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This Week in Health Care Reform - June 17th, 2016

A bill seeks to establish a national telehealth model; a new report highlights the threat posed by out-of-control drug prices to Medicare and its beneficiaries; and, a correlation is found between hospital consolidation and higher prices.


Week in Review

Telehealth Model: As covered in a previous newsletter, a recent pilot project, Project ECHO (Expanding Capacity for Health Outcomes), has shown itself to be something of a blueprint for how our health care system can address one of the most persistent barriers to care: Access.  Undertaken by the University of New Mexico, Project ECHO was established as a continuing medical education model that integrates technology into the continuum of care delivery – for instance, connecting specialists with primary care physicians in remote, rural areas via interactive videoconferencing.  Having seen the project in action, a pair of lawmakers is seeking to establish the best practices learned from the pilot as a national telehealth model.  Reps. Michael Burgess (R-Texas) and Doris Matsui (D-California), introduced the bipartisan ECHO Act with the belief that integrating the Project ECHO model into local health systems would lead to a “more efficient health IT ecosystem”.

MedPAC Report:
A new report, released by the Medicare Payment Advisory Commission (MedPAC), draws attention to the deterioration of Medicare’s financial stability owing to the rising cost of prescription drugs.  In their report, MedPAC, a Congressional agency tasked with making recommendations on ways to improve or protect the Medicare program, reiterated its concerns that the rapid growth in drug prices continues to impact beneficiaries’ access to needed medications.  To underscore this, MedPAC drew attention to the fact that spending for Medicare’s prescription drug program, alone, ballooned by nearly 60 percent, from $46 billion to $73 billion, between 2007 and 2014, driven largely by high-cost beneficiaries, who tend to use the highest-priced medications.  While its recommendations weren’t universally embraced, that the issue needs to be addressed is something which stakeholders can agree on.

Hospital Consolidation:
The trend in hospitals merging has led to increased prices for consumers, at least according to the findings of a new study released last week.  Published in the Journal of Health Care Organization, Provision, and Financing, researchers pointed out that, despite hospitals’ claims that these combinations lead to savings and improved services from coordinated patient care and the elimination of inefficiencies, no evidence has been found that these potential savings make their way to the employers or insurers who ultimately pay for the care.  In fact, just the opposite appears to be true, at least according to what was observed in California, where two of the biggest hospital chains used their increased market power to raise their prices more than 20 percent higher than other hospitals in the state – a gap of nearly $4,000 per patient.

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