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This Week in Health Care Reform - November 18th, 2016

Prescription drug price growth is measured at its highest level in nearly a generation; meanwhile, a powerful constituency adds its voice to the growing chorus advocating for greater use of telehealth; and, new research explores the impact that the trend in provider consolidation is having on health care prices.

Week in Review

Economic Indicators: In its latest Health Sector Economic Indicators briefs, the Altarum Institute measured its Health Care Price Index (HCPI) at 2.1 percent above the level seen at the same time last year, the fastest rate since August of 2012.  That increase was driven primarily by prescription drugs, whose own price growth of 7 percent was the highest rate seen since 1992.  Separately, the Centers for Medicare & Medicaid Services (CMS) released new data this week detailing which drugs cost the Medicare and Medicaid programs the most in 2015.  Unsurprisingly, both programs spent the most on the specialty drug used to tread hepatitis C (Harvoni), to the tune of more than $9 billion.  Given that the populations for these programs often live on low- or fixed-incomes, the rising cost of prescription drugs takes a significant toll on their budgets.  Further, as experts are quick to point out, as both these programs are government-funded, it’s not just beneficiaries who feel the impact of these rising costs as taxpayers are also made to shoulder the burden.
Moms Demand Telehealth: As the future of health care continues to reorient itself around developing technologies and data analytics, a new survey gives voice to a hitherto unsolicited constituency with as clear a line of sight as any into the health care needs of America’s families.  In a poll of more than 500 mothers, researchers found that the vast majority of those surveyed (80 percent) were interested in learning more about how telehealth could help them deal with non-emergency medical issues.  Further, with 65 percent saying getting a sick child to the doctor during the school year was a challenge, respondents viewed telehealth as a more convenient alternative.  And, as if to reinforce the critical role they play in the health care decision-making process, 84 percent of the women polled said that they are the most “health tech-savvy” members of their family.
Provider Consolidation:
There is a growing body of evidence establishing the impact that increased market share by hospitals and providers has on the prices that consumers ultimately pay.  A new study carries that exploration a step further, examining how health care prices are also affected by physician practice consolidation and by the growing vertical integration between these provider groups and hospitals.  Supported by a grant from the National Institute for Health Care Management (NIHCM) Foundation, researchers found a correlation between increased market share of hospital-owned physician practices and higher hospital prices.  In fact, depending on the specialty, prices paid by privately insured patients for office visits in counties with the highest concentration among physician practices was 8 to 16 percent higher than in those on the lower end of the concentration spectrum.  When viewed as a whole, researchers pointed to their analysis as being part of a larger worrisome pattern concerning growing provider consolidation, warning that, left unchecked, that consolidation would continue to confer appreciable market power to these groups resulting in higher prices for patients.

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Looking Ahead

Since the sign-up period began at the beginning of the month, more than 1 million people have purchased coverage through the insurance exchange marketplaces, including 250,000 new consumers and 750,000 returning ones, exceeding last year’s pace.

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Have a safe and wonderful Thanksgiving!