Group Purchasing of Contraceptives : a Feasibility Study
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University of Montana ScholarWorks at University of Montana Graduate Student Theses, Dissertations, & Professional Papers Graduate School 1985 Group purchasing of contraceptives : a feasibility study. Colleen Lindsay The University of Montana Follow this and additional works at: https://scholarworks.umt.edu/etd Let us know how access to this document benefits ou.y Recommended Citation Lindsay, Colleen, "Group purchasing of contraceptives : a feasibility study." (1985). Graduate Student Theses, Dissertations, & Professional Papers. 8891. https://scholarworks.umt.edu/etd/8891 This Thesis is brought to you for free and open access by the Graduate School at ScholarWorks at University of Montana. It has been accepted for inclusion in Graduate Student Theses, Dissertations, & Professional Papers by an authorized administrator of ScholarWorks at University of Montana. For more information, please contact [email protected]. COPYRIGHT ACT OF 1 9 7 6 Th is is an unpublished m anuscript in which copyright sub s i s t s . A ny further r e p r in t in g of it s contents must be approved BY THE AUTHOR, Ma n s f ie l d Library UNIVERSITY_OK%NgANA Date : Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. GROUP PURCHASING OF CONTRACEPTIVES: A FEASIBILITY STUDY By Colleen Lindsay B.S., Utah State University, 1974 Presented in partial fulfillm ent of the requirements for the degree of Master of Public Administration University of Montana 1985 Approved by Chairman, Board of Exaihiners Dean, Graduate School ^ Datf^ Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: EP39692 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction Is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMT UMI EP39692 Published by ProQuest LLC (2013). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQ^sC ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS Chapter I. THE NECESSITY OF FINANCIAL RETRENCHMENT IN A PERIOD OF RISING HEALTH CARE COSTS ........................................................... Introduction Purpose and Origin of the Federally Funded Family Planning Program Benefits of Federally Funded Family Planning Programs Family Planning in Montana Financial Retrenchment Rising Health Care Costs I I . EXPLORING OPTIONS IN THE FACE OF RETRENCHMENT .... 15 Across the Board Cuts vs. Selective Cuts Implementing a Capitation System Terminating Programs Statewide Contract for Pap Smears Increased Emphasis on Patient Fees and Donations Group Purchasing of Contraceptives I I I . FEASIBILITY OF GROUP PURCHASING ................................................... 23 Contraceptives Currently Used Survey Results Determining Prices Available Through Group Purchasing IV. RECOMMENDATIONS Summary Conclusions and Recommendations BIBLIOGRAPHY ....................................................................................................... 37 11 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. LIST OF TABLES 1. T itle X Family Planning Funding Montana 1972 - 1985 7 2. Summary of Contraceptives Currently Used in the Fifteen Family Planning Programs ...................................................................................... 24 3. Summary of Responses Received From Manufacturers . 29 4. Comparison of Current Prices and Those Available Through a Group Purchasing Arrangement ................................................... 30 111 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER I THE NECESSITY OF FINANCIAL RETRENCHMENT IM A PERIOD OF RISING HEALTH CARE COSTS Introduction Rising health care costs and expenditures is one of the most serious problems facing our country today. Expenditures for health care have risen from $12.7 b illio n in 1950 to $322.4 b illio n in 1982.^ Rising costs, coupled with a decline in governmental resources, have created new problems in the area of federally funded health care programs. The decade of the 1980s marks the beginning of a new era for publicly funded health and welfare programs. Social welfare programs inaugurated during the Johnson administration's "Great Society" of the mid-1960s are moving from a funding environment of seemingly unlimited resources to one of increasing competition for limited resources. As programs come under the scrutiny of Congress or state legislatures for continued appropriations, each is asked to ju s tify the continued existence of the program through measurements of success, such as levels of service, population served, and program costs. Programs are being asked to become increasingly more accountable and cost effective. ^James Fralick, "Rx for Treatment of Hyper Health-Care Costs," Across the Board, April 1982, p. 68. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2 The process of allocating resources among competing demands from various programs becomes more d iffic u lt in a period of retrenchment. The question is not who should get how much of an increase, but who should be forced to absorb what portion of the cuts. Family Planning, a federally funded health care program, is a prime example of an organization which has been affected by rising health care costs and decreased federal dollars. In this "era of retrenchment," family planning programs, i f they are to survive, must look for creative, innovative ways of allocating scarce resources. As Robert B ille r has stated, "Retrenchment makes possible the redeployment of resources in 2 potentially more unique and particularistic ways." According to this argument, retrenchment may have positive effects by causing people to re-think, re-evaluate and search for alternative methods of cutting costs and allocating funds. The family planning program is currently undergoing this process. Methods for cutting costs and stretching dollars are being explored so that services w ill not be reduced. The research reported here is a fe a s ib ility study of one method by which the Family Planning program might save dollars in order to maintain present levels of services in the face of declining budgets. This method centers on the group purchasing of contraceptives. The present chapter explores the problem of rising health care costs in our country and the need for financial retrenchment as programs are faced with decreased funds. Within their control, various options for maximizing family planning dollars in Montana w ill be discussed with ^Robert P. B ille r, "Leadership Tactics for Retrenchment," Public Administration Review (November-December 1980):605. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 3 the remaining portion of the paper devoted to exploring the fe a s ib ili ty of group purchasing of contraceptives. Purpose and Origin of the Federally Funded Family Planning Program In order to underscore the importance of maximizing federal family planning dollars, it is first necessary to explore the purposes of the program, the services i t provides, and the documented need and successes of those services. Congress enacted the Family Planning Services and Population Research Act of 1970 (Public Law 91-572) in order to enable persons who desire family planning care the access to the necessary services. This Act added T itle X, "Population Research and Voluntary Family Planning Programs," to the Public Health Service Act. The mission of T itle X, as outlined in the Program Guidelines, is "to provide individuals the information and means to exercise personal choice in determining the number and spacing of their 3 children." The Federal Register details further that a ll services must be voluntary without any coercion and must not be a prerequisite 4 for eligibility or receipt of any other services. The Alan Guttmacher In s titu te , in a paper prepared for the Planned Parenthood Federation of America, sees the government's decision to fund family planning services as a result of three concerns: a ll persons should be able to determine the number and 3 U.S., Department of Health and Human Services, Program Guidelines for Project Grants for Family Planning Services (1981), p. 1. 4 U.S., Department of Health and Human Services, Federal Register, 45 (Tuesday, June 3, 1980). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4 spacing of their children; the health and well-being of women and children should be assured; and an e ffo rt should be made to reduce 5 poverty and dependency. Although the program's f ir s t p rio rity is to serve low-income individuals, the basic goal of the program is to make medical family planning services available to persons from all socioeconomic groups who desire them but cannot or prefer not to obtain them from private