Our Systems Are Down, So You Can't Have Your Medicine
Monopolies create costs that are almost impossible to measure. But they are very real.
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Back in November, I got prescribed some basic medicine, which I later learned wasn’t covered by my health insurer. As it turns out, it didn't matter because CVS's computer system was down, so the pharmacy couldn't dispense it to me anyway. I wasn’t feeling great, and the pharmacy was a madhouse. The pharmacist was apologizing sheepishly, telling people he couldn’t fill prescriptions and didn’t know when the system would come back online. People kept asking, and he kept shrugged. Some couldn’t speak English, and the situation was very confusing for them.
Meanwhile, there was an angry man sitting on the floor with a cast on his leg. He had been waiting there for an indefinite period of time. The pharmacist told him to leave and come back later because he wasn't sure when the system would come back. The guy was like "I physically can't come back, this is pain medication for a surgery I had today." And there was a tiny argument, but it was clear that everyone involved was powerless.
I bring this up because CVS is a massive company that has made the case that its mergers, like its purchase of Caremark and then Aetna, will help the firm become more efficient. The reality is that it is simply too big to manage. These downtimes are likely common. Here’s a notice in December of a national outage of the CVS Caremark claim system.
It’s not just CVS, of course, downtimes are common in industries with a lot of mergers like airlines or banks, which have a bunch of tangled IT systems that can’t easily be woven together. Monopolies make this situation much much worse, especially in the medical arena. Here’s a recent notice of downtime for Surescripts, which is right now being sued by the FTC for monopolizing the e-prescription market.
These kinds of downtimes can be a dangerous and confusing situation for patients. In a some states, it’s a requirement to send prescriptions electronically, (unless there’s downtime, but a lot of medical bureaucracies simply don’t know that anymore). So what will happen is that prescriptions won’t be written or will be delayed.
Anything that even temporarily disrupts the expected way that millions of people get their drugs is a small disaster. It’s not like doctors can just rewrite all the prescriptions for all the old people who are on 15 drugs immediately. And all the people most dependent on drugs are the least able to jump through hoops to get medicine and probably don’t know what medicines they’re on.
I don’t know what happened to that guy sitting on the floor, angry and in pain. I’m guessing he got his medicine eventually. There’s a chance he didn’t, and the situation got really bad for him, but he probably ended up fine. He’ll just trust the medical system a little less, and be a little less willing to trust our social institutions in general because of the pain they caused him. And that’s something you won’t find in any economic model explaining why CVS’s purchase of Caremark was a good idea.