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HEALTH ACTION NETWORK - ADVOCATES FOR BETTER HEALTH CARE SOLUTIONS

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This Week in Health Care Reform: September 20th, 2019

House leaders investigate private equity’s role in surprise medical billing; a new analysis links hospital market concentration with higher costs; prices for rare disease drugs skyrocket; and, institutional barriers frustrate social determinants of health.

Week in Review

House Probe: As covered in last week’s Health Action Network newsletter, the revelation of the dark money interests behind the efforts to frustrate surprise medical billing legislation served to expose the nefarious role that private equity firms have secretly played in the issue becoming so widespread.  Specifically, two physician staffing firms, TeamHealth and Envision Healthcare, are behind the group that’s responsible for running ads against Congress’ attempt to protect consumers from surprise medical bills.  That group, Doctor Patient Unity, has spent $28 million on those ads, which only speaks to how much those firms stand to lose should legislation pass.  TeamHealth and Envision Healthcare supply emergency room physicians and specialists (e.g., radiologists and anesthesiologists) to hospitals – medical personnel that are among the most likely to be out-of-network and surprise medical bill patients.  Pointedly, both firms are backed by private equity.  Lawmakers didn’t take long to respond, launching an investigation this past Monday seeking to determine whether these private equity firms use out-of-network billing as an intentional strategy to drive up their rates.

Hospital Concentration: A new report builds on mounting evidence establishing the link between the rising cost of hospital care and increasingly concentrated hospital markets.  Released by the Health Care Cost Institute (HCCI), researchers examined more than 4 million commercial inpatient hospital claims from 2012 to 2016 and found that nearly three-quarters came from hospital markets rated as “highly concentrated”.  In fact, over two-thirds experienced an increase in concentration over that period, resulting in more lopsided markets by the end of 2016.  Hospital prices have been shown to be the main driver of health care spending inflation in this country.  And, with other research demonstrating how much higher prices are at hospitals with little to no market competition, there’s understandable concern that this trend will only get worse as concentration increases.

Rare Disease Rx Prices: According to a new analysis, the prices for drugs used to treat rare medical conditions are 25 times more expensive than traditional drugs – a 26-fold increase over two decades.  That study, released by AHIP last week, goes on to show that these so-called “orphan drugs” are now entering the market at astronomical prices, ranging up to the hundreds-of-thousands of dollars per patient.  According to their analysis, orphan drugs are a key driver behind the sharp increase in annual drug costs at launch, which have gone from nearly $9,800 in 1998 to over $106,000 in 2017.  Further, in that year, 7-out-of-10 best-selling drugs had orphan designations.  And, today, nearly 9-out-of-10 orphan drugs cost more than $10,000 per patient per year
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SDoH Challenges:
The widespread acknowledgment of the role that social determinants of health (SDoH) play in a person’s overall wellbeing continues to reverberate across our health care landscape.  Stakeholders find themselves grappling with the inherent challenges that come with incorporating the kinds of sweeping programmatic changes to our health care delivery and reimbursement model that better address SDoH.  However, despite the general consensus that social factors are an integral component in managing whole-person health, a new study finds that most providers don’t screen for SDoH.  According to the study published by JAMA on Wednesday, while most physician practices and hospitals do, in fact, screen their patients for at least one social need, the majority fail to do so for all five SDoH categories prioritized by the Centers for Medicare & Medicaid Services (CMS).  Specifically, only about a quarter of hospitals and just 15.6 percent of physician practices screened for all of CMS’ SDoH priorities – food insecurity, housing instability, utility needs, transportation needs, and interpersonal violence.  Evidence has established the benefits of increased social risk screening, linking failure to do so with poorer treatment adherence, worse health outcomes, and higher costs of care.      

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