The Federal government already pays for between 40 and 50 percent of the health care in the United States. How? When you include active military, VA, medicare, medicaid, federal employees, children, and disability care, the number ranges between 40 and 50 percent. Yet, the payment structure, administration, and prescription lists are vastly different across programs and agencies. It is a well acknowledged fact that prescription costs are a major part of health care spending, and a major cost for consumers. Consolidating the prescription programs will save money and simplify the administration, reducing waste.
There doesn't need to be a new agency to do this. This can all be centralized in Health and Human Services. They would obtain the data from all federally funded health care (public and private) of the total number prescriptions (generic and name brand) dispensed for each medicine. They would take that data and set out for competitive bid from all the major prescription plan providers, drug stores, department stores, mail order pharmacies and drug manufacturers. The lowest cost for all the medicines would then be consolidated into a single final formulary.
This formulary would then be put out for bid for an administration and fulfillment contract.
The resulting competitively bid contract would provide a significant cost savings on each and every prescription, and eliminate the waste and duplication from all these separate programs. Once awarded, the states would be allowed to buy in to the program for their employees as well, saving even more and providing the same buying power leverage that the major insurance companies now have in negotiating drug costs.
There would be a universal formulary, consisting of every drug on the market, both brand name, and generic, so providers would have the ability to choose which drugs to prescribe and there wouldn't be any "rationing" or denial.
This is not government control. The government is already overpaying for these drugs. This is allowing free-market competition to cut costs for the government as it does for the private sector. The reduction of the multiple government programs to one will also cut costs for all the health care providers and pharmacies, since there will be a single formulary, single price, and single source for information. Doctors won't have to wonder if a prescription is covered or not on one plan or the other. Pharmacists won't have to call 10 different agencies or companies to find out if a drug is covered.
This is the first small step toward controlling costs in health care. It preserves choice, preserves free market competition, and cuts costs.