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This Week in Health Care Reform: June 7th, 2019

The overall drug cost burden is distributed unevenly amongst payers; hospitals’ kickbacks to doctors come under scrutiny; meaningful EHR use is shown to yield improved patient outcomes; and, the link between meeting social needs and better care delivery is explored.

Week in Review

Rx Burden: Total spending on prescription drugs reached $333 billion in 2017.  Recent analysis breaks out how that spending was spread across payers, with the vast majority being shared by employer-sponsored plans, Medicare Part D, and Medicaid.  Combined, these payers covered 82 percent of all prescription drug spending that year, with employer-sponsored plans bearing the heaviest load at 42 percent, followed by Medicare and Medicaid at 30 percent and 10 percent, respectively.  The analysis went on to reveal significant variation in what certain drugs cost.  For instance, the top five most expensive drugs accounted for 10 percent of all spending across the three groups.  Regardless of how those numbers shake out, stakeholders from across the health care spectrum agree that we’re well past the tipping point, insofar as needing to rein in these out-of-control costs.

Hospital Kickbacks: Our ongoing examination of health care costs has led to the growing recognition of the role that hospitals play in driving up those costs.  Against that backdrop, a closer inspection of the perks and incentives used by hospitals to attract and retain specialists has come under increased scrutiny.  It’s widely acknowledged that hospitals thrive on physician referrals.  Put another way, doctors generate business for their organizations with each test or procedure they order, and when they decide to admit patients overnight or send them to see a specialist at the hospital.  These efforts are supported by recruitment tactics that, critics argue, run contrary to federal self-referral bans and anti-kickback laws, which are designed to protect against financial considerations unduly influencing clinical decisions.  In fact, anecdotal evidence suggests that the losses incurred as a result of the extravagant salaries and perks used to recruit these specialists by hospitals are more than made up for by the services these specialists in fields such as cardiology, labor and delivery, and pain management go on to refer to patients.

EHR Use: While electronic health records (EHRs) have struggled to gain traction, a steady trickle of research has begun to link the increased utilization of EHRs to notable improvements in patient health outcomes.  Among the datasets examined by researchers in the California study: discharge information, patient demographics, dates of admission, and the types of procedures administered.  Researchers found that the overall length of stay decreased by an average of 3 percent among patients receiving treatments at hospitals having achieved meaningful use attestation of EHR functionality.  Further, those hospitals also had lower rates of readmissions

Social Needs:
As our appreciation of the numerous non-medical factors that influence whole-person health grows, so, too, does our understanding of just how these social needs being unmet can impact that status.  A new survey takes a look at the relationship between these social factors – such as economic stability, education, access to healthy foods, and reliable transportation – and a person’s ability to effectively manage their health.  Respondents who self-reported higher health care utilization or poorer health were also more likely to report multiple unmet social needs, as were those who reported higher ER or inpatient utilization.  Experts quickly pointed to the survey’s findings as reinforcing the importance of making investments to better address social needs in helping people overcome barriers that can prevent them from living healthier lives.      

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