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HMO incentives fail to curb drug costs

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SAN FRANCISCO, Sep 19, 2005 (United Press International via COMTEX) -- A California study finds that giving doctors financial incentives to keep drug costs in line has not worked because of poor communication by HMOs.

Researchers at the University of California, San Francisco, surveyed 36 physician groups and health maintenance organizations in four cities.

They found that doctors were often unaware of the financial incentives for curbing drug costs. Frequent changes in contract terms also left doctors unwilling to put in cost-cutting measures that might turn out to be useless.

While HMOs negotiate with pharmaceutical companies and drug-store chains to get favorable prices, they often did not share pricing information with doctors, the study found.

"The problem lies in the contract terms and information-sharing between the HMO and doctors," said Dr. R. Adams Dudley, an associate professor of medicine and health at UCSF. "Fix that, and you'll go a long way to controlling drug costs."

The study was published in the Journal of Health Politics, Policy and the Law.

Copyright 2005 by United Press International.

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