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This Week in Health Care Reform: March 16th, 2018

A new study highlights how much more we pay for health care in the U.S. – and why; lawmakers advance their efforts to stabilize the individual market; sticker shock over the latest drug price hike; and, the nation’s governors offer up the state of health care in their State of the State addresses.

Week in Review

Health Spending: We spend twice as much on health care in the U.S. than ten other high-income countries, according to a new study released on Tuesday.  Appearing in the Journal of the American Medical Association, the analysis goes on to show that, while Americans don’t use more services than people in these other places, overall health spending in this country still eclipsed what they spend abroad, largely owing to prescription drug prices, medical devices, and administrative costs, including physician and nurse salaries and medical claims processing.  In fact, health spending as a percentage of GDP in 2016 was nearly 18 percent in the U.S., far greater than what was measured in other countries, like Australia (9.6 percent) and Switzerland (12.4 percent).  Additionally, spending per capita on prescription drugs was $1443 in this country compared to as little as $466 elsewhere.  And, lest we think that our greater health spend translates into better health outcomes, life expectancy in the U.S. averages 78.8 years, about three years shy of the average of 81.7 years among the other countries studied.  Which is all to say that, not only do we not use more health care than other countries, we just pay more for it – and, the money that we do spend isn’t buying us better health.

Market Stabilization: Against the backdrop of independent analysis showing the potential impact to the individual market should they fail to enact legislation, Senate lawmakers continued to push forward in their efforts to advance a pair of stabilization bills.  That analysis, conducted by management consulting firm Oliver Wyman, showed that, combined, the two bills could lower premiums on the individual market by as much as 40 percent.  Leading the charge, Sens. Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington), who remain undeterred in their legislative quest to bring stability to the individual market.  The pair has co-sponsored a bill that would provide funding for the cost-sharing reduction subsidies for three years in exchange for giving states regulatory flexibility in their administration of the Affordable Care Act.  Preliminary analysis from the nonpartisan Congressional Budget Office, released this week, estimates that the Alexander-Murray bill alone would reduce premiums in the individual market by 10 percent next year and by 20 percent in 2020 and 2021.  Separately, Sens. Bill Nelson (D-Florida) and Susan Collins (R-Maine) co-sponsored a bill of their own that would give states $10 billion over two years to cover the cost of reinsurance programs.  While both bills have enough support to clear the Senate, there’s concern that that support may be lacking from House Republicans, who worry that the bills would only serve to prop up a health care law that they believe to be collapsing.

Painkiller Price Hike:
An Irish drugmaker found itself in the crosshairs in the wake of its jacking up the price of the painkiller Vimovo to nearly $3000 a bottle – 22 times more expensive than when the company first acquired the drug less than five years ago.  Compounding the sticker shock is the fact that the component pieces of the drug can be purchased separately for just $36.  That company, Dublin-based Horizon, acquired Vimovo from AstraZeneca back in November 2013, when the drug was listed at $138 per 60-pill bottle.  While undoubtedly alarming, Horizon’s price hike stands as merely the latest example of the pricing tactics employed by a drugmaker under cover of the notoriously murky pharmaceutical supply chain and only serves to increase pressure on stakeholders to find a sustainable model that reconciles affordability with the overarching imperative to deliver innovations to market.

State of the States:
By the end of February, the majority of the country’s governors had delivered their State of the State addresses.  Given their proximity to some of the challenges facing health care consumers in markets across the country, these speeches provide valuable insights into the health care priorities that will likely drive legislative, regulatory, and budget agendas at the state-level.  Unsurprisingly, Medicaid, behavioral health, and opioids dominated their addresses.      

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