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This Week in Health Care Reform - October 28th, 2016

Gearing up for regulatory battle, the drug industry adds to its war chest; the unpopular health insurance tax continues to draw opposition; California releases report cards for health plans; and, a new study follows up on a report from last year on hospital pricing practices.

Week in Review

PhRMA's War Chest: Having found its member companies and its industry squarely in the legislative and regulatory crosshairs for a while now, the pharmaceutical lobby (PhRMA) is gearing up for the battles it anticipates having to wage on the other side of the elections.  In light of recent high-profile price increases to an array of life-saving drugs making their way into the public consciousness, it was reported this week that PhRMA has raised membership dues 50 percent for next year, adding some $100 million to the drug industry trade group’s already sizable coffers.  Facing considerable headwinds both in Washington and in state capitals across the country, PhRMA has worked to improve its image and that of the industry it represents and plans to spend heavily on TV advertising which will highlight the complex research requirements that go into bringing life-saving drugs to market.
HIT Opposition: Despite Congress’ having passed a one-year moratorium on the health insurance tax (HIT) for 2017, the unpopular fee continues to weigh heavily on stakeholders bracing for its reimplementation in 2018.  Given that the HIT impacts everyone – from middle-class families to seniors – it’s not hard to understand why more and more lawmakers have taken to voicing their opposition to it, calling for the permanent repeal of the HIT.  Most recently, Sen. Pat Roberts (R-Kansas), penned an opinion piece on behalf of some of those most affected by the HIT, including farmers, ranchers and others in the rural small business community.  As both the Chair of the Senate Agriculture Committee and member of the Senate Finance Committee, Sen. Roberts puts forth the need to alleviate the uncertainty that the HIT imposes on those least able to bear its financial burden.
California Grades:
As consumers’ comfort and familiarity with their health insurance needs continues to evolve, more tools are being developed to help them make better, informed choices.  In California, that’s seen tools like the California Health Care Quality Report Cards developed by the state’s Office of the Patient Advocate carry greater weight in the health care decision-making process.  The most updated version was released last week in advance of the looming open enrollment season in order to provide consumers with what they need as they prepare to shop for coverage.
Hospital Pricing:
Last year, a study documenting hospital pricing practices caused outrage across the country.  At issue, the fifty hospitals in the U.S. that researchers identified as charging uninsured consumers more than 10 times the cost of care.  With twenty of those hospitals located in Florida, this year, researchers at the University of Miami sought to determine whether the fallout from that study had been enough to pressure those hospitals into lowering their charges.  Alarmingly, not only did the researchers discover that the negative publicity hadn’t resulted in any price reductions, what they actually found was that, overall, the charges were significantly higher after the study went public.  In responding to their findings, researchers pointed to the lack of market competition, as well as the lack of hospital transparency as being some of the main factors leading to overcharging.  “There’s nothing to stop them,” said Karoline Mortensen, one of the study’s authors.  “They’re not being held accountable to anyone.”

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