When an insurer dictates a lower price with a pharmacy less, or for a doctor (the same as a physician assistant or a nurse practitioner or a naturopath or a chiropractor), that is reducing the payer cost.
Healthcare has a few main vendors. Doctors, pharmacies, hospitals, drug manufacturers, and then the vendors’ vendors, like EMR software (epic, Athena, etc), equipment, liability insurance, etc,
In this chain, the least squeezable are drug manufacturers, because they own the patent and the insurer has to pay. Hospitals are sort of next, and then doctors, and then finally pharmacies must be the easiest to squeeze based on them having been squeezed nearly to death over the last 15 years.
You can see this in publicly listed company profit margins:
Pharma companies - highest profit margins, 20%+
Hospitals - 10%
Pharmacies and health insurers - less than 5%
Doctors are probably below Pharma, above hospitals if they are earning $150+ per hour. Epic and other EMR software is probably even higher profit margin than Pharma.
Healthcare has a few main vendors. Doctors, pharmacies, hospitals, drug manufacturers, and then the vendors’ vendors, like EMR software (epic, Athena, etc), equipment, liability insurance, etc,
In this chain, the least squeezable are drug manufacturers, because they own the patent and the insurer has to pay. Hospitals are sort of next, and then doctors, and then finally pharmacies must be the easiest to squeeze based on them having been squeezed nearly to death over the last 15 years.
You can see this in publicly listed company profit margins:
Pharma companies - highest profit margins, 20%+
Hospitals - 10%
Pharmacies and health insurers - less than 5%
Doctors are probably below Pharma, above hospitals if they are earning $150+ per hour. Epic and other EMR software is probably even higher profit margin than Pharma.