Healthy Skepticism Library item: 461

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Publication type: news

Reputations of Pharmaceutical and Health Insurance Companies Continue Their Downward Slide June 22, 2004
2004 Jun 30

Full text:

ROCHESTER, N.Y. – June 22, 2004 – Our latest annual measures of how 15
different industries are rated in terms of “serving their customers” are not
good news for the health care industry. The ratings of both the
pharmaceutical and the health insurance industry have declined further this
year, continuing a downward slide, which we’ve seen almost every year since
we first started asking this series of questions seven years ago in 1997.

In this year’s survey, 44% of all adults think the pharmaceutical companies
are doing a good job for their consumers (and 48% think they are doing a bad
job). In 1997, fully 79% thought the industry was doing a good job. This
fell to 73% in 1998, 66% in 1999 and 59% in 2000. It remained virtually
unchanged in 2001 and 2002 before plunging again to 49% in 2003 and 44% in
2004. In total, those who see the pharmaceutical companies as doing a good
job for their consumers have fallen 35 percentage points over the last seven
years.

Health insurance companies were never as popular, during the last seven
years, as pharmaceutical companies, but in 1997 a 55% majority believed they
were doing a good job for their consumers. After falling a further four
percentage points this year, only 36% now give them good marks – 19 points
lower than seven years ago.

Some members of the public see a difference between managed care and health
insurance companies, even though virtually all insurance companies now sell
managed care, and it really is just one industry. Only 30% of the public
give managed care companies good marks, unchanged from last year, but 21
points lower than the 51% majority who gave them good marks in 1997. For
the last two years, managed care has been tied for last place with tobacco
companies.

Hospitals continue to be well regarded by most people, with 70% of all
adults giving them good marks, down marginally from 73% in the two previous
years. It is interesting to note that the huge increase in hospital costs
in the last two years has produced virtually no backlash when (we believe)
the principal reason for growth in hostility toward the pharmaceutical
companies is the big increase in the cost of drugs. One difference is that
many people have experienced big increases in their out-of-pocket costs for
drugs, but not for hospitals. Coverage makes a huge difference in public
attitudes.

Another difference is that the media have given a great deal of coverage to
drug prices and relatively little to hospital prices, even though increased
hospital costs account for a far larger share of total health care cost
increases. It seems that the consumer is scarcely aware of this.

These data come from a nationwide Harris InteractiveR survey of 979 adults
surveyed by telephone between April 8 and 15, 2004.