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This Week in Health Care Reform - October 24th, 2014

Specialty drugs, beyond those meant to treat hepatitis C, threaten to overwhelm the health care system; despite regulatory barriers, telehealth continues to attract investment; the disruptive power of legal challenges to the health care law are still a cause for implementation indigestion; and, with Medicare open enrollment having begun, thoughts turn to the dangers ahead for the popular Medicare Advantage program.


Week in Review

Specialty Rx: Given the extreme turbulence inflicted upon the health care system by Sovaldi, Gilead Sciences’ breakthrough hepatitis C drug, it’s only natural that the aperture that had been fixed on this one drug’s impact would eventually be broadened to include the class of drugs to which it belongs.  Already, we’ve seen the turmoil that $1,000-a-pill Sovaldi has unilaterally caused state budgets, public programs, and private industries.  And, with Gilead’s higher-priced, next generation drug, Harvoni, having just made its way to market, it stands to reason that we now find ourselves at a tipping point for specialty pharmaceuticals.  In fact new research projects that this class of drugs, which currently represents only a fraction of filled prescriptions, will account for half of all pharmacy spending ($235 billion) by 2018.  Further, despite these medications only being used by 3.6 percent of the commercial population, the rising costs of these drugs led to an increase in total prescription drug spending last year to the tune of $392.2 billion, alone.  Given the ramifications of these numbers, it should come as no surprise that lawmakers have been drawn into the fray.  And, while Gilead executives and the pharmaceutical industry continue to offer up the twin talking points of long-term value and the price of innovation as a defense for their pricing mechanisms, some are beginning to question how, if at all, innovation benefits from these exorbitant prices. 

Telehealth Growth: As the practice of medicine slowly wraps its arms around advances in technology, we all stand to benefit.  With stakeholders increasingly drawn to the promise of increased patient access and enhancements to the delivery of care offered by telehealth, investment in the field has exploded (no small feat, given the trend of capital flowing away from the health care space in reaction to the health care law’s taxes and fees).  However, the complicated and restrictive web of regulations and laws governing its utilization keep the widespread adoption of telehealth just out of reach.  But, where some see barriers, others see mere speed bumps along the road to a fully-realized and deployed telehealth ecosystem.

Legal Havoc:
Despite having survived previous attempts to unravel its legal standing, the health care law finds itself, once again, on a collision course with opponents before the Supreme Court.  At issue, the legality of tax subsidies extended to individuals in states that elected not to establish their own insurance exchanges, an interpretation of the law that those opponents argue steps beyond how the law is actually written.  Recent contradictory decisions handed down by lower appellate courts in separate lawsuits, lead some experts to believe that the law is on shaky ground.  Whether or not this opinion is widely held, it’s hard to ignore just how high the stakes are as the law appears set to make a return trip to the Supreme Court.

Medicare Advantage Fight:
As seniors and beneficiaries weigh their options during the just-opened Medicare enrollment period, many will undoubtedly consider Medicare Advantage – and, given the popular program’s coordinated model of care and proven outcomes, it’s easy to see why.  However, funding cuts imposed under the health care law, in addition to annual proposed changes to its underlying payment structure, threaten to expose the millions of seniors and persons with disabilities who rely on Medicare Advantage for their care needs.  In recent years, plans have been able to insulate beneficiaries from these changes, but it’s widely expected that the next round of recommended cuts from the Centers for Medicare & Medicaid Services (CMS) will not only result in increased premiums and higher out-of-pocket costs, but further restrict choice, as more plans and providers are forced to exit the market.  Recognizing the threat, earlier this month insurance executives raised the alarm, speaking of the importance of fighting to protect Medicare Advantage from further cuts.  Lawmakers, too, have spent their time away from Washington, meeting with beneficiaries to hear more about how this important program improves their daily lives.  To learn more about the threats facing Medicare Advantage and the efforts to protect it, be sure to visit the Coalition for Medicare Choices.

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Looking Ahead

As preparations ramp up ahead of the second open enrollment period, new polling suggests that most Americans have no idea it’s nearly upon us.  And, less than two weeks from Election Day, more and more voters expect the GOP to take control of the Senate, while also hanging onto the House – but, some experts aren’t quite ready to call it a wave election, yet. 

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