies.

So they may apply some different definition, based on cost, but that is not what a formulary is intended to be.

edited to add link to referenced thread

[theboss]

1. It's the same concept

Someone is making a determination on what drugs are prescribed based on safety, effectiveness, and - yes - cost.

[magical thyme]

3. not according to Mineral Man.

Hospital formularies are intended to guide physicians, based on efficacy and patient safety, per the NIH.

According to Mineral Man, Insurance formularies are intended to drive down costs.

Very, very different purposes.

[MineralMan]

2. Since you mentioned my thread, here's a link to it:

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=4691362

I clearly defined what formularies I was talking about in the first sentence of the post.

You are correct, though: hospital formularies have a different purpose than the ones I was talking about.

Note: If you mention another thread on DU, it's generally polite to link to it.

[magical thyme]

4. your first sentence says insurance companies use (the pharmaceutical) formularies,

it doesn't say they make their own formularies.

[MineralMan]

6. As you say.

You are correct. It says what it says, and I'm content to have people judge my post for themselves.

However, insurance companies do create and modify their own formularies. So do healthcare systems like Medicare. Those formularies change almost constantly. Since I was only talking about insurance companies and healthcare systems, those were the very formularies I was talking about.

Hospitals, too, create their own formularies, usually by modifying a more general one. Those change, as well, from time to time. There is no single, universal formulary in use by everyone, you see. Not in the US, anyhow.

[magical thyme]

8. my interest is *informing* people. nt

[MineralMan]

10. That's a very good interest. That's also

my interest. It's very good to be well-informed.

[Sheepshank]

5. so? and?

not sure of the purpose here....is it Obama's fault?

[magical thyme]

7. not every thread in GD is about President Obama, contrary to some people's opinions

The purpose is stated write in the OP -- to correctly define pharmaceutical formulary, since insurance formulary is incorrectly labeled as pharmaceutical formulary elsewhere.

And what is your purpose in posting here?

[Voice for Peace]

11. yes of COURSE it is

[Sheepshank]

14. Exactly!!!!! n/t

[Hoyt]

9. Heck, nowadays it's becoming increasingly difficult to differentiate hospitals and insurers.

The are becoming one and the same. The ACA actually provides incentives for hospitals and/or physician groups to essentially become insurers and providers in what is called an Accountable Care Organization. Of course, integrated HMOs are essentially insurer and provider.

Even where that is not happening -- for those payers that don't pay a flat fee based upon diagnosis (like Medicare usually does for inpatient care), a hospital is definitely going to put drugs on its formulary that are usually covered by insurance companies. And the formulary definitely take costs into account when payment is made under a flat fee.

[magical thyme]

12. I think ACO's put quality and outcomes ahead of costs.

Whereas insurance companies don't seem to be concerned about outcomes, providers have to be.

Quality of care, patient safety, preventive care all feed into outcomes. And preventive care also feeds into lower long term cost savings.

Providers have a number of ways to reduce costs other than using the cheapest supplies and materials.

Insurance companies have no incentive to pay for care; once they've got your premium, their sole incentive is to not pay for it.

[Hoyt]

13. Let's hope so. But insurance companies have to pay out 80% in benefits, and they

have to be competitive with other plans in terms of cost and quality.

ACO's can share any savings they get from the government's flat payment among the providers. Personally, I don't see any problem with that, but one can certainly bump up the short-term gain by skimping on care. Long-term, the ACO won't make it -- And neither will an insurance company.

[magical thyme]

15. they do now (have to pay out 80%) and that's a definite improvement.

hopefully the insurance companies won't make it long term. My hope is that ACA is a first step toward single payer. It has proven so for Vermont, anyway.

[Hoyt]

16. I hope you are right, but as I understand it the Vermont plan is not up and running.

Plus, I don't see Arizona, Georgia, Mississippi, etc., enacting anything like that. That's a shame, but reality.