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This Week in Health Care Reform: March 8th, 2019

Support lines up behind efforts to delay the HIT; despite the rhetoric, rising drug costs still come down to the price; why eliminating drug rebates hurts the wrong negotiating partners; and, stakeholders highlight the need to coalesce around a strategy to maximize the benefits from whole-person health initiatives.

Week in Review

HIT Delay Support: Last week, House lawmakers released a bipartisan proposal aimed at extending the current moratorium on the health insurance tax (HIT).  By way of reminder, the HIT is essentially a sales tax on health insurance, with experts predicting the tax to add more than $100 billion to the cost of health coverage, impacting nearly everyone, including hard-working families, small business owners, and enrollees in government-sponsored programs, such as seniors in Medicare Advantage and Medicaid beneficiaries.  In response to the House bill, stakeholders were quick to offer up their support, prompting lawmakers in the Senate to urge their leaders to take up their own bill – offered up earlier this year – to also forestall the return of the HIT.

Rx Price Projections: According to recent projections, spending on prescription drugs is expected to continue its upward trajectory.  In fact, over the next decade, that spending will increase at an accelerating rate, ramping up to as much as 6.1 percent growth by 2020.  Against that backdrop, stakeholders would like to remind policymakers, regulators, and patient-consumers that, despite all their inflamed rhetoric and diversionary tactics to deflect blame for the issue threatening to overwhelm our health care system, drugmakers ultimately bear the responsibility for a problem that simply comes down to price.

Rebate Rule: As recently covered, new rules released by the Administration seek to fundamentally restructure the prescription drug marketplace by eliminating drug rebates that are currently offered through Medicare Part D plans and in Medicaid.  Already, experts are warning that the rule threatens enrollees in Part D with higher premiums, with further implications for Medicaid beneficiaries, in addition to the states administering the program and managed care organizations.  Further, disruption to the market also runs the risk of restricting consumer choice.  Lawmakers have also weighed-in, opposing the proposed rule.  And, conservative voices have similarly spoken up, pointing out that focusing on rebates only hurts the wrong negotiating partners and is merely a distraction, as the overarching problem remains the price point set by drug manufacturers

SDoH Strategy:
Reducing health care costs largely hinges on our ability to better manage population health, while successfully integrating value-based reimbursement into care design.  This focus on whole-person health is firmly rooted in our growing appreciation of the role that social determinants of health (SDoH) play in positive health outcomes.  However, despite our best intentions, stakeholders argue that in order for us, writ large, to maximize the benefits offered by SDoH, we need to move away from our traditionally fragmented care delivery model and, instead, coalesce around a coherent, strategic approach that enables us to leverage population health initiatives in a systemic way in order to extract the full value from these programs.      

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