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This Week in Health Care Reform - June 27th, 2014

Having watched the Sovaldi debate blaze into an inferno, Congress lumbers into the fray; the steady march towards widespread adoption of new health care technologies continues to draw interest; opponents know who’s to blame for the exchange website’s woes, while administrators look to extend its behind-the-scenes operatives; and, a new manager is appointed to lead implementation efforts.


Health Care Reform

Congressional Crosshairs: The growing chorus of voices raised in objection against Gilead’s new $1,000-a-pill hepatitis C drug, Sovaldi, finally added lawmakers to its ranks as, late last week, Democrats on the House Energy & Commerce Committee requested a formal hearing on the drug’s cost.  In a letter to full Committee Chairman Fred Upton (R-Michigan) and Oversight & Investigations Subcommittee Chairman Tim Murphy (R-Pennsylvania), their ranking member counterparts, Henry Waxman (D-California) and Diana DeGette (D-Colorado), called for a hearing into Sovaldi’s price and its potential costs for the Medicare prescription drug program, Part D.  Their request ups the ante for Democrats on the Committee who, earlier in the year, had requestedbriefing from Gilead on their pricing of the breakthrough drug.  Given all the attention Sovaldi’s drawn to itself, it stands to reason that Congressional interest would be piqued.  As further evidence, early last month, the formation of the new bipartisan House Affordable Medicines Caucus was announced – and quickly greeted by applause.  The group’s main focus will be to provide Members of Congress and staff the opportunity to use their influence to discuss ways to bring down the rising cost of prescription drugs as a way of keeping overall health care costs under control.  Meanwhile, experts continue to highlight the unjustifiable price tag of Sovaldi in the U.S., while worrying about the dangerous precedent it sets across the entire health care system.   

Health Tech Interest:
It was recently reported that, once again, when compared to other western, industrialized nations, the United States ranks dead last in the quality of its health care system.  At its most basic, what the survey tells us is that we not only have the most expensive system, but the least effective one, as well.  However, when you find yourself at the bottom of the pile, that usually means there’s no place to go but up.  And, what the report goes on to highlight is the role that health IT could play in getting us to the top.  Generally speaking, it’s hard to deny that the application of new technologies to the health care delivery paradigm represents a transformative reshaping of the health care landscape.  Understandably, there’s been some resistance, as fears persist over potential threats to data integrity and whether or not our ability to regulate advances in health IT is able to keep pace with their widespread adoption.  Nonetheless, lawmakers, unable to deny the critical role they play in smoothing over the bumps along the road to that embrace, have begun to apply their energies to doing just that.  In addition to holding hearings on the issue, the House Energy & Commerce Committee recently launched a new initiative aimed at bridging the gap between our laws and the pace of innovation.  Stakeholders, for their part, have also weighed in, reaching out to lawmakers, urging their support for telemedicine.  Government agencies have also stepped up, with the FCC and the VA both demonstrating their belief in the promise offered by telehealth.  Even the FDA, which enjoys a reputation of being slow-moving and stodgy, especially amongst technological innovators, has shown surprising (relative) responsiveness in adapting regulations to accommodate new advances.  Unsurprisingly, the continued facilitation of health IT adoption from the public sector has not gone unnoticed by the private sector.  The evolving landscape has opened up something of an arms race in the medical app industry, leaving some to caution that we not lose sight of what these technologies are supposed to be about.    

Website Woes:
It’s no secret that the launch last fall of the new insurance exchange marketplaces was not without some turbulence.  On the frontend, consumers encountered long delays, and that’s only if they were able to even get to the website at all.  Less discussed, however, were the problems on the backend, such as application transmission errors between the government and insurers, that, even now, continue to cause headaches across the system.  Having allowed some time for the dust to settle, a pair of Senate Republicans last week released a report pointing a finger at whom they believe was at least partially responsible for the troubled launch of  Through a dangerous cocktail of politics and poor management, the report, released by Sens. Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa), charges that meddling from the Administration not only delayed the construction of the website, but forced its launch when the system was barely functional.  Meanwhile, it was quietly announced this week that the Department of Health & Human Services (HHS) had signed a second extension with its Verizon-subsidiary vendor to oversee the management and operation of the exchange website.  That relationship had originally been scheduled to be transitioned to Hewlett-Packard last year, but was extended following the flawed rollout of and the overriding need to “stabilize the infrastructure.”

Having assumed her position atop the HHS org chart, newly established Secretary Sylvia Burwell’s first major action was to initiate a management overhaul for the federally-facilitated exchange marketplace ahead of the next open enrollment period.  To start with, a pair of new positions was announced, that of chief executive officer, to oversee the day-to-day management of the exchange, and a permanent chief technology officer.   But ahead of filling those positions, it was announced late last week that a new and separate post was not only being created, but had already been filled by Andy Slavitt, an executive from Optum, the contracting firm that had been hired to fix the faulty exchange website.  In his new post, Slavitt will serve as the principal deputy administrator at the Centers for Medicare & Medicaid Services (CMS) and offer a clearer line-of-sight into the agency’s programs.  While some opponents questioned his ability to remain objective – citing what they believe to be a clear conflict of interest – others are giving the new Secretary the benefit of the doubt, owing to her reputation as being a skilled manager.      

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Looking Ahead

Last week’s election of California Republican Kevin McCarthy to House Majority Whip leaves some asking what’s next for prospective legislation.  Meanwhile, with an eye on how November’s midterm elections could reshape the topography of Washington, others are beginning to wonder what a Republican-controlled Senate might mean for the future of the health care law.

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