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This Week in Health Care Reform - January 30th, 2015

A fundamental shift is announced for the Medicare program; oversight is found to be lacking for health care website contractors; the GOP moves away (slightly) from full repeal; a new survey finds more patients are willing to embrace telehealth; and, prescription drug prices are found to have dramatically spiked in 2014.


Week in Review

FFS Makes Room for Quality: On Monday, Health & Human Services (HHS) Secretary Sylvia Mathews Burwell announced a paradigmatic change to how Medicare will be administered going forward.  The ambitious new effort will seek to reward quality in the delivery of medical care, while transitioning the program away from its traditional volume-based, fee-for-service payment model.  The fundamental shift in Medicare’s payment structure goes beyond the conceptual, bringing with it an explicit timeline, wherein value-based payments would see a 50 percent increase by 2018.  In real world dollars, that would see half of Medicare’s $362 billion in annual payments going to doctors, hospitals, and other providers that place an emphasis on cost containment and quality of care.  With so much of the health care reform conversation revolving around both of these pillars, some see this change to how Medicare is going to be paid as something of a death knell for fee-for-service. 

Lack of Oversight:
An investigative report was published last week in which the federal government was found to have skipped key contracting requirements when it awarded hundreds of millions of dollars in contracts leading up to the build-out of the troubled website.  Prepared by the Office of the Inspector General for HHS, the report found that officials not only failed to fully probe the past performance of one of the lead contractors in the site’s creation and subsequent launch, CGI Federal, Inc., but that agreements were also drafted that left the government responsible for whatever it cost those contractors to finish their work – which, in some cases, ballooned to three times the estimated cost.  Further, the report determined that only four of the six contracts that investigators examined were properly vetted before being approved.  It’s not hard to argue that the lack of oversight combined with poor planning resulted in a less than stellar rollout of the federal government’s exchange portal.  That being the case, it’s easy to see why GOP lawmakers were flabbergasted to learn that the IRS had also hired CGI Federal, Inc.  In a letter to IRS Commissioner John Koskinen, House Ways & Means Subcommittee on Oversight Chairman Peter Roskam (R-Illinois) sought assurances that taxpayer dollars were “being put to their highest and best use.”

Plan B: Whether or not you believe the tenor of the health care reform discussion in Washington is undergoing a needed shift, it’s beginning to look like at least some of the tactics surrounding it are changingRepublicans have shown signs that they’re slowly coalescing around the merits of incremental changes to the health care law, a not insignificant departure from the wholesale repeal rhetoric that had become their rallying cry since its initial passage (next week’s vote notwithstanding).  Still, with the looming Supreme Court challenge sowing so much doubt regarding the law’s future, Senate Republicans are busy preparing a legislative course of action, should the high court strike down the tax subsidies extended to individuals on the federal exchange. 

Online Visit Comfort:
A new survey finds that the majority of patients are growing increasingly comfortable with online doctor visits.  Commissioned by telehealth company American Well, the Harris Poll survey reported 64 percent of respondents expressing a willingness to use available technology to see a doctor for an online consult.  A separate and unrelated survey indicates rising consumer interest in the practice of telemedicine, as well.  That survey, conducted by Software Advice, reports that 75 percent of patients who have not used telemedicine previously are at least “moderately interested” in using it.  As telehealth continues to attract interest, comfort levels with its utilization allow for broader application of its practice and increased calls to simplify the onerous regulations impeding its widespread adoption.

Rx Price Spike:
According to new research, the average price of prescription drugs increased last year by 10.9 percent.  Compiled by Truveris, a research firm that tracks drug pricing, overall, the prices for brand, generic, and specialty drugs were found to have all risen significantly in 2014 compared to the year prior.  Of growing concern, especially as the trend in rising drug prices has come to dominate any substantive discussion on out-of-control costs in our health care system, there’s little room for optimism, as experts believe that prices will continue to increase by as much as 15 percent for the foreseeable future.

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Looking Ahead

Medicare Advantage stakeholders begin to circle the wagons ahead of next month’s annual proposed changes to the program coming out from the Centers for Medicare & Medicaid Services (CMS).  Learn the facts about Medicare Advantage and it’s easy to see why nearly 16 million seniors and persons with disabilities have selected the program for their health care needs.  And, once CMS releases its proposed changes to how Medicare Advantage is funded, keep an eye out for how you can get involved in the fight to preserve this critical program. 

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