Health care alliance

The working agreement among Vermont, New Hampshire and Maine to organize a regional buying pool to leverage lower-priced prescription drugs is good news for several reasons.

First, the agreement shows that Maine is not alone in its concerns about the high price of pharmaceuticals, particularly for people without the buying power that health coverage brings. Though the pharmaceutical lobbying group campaigning against the Maine Legislature’s decision to organize the uninsured suggested that the state was out on a limb with its plan, this turns out not to be the case. The agreement among the three states demonstrates that Maine was merely a few months ahead of its neighbors.

Second, the agreement is good news because it tells both other states and the federal government that they can face the drug lobby and emerge with meaningful legislation. Though Rep. Tom Allen’s bill to do for Medicare what the New England governors want to do for anyone lacking coverage has yet to catch on with Republicans, they can hardly fail to notice that three governors could soon show that such an arrangement can be made without killing the industry.

The theory behind the buying cooperative is the same one used by health maintenance organizations to negotiate lower prices – aggregate lots of consumers, tells pharmaceutical companies that if they want these consumers to be covered for their products they will charge the HMO a price much lower than retail. Maine’s new law allows it to proceed without the other states, but for reasons of scale if nothing else, it is far better for it to join with others.

Third, the agreement highlights a useful role for government – not to take over medical services or set an endless number of regulations on how the medical establishment should behave, but to act as a go-between between the business side of medicine and unprotected consumers. With 44 million Americans with no health care coverage at all, this role is going to become even more important as states seek ways to find affordable health care for citizens.

The Northern New England pact is not expected to be finished for several more months, but there is no reason that it cannot happen or that groups of other states could not also form similar alliances. These sorts of actions would tell the federal government just how far behind it is falling in the debate over health care.