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This Week in Health Care Reform - December 4th, 2015

A new report shows health spending growth outpacing inflation; meanwhile, high-priced drugs continue to draw the ire of wary lawmakers and a weary public; and, Congressional Republicans find comity on their latest attempt to repeal the health care law.


Week in Review

Health Spending: On Wednesday, the Department of Health & Human Services (HHS) released its annual report on health care spending trends.  Their findings would seem to indicate that the slow to moderate growth we’ve seen in health care spending the past few years has come to an end.  Last year, health spending in this country topped $3 trillion, or $9500 a person.  Total spending grew 5.3 percent in 2014, faster than inflation and the largest jump since 2007.  This comes on the heels of last year’s measurement, which saw spending increase just 2.9 percent in 2013, the lowest rate of increase since the figure first started being tracked by the federal government in 1960.  As further context, the just-released figures have health spending accounting for 17.5 percent of the nation’s overall economic output last year.  Politics aside, driving that growth is a heady combination of major provisions of the health care law taking effect, such as Medicaid expansion, and, as has been increasingly covered, the rise in prescription drug prices.  Unsurprisingly, a separate poll from Gallup this week shows that health care costs continue to be a concern for Americans. 

High-Priced Rx: With the spotlight turning to the growth in health care spending, the focus, naturally, has also turned to the factors driving that growth, specifically, the rising prices of prescription drugs in the U.S.  While specialty medicines have drawn a lot of the attention – a new study found that the average annual retail cost of some of these drugs used to treat complex conditions, such as cancer, rheumatoid arthritis, and multiple sclerosis, now exceeds the median household income – massive price hikes are now being discovered across drug classes.  Elected officials have already begun to address the issue.  Recently, the Administration hosted a daylong forum to facilitate a conversation amongst stakeholders on what to do about rising drug prices.  And, this week, a new investigative report from Sens. Ron Wyden (D-Oregon) and Charles Grassley (R-Iowa) was released, denouncing the pricing strategy employed by Gilead Sciences, whose $1000-a-pill hepatitis C treatment, Sovaldi, helped usher in this urgent crisis.  According to the report, the drug manufacturer purposefully priced the drug where it did, not just in pursuit of higher immediate profits, but in order to secure a higher list price for that drug’s follow-up medication, Harvoni.  Pointedly, the report goes on to accuse Gilead of pricing Sovaldi, knowing that it would be out of reach for many patients, while causing “extraordinary problems” for government health programs.  Not that the public needed another reason to maintain their already low opinion of the pharmaceutical industry, as illustrated in a recent poll from Stat News and the Harvard School of Public Health, in which over half (53 percent) of Americans blamed excess pharmaceutical profit-seeking for high drug prices.

Repeal Vote:
As expected, Senate Republicans passed their bill aimed at repealing key provisions of the Affordable Care Act during Thursday’s ‘vote-a-rama’.  Having tried numerous times to bring such legislation to the floor, Senate Republicans had never been successful in overcoming Democratic filibusters.  But, by using the budget procedure known as reconciliation, they were able to pass the bill with a simple majority.  The House still needs to approve the measure before it can be sent to the White House, where the President is expected to immediately veto the bill.

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Looking Ahead

As the march to next November’s elections continues, experts consider what health policy issues Presidential candidates would do well to focus on.  And, before we turn the calendar to 2016, here’s a quick look back at health care in 2015. 

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