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This Week in Health Care Reform: January 12th, 2018

States edge closer to running out of CHIP funding; a nomination hearing is held for the next HHS Secretary; wild price variability for health care services is observed across local markets; and, a glimpse into what the future may hold for the delivery of health care services.

Week in Review

CHIP Funding: Faced with the near-term uncertainty surrounding funding reauthorization for the Children’s Health Insurance Program (CHIP), many states find themselves scrambling under the looming threat of budgetary shortfalls.  Federal funding for CHIP – which covers nearly 9 million children from working families who earn too much to qualify for Medicaid, but cannot afford access to private coverage – expired at the end of September last year.  Despite federal lawmakers’ efforts, including the $2.85 billion Congress approved in late December that was meant to fund states’ CHIP programs through March of this year, some states are projected to start running out of money by the end of next week.  While lawmakers in both chambers and in both parties have agreed in principle to renew funding for five years, disagreements over how to pay for it have complicated passage.  However, late last week, the Congressional Budget Office released updated estimates of what it will cost to fund the program over ten years.  Those projections ($800 million) are far lower than analysts’ original estimates ($8.2 billion) and pave the way for much easier passage, which could now happen as soon as next week.

Azar Nomination: Earlier this week, the Senate Finance Committee held a confirmation hearing to consider the nomination of Alex Azar to serve as Secretary of the Department of Health & Human Services (HHS).  Having already secured the endorsement of a pair of former HHS Secretaries, Tuesday’s hearing gave Committee members the opportunity to consider the nominee’s qualifications, while also gauging his approach to addressing the issue priorities (such as high-priced prescription drugs and Medicaid expansion) over which he would possibly have jurisdiction.

Minnesota Prices:
A new report highlights the alarming price variability that often confronts health care consumers across the country.  Released last week by the Minnesota Department of Health, the analysis compared the prices charged by hospitals for four common procedures.  The results: Depending on which hospital Minnesotans choose, they could be paying up to eight times more for those procedures.  For example, a total knee replacement cost as low as $6,200 in one hospital, but nearly $47,000 in another.  And, deliveries by caesarean section ranged from around $4,700 to nearly $23,000.  Stakeholders have begun to push back, though, enacting policy changes and implementing regulations that seek to connect consumers with the information that they need to make better, informed choices.

Future of Care Delivery:
Digital technologies have opened up new avenues for practical applications, such as telehealth, that continue to reshape our relationship with our health care.  While the temptation may be to assume that this transition has its roots solely in our shared and growing understanding of the role we each play in our own health care decision-making, it’d be a mistake to miss that what’s also driving this evolution is the growing patient movement towards consumerism.  From health monitoring devices and fitness tracking apps to electronic health records and virtual medical consultations, how, when, and where patient-consumers interact with the care delivery system is changing.  And, not to be ignored is the larger shift towards value-based care and away from traditional volume-based fee-for-service reimbursement models.      

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A new study establishes a correlation between socioeconomic demographics – also known as social determinants of health (SDoH) – and a patient’s vulnerability to chronic diseases and other clinical conditions.  The research also examined the impact that other behavioral factors (e.g., physical activity and smoking) have on overall population wellness.  Experts point to the findings as reinforcing the criticality of integrating SDoH in predicting the impact that external factors have on community health.  In fact, it’s believed that as much as 80 percent of patient health is determined by social factors.

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