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This Week in Health Care Reform: June 23rd, 2017

Senate leaders move a step closer to advancing their health care replacement bill; hospital execs point to drug prices as being responsible for the rise in inpatient drug spending; and, the medical cost trend shows signs of an upswing, driven largely by super-spenders.

Week in Review

Replacement Bill: Yesterday, Senate Republicans unveiled their anticipated “discussion draft” of the bill aimed at replacing the Affordable Care Act.  In seeking to put the bill to a vote before lawmakers head home for the 4th of July break, Senate Majority Leader Mitch McConnell (R-Kentucky) has intimated that the bill would be scored by the nonpartisan Congressional Budget Office early next week, in time to allow for a vote next Thursday.  Given the accelerated timetable at work, analysis, reception, and reaction can be expected to be fluid leading up to that vote.  Be sure to keep up with the latest by following the Health Action Network on Facebook and on Twitter.

Rx Inpatient Spending:
In a new survey of health care executives, the majority (64 percent) reported that inpatient drug spending at their organizations had significantly increased over the past five years, with a further 32 percent saying it had somewhat increased.  The vast majority of respondents (95 percent) cited rising drug prices as the main driver for the uptick in spending, followed closely by the increased utilization of specialty drugs (91 percent).  While the executives listed different strategies they had deployed to combat the issue – including, boosting use of generic drugs and asking pharmacists to identify expensive drug use patterns and suggest alternative treatments – nearly half (49 percent) said they expected drug expenses to increase by a minimum of 10 percent over the next five years, with 16 percent bracing themselves for a 30 percent spike over that same period.

Medical Cost Trend:
Even as the medical cost trend shows signs of leveling off – largely owing to the increased emphasis on value-based payment arrangements and coordinated care management – concern over health care spending persists.  And, it’s not hard to see why, given that that spending continues to outpace the economy, prompting experts to caution that future reductions in the medical cost trend will require a greater focus on price.  Despite the tapering, medical costs did still hit a new high of $3.4 trillion last year, or about 18 percent of total GDP – which translates into $1 out of every $6 being spent in 2016 going to health care.  Perhaps even more alarming is how highly concentrated that spending shook out, with estimates pegging 50 percent of total medical costs on just 5 percent of the population.      

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Foster care is finding itself the focus of increased legislative energies as a handful of new bills are considered in Congress, each looking to improve the system.  One of those bills – introduced in the House by Reps. Jackie Walorski (R-Indiana) and Danny Davis (D-Illinois), with the companion bill introduced in the Senate by Sens. Todd Young (R-Indiana), Kirsten Gillibrand (D-New York), and Chuck Grassley (R-Iowa) – seeks to modernize the current interstate placement system of children in foster care in order to reduce the delays and costs of paperwork.  A separate bill – introduced in the House by Rep. Kristi Noem (R-South Dakota) – takes aim at building support systems for parents undergoing drug treatment, as a means of keeping families together and children out of foster care.

You can keep up with the latest by following the Health Action Network on Twitter and by liking us on Facebook.