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This Week in Health Care Reform - September 5th, 2014

A new analysis shines a spotlight on the impact that specialty drug pricing is already having on efforts to control health care costs; tax complications stemming from exchange subsidies threaten to throw next year’s tax filing season into turmoil; telehealth continues to reshape the health care landscape; and, the federal government announces the appointment of a new CEO for their exchange marketplace.


Week in Review

CAHP Fact Sheet: As has been covered here, the price of specialty drugs continues to put overall health spending on an upward trajectory.  Case in point: Gilead’s breakthrough hepatitis C drug, Sovaldi.  Already, we’ve seen states, federal agencies, and even lawmakers, cite the pharmaceutical company’s decision to price the drug at $1,000-a-pill as unsustainable.  And, this week, a new analysis from the California Association of Health Plans (CAHP) illustrates exactly how much of a cost driver specialty drug spending has proven itself to be.  For instance, by 2020, it’s projected that spending on specialty drugs alone will total $401.7 billion, more than quadrupling from 2012’s $87.1 billion total.  Further, were the estimated 3.2 million Americans who suffer from hepatitis C treated with Sovaldi, total annual drug spending in this country would double from $300 billion to $600 billion.  Despite the pharmaceutical industry’s claims that these upfront costs represent backend savings – the argument being that the $84,000 for a typical 12-week course of treatment is far less than the cost of allowing the disease to advance to the point where the patient would need a liver transplant, which discounts the fact that many people suffering from hepatitis C don’t advance to that stage – the larger worry here is that Sovaldi represents merely the tip of the spear, as more breakthrough drugs look to make their way to market. 

Tax Concerns:
If you thought people were already confused by the health care law, experts believe that next year’s tax season is shaping up to make things a whole lot worse, especially for the millions of Americans receiving tax credits to help cover the cost of their health insurance premiums.  At issue, consumers’ actual 2014 income, which may, in fact, be higher than what they estimated at the time they signed up for coverage to help determine their subsidy eligibility.  In those instances, enrollees would not qualify for as much of a tax credit, meaning that any difference between what they initially qualified for and what they actually qualified for would have to be paid back, usually out of their tax refund.  Tax preparation companies say that most consumers are unaware of their risk and estimate that more than a third of recipients will owe some money back.  But, before we even get to that point, there’s growing concern that the new tax form – which will be required in order to file tax returns next year – won’t be ready in time.

Telehealth's Reach:
With so much attention being paid to what’s wrong with our health care system, there’s abundant appetite out there to explore some of what’s right.  Unsurprisingly, telehealth finds itself at the forefront of this discussion as advances in technology are increasingly applied to the delivery of health care.  Whether by eliminating logistical barriers between patients and physicians or improving efficiency as a means of lowering costs, the promise of telehealth is already reshaping the contours of health care.  Here are seven ways in which it’s revolutionizing care delivery. CEO:
Last week, it was announced that the oft-troubled federal insurance exchange marketplace would be getting a new leader ahead of the next open enrollment period.  In the latest of, what has been, a steady stream of management changes brought about under new Health & Human Services (HHS) Secretary, Sylvia Mathews Burwell, Kevin Counihan was appointed CEO of the federal exchange, having previously overseen the successful launch of Connecticut’s insurance exchange.  In addition to his operational and technological expertise, the hope is that having a single point of contact will ensure clarity of focus, streamlined decision-making, and accountability – all crucial elements heading into, what many are predicting will be, a challenging second year for the exchanges. 

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Looking Ahead

With the midterms poised to dominate the news cycle for the next couple of months, analyses abound as to which issues and key players voters should be keeping an eye on as we head into November.  Also, with the House and Senate both up for grabs, the spotlight focuses on which members, in both chambers, are the most vulnerable.  And, with Labor Day behind us, a quick look back at the top health stories from this summer. 

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