On January 24, Vanessa Fuhrmans wrote a story in the Wall Street Journal about insurers paying doctors to prescribe generic drugs, rather than name-brand drugs for their patients.   According to the story, Doctors Paid to Prescribe Generic Pills, the basic idea is to reduce health care costs for patients, employers and insurers by implementing an incentive program set up by health insurers to reward physicians for prescribing generic drug prescriptions instead of the more expensive, brand-name drugs.

I think this approach to reducing health care costs is wrong.  Consumers --not the providers are the ones that should be recipients of incentives by asking for generic rather than brand-name drugs.  If consumers can directly benefit by becoming cost-conscious, consumers will be motivated to ask for discounts, request generic prescriptions, and shop around for the best value in order to save money.  In fact, this type of behavior already exists with consumers that have high-deductible health plans.  Do you think a consumer that is responsible for paying $2000-$5000 out-of-pocket would choose to pay $230 for a brand-name prescription when he can save $170 and pay only $60 for a generic drug?  This already happens today just by asking your pharmacist or physician for a generic equivalent when filling a prescription.  Consumers are not rewarded by insurance plans for this cost-conscious behavior, but they do save money by shopping around for good deals.   Insurers and health care industry experts underestimate the intelligence and responsibility of consumers.  In every other industry, consumers are self-motivated to shop for the best value.  The same motivation would occur in health care if consumers were paying out-of-pocket for these services.  I’d like to see health plans reward consumers for making cost-effective choices by offering premium discounts to reward this good behavior.  Automobile insurance policies reward consumers with discounts for good driving records, anti-theft features on your car, vehicle safety, accident free, and new student drivers with good grades in high school. 

Mona