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This Week in Health Care Reform: July 28th, 2017

Senate Republicans’ health care reform efforts come to a head; stakeholders urge lawmakers to permanently fund cost-sharing reduction subsidies; drug prices are projected to continue their upward trajectory next year; and, the possible merging of competing hospital systems threatens to overwhelm rural communities in two states.

Week in Review

Senate Efforts: On Tuesday, Senate GOP leaders were successful in lining up enough support – behind the Vice President’s tie-breaking vote – to pass their motion-to-proceed, advancing their ongoing efforts to repeal and replace the Affordable Care Act.  What followed was an accelerated course in parliamentary procedure as the stopwatch began on the Senate’s 20-hours of debate, which led directly into a “vote-a-rama”, before culminating in the dramatic defeat of Republican’s “skinny” repeal bill early this morning.  With so much energy having been expended by lawmakers to get to this point, many are left wondering where they go from here.  In the immediate, there seems to be appetite to “move on” and for both parties to come together to find bipartisan solutions.

CSRs: Meanwhile, stakeholders continue to struggle mapping their way forward in an environment riddled with uncertainty, specifically around funding for the critical cost-sharing reduction (CSR) subsidies that help low-income individuals afford their co-pays, deductibles, and other out-of-pocket costs.  In seeking to underscore the important role that CSRs play in the stability and sustainability of the individual insurance marketplace, the American Academy of Actuaries and the National Association of Insurance Commissioners each sent letters to policymakers urging them to make the funding for these subsidies permanent.

Rx Projections:
A new analysis projects that health systems can expect drug prices to increase nearly 8 percent next year, owing largely to the surging prices of branded, specialty medications.  Published by Vizient in their July 2017 Drug Price Forecast, the report seeks to provide pharmacy leaders and health care executives with the latest analysis and insight on the factors driving pricing determinations in the pharmaceutical industry.  Among the highlights: Biosimilars are poised to hit the market in a big way; orphan drugs continue to exert disproportionate influence over the cost curve; and, the market could potentially see a reversal in the decline in drug shortages that has been observed over the past few years.

Hospital Merger:
The proposed combination of the two dominant hospital systems in Northeast Tennessee and Southwest Virginia continues to meet with opposition.  For more than two years now, Mountain States Health Alliance and Wellmont Health System have attempted to combine their competing hospital systems, submitting applications via an obscure legal maneuver known as a certificate of public advantage (COPA), which would essentially allow them to skirt federal antitrust scrutiny in favor of state oversight.  However, despite their claims that the combined hospital system would benefit the region (consisting of 13 counties that studies have placed among the nation’s least healthiest), health economists have yet to find an incidence where hospital consolidation didn’t also result in increased prices.  COPA notwithstanding, regulators at the Federal Trade Commission are urging the states to reject the proposed merger.      

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