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This Week in Health Care Reform: July 27th, 2018

House lawmakers take up legislation further suspending an onerous health care tax; CMS proposes drug pricing transparency changes for Medicare; meanwhile, hospital spending is shown to exceed that of drugs as a share of overall consumer health care expenditures; and, a new survey highlights consumers’ attitudes towards digital health tools.

Week in Review

HIT Suspension: On Wednesday, lawmakers in the House of Representatives took up a broad health care package that included an extension of next year’s suspension of the unpopular health insurance tax (HIT) a further two-years, through 2021.  The measure passed, receiving votes from both sides of the aisle, as part of a larger bill that also expands health savings accounts (HSAs).  Recent polling reinforces voters’ overwhelming support for relief from the HIT, suggesting House lawmakers did well to find a way to protect the millions of Americans impacted by this burdensome tax.  A companion bill, introduced by Sen. John Barrasso (R-Wyoming), awaits consideration in the Senate.  Thanks to the hundreds of Health Action Network members who reached out to their Representatives this week to urge them to support extension of the HIT moratorium.

Rx Price Proposal: As covered last week, the Centers for Medicare & Medicaid Services (CMS) proposed changes to the Medicare program earlier this month that would allow for physician reimbursement for virtual visits.  CMS also trained its regulatory sights on rising drug costs, proposing new policies to make prescription drugs more affordable for some beneficiaries.  Specifically, CMS would adopt a new pricing model for drugs in Medicare Part B that would better align the prices paid by patients with the true cost of their drugs.  CMS also requested stakeholder comment on ways to promote greater price transparency as it relates to the cost of health care services for beneficiaries.  Taken together, the agency was enthusiastic about the proposed changes, believing that the new policies would not only enhance enrollees’ experience, but reduce program costs and ease the administrative burden in Medicare, as well.

Hospital Spending:
In a new analysis from CMS, per capita spending on hospitals was found to make up a much larger share of overall health care spending than that attributed to prescription drugs.  In fact, per capita spending on hospital care easily eclipsed spending on categories other than medicines, such as professional services and home care.  Further, while spending on drugs represents about 10 percent of health care expenditures in this country, hospital and doctor services constitute about half of all spending.  But, all that isn’t to say that the rising cost of drugs doesn’t continue to play a role in escalating health care costs.  While a good deal of attention has been paid to recent announcements by pharmaceutical manufacturers to curb their price hikes, experts caution that they’ve sung this tune before.

Digital Consumers:
Patients continue to assume greater responsibility over their care, driven largely by our health care system’s embrace of consumerism in benefit design.  Where this is most likely to be felt in the near future is at the intersection of the consumer experience and the deployment of digital health tools.  In a recent survey of nearly 650 health care consumers – 40 percent of whom self-identified as being on the ‘younger’ end of the spectrum – the overwhelming majority (92 percent) said that improving the consumer experience should be a top priority for health care organizations.  In particular, the survey goes on to reveal, patients have increasingly high expectations for the health IT offerings made by providers.  

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Former HHS Secretaries Kathleen Sebelius (who served under President Barack Obama) and Tommy Thompson (who served under President George W. Bush) recently penned an Op/Ed focusing on steps our health care system needs to take to overcome the inherent challenges in the transition from volume- to value-based care.

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