News in brief - Dec. 29, 2008

Rescission reform introduced in California again

After a gubernatorial veto cut short successes in the last legislative session, advocates who pushed for changes in California's laws around health insurance policy rescissions are trying again.

Assemblyman Hector De La Torre introduced a bill requiring an automatic third-party review of policy rescissions and cancellations. The action is meant to keep insurers from revoking policies after members become ill -- known in the industry as postclaims underwriting. The California Medical Assn. supports the bill.

State regulators last year forced health insurers to reinstate thousands of members whose individual policies the state said were unfairly cancelled.

Last year an identical bill passed both state legislative bodies but was vetoed by Gov. Arnold Schwarzenegger, who said he preferred a broader health care reform package rather than adopting changes piecemeal.

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Retail clinics serving relatively small patient population

Only about 3.4 million, or 2.3% of American families, had used a retail clinic as of 2007, according to a study from the Center for Studying Health System Change released in December 2008.

The study found that among those using the clinics, 27% had at least one family member who was uninsured. Families with members age 18 to 34 were more than twice as likely to use a retail clinic than those age 50 to 64. Those who had not gotten needed care, or had delays getting care, were 2½ times more likely to use a retail clinic.

The study's authors reported that retail clinics have turned out to be more complex and costly to operate than expected, and that the response of some traditional physician practices has been to extend office hours and do more same-day scheduling.

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Spending for generic drugs drops

Increased competition among manufacturers and lower prices have resulted in about $1 billion in decreased spending on generic medications for U.S. consumers and health insurers for the 12 months ending September 2008, according to a report by IMS Health.

That is happening even though use of generics is increasing. The report found that total spending on generic medications decreased by 2.7% to $33 billion, the largest decline in at least a decade.

The average price pharmaceutical firms charged wholesalers for generics decreased 8%, and consumer demand for the medications increased 5.4%, according to the report, released in December 2008.

IMS expects these trends to continue through 2012.

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