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This Week in Health Care Reform: September 14th, 2018

Stakeholders urge lawmakers to remove barriers to effective substance use disorder treatment ahead of a critical vote on opioids; a new study projects what the return of an unpopular tax could cost health care consumers; hospital consolidations result in higher bills for patients; and, emergency rooms are targeted for their role in pushing health care costs higher.

Week in Review

42 CFR Part 2: Ahead of the Senate taking up its Opioid Crisis Response Act of 2018 on Monday, stakeholders are urging lawmakers to ensure that their final package includes a provision that better aligns an outdated regulation currently standing in the way of more effective treatment for substance use disorders (SUD).  That regulation, 42 CFR Part 2, is more than 40-years old and effectively separates a patient’s SUD records from the rest of their physical and mental health records.  Unfortunately, that only serves to limit a provider’s ability to access a patient’s comprehensive medical history, creating unnecessary, life-threatening barriers to integrated treatment.  Earlier this summer, the House of Representatives passed its own piece of legislation, H.R. 6082, which better aligns 42 CFR Part 2 with the robust Privacy Rule framework codified by HIPAA.  We need our Health Action Network members to reach out to their Senators ahead of Monday’s vote and urge them to include a similar provision aligning 42 CFR Part 2 with HIPAA, thereby removing barriers to life-saving SUD treatment in their final legislative package. ACT NOW!

HIT Cost: Senate lawmakers are also poised to take up legislation soon that would extend delay of the health insurance tax (HIT) into 2020.  As a reminder, the HIT was delayed for 2019, but that one-year suspension is slated to expire at the end of next year.  In July, lawmakers in the House passed a broad health care package of their own, which included an extension of the HIT delay a further two-years, through 2021.  Late last month, a new report from management consulting firm Oliver Wyman underscored the urgency surrounding the efforts to suspend the HIT.  According to their actuarial analysis, more than 142 million American families, small business employees, and seniors would be on the hook for $20.3 billion in additional premium charges in 2020, absent Congressional action – that’s nearly $50 million a day.  And, it’s not just commercial health plans that will be impacted as the reimplementation of the HIT is also expected to drive up costs for beneficiaries enrolled in Medicaid managed care and Medicare Advantage plans.  Be sure to keep an eye out for your chance to raise your voice in support of the ongoing efforts to further delay the HIT.

Hospital Consolidations:
While drug prices have justifiably received much of the focus regarding what’s driving rising health care costs, a new study takes aim at another driver of the increasing medical cost trend.  Performed by PwC’s Health Research Institute (HRI), the analysis points to a handful of factors contributing to the upward trajectory of costs, in particular, the proliferation of provider megamergers.  In fact, HRI estimates that by next year, the vast majority of most metropolitan hospital markets (93 percent) will be classified as highly concentrated.  Unsurprisingly, this has led to increased scrutiny of these consolidations.  And, it would seem, not without good reason, as a separate study – this time, published in Health Affairs – takes a closer look at how consolidation trends have impacted California’s health care system in particular.  In that study, researchers found that hospitals have acquired nearly 40 percent of physician practices in the state, resulting in higher bills for patients.  Tellingly, they also observed that in areas with high levels of concentration among hospitals and between hospitals and physicians, there was an estimated 12 percent increase in premiums on California’s insurance exchange marketplace from 2013 through 2016.

ERs Driving Costs:
As just highlighted, increased provider consolidation has contributed to rising health care costs.  But, attention has begun to turn to the role that emergency rooms have also played in pushing those costs up – specifically, the little-known regulations that have essentially granted hospitals what amounts to monopolistic control over emergency room patients, and, pointedly, what they’re able to get away with charging them.  However, a new study published in JAMA Internal Medicine shows a shift in how and where patient-consumers are seeking emergency care, with more of them trading in the hospital for urgent care centers for minor medical conditions.  Between 2008 and 2015, emergency room visits for low-acuity conditions dropped by more than one-third (36 percent), while visits to urgent care centers or calls in to telemedicine services grew by 140 percent.      

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