Never underestimate America's insatiable demand for access to more and better healthcare. And in the perfect patient world, the latest and best medical advancements are available nearly free of charge because they are fully covered by insurance.
This fundamental principle of healthcare economics is at work with Viagra, the blockbuster impotence drug. But beyond the endless jokes, the success of Pfizer's stock and the superstar status bestowed on the medical scientists who developed the product, is a lesson for healthcare managers. That is especially true for executives of health systems anxious to assume risk and insure medical coverage.
Providers, insurers and payers were caught off-guard by the runaway demand for the $9-a-pop pill. Some 20 million men, most of them over 40, are believed to suffer from impotence. Millions more would like to add zest to their sex lives, especially if it only requires a simple pill.
Erectile dysfunction is rarely a life-and-death issue, yet it is no laughing matter. It can cripple a man's ego and destroy romantic and family relationships. Viagra is only the latest and most convenient therapy designed to combat the problem. Truthfully, insurers have covered some of the injections and suppositories because the overall financial impact was minimal. Many men, it seemed, suffered the indignity of impotence rather than seeking medical help and dealing with treatment considered painful, experimental or offbeat.
But Viagra has changed all that. Physicians are on a pace to write a million new prescriptions per month, and health plans are baffled about how to handle the demand without breaking the bank. After all, how many erections does a managed-care plan owe an enrollee?
Oxford Health Plans already has been sued by a disgruntled customer for not including Viagra in its approved drug formulary. Other insurers that have denied or restricted coverage also face legal and public relations problems. On the welfare side, the Chicago Sun-Times reported that 11 states and the District of Columbia have approved Viagra for Medicaid recipients, while 12 others have placed tough restrictions on coverage. States making what they considered a prudent economic decision have heard rumblings about civil rights violations and rationing sex for the poor. Judges, lawyers, bureaucrats and politicians will determine Viagra's public-sector fate.
In the private sector, the case illustrates why health plans need to offer a variety of products ranging from economy to first-class. The more employers or patients pay, the richer the benefits package.
In the meantime, health plans should evaluate their past policies on impotence drugs and contraceptives, which many insurers also don't cover. The decision on Viagra should be based on precedent and medical necessity, although we suggest avoiding an extreme stand. Rather than offering unlimited access or refusing to cover the drug, health plans could offer to split the cost with patients.