General Motors, Walgreen Disagree Over Role of Mail-Order Pharmacies in Health Plans
General Motors' recent decision to eliminate Walgreen from its pharmacy network for employees has prompted a "showdown" over how employees purchase prescription drugs, the Wall Street Journal reports. In an effort to save money, GM and other large employers in recent years have begun requiring workers to order medications for chronic diseases from mail-order pharmacies, while allowing members to purchase short-term medications from traditional pharmacies. According to Medco Health Solutions, GM's pharmacy benefit manager and mail-order pharmacy, mail orders are less expensive because there is less labor, and overhead and prescriptions are filled in bulk. Walgreen in December told some employers with mandatory mail-order policies, including GM, that its drug stores would no longer fill short-term prescriptions for employees if the policy continued. GM then barred Walgreen from covering 75% of its 1.1 million workers. Although the companies are in discussions regarding a continued relationship, Gregory Wasson, a Walgreen senior vice president, said, "We're not going to stand back and watch our most loyal customers ... be forced to another channel when there's a solution." Walgreen in 2004 began offering 90-day supplies of drugs -- the typical amount for mail order -- to some customers in stores and through its own mail-order program. Walgreen and other pharmacies also hope customers "will pressure their employers to change policies," the Journal reports. A recent Hewitt Associates survey found that 22% of employers will have mandatory drugs-by-mail programs in 2005 (Adamy et al., Wall Street Journal, 2/14).
GM Workers Lose Access to Doctors
In related news, GM on Feb. 1 launched a program intended to direct covered employees to "the highest quality and most efficient doctors," but employees and physicians affected by the program are reacting "with a mix of confusion and outrage" because only about one-third of physicians from the United Healthcare network are classified as high quality and efficient, the St. Louis Post-Dispatch reports. The program, called UnitedHealth Performance, is being piloted by employers in 13 states. Under new terms negotiated with United Auto Workers, employees pay for half the cost of office visits to recommended doctors but pay 100% of United Healthcare's negotiated discount rate for office visits with other doctors in the United Healthcare network and 20% of the cost of additional office services. The health plan covers the full cost of additional office services for physicians included in UnitedHealth Performance. Richard Shoemaker, UAW's lead negotiator on the GM contract, said the union is working with GM and United Healthcare to address concerns arising from the new plan (Vandewater, St. Louis Post-Dispatch, 2/13).
Eastman Kodak Enters Medical Software Market
In other news, Eastman Kodak on Monday will announce its entry into the "gigantic" electronic health records market with a new suite of software products, the Rochester Democrat and Chronicle reports. Kodak has designed software to help medical professionals convert medical documents from paper to computers, including features intended to support scheduling, billing, physician orders, prescriptions, medication management, care instructions and other clinical tasks in an electronic format. Other Kodak programs create "overarching electronic patient records," the Democrat and Chronicle reports. "Kodak is definitely in a good starting position" in the "race" for medical software systems," Abraham Seidmann, a professor of computer and information systems at the University of Rochester, said (Rand, Rochester Democrat and Chronicle, 2/14).
