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This Week in Health Care Reform - April 21st, 2017

Republicans inch closer to a revived health care bill; prices for one class of drugs are expected to outpace all others; and, telehealth savings get quantified.

Week in Review

GOP Health Care Bill 2.0: While its members have been back in their districts over the Easter recess, House GOP leaders have continued in their ongoing efforts to piece together a health care bill that earns the support of the party’s more conservative wing.  In remarks delivered earlier this week, House Speaker Paul Ryan (R-Wisconsin) said that Republicans were putting the “finishing touches” on their Affordable Care Act replacement bill.  Meanwhile, late last week, the Administration released final rules of its own targeted at stabilizing the insurance exchange marketplaces.  While those rules focused on a handful of items that stakeholders cite as contributing to the turbulence that has undermined the exchanges, they failed to adequately address funding for the cost-sharing reduction subsidies, the one issue that experts point to as being largely responsible for the uncertainty that continues to cast a shadow over the future of the marketplace.
Orphan Drugs: According to a new analysis, sales of orphan drugs are expected to increase 11 percent by 2022, more than twice the forecasted rate of growth for all other prescription medicines.  Orphan drugs refer to medicines that have been developed specifically to treat rare medical conditions, often with correspondingly small patient populations.  Given that these drugs offer limited profit potential for pharmaceutical manufacturers, drug companies are often reluctant to commit significant resources to developing these drugs.  However, as covered in a previous newsletter, the lucrative financial incentives codified in 1983’s Orphan Drug Act have resulted in a windfall for pharmaceutical companies.  So much so, in fact, that, alarmingly, it’s predicted that this class of drugs alone will account for more than 21 percent of all brand-name prescription drug sales worldwide in five years, up from the 6 percent measured in 2000.  In light of this class of drugs’ outsized (and growing) impact on the cost curve, lawmakers have duly pledged to shine the light of public inquiry on the issue.
Telehealth Savings:
Numerous metrics have been used to establish a cost savings baseline for the supplemental benefits that can be realized when telehealth is included in the overall care delivery continuum.  However, a new study thought to take a look at the practical savings that could result to consumers through the use of these services.  Specifically, researchers at the University of California (UC) Davis focused their attention on the potential savings to consumers’ driving costs.  Spanning two decades, the study examined UC Davis Health’s own clinical records, evaluating interactive video visits for more than 19,000 patients.  Collectively, researchers found that telehealth visits saved those patients nearly nine years of travel time, five million miles, and $3 million in costs.  While the study was regional in scope, it’s clear that the cost savings potential of telehealth has widespread applicability.  In a separate study performed by the NTCA-The Rural Broadband Association, researchers also found that the adoption of telehealth technologies in rural areas can result in significant savings for hospitals and the communities they serve due to lower transportation costs and fewer lost wages.      

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