Topeka — Kansas officials have been citing the growing number of people receiving state assistance for health care as one of the chief reasons that the budget is out of whack.
But statistics unveiled the first week of the 2002 legislative session show that while the number of people under Medicaid is increasing, it is the skyrocketing cost of prescription drugs that is most driving up health-care costs.
"One of the biggest cost drivers is pharmacy costs," Janet Schalansky, secretary of the Kansas Department of Social and Rehabilitation Services, said as she briefed legislators.
Lawmakers are debating budget cuts and tax increases to bridge a deficit caused by falling revenues and increased social service expenditures, including Medicaid, which is the federal-state program that provides health care for the poor and disabled. Some legislators are even talking about making it tougher for poor and disabled people to qualify for assistance.
From 1997 through 2001, the number of Kansans receiving Medicaid assistance increased 4.2 percent from 190,000 to 198,000 people.
But Medicaid costs during that time increased 44.3 percent, from $476 million to $687 million, according to SRS figures.
The main culprit behind the explosive increase was the cost of prescription drugs in the Medicaid program, which nearly doubled from about $100 million to $185 million.
Last year, pharmaceutical costs were the No. 1 expenditure in Medicaid, making up 27.5 percent of the entire bill. Ten years ago, drug costs were only 12 percent of the Medicaid budget.
Laura Howard, an SRS assistant secretary, said the state is trying to get a handle on prescription drug costs through the use of generics and taking advantage of drug rebates.
But she said every time a new drug comes out and is advertised on television, the demand and the costs go up.
"I was watching the Jayhawks play last night and counted seven commercials for pharmaceuticals," Howard said.
Howard said she doesn't fault the drug manufacturers for the high price of drugs, saying that often the medicine helps people avoid costly hospital care.
Kansas is not alone. States nationwide are grappling with the cost of new prescription drugs.
Some states, mostly in the northeast, have recently joined together to form large purchasing pools in an attempt to leverage discounts from pharmaceutical manufacturers.
But Howard said there hasn't been any evidence yet that the strategy works.
"There really is no magic bullet," she said.
State Sen. Sandy Praeger, R-Lawrence, who often works on health-care issues, said politicians in northeastern states were pressured to reduce drug prices because constituents are well aware of cheaper prices in Canada, which unlike the United States, established price caps on medicines.
Praeger said Kansas could do a better job of "disease management," which means taking a more hands-on approach in managing the care of people who are taking a lot of different prescription drugs. Often, she said, people are taking more medicines than they should, which ends up costing the state more and makes the person sicker.
"It's almost like social case management. We need to get actively involved in how they are managing their disease," she said.
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