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This Week in Health Care Reform: June 29th, 2018

Health care spending maintains its upward trajectory; vulnerable patients find themselves increasingly exposed to the harms of rising drug prices; and, the growth of telemedicine benefits multiple populations.

Week in Review

Spending Trend: In its latest Health Care Price Index, health analytics firm Altarum estimates health care spending growth of 4.7 percent for the first four months of 2018, slightly more than the 4.6 percent rate seen for all of last year.  While their data attributes the increase to economy-wide inflation, further analysis also points to a downward trend in utilization rates for health care services.  Meaning that we’re spending approximately the same amount on health care despite using less of it – indicators that would appear to be reflected in the growing share of state and local budgets being dedicated to the provision of health care and social services, at least according to a new report from Fitch Ratings.  Fitch analysts forecast that the current rate of spend will drive the proportion of these budgets spent on health care and social services up to 38.3 percent in 2025, up from the 30.7 percent last seen in 2015.

Rx Prices: Despite the increased rhetoric focused on bringing more accountability to the out-of-control costs of prescription drugs, pharmaceutical manufacturers continue to raise the prices of their products.  The latest to do so is Bayer, who, earlier this month, hiked the list price of a pair of cancer drugs by more than $1,000 per month – the second price increase for these drugs in six months.  And, they weren’t alone, as analysts point to dozens of other increases by drugmakers.  Meanwhile, a new report shows how rising drug prices are affecting another vulnerable population.  According to a recently released analysis from the Inspector General’s office at the Department of Health & Human Services (HHS), Medicare beneficiaries are filling fewer prescriptions for brand-name drugs, but still spending more on these medications.  The report places the blame on rising manufacturer prices and goes on to project that rising payments for these drugs “will continue to affect Part D and its beneficiaries for years to come.”  Among other findings from the report: Total program spending on brand-name drugs increased from $58 billion to $102 billion between 2011 and 2015, an increase of 77 percent, an alarming reflection of taxpayers’ growing burden.  Additionally, the percentage of Medicare enrollees spending $2,000 or more a year of their own money on these drugs doubled over this same period to 7.3 percent.

Telemedicine Growth:
Challenging the assumption that telemedicine adoption is limited to younger tech-savvy consumers, more seniors have expressed a willingness to give virtual care a try.  No doubt helped along by recent legislation expanding Medicare coverage for telehealth benefits, nearly 9-in-10 adults over the age of 40 said they would be comfortable using telehealth for themselves or an aging loved one.  With a growing body of research showing how telemedicine helps health care organizations improve patient satisfaction and engagement, it’s not hard to see why so many are warming to its embrace. 

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Last Friday, the U.S. House of Representatives passed bipartisan legislation aimed at combatting the opioid epidemic.  The measure, which passed by an overwhelming margin (396 to 14), represents the culmination of innumerable hearings and two weeks’ worth of legislative activity, which saw the lower chamber pass dozens of other opioid-related pieces of legislation.  Advocates were supportive of lawmakers’ efforts, but cautioned that much more work – not to mention funding – was still needed to begin to tackle the enormity of the issue’s scale and scope.  The measure now heads to the Senate, where similar legislation has also been the focus of legislators’ energies.

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