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This Week in Health Care Reform - September 16th, 2016

A government report highlights the growing impact of drug prices on Medicare; yet another patient group is shown to benefit from telehealth’s reach; and, a new analysis links hospitals’ market power to inflated prices.

Week in Review

Generics & Part D: Last month, the Government Accountability Office (GAO) released its latest report detailing the waning impact that generic drugs – historically, a source of cost-savings – are beginning to exhibit on the overall cost curve in the Medicare Part D prescription drug program.  While on the surface, the GAO report found that, overall, generic drug prices fell in recent years, recent, significant price increases to certain generics have limited those savings.  For instance, despite a group of some 2400 generic drugs – including recent entries to, or exits from, the market – experiencing a 59 percent drop in their prices, the more than 1400 established generics – those already available and remaining on the market – fell by only 22 percent.  The “extraordinary” price increases observed in this category kept prices from falling further.  In fact, in more than 300 cases, those hikes amounted to at least 100 percent.  Whether or not the issue’s reached the tipping point, stakeholders continue to search for solutions.  Earlier this week, the American Enterprise Institute (AEI) hosted a panel discussion in Washington, bringing together economists, researchers, physicians, and representatives from the pharmaceutical industry in an effort to foster a conversation around the price of specialty drugs.  You can watch a replay of the AEI event here.  (The Health Action Network also live-tweeted from the discussion, so be sure to follow @HealthActionUS for further updates.)
Asthma Care:
For kids with asthma, treatment usually begins with a trip to the allergist.  Unfortunately, not every child lives close enough to one to make this a practical reality.  A new study, however, offers a solution.  Published by the American College of Allergy, Asthma and Immunology, the study revealed that over a six-month treatment period, all patients “whether in the clinic or by telemedicine” showed an improvement in their condition.  The results add to the growing body of evidence establishing telehealth’s ability to help our health care system overcome some of the traditional barriers to care – access and proximity – while also highlighting the value that patient engagement plays in bringing about better health outcomes. 
Hospital Prices:
A new study uncovers a correlation between hospital market share and inflated prices, in some instances, by 20 times or more.  According to researchers at John Hopkins University, exorbitant markups at hospitals varied based on the power and availability of services in a given area.  Published this month in Health Affairs, the analysis established that those facilities with greater regional market power averaged higher markups than their counterparts.  Researchers went on to suggest that improved transparency in pricing and increased disclosure of costs on medical bills and financial statements would help alleviate the growing problem, which, if left unaddressed, could potentially result in economic harm to patients.
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