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This Week in Health Care Reform - July 22nd, 2016

High drug prices hit Medicaid’s bottom line; interoperability standards are called for in telehealth; and, the evolving expenses of our health care system leave some wondering where the money goes.

Week in Review

Medicaid Rx: As we’ve seen, rising drug prices have laid waste to budgets across the health care spectrum.  Despite public outrage, the alarming trend continues unabated, impacting families, businesses, and public programs.  A new analysis seeks to shine a light on that spending and its impact on a specific vulnerable segment of the population: Medicaid and its 70 million beneficiaries.  Prepared by the Kaiser Commission on Medicaid and the Uninsured, the report found that Medicaid spent more than $27 billion on prescription drugs in 2014, a 24 percent increase from previous years.  Their analysis focused not just on the 50 costliest medicines most responsible for driving up costs, but also how frequently those drugs were prescribed.  Under that rubric, 45 of the drugs were considered high-cost items, partly because of their high frequency of prescription.  However, 17 were both frequently prescribed and also expensive.  Regardless of how it’s determined, experts continue to argue that the issue of rising drug prices, whether in Medicaid or in general, is one we can no longer afford to ignore.
Telehealth Standards: At each opportunity, telehealth has proven itself to be a facilitator when it comes to health care delivery.  However, for our health care system to fully realize the benefits of telehealth’s widespread application, an underlying infrastructure needs to be established.  With that in mind, a new focus on nationwide interoperability standards seeks to measure what’s already in place, while at the same time ensuring that our system has the requisite architecture to support new and developing technologies – a worthwhile investment, as resources continue to be allocated towards taking advantage of these advancements, while the practice of telemedicine is slowly woven into the existing med school curriculum.             
Health Care Spending:
Our evolving approach to health care delivery in this country has led to a greater emphasis on determining how we spend our health care dollars.  A new study appearing in Health Affairs takes this examination a step further, seeking to track down where exactly the money goes.  The analysis focused on three different sectors – hospitals, physicians’ offices, and outpatient care centers – across a range of years – 1997, 2002, 2007, and 2012 – and discovered that, despite labor remaining the single largest contributor to costs, the share of revenue spent on workers declined (modestly) across the observed dates.  Meanwhile, the fastest growing expense category across all of the sectors was for goods and services, which include pharmaceuticals, medical devices, and IT systems.  Researchers point to regulatory and market changes, as well as economic trends and the expanding role of technology, as all influencing our health care spending, leaving others to wonder what the future holds.

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