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This Week in Health Care Reform - July 11th, 2014

Drug prices (generally) and Sovaldi (specifically) threaten to explode health care costs; telemedicine continues to make inroads; millions of data inconsistencies are identified, though unresolved; and, the health care law remains as polarizing as ever.


Health Care Reform

The Price of Drugs: As we’ve exhaustively covered, the rising price of specialty medicines continues to cast an ominous shadow over the health care cost landscape.  The latest, and arguably, most glaring example being Gilead Sciences’ hepatitis C drug, Sovaldi, which, while being hailed as a breakthrough, has left just about everyone justifiably apoplectic over  its $1,000-a-pill price tag.  Still, there are some that believe the drug manufacturer’s pricing determination is merely a function of what the market will allow.  From a practical standpoint, though, this argument holds little sway, given what spending on Sovaldi is already threatening to do to budgets across the entire health care delivery spectrum.  In fact, one analysis projects that this drug, by itself, will impact overall health costs in the U.S. (estimated at $2.8 trillion) by .5 percent this year alone.  With the health care paradigm undergoing a generational change in this country, Sovaldi represents a worrisome outlier in the cost-containment conversation.  Luckily, the larger issue has not gone unnoticed and continues to draw interest from lawmakers, pharmacy benefit managers, and other stakeholders.  None too soon, it would seem, as the upward trend in pharmaceutical pricing has begun to infiltrate the generic drug market, as well.   

Telehealth Progresses:
With concern mounting over what is projected to be a shortage of primary care doctors in the not-too-distant-future, medical board officials have taken what they believe to be the first, necessary step in addressing that gap.  Recently, the Federation of State Medical Boards (FSMB), the governing body comprised of the country’s medical agencies charged with the licensing, regulating, and disciplining of doctors across the U.S., drafted a model law that would open the door for doctors licensed in one state to treat patients in other states, whether in person or electronically.  Their recommendation represents the biggest change to medical licensing in decades and would create a new, speedier pathway for doctors looking to practice medicine in multiple states.  This latest FSMB proposal builds on the organization’s most recent attempt to remove the regulatory barriers impeding the widespread adoption of telemedicine.  While there is still some resistance to those efforts, it’s becoming harder to deny the transformative possibilities offered up by telehealth.    

Enrollee Data Flaws:
New reports from the Department of Health & Human Services (HHS) indicate that as many as 2.9 million inconsistencies have turned up from consumer data obtained through the federal insurance exchange marketplace.  Performed by the Office of the Inspector General (OIG) at HHS, the analyses examined how the exchanges ensured the accuracy of applicants’ submitted information.  The reports marked the first independent look into how extensive the behind-the-scenes issues that plagued the rollout of the website last fall ultimately wound up being.  Millions of personal details submitted by consumers failed to match up with existing government records – a critical discrepancy given that much of that data was used to determine individuals’ subsidy eligibility.  While the inspector general stopped short of drawing a line connecting the two, the reports did highlight the Administration’s limited technical capabilities, which, at the time of their release, had led to 2.6 million of those inconsistencies being unresolved.

Midterm Impact:
Unsurprisingly, public opinion of the Affordable Care Act remains as politically divisive as ever.  What is surprising, though, is that, while Republicans almost universally oppose the health care law, the same can’t be said for Democrats, in terms of their support for it.  In the latest poll from the Pew Research Center, 94 percent of those on the right said that they disapproved of the law, while 86 percent of those on the left said they felt the opposite.  While few campaign experts will likely lose any sleep over those results, a separate survey might make them sit up and take notice.  In a poll conducted by, 68 percent of respondents said that the Affordable Care Act will factor into how they vote in this November’s midterm elections, leaving Republican and Democrat operatives, alike, scratching their heads on how best to approach the issue on the campaign trail.         

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Looking Ahead

Congress returns to town with its focus on November, even as some are more worried about what September might bring.  And, as planning gets underway for the second open enrollment period, many states are also beginning to wonder how they’ll pay for year 2 of the insurance exchange marketplace.

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