Chapter $4$ Case Study $-$ The Challenge of Increasing Prices

Case studies provide an excellent class method to explore chapter concepts in work settings. The

majority of the cases at the end of the chapters in this text come from real situations that have

been faced by healthcare managers. The intent of having you do these short cases is to engage you to gain a better understanding of the chapter concepts and to apply the concepts to develop reasonable answers to the cases$$ questions.$$ Similar to what you do in a real healthcare management role.

A recommended procedure for addressing the case studies is:

Read and examine the case thoroughly.

$-$ Decide what the key issue or issues is$/$are in the case.

Focus your analysis

$-$ What class materials are relevant to the case?

Uncover possible solutions applying class materials.

$-$ Brainstorm to generate different potential solutions$/$answers to the case questions.

$-$ Make sure that the solutions are tied back to class materials.

Finalize your submission.

$-$ Support your ideas and answers.

The Challenge of Increasing Prices

Chuck, an independent truck driver who had diabetes, had to make a tough choice when he was informed that his health insurance plan would no longer cover the brand of insulin, Humalog, that he had used for $17$ years to control his type $1$ diabetes. The change was precipitated by a spike in the price of Humalog$-$a $290$ percent cost increase over ten years. As a result, Humalog was taken off the insurance company's formulary, causing Chuck's copayment for a $90-$day supply of the drug to increase almost threefold, to $\backslash (\backslash$$ $500\backslash ).$ As he appealed the sudden and costly change in coverage, he decreased his dose of Humalog. Lacking the insulin he needed, Chuck became so sick that he had to go to the emergency room several times with dangerously high blood sugar levels. Being ill made it difficult for Chuck to continue driving, which lowered his income, making it even more difficult for him to buy insulin.