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This Week in Health Care Reform - June 24th, 2016

House Republicans release their latest proposal aimed at replacing the health care law; stakeholders pursue a new tactic in seeking to rein-in out-of-control drug prices; and, spending on mental disorders is seen to make up the largest share of health care expenditures.


Week in Review

Task Force Proposal: As expected, House Republicans this week unveiled their long-promised replacement proposal targeting the Affordable Care Act at a press event in Washington.  Prepared under the auspices of Speaker of the House Paul Ryan’s (R-Wisconsin) Task Force on Health Care Reform, the plan represents the fifth component of the party’s six-part “A Better Way” agenda.  Unlike its numerous predecessors, this latest effort focuses on piecing together policy elements from the vast array of proposals circulated by conservative think tanks, campaign platforms, and other stakeholders from the past decade.  Among the items offered up by the new plan: Expanding health savings accounts; allowing people to purchase insurance across state lines; and, significantly increasing states’ Medicaid flexibility through either a block grant or a “per capita allotment”.  Not formally legislation, the Speaker acknowledged that the proposal was unlikely to displace the current law anytime soon.  In fact, the plan would keep some of the health care law’s more popular pieces in place, such as permitting children to stay on their parents’ coverage until the age of 26.  What the proposal does represent, the Speaker went on to say, is “a first-time-in-six-years consensus by Republicans in the House” on what they want to see replace the health care law.  Opponents, however, weren’t nearly as generous with their assessment of the GOP proposal.

Outcomes-Based Payments:
With anxiety mounting over the escalating prices of prescription drugs, stakeholders have begun exploring ways of bringing these costs under control – specifically, the pronounced shift to value, mirroring what’s already reshaping reimbursement across the health care system in general.  In a new survey from health consultant Avalere, a majority of health plans expressed interest in forming outcomes-based arrangements with drugmakers that tie payments to patient outcomes.  Under these agreements, plans could negotiate an extra discount from a pharmaceutical manufacturer if a medicine does not help a patient as much as expected.  Survey respondents were particularly interested in establishing these arrangements in regards to expensive specialty drugs.

Mental Health Spending:
A recent study released by Health Affairs puts mental disorders at the top of the list of most costly conditions.  According to their analysis, in 2013 an estimated $201 billion was spent on mental health, more than any other medical condition.  Further, the study’s author points out that the reduction in deaths from cardiovascular and cerebrovascular disease will likely drive up spending on mental health as more people survive to older ages, when disorders, such as dementia, are more prevalent.  Worryingly, this spending likely represents just the tip of the iceberg, given that only 41 percent of the 1-in-5 adults in the U.S. who experience mental illness annually received mental health services in the past year.

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Looking Ahead

A new medical cost trend report from management consulting firm PricewaterhouseCoopers was released identifying four influential forces to keep an eye on in 2017.

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