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This Week in Health Care Reform: April 19th, 2019

New analysis shows exponential drug spending growth in Medicare; stakeholders weigh in on how to best address rising hospital prices; telehealth adoption is on the rise; and, in our pursuit of value, experts remind us that value extends beyond costs.

Week in Review

Medicare Rx Spending: According to a new Bloomberg Government analysis of Medicare Part D data released by the Centers for Medicare & Medicaid Services (CMS) last week, the cost for nearly two dozen drugs exploded more than 500 percent per dose between 2013 and 2017.  Those figures come on the heels of other data reported by CMS last month citing an average annual spending increase in Medicare’s prescription drug program of 10.6 percent over that same period.  Overall, Medicare spent approximately $155 billion on 42.7 million Part D enrollees in 2017, alone.  Alarmingly, the median per dose increase for drugs offered through the program was 28 percent, which stakeholders were quick to point out only serves to further expose pharmaceutical manufacturers’ anti-competitive, price-gouging tactics for which American taxpayers have to foot the bill.

Hospital Prices: A lot of the evolving conversation surrounding health care spending has focused on hospital price growth, especially as these costs have established themselves as being the primary driver of the spending trend’s upward trajectory.  With the focus now shifting to what can or should be done to address rising hospital prices, stakeholders from across the health care spectrum have taken to offering up their thoughts on the issue.  For their part, hospitals think that too much attention is being paid to the prices themselves, rather than whether or not any realized cost savings are transferred to consumers.  Providers and physicians believe that a better integrated, holistic approach to the administration and delivery of care would result in a better, more mutually beneficially appreciation of the financial burden that decisions ultimately place on patients.  Insurers point to the continued transition to value-based care models and better collaborative relationships with providers as being an integral component in bending the health care cost curve down.  And, employers say that they need to take a more active role in negotiating coverage and benefits packages on behalf of their employees.

Telehealth Utilization: A new survey shows that approximately 1-in-5 physicians are now using telehealth to treat their patients.  That number represents a significant jump from the 5 percent reported in 2015.  And, according to the results of the survey released by telehealth company American Well, that figure is only going to continue to go up.  By 2022, in fact, more than 60 percent of physicians who are currently not using telehealth indicated that are at least likely to start using it.  In exploring what may possibly account for the uptick in utilization, respondents cited a handful of benefits, such as, increased access for patients, the ability to attract and retain new patients, and greater flexibility in achieving a better work-life balance

Understanding Value:
As our focus on health care cost drivers grows, so, too, does our appreciation for the role that value plays in revolutionizing health care delivery.  Informing that transition to value-based insurance design is our larger embrace of consumer-centered care, which allows increased access and encourages greater patient engagement.  And, while the value conversation has, of late, largely centered around drug prices, experts are working to recalibrate that focus beyond just pharmaceuticals to include other therapies, diagnostics, and hospital services.    

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