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This Week in Health Care Reform: March 1st, 2019

House lawmakers propose a further delay to an unpopular tax; pharma execs are made to defend rising prices; U.S. health care spending projections are released; and, a new bill targets hospital consolidation.

Week in Review

HIT Delay Bill: As anticipated, a bipartisan group of House lawmakers introduced legislation yesterday to delay the reimplementation of the harmful health insurance tax (HIT).  Co-sponsored by Reps. Ami Bera (D-California), Josh Gottheimer (D-New Jersey), Jackie Walorski (R-Indiana), and Kenny Marchant (R-Texas), the proposed bill would extend the moratorium on the HIT, preventing its return until after 2021 and saving health care consumers hundreds of dollars.  Their efforts mirror those of their Senate counterparts who, earlier this year, introduced similar bipartisan legislation.  Collectively, lawmakers would do well to focus their energies on delaying the HIT, at least according to new national polling, which shows the majority of voters oppose the tax and are looking to Congress to act accordingly.

Senate Hearing: On Tuesday, drugmakers were made to account for their pricing practices before lawmakers and an overburdened American health care system.  Appearing before the Senate Finance Committee, executives from seven pharmaceutical companies were taken to task for their role in rising drug prices.  As expected, the executives sought to deflect blame for high drug prices, instead, trotting out the same old talking points they’ve used for years to defend their ability to charge whatever they want for their products.  In seeking to justify their pricing tactics, they argued that these prices were simply the cost of innovation, while emphasizing the value of their medicines to patients, making sure to shift blame to other parts of the health care industry.  While the proceedings were more muted than many had hoped, Senators reproached the industry for their “morally repugnant” drug pricing practices.

Health Care Spending: Late last week, preliminary estimates were released detailing total health spending in this country.  According to the analysis from independent federal actuaries, Americans spent $3.65 trillion on health care in 2018, which is 4.4 percent higher than the previous year – a rate that continues to outpace broader economic growth.  Digging further, that translates into $11,121 per person.  Spending on hospitals, doctors, and other clinical services comprised the bulk of the total spend at 59 percent, totaling $2.16 trillion.  Separate analysis projects total U.S. spending on health care to reach $5.96 trillion in 2027, which would represent 19.4 percent of GDP.  Those projections, released by the Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary, forecast an average growth rate for national health expenditures of 5.5 percent per year, with the vast majority continuing to come from hospital care and other physician and clinical services

Hospital Consolidation:
As has been established, price growth for hospital services has played a major role in driving up overall health care costs.  However, what’s only starting to be examined and acknowledged is the contributory harm that the increased concentration of hospitals and health systems may cause to health care quality.  With this is mind, a new bill seeks to target hospital consolidation and protect consumers from higher costs.  Proposed by Rep. Bruce Westerman (R-Arkansas), the bill represents lawmakers’ latest attempt to address rising health care costs, specifically, by singling out the growing trend of hospital consolidation rapidly reshaping the contours of the health care delivery model in this country.  The proposed legislation builds on earlier efforts by Rep. Jim Banks (R-Indiana), who also introduced a bill that would crack down on these mergers.      

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