Health Policy Updates: January 7 2018

I loved this perspective piece in JAMA on pricing inefficiencies in US health care. Authors Austin Frakt and Michael Chernew point out several areas in which the US health care system pays different prices for the same care – including 340b drug pricing, and differential Medicare reimbursement between office-based and hospital care – and how these price distortions harm care delivery. Highly recommended, in understanding some of the structural problems in our health care system.

“…Implementing site-neutral payments, and reforming how the physician fee schedule is updated are examples of potentially simple, although admittedly politically difficult, policy changes…Nevertheless, changing fee schedules is difficult because politically powerful stakeholders, such as hospitals, that succeed under the current system (many of whom built business models based on the existing prices) vigorously oppose it. These groups often maintain they need the revenue resulting from overpriced services to accomplish a valued mission.”


Great article this week by Austin Frakt and Aaron Carroll in the NYTimes on US health care costs, pointing the finger at our comparatively exorbitant prices:

“That leaves what happens during health care visits and hospital stays (care intensity) and the price of those services and procedures…Though the JAMA study could not separate care intensity and price, other research blames prices more. For example, one study found that the spending growth for treating patients between 2003 and 2007 is almost entirely because of a growth in prices, with little contribution from growth in the quantity of treatment services provided.”

They also do some myth-busting regarding factors that are NOT contributing to rising costs:

“Did the increasing sickness in the American population explain much of the rest of the growth in spending? Nope. Measured by how much we spend, we’ve actually gotten a bit healthier.”


Great collection of charts that tell the story of health care spending growth in the US. To summarize? Health care spending has historically growth much faster than the US economy overall, though in recent years it has slowed and now only mildly outpaces GDP growth.


More pharmaceutical industry shenanigans, this time spending millions in lobbying efforts to block legislative efforts to curb drug prices:

“The group also aimed dollars at states where policymakers were considering drug-related measures such as price limits or greater price transparency, the document shows…It gave $64 million to a California fund established to defeat a proposal requiring state agencies to pay no more for drugs than does the federal Department of Veterans Affairs. Also supported by direct contributions from drug companies, the fund spent $110 million last year to defeat the initiative, California regulatory filings show.

 

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