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This Week in Health Care Reform: June 8th, 2018

The latest Medicare trustees report warns of a worsening financial outlook for the program; a new drug trend analysis offers unique insights into ways to better manage costs; meanwhile, the rising cost of drugs prompts new fears in cancer care; and, spending at emergency rooms sees an uptick, despite utilization remaining flat.

Week in Review

Medicare Trustees: Medicare trustees sent out a bleak forecast in their latest checkup on the financial health of the program, warning that Medicare will become insolvent in 2026.  That estimate, presented in their latest report released on Tuesday, projects that the program will run out of money three years earlier than previously forecast.  Trustees blamed Medicare’s worsening financial outlook on adverse changes to both the program’s income and costs.  Separately, for the first time since 1982, Social Security is having to dip into its reserves to fund the program this year.  And, like last year, Social Security trustees estimate that both of that program’s trust funds would be depleted by 2034.

Drug Trend Analysis: A new analysis from IngenioRx seeks to establish a correlation between consumers’ ability to manage both medical and pharmacy drug benefits and lower costs.  The report takes a synchronistic view of drug spending, whether dispensed by a retail pharmacy or administered in a physicians’ office.  Previous trend analyses often fail to factor in the spending that happens under the medical benefit, where as much as 21 percent of total drug spending occurs.  The findings demonstrated that when employer-based health plans were able to manage both medical and pharmacy claims, overall drug costs increased by only 2 percent, as opposed to the 6 percent increase observed for those same drug costs for plans without that access.  Additionally, the report highlights the insights that accrue to consumers when plans are able to manage both medical and pharmacy benefits, including enhanced visibility into changes in medication use and drug costs.

Financial Toxicity:
While the side effects of certain cancer treatments have been largely recognized, a new risk to patients has begun to be talked about by oncologists and cited in medical journals: financial toxicity.  The prevailing concern is one of allowing patients greater access to the advances being made in cancer treatments without also subjecting them to the strain that often results from the sticker shock associated with the prices and affordability of these new medicines.  Experts warn that the high prices being imposed on cancer patients force too many of them to make their treatment decisions based on socio-economic factors rather than medical need.

ER Spending: N
ew data from the Health Care Cost Institute (HCCI) shows that emergency room (ER) spending nearly doubled between 2009 and 2016, despite utilization remaining largely the same.  In drilling into their analysis, researchers went on to establish that the severity of those ER visits and the prices associated with them went up.  Those two trends drove up average spending per person 98 percent, from the $125 average in 2009 to $247 in 2016, while overall ER use held steady.      

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