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This Week in Health Care Reform: March 22nd, 2019

New analysis provides stark insight into how patients are managing rising drug costs; meanwhile, spending on specialty drugs is shown to be exponentially disproportionate to rates of prescribing; ER doctors charge significantly more when they’re out-of-network; and, the cost of diagnostic imaging overuse is examined.

Week in Review

Unaffordable Medicines: A new survey from the Centers for Disease Control and Prevention (CDC) shines a light on how patients are struggling to manage the cost of increasingly unaffordable medicines.  Released earlier this week, the CDC’s findings looked at the ways in which U.S. adults – nearly 60 percent of whom said they’d been prescribed a medication in the past year – tried to cut their drug costs in 2017.  Respondents said that they’d either skipped doses, took less than what had been prescribed, or delayed filling their prescription altogether.  Drilling further, 20 percent said they’d asked their doctors for cheaper alternatives.  And, more than one-in-ten didn’t take their medication as prescribed.

Specialty Drugs: Last month, a new report took an in-depth look at pharmacy spending trends.  In the commercial space, the per-member per-month spending trend on drugs between 2016 and 2017 totaled 18 percent – 4 percent higher than the five-year average.  Alarmingly, 15 percent of all patients drove 94 percent of that overall commercial spend.  Of particular note, though, was the finding that across the commercial market, Medicare, and Medicaid, specialty drugs accounted for more than 91 percent of the overall drug spend.  And, as it pertains to that spending in the Medicare and Medicaid space, new data released this week from the Congressional Budget Office (CBO) provides further details on how that disproportionate spending is driving up costs for both programs, the federal and state governments administering them, and for taxpayers.  According to the CBO analysis, the amount of money spent on specialty drugs in the Medicare Part D prescription drug program ballooned to nearly $33 billion in 2015 up from the $8.7 billion spent in 2010.  Meanwhile, that spending doubled in Medicaid to almost $10 billion over that same period.  To put that in further context, these drugs accounted for 30 percent of all spending in Part D and Medicaid in 2015 despite representing just 1 percent of all prescriptions.

Out-of-Network ER Docs: A lot of attention has been paid to the outsized impact that emergency rooms (ERs) are wielding on the larger health care cost curve.  Anecdotal examples abound of patients finding themselves at the mercy of outrageous charges stemming from trips to the ER.  Now, a new study brings to the forefront how much those costs can be when those emergency department physicians aren’t a part of a given hospital’s insurance network or employed by that hospital.  According to the study, in 2017 these out-of-network ER doctors charged 150 percent more on average than their in-network counterparts.  Further, these out-of-network charges resulted in an estimated price increase of $6 billion for privately insured consumers who visited an in-network emergency department.  And, more than one-quarter of the in-network visits in the study resulted in charges from out-of-network physicians

Cost of Imaging Overuse:
As we continue to grapple with how to address rising health care costs, our understanding of what’s driving those costs also grows.  Last year, research established that we spend twice as much on health care in this country than any other high-income county in the world.  Pointedly, heavy utilization of imaging technology was identified as a significant contributing factor.  Now, a new study from the National Institute for Health Care Management (NIHCM) takes a look at just how much of that diagnostic imaging is, in fact, inappropriate and, more pressingly, what that ends up costing us.  According to the NIHCM research, we currently spend well over $100 billion on diagnostic imaging procedures annually.  And, of that amount, up to 60 percent of MRIs provided to patients with non-traumatic pain were inappropriate.

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