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This Week in Health Care Reform: April 12th, 2019

A Senate hearing on rising drug prices gives PBMs the opportunity to remind everyone who’s really to blame; stakeholders urge lawmakers to change proposed rules to keep drugmakers honest; consolidation trends establish a link between hospital concentration and higher costs for consumers and health care workers; and, a new study finds fewer heart disease-related deaths in states that expanded Medicaid.

Week in Review

PBM Hearing: On Tuesday, the Senate Finance Committee held its latest hearing examining rising prescription drug prices, inviting executives representing the nation’s largest pharmacy benefit managers (PBMs) to testify.  Having found themselves increasingly the target of distractionary invective, the PBM leaders defended their important role in connecting American consumers with the affordable medicines upon which they depend.  Pointedly, they pushed back against the prevailing narrative that the rebates they negotiate on behalf of consumers are responsible for rising drug prices, countering that they are, in all actuality, “a powerful tool used to offset” skyrocketing list prices by pharmaceutical manufacturers.
Rebate Rule: Just one day prior, comments were due on the Administration’s proposed rule targeting safe harbor protections for drug rebates in the Medicare Part D prescription drug program and Medicaid managed care.  Not to be missed, a recent study makes the case that eliminating those rebates would only further benefit the pharmaceutical industry.  Largely echoing the PBMs’ testimony in Tuesday’s Senate hearing, a diverse range of vested stakeholders – including, both, hospitals and insurers – urged that the proposed rule be changed to, instead, include new requirements or incentives for drugmakers to lower their list prices.

Hospital Consolidation: A steady drumbeat has been building drawing attention to the outsized role played by hospitals in driving up overall health care spending.  As has been covered in previous newsletters, hospital prices have become the main driver of health care spending inflation in this country.  What’s only starting to get some scrutiny, though, is the relationship between hospital concentration and health insurance premiums.  A new analysis from Health Affairs sought to remedy that, leading researchers to discover that areas with the highest levels of hospital market concentration had annual premiums 5 percent higher, on average, than those in the least concentrated areas.  A separate study, approached the impact of health system consolidation from a different angle, looking, instead, at the effect of these mergers on wages.  That analysis confirms that, in less competitive labor markets, at a minimum, health care worker wage growth is suppressed.  Collectively, these findings only add to the growing body of evidence countering the argument that hospital consolidation leads to improvements in the quality of clinical care, and actually suggests that that quality is, in fact, worse as a result

Medicaid Expansion:
Last summer, new research came out showing how Medicaid expansion had helped reduce health disparities among different cancer groups.  Those findings built on previous research which suggested that expansion had also led to earlier cancer diagnoses.  Separately, researchers set out to examine coverage rates for patients who’d suffered a “major cardiovascular event” in states that had expanded their Medicaid programs under the Affordable Care Act.  Their data showed that those suffering from heart attacks and strokes were more likely to be insured.  They also pointed out that heart care patients were found to be gaining greater access to primary care and preventive medicine.  Finally, preliminary research presented at an American Heart Association conference earlier this week indicated that counties in states with expanded Medicaid coverage had fewer annual deaths from heart disease compared to those areas which had failed to expand their programs.      

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