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This Week in Health Care Reform: October 4th, 2019

A new proposal is made to tackle surprise medical bills, as one state’s experience shows a potential path forward; Americans pay much, much more for their drugs than other countries; meanwhile, hospitals are shown to keep significantly more of the profits from physician-administered medicines than doctors' offices; and, the vast majority of people support Medicaid.

Week in Review

Surprise Medical Billing: Earlier this week, House Ways and Means Committee Chairman Richard Neal (D-Massachusetts) announced a proposal aimed at addressing the surprise medical billing issue that’s come to dominate the health care conversation.  In a letter to his Democratic colleagues, the Chairman proposed the creation of a new committee comprised of stakeholder groups, as well as the Departments of Health & Human Services (HHS), Labor, and Treasury.  That group would then be charged with coming up with regulatory recommendations to be issued by the Administration.  The move comes as House leaders launch their own investigation into private equity firms’ behind-the-scenes efforts to hamstring legislation that would have advanced a workable, pro-consumer solution to surprise medical billing, specifically by successfully lobbying for the last-minute inclusion of an arbitration-style model, which experts have shown would only lead to runaway costs and higher premiums.  Saliently, a new analysis of California’s surprise billing law found that fewer specialty services were now out-of-network, undermining the claim by doctors and hospitals groups that the establishment of a benchmark rate for out-of-network services (favored by most health policy researchers) would lead to diminished access for patients.

Americans' Rx Spend: An alarming new report released early last week by the House Ways & Means Committee shows that we pay nearly four times more on average for prescription drugs in this country than 11 other economically similar countries.  In fact, because most of those countries had average prices up to 30 percent lower than those here, it’s estimated that the U.S. could save $49 billion annually on Medicare Part D alone by pricing drugs at those levels.  By examining the price differences for 79 drugs sold in those 11 countries and the U.S., researchers determined that patients in Denmark had the lowest annual per capita spend at $318, compared to the opposite end of the spectrum, where U.S. patients paid the most at $1,220.

Hospitals' Rx Profits: According to a new analysis, hospitals rake in significantly more from physician-administered drugs – such as injectable and infused drugs – than do their counterparts outside of hospital settings, such as doctor’s offices.  While both groups treat pretty much the same amount of commercially-insured patients (53 percent for hospitals and 47 percent for standalone practices), hospitals pocket 91 percent of the gross profit margin that results from the administering of these medicines, compared to the 9 percent collected by doctor’s offices.  On top of that, hospitals are also eligible for discounts that aren’t offered to physician practices

Medicaid Support:
The Medicaid program continues to make a positive difference in the lives of vulnerable populations across the country.  While a lot of the rhetoric surrounding its administration has obscured the program’s efficacy, its popularity has been largely unaffected, as evidenced by new polling from the Modern Medicaid Alliance, which shows that the vast majority of Americans support the program.  According to the survey results, 87 percent of those polled said it is important to have a strong, sustainable Medicaid program.  Over 72 million Americans are currently covered by the program – nearly 20 percent of the entire country.  And, about half of those Medicaid recipients are children.  With so many depending on Medicaid, it’s not hard to see why the program’s supporters are so anxious to protect its legacy.      

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Last week, the Centers for Medicare & Medicaid Services (CMS) announced that it expected monthly premiums in the popular Medicare Advantage program to hit their lowest point in over a decade.  And, not only will beneficiaries be paying less, plan options will increase and benefits will expand.  As such, CMS also went on to project that enrollment will reach an all-time high of 24.4 million enrollees.

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