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This Week in Health Care Reform - June 13th, 2014

Sovaldi’s various opportunity costs draw much needed attention to the unsustainability of the drug’s exorbitant price; advances in telehealth are poised to change the delivery of health care services; plans are drawn up to revamp the flailing health care website; and, the new head of HHS gets confirmed before being handed the keys.


Health Care Reform

The Cost of Sovaldi: Hepatitis C is an indiscriminate, liver-destroying disease whose reach extends across all population groups.  With an estimated 3 million Americans suffering from the virus, it’s no surprise that new treatments – let alone a breakthrough cure – would find a ready-made audience eagerly lining up at its door.  That level of unprecedented demand did not go unnoticed by Gilead Sciences, whose latest drug, Sovaldi, has found itself at the center of a policy and moral debate on the rising prices of specialty drugs.  Impact of the $1,000-a-pill drug to date has largely focused on private insurers and Medicaid budgets.  But, as touched on in last week’s newsletter, Sovaldi’s reach is now threatening to upend the Medicare program, too.  A recent Health Affairs blog post examines exactly how Sovaldi will affect Medicare’s prescription drug program, Part D.  Given the drug’s efficacy, it’s likely that most, if not all, Part D plans will cover Sovaldi.  However, with the 12-week course of treatment running at $84,000, plans, already in the process of submitting bids for 2015, will have to incorporate these costs into next year’s premiums.  What that means is higher costs for both enrollees and the federal government.  And, as the Health Affairs analysis elaborates, with some 350,000 Medicare beneficiaries suffering from hepatitis C, those costs will be significant.  To contextualize those costs, a separate analysis revealed that purchasing the drug for all of California’s Medicaid beneficiaries with the disease would eclipse what the state currently spends on K-12 and higher education alone.  As such, earlier this week the Medicaid Health Plans of America (MHPA), the national trade group that represents Medicaid managed care plans all over the country, sent a letter to the Office of Management and Budget (OMB) asking the agency to conduct its own analysis on the projected cost of Sovaldi across all federal programs.  With Gilead reaping in record profits off of its new drug, it’s not hard to understand why competitors are looking to tap into rival therapies.  But, beyond the hepatitis C market, experts worry that the pharmaceutical industry’s latest windfall might chart an unsustainable path forward for other treatments.   

Technology and the Future of Health Care:
In our increasingly connected world, a new study throws a spotlight on the growing role that social media plays in the traditionally sacrosanct physician-patient relationship.  As recently as 2011, two-thirds of physicians reported using social media for “professional purposes.”  But, a newly released report from the Federation of State Medical Boards (FSMB) indicates that that number is now “almost certainly higher.”  Given the growing prevalence of this online activity, FSMB believes that providers have an obligation to interact with their patients where they’re already spending the majority of their time.  The ubiquity of telehealth and the virtual practice of medicine are becoming increasingly difficult to ignore.  (Practically speaking, the market for telehealth is projected to grow at an annual rate of 56 percent through 2018, or to put it another way, to increase from last year’s $440 million to $4.5 billion.)  Accordingly, this week, the American Medical Association (AMA), the nation’s largest association of physicians, endorsed a new set of telemedicine guidelines designed to increase access and foster innovation, while also protecting the patient-physician relationship and improving care coordination and communication. 2.0:
The web portal that nearly derailed the launch of the federal insurance exchange marketplace last year is getting a makeover.  To say that didn’t perform to expectations would be putting it mildly.  Glitches on the frontend led to such miserable consumer experiences that the Administration officials in charge of its rollout and the vendors tasked with its execution were called up to Capitol Hill and made to explain themselves in a series of Congressional hearings.  And, now that open enrollment is closed, backend payment issues threaten to reinvigorate any residual angst over the troubled website’s well-documented failings.  With enrollment for 2015 expected to open on November 15th, some worry that with so many issues still needing to be addressed, the tight timeline raises the possibility of another flawed rollout.  Nevertheless, officials are optimistic that this time out, their targeted list of key upgrades should make for a much smoother consumer experience – cold comfort, however, to the millions of unprocessed Medicaid applicants still lingering in the system. 

Burwell Takes the Reins:
Last week, the Senate confirmed Sylvia Mathews Burwell as the new Secretary for the Department of Health & Human Services (HHS) with little resistance.  The vote, while not really ever in doubt, was not without some politicking, though.  Still, her confirmation marks the beginning of a new era, while simultaneously bringing to a close an arguably more acrimonious one.  

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Looking Ahead

The surprise defeat of House GOP No.2 Eric Cantor in Tuesday’s primary in Virginia set off a mad dash amongst party hopefuls to fill his post.  Meanwhile, in his Capitol Hill press conference the day after, the outgoing House Majority Leader made no mention of the long-touted Republican health care law replacement bill as he mapped out the legislative priorities for his final seven weeks in the position.  And, finally, decisions in two cases before the Supreme Court could dramatically impact the future of the Affordable Care Act.

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