This Week in Health Care Reform - May 8th, 2015
The rising cost of drugs casts a darkening shadow across our health care landscape; barriers to the widespread adoption of telehealth continue to fall; 17 million more Americans now have coverage under the Affordable Care Act; and, Republicans pass their budget…with an eye on repealing the health care law.
Week in Review
Rx Concerns: Late last week, Medicare officials released their most detailed breakdown to date of prescription drug claims for beneficiaries under Medicare’s Part D program. Unsurprisingly, for those that have been following the discussion concerning the unsustainable trajectory of drug prices in this country, a small number of drugs was found to be largely responsible for driving up spending. Those costly drugs, for diseases such as cancer and multiple sclerosis, accounted for more than a quarter of overall spending on prescriptions for the country’s disabled and elderly population, despite representing just one percent of claims. Separately, a new study highlights just how much spending on oncology drugs alone has grown in recent years. Released by IMS Health, their Global Oncology Trend Report puts global spending on cancer drugs at $100 billion in 2014, an increase of 10.3 percent from the previous year and, perhaps most alarmingly, up $75 billion from five years earlier. Driven largely by expensive newer treatments, they project that spending on these drugs could rise to as much as $147 billion by 2018. The separate reports only add fuel to the raging conflagration already threatening to reduce our health care system to ashes. Already under the microscope for their lack of transparency (not to mention some of their more questionable pricing decisions), drugmakers have pledged more openness in their process. Whether or not this represents more than just a superficial image overhaul, many believe that it’s time Washington shifted its focus from innovation in the prescription drug space to the issue of cost.
Telehealth Expansion: At its annual meeting this week, the American Telemedicine Association reported that nearly half of all states now require that reimbursement for health care services delivered via telehealth be paid comparably to in-person services. That these parity laws continue to find legislative support in state capitals across the country is testament to telehealth’s growing influence, driven largely by the recognition of its power to transform health care. Experts continue to make the argument that the application of technology to the care delivery spectrum will only lead to better outcomes. For example, a recent pilot program by Phoenix-based Banner Health led to significant reductions in cost of care (down 27 percent) and hospitalizations (down 45 percent) for so-called “superusers” of health care services – the five percent of patients with multiple chronic conditions that account for up to half of all health care spending.
17M Covered: New estimates published this week put the number of Americans who have gained health insurance coverage since some of the Affordable Care Act’s more important provisions went into effect at just under 17 million. Performed by the RAND Corporation, their analysis determined that between September 2013, just prior to the exchanges opening, and February of this year, 22.8 million uninsured people obtained coverage, while 5.9 million lost coverage during that same period, resulting in a net gain of 16.9 million newly insured Americans. But, the study’s authors are quick to point out, “the vast majority of those previously insured experienced no change in their source of coverage.” Nevertheless, they go on to say that the law has “greatly expanded health insurance coverage.”
Budget & Repeal: Close on the heels of their House counterparts, Senate Republicans this week adopted their version of a budget framework, paving the way for an all-out assault on the health care law. Narrowly passing by a nearly party-line vote, the proposal outlines deep cuts on domestic spending and puts the Affordable Care Act square in its sights. While the resolution is non-binding, it provides lawmakers something of a blueprint as Congress considers government agency spending bills and serves as a fiscal platform heading into the next Presidential election.
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With a Presidential election closer than we think, experts at the National Institute for Health Care Management (NIHCM) have turned their attention to the perennial debate over reforming federal health entitlement spending, told graphically in this chart-story (which was also shared over on our Facebook page earlier in the week, for those of you paying attention).
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