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This Week in Health Care Reform - August 22nd, 2014

States find themselves at risk over the hard choices Sovaldi’s forced them to make; legal challenges darken the road ahead for the health care law; telehealth continues its inexorable march towards widespread utilization; and, a new study highlights the differences between traditional Medicare and the increasingly popular Medicare Advantage program.


Week in Review

Sovaldi Risk: As if states didn’t have enough to worry about, they now find themselves having to weigh the legal repercussions of their Sovaldi decisions.  At $84,000 for a typical 12-week course of treatment, nearly half the states have restricted Medicaid patients’ access to Gilead Sciences’ breakthrough hepatitis C drug.  It’s now looking like those decisions aren’t without litigious consequence, as patient advocacy groups are marshaling their resources to challenge these restrictions.  Essentially, the states that are likely to find themselves in court have had to limit how and where and to whom Sovaldi can be prescribed across their Medicaid populations – the end result being that Sovaldi is restricted to only those beneficiaries in advanced stages of the liver-destroying disease, which, opponents argue, is often too late.  How this ultimately plays out, remains to be seen.  But, with so many more high-cost specialty drugs on the horizon, some believe that a federal health policy solution may be just what the doctor ordered. 

Legal Threat:
On a separate legal track, lawyers challenging the subsidies offered through the state-run exchanges are arguing that they should be allowed to appeal their case directly to the Supreme Court.  Their complaint stems from the lawsuit they brought against the federal government on behalf of individuals, business groups, and states over the IRS rule that allowed for subsidies to be granted across all exchanges, rather than just the federally-run exchange, as originally laid out in the Affordable Care Act.  While a recent lower court ruling came out in their favor, the government has asked for a rehearing.  However, in a submission filed earlier this week, plaintiffs stated that the “uncertainty” of the rule was causing too much disruption and was “simply not tenable.”  With 4.5 million subscribers receiving subsidies through the exchanges now potentially exposed, it’s not hard to see why both sides are digging in their heels.

Telehealth Value:
Whether or not telehealth has reached the tipping point is up for debate.  What’s hard to deny, though, is that with so many stakeholders (insurers, providers, patients) clamoring for its utilization, telehealth is moving out of the shadows and asserting itself as a major influence on the ever-changing contours of the health care landscape.  One of the more important ways in which it’s doing so is on the value proposition that seems to march in lockstep with any discussion on ways to improve health care delivery in this country.  Specifically, telehealth is finding favor amongst health care providers as they seek to deliver enhanced care to a larger, more widespread patient population, at lower costs.  Through increased interoperability, more widespread (but, secure) data exchange, and enhanced care coordination, the promise of telehealth could potentially lead to $6 billion a year in health care savings, according to some estimates.

Medicare vs. Medicare Advantage:
An objective, reasoned analysis, comparing traditional Medicare to its ever-more popular offspring, Medicare Advantage, provides insight into why the latter may be a better value than the former.  Yes, Medicare Advantage is slightly more expensive, but new research from Harvard health economists, Joseph Newhouse and Thomas McGuire, shows that that added cost allows it to outperform Medicare across a variety of quality measures.  While they stop just short of declaring Medicare Advantage better than Medicare, they do believe that the evidence is mounting to support that claim, even going so far as to say that the payment cuts to plans may also prove to be “shortsighted.”

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Looking Ahead

With the midterms on the horizon, the health care law figures to play a role on the campaign trail – exactly how large a role, though, is up for debate

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