Yesterday's announcement by Bartell Drugs that it's going to stop filling Medicaid prescriptions at 15 of its 57 stores is the latest salvo in a battle that's been going on for months.
You want some of these? Good luck if you're on Medicaid.
The pharmacies are trying to pressure Washington into improving reimbursement for Medicaid drugs. The state is betting that enough pharmacies will continue to fill prescriptions--even at a loss--that the government can stand firm.
"[The state] is saying, 'You keep filling them, so obviously you're not losing money,'" says Holly Whitcomb Henry, who owns three Seattle-area drug stores and is the past president of the National Community Pharmacists Association.
Now Bartell is trying to send a message to the contrary. People on Medicaid, the state-run health care program for the poor, are caught in the middle.
"I feel horrible about this," said company CEO George D. Bartell, in an interview with SW.
The stores where he's cutting off Medicaid drug sales on Feb. 1 are the ones where the company is suffering its biggest losses, percentage-wise, he says. You'd think those would be in the poorer parts of town, but it's actually the opposite: The list includes some of the most affluent neighborhoods in Seattle and the Eastside--University Village, Magnolia, Bridle Trails (!).
Bartell couldn't explain precisely why that was, but he says his biggest hit comes from brand-name drugs, not generics, and that brand-name drugs may be requested more at those stores. Holly Henry speculates that there may also be big institutional facilities near some of these stores--housing, say, developmentally disabled people frequently filling a lot of costly prescriptions.
Loss leader: the University Village store.
The state is clearly betting that other drug stores won't join the Bartell boycott. And it's probably a good bet. Medicaid prescriptions, even sold at a loss, are still a handy way to draw customers in--and get them to shell out for heavily marked-up greeting cards, razor blades, and mixed nuts.
So while Bartell has dug in his heels on the retail front, pharmacy trade groups are turning to court. They've filed suit in Washington (and a handful of other states), saying the government is under obligation to boost its payments. Other states have done so, says Bartell. Washington, New York, Minnesota, and California are holdouts.
The only amusing part of the controversy is seeing deluded commenters on the Times and P-I sites squawking about how Bartell's move is exactly what we'll see under Obamacare. Good luck getting any drugs once the government's in charge of paying for them!
They have perhaps forgotten that less than two months ago the largest hospital in Seattle, Swedish, said it may stop accepting patients covered by Regence-BlueShield, the state's biggest health insurer--a 100% private, free-market entity!--because their reimbursement rates are so crappy.