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This Week in Health Care Reform: December 8th, 2017

Stakeholders urge federal lawmakers to find a long-term funding solution for CHIP; a lack of transparency in health care pricing contributes to wasteful spending; ER monopolies leave patients paying the price; and, a focus on value continues to reshape our health care delivery model.

Week in Review

CHIP Funding: In advance of the current continuing resolution funding the government expiring today, federal lawmakers have spent the week hammering out the specifics of a new stopgap funding extension – which passed yesterday – that would keep the lights on for an additional two-weeks, in order to allow members to focus their efforts on reconciling the House- and Senate-passed versions of tax overhaul legislation.  Against this backdrop, stakeholders have kept an anxious eye on the ongoing negotiations surrounding funding reauthorization for the Children’s Health Insurance Plan (CHIP), which expired at the end of September.  The National Governors Association has pressed lawmakers to take whatever steps are necessary to renew funding, citing the disruptions that have already resulted owing to the funding lapse that continues to threaten access to care for millions of needy children.  While there’s some optimism that a resolution will be reached by year’s end, there’s also growing concern that federal officials’ inability to agree on how exactly to pay for a funding extension will only exacerbate the elusiveness of finding a long-term solution.

Epidemic of Waste: As highlighted in last week’s newsletter, waste in our health care system has become pervasive.  So much so, in fact, that some experts estimate that as much as half of the $3.4 trillion we spend in this country on care delivery is attributable to potentially recoverable waste.  With that in mind, it’s not hard to understand why many point to transparency as possibly helping our health care system address the issue.  However, a recent analysis by a team of researchers only serves to underscore how difficult it remains for consumers to access the kind of price information that would allow them to make better informed choices regarding their own care.  In their analysis, researchers used common search engines to compare the cost of common medical services, such as cholesterol tests and MRI scans in 8 different cities.  Of the more than 1,300 websites that turned up in their searches, only 17 percent of them provided geographically relevant price information.  The glaring lack of price transparency stands in direct opposition to consumers’ growing comfort, familiarity, and expectations when it comes to their ability to comparison shop online.

ER Monopolies:
Nearly half of all hospital-associated medical care in the United States is delivered through emergency departments, according to a new report.  Further, the percentage of care administered through ERs has grown significantly in recent years, with an almost 44 percent increase in visits observed over a 14-year period.  Researchers point to the data as being critical in helping shape our larger understanding of how health care delivery in this country has evolved.  They go on to say that the misuse of emergency departments for non-emergency medical care only takes away needed resources for actual emergencies.  Given their growing influence over the manner in which patients are increasingly seeking out care, it’s hardly surprising that companies have also sought to cash-in.  With such a lucrative revenue-stream having been identified, the trend-lines extracted from ER fees alone illustrate the monopolistic harms being exacted on our health care system by emergency departments in regions across the country.  For example, between 2009 and 2015, the price of these fees rose 89 percent – four times as fast as overall health care spending.  Additionally, spending on overall emergency room fees over that same period increased by more than $3 billion, despite data showing a slight decline (2 percent) in the number of emergency room fees billed.

Value of Value:
Health care expenditures are projected to balloon to approximately 20 percent of the Gross Domestic Product by 2025.  With that in mind, it’s becoming clearer that our relationship to our health care delivery model has to change.  For many, that shift has involved a transition away from fee-for-service and towards value-based reimbursement.  While these programs have been in place for years, their wider acceptance has only started to gain traction.  A new study highlights how far value-based care has come, with one group of stakeholders in particular.  Conducted by the American Academy of Family Physicians, the survey of family physicians found that more than half (54 percent) now participate in value-based payment models.  Of additional note, 50 percent of those surveyed said they believed that these arrangements encourage greater collaboration and care coordination.  Pointedly, respondents identified the lack of transparency and standardized performance measures as being among the top barriers to further implementation of value-based reimbursement models.      

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Earlier this week, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma was interviewed at a health care summit hosted by Forbes.  In that conversation, she laid out her policy agenda, which included drug prices, the opioid crisis, and modernizing the Medicare and Medicaid programs.

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