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This Week in Health Care Reform - April 7th, 2017

Modifications to the Medicare Advantage program are finalized; House Republicans press on in their attempt to overhaul the health care law; an alarming trend is uncovered in generic drug pricing; and, a new study apportions health care spending by utilizer.

Week in Review

Final Rate Notice: As expected, the Centers for Medicare & Medicaid Services (CMS) finalized their proposed changes to the underlying funding structure for the popular Medicare Advantage program this past Monday.  While initial analysis of CMS’ final modifications to the program – particularly methodological changes to risk scores and how health care services encounter data is used to calculate payments – indicated that the agency had moved in a positive direction, industry experts and insiders continue the critical work of figuring out how best to integrate these changes for next year, and in a way that minimizes disruption for the 18 million seniors and persons with disabilities enrolled in Medicare Advantage plans.  The decision by CMS followed weeks of intense advocacy by stakeholders from across the health care spectrum, including patient groups, providers, and insurers.  Lawmakers, too, threw their support behind these efforts, with close to 350 members of Congress coming together to voice their concerns about potential cuts to the program.  Leading up to the final decision, we asked Health Action Network members to reach out to their elected officials, urging them to contact CMS in support of Medicare Advantage – and you responded, sending more than a thousand letters.  We’re now asking those of you whose lawmakers signed onto letters of support to thank your members of Congress for standing up on behalf of the program and its millions of beneficiaries.
GOP Overhaul Efforts: With Congress looking to head out of town for recess, GOP leaders in the House spent the days leading up to the break negotiating behind-the-scenes in an effort to find a way forward on overhauling the Affordable Care Act (ACA).  Two weeks removed from having had to pull their latest bill, the American Health Care Act (AHCA), from a floor vote, the White House has kept busy, spending that time meeting with House conservatives, seeking to mollify centrist members of their own party who continue to be wary of the legislation.  With talks on the AHCA coming to a standstill, focus has turned to more immediate concerns – namely, the cost-sharing reductions that have become critical to the preservation of the health insurance exchanges.  Against this backdrop, new polling released this week shows support for the ACA reaching a new milestone as, for the first time, a majority of Americans (55 percent) now approve of the law.  Compiled by Gallup, that number tops the previous high (48 percent) last observed in 2012.  Meanwhile, a separate poll (this time from the Kaiser Family Foundation) shows that 75 percent of Americans want to see the Administration do what it can to make the ACA work.  While that sentiment was strongest amongst Democrats, 51 percent of Republicans expressed these same views.  With all this in mind, stakeholders point to a handful of items that policymakers can address in an effort to stabilize the market, including: Encouraging enrollment, embracing Medicaid, offsetting insurer losses, and assisting patients with high out-of-pocket costs.  Whether or not they can find agreement on any of these remains to be seen, but, what’s become pressingly clear is that doing nothing is not an option.
Generic Rx Prices:
Prescription drug pricing has, by necessity, become the focus of so much of the conversation surrounding cost-drivers in our health care system.  Understandably, a lot of the attention has been paid to new specialty treatments, many of which can cost patients hundreds of thousands of dollars.  However, new research points to an alarming trend quietly underway in the generic drug market.  While some of those drugs remain cheap, boasting comparatively modest price increases, the sheer volume in which these generics are prescribed and used, can quickly add up.  And, with generic drugs accounting for about eight-out-of-ten prescriptions filled in this country, it’s clear that the issue of high-cost prescription drugs is no longer limited to any one segment of pharmaceuticals
Health Care Spending:
A new study from Health Affairs illustrates just what makes crafting health policy so challenging.  According to their analysis, the top 1 percent of health care spenders collectively uses more resources than the bottom 75 percent.  With the political debate focusing on how to design a health care model that works for everyone, policymakers face the difficult task of coming up with a system that not only meets the needs of the sick, but is also attractive (and affordable) enough for those who are healthy and spend little on health care.      

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