More Than One-Quarter of High-Cost Medicare Patients Have Persistent High Costs Over Three Years

https://www.commonwealthfund.org/publications/journal-article/2019/jan/high-cost-medicare-patients-persistent-three-years

Medicare high costs of outpatient care and medications

The Issue

It has been well documented that a small portion of Medicare patients — just 10 percent — account for more than half the program’s spending in any given year. But how many of these patients continue to incur high costs over time? Using three years of Medicare claims data (2012–2014), Commonwealth Fund–supported researchers sought to determine the share of patients with persistently high costs, as well as the key traits that differentiate them from those who incur high costs in only one or two years — or never.

What the Study Found

  • More than one-quarter (28%) of patients who had high costs in 2012 remained persistently high-cost over the subsequent two years, while 72 percent were transiently high-cost — for one or two years.
  • Persistently high-cost patients were younger (66.4 years) than either the transiently high-cost (73.3 years) or never high-cost (70.5 years) patients. They were also more likely to be members of racial and ethnic minorities, eligible for Medicaid in addition to Medicare, and qualify for Medicare because of end-stage renal disease.
  • On average, in the first year, persistently high-cost patients spent $64,434, compared with $45,560 for the transiently high-cost and $4,538 for the never high-cost.
  • Persistently high-cost patients spent more in all categories of spending. Notably, they spent more than four times as much as transiently high-cost patients did in outpatient settings ($16,148 v. $4,020) and on drugs ($15,467 v. $3,841).

The Big Picture

The 28 percent of Medicare beneficiaries with persistently high costs represent slightly less than 3 percent of the overall Medicare population but account for nearly 20 percent of Medicare spending for the three years studied. Only 5 percent of their total spending was related to potentially preventable hospitalizations, suggesting that it may be of little benefit to focus efforts on reducing such incidents.

The Bottom Line

Medicare patients who incur high costs over several years spend more on outpatient care and medications than those with lower costs. Targeting interventions on those two areas could help reduce overall spending.

 

 

Insurers blame specialty drug costs for rising premiums. This report from California shows why

https://www.fiercehealthcare.com/payer/report-prescription-drug-costs-driving-up-insurance-premiums?mkt_tok=eyJpIjoiWWpZNU4yTTROREExWlRsaSIsInQiOiJjZHh5VGpsWnhSN3RLQjNHbDNsWUROQkg0Y2EzOFZ3OFY2Z0Z1a1dFNVhwNkRXNTE3dTNMK0U2TloxUnFKT1RDU29cL3NEZ0gwMTdJbUptaTFxamFTbFg1cG1PbFRHbTQ2TmQzRHhYZERqcUZXQ1B0YVF1aW1QODBDb2g3aHA1cEwifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Drugs and money sign

Specialty drugs made up about 3% of prescriptions in California in 2017 but accounted for more than half of the prescription drug spending that year, according to new report that compiled drug spending from nine insurers in that state.

According to the first Prescription Drug Cost Transparency Report released by the California Department of Insurance, there were about 270,000 specialty prescriptions compared to about 1.4 million brand-name prescriptions and about 8.9 million generic prescriptions in 2017.

Insurers—including Aetna, Anthem, Cigna, Kaiser Permanente and UnitedHealthcare—reported spending upwards of $606 million on specialty drugs, $271.3 million on brand-name drugs and $172.6 million on generics in 2017.

Among other findings, the report said:

  • In all, insurers reported that per member per month drug spending reached about $81 last year, or about 16.5% of premiums in 2017, comparable to per member per month spending of about $76 or 16.3% in 2016. Total health insurance premiums per member per month were about $491 in 2017, compared to about $470 in 2016.
  • Specialty prescriptions on average cost about $2,361 per prescription compared to about $236 for brand-name prescriptions and $29 for generics. Members typically pay about $113 per specialty prescription while insurers said they pay about $2,248 per specialty drug. They report members pay about $45 per brand-name drug, while insurers pick up $192 of the tab for brand names. And they report members typically pay about $10 for generics on average while insurers pay about $19.
  • The top 25 most frequently prescribed drugs in California represent about 40% of insurers’ overall spending. Specialty drugs make up about 1.3% of the 25 most frequently prescribed drugs and about 20% of insurers’ spending (resulting in a 3.7% impact on health insurance premiums.) In comparison, brand-name drugs make up about 6.8% of the most frequently prescribed drugs and about 11% of insurer spending (and a 1.2% impact on health insurance premiums). Generics represent about 32% of the most frequently prescribed drugs and 4% of the cost to insurers (and about .3% impact on premiums.)

The most frequently prescribed specialty drugs included HIV drug Truvada, immunosuppressant Humira, insulin therapeutic Humalog, diabetes drug Victoza and hormonal agent Androgel.

The most costly specialty drugs by total annual prescription drug spending included Humira, arthritis drug Enbrel, Truvada, psoriasis and psoriatic arthritis drug Stelara and multiple sclerosis drug Copaxone.

 

 

 

Health Care Is on Agenda for New Congress

https://www.scripps.org/blogs/front-line-leader/posts/6546-ceo-blog-health-care-is-on-agenda-for-new-congress

After months of polls, mailbox fliers, debates and seemingly endless commercials, the mid-term elections are over and the results are in. As predicted by many, the Democrats have won back the majority in the U.S. House of Representatives, while the Republicans have expanded their majority in the Senate.

This means that for the first time since 2015 we have a divided Congress, which leaves me pondering the possible consequences for Scripps Health and the broader health care sector.

Without a doubt, health care will be on the agenda for both parties over the coming months. That became apparent during pre-election campaigning as voters on both sides of the political spectrum voiced concerns about a wide range of health care-related issues.

Exit polls found that about 41 percent of voters listed health care as the top issue facing the country, easily outpacing other issues such as immigration and the economy.

That’s really no surprise. Health care affects all of us, whether we’re young or old, poor or well off, or identify as more conservative or more liberal. And despite all of the division around the country, most Americans seem to agree on at least a few things – health care costs too much, more needs to be done to rein in those costs, everyone should have access to health insurance, and pre-existing condition shouldn’t be a disqualifier for getting coverage.

When the new Congress convenes on Jan. 3, a wide range of health care issues will be on the agenda.

Here are a few of the issues that I’ll be watching as our lawmakers adjust to the reshuffled political dynamics in Washington.

  • Repealing elements of the Affordable Care Act (ACA) is likely off the table now that Democrats control the House. Previously, House Republicans had voted to change a number of ACA provisions that required health insurance policies to cover prescription drugs, mental health care and other “essential” health benefits. But even before the election, Republicans had reassessed making changes to measures that protect people with pre-existing conditions as that issue gained traction with voters.
  • Efforts to expand insurance coverage and achieve universal health care will likely increase. A number of newly elected Democrats vowed to push for a vote on the single-payer option, but other less politically polarizing options such as lowering the eligibility age for Medicare and expanding Medicaid likely will draw more support.
  • While Republicans used their majority in the House to reduce the burden of government regulations in health care and other industries, Democrats might use their new-found power to initiate investigations on a wide range of matters such as prescription drug costs.

We could see some significant changes take place at a more local level as well. On Tuesday, voters in three states approved the expansion of Medicaid, the government program that provides health care coverage for the poor.

And here in California, we will be watching newly elected Governor Gavin Newsom to see what plans he will put forward for expanding health care coverage in this state.

At Scripps, we believe everyone should have access to the health care services that they need, and we have worked hard in recent years to do all that we can to bring down the costs of delivering that care to our patients.

In this new world of divided government, gridlock likely will prevail and President Trump’s initiatives will struggle in the Democrat-controlled House. Everyone will be focused on positioning themselves and their party for the next presidential and congressional elections in two years.

Compromise and bipartisanship are clearly the best options for addressing the health care challenges we now face in ways that have the best chance to win wide public support.

If Democrats in the House fail to reach across the aisle to Republicans or try to make too many changes too quickly, they surely will face many of the same pitfalls that confronted Republicans over the last two years.

 

 

Public blames everyone for high health costs

https://www.kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-late-summer-2018-the-election-pre-existing-conditions-and-surprises-on-medical-bills/

Health care costs remain a leading issue ahead of this year’s midterms, and voters have plenty of blame to go around, according to the Kaiser Family Foundation’s latest tracking poll.

  • Kaiser asked its respondents whether certain factors are a “major reason” health care costs are rising. (There could be multiple “major reasons.”)
  • Blame for the potential political culprits — the ACA and the Trump administration — was split about evenly.
  • But there’s a broader bipartisan agreement that industry is to blame: At least 70% faulted drug companies, hospitals and insurers. Doctors caught a break, at 49%.

Partisanship reigns, though, on the question of whether President Trump will help.

  • A mere 13% of Democrats are at least somewhat confident that Americans will pay less for prescription drugs under the Trump administration, compared with a whopping 83% of Republicans. Independents generally share Democrats’ skepticism.
  • Roughly a quarter of Democrats and two-thirds of Republicans, think Trump’s public criticism of drug companies will help bring down prices.

Surprise hospital bills haven’t attracted the same political uproar as prescription drug costs, but the Kaiser poll provides more reason to believe they could be the next big controversy.

  • 67% said they’re “very worried” or “somewhat worried” about being unable to pay a surprise medical bill, while 53% fear they won’t be able to pay their deductible and 45% are afraid of the tab for their prescription drugs.
  • 39% experienced a surprise bill in the past year.

 

 

 

U.S. Prescription Drug Costs Are a Crime

https://www.bloomberg.com/view/articles/2018-02-27/prescription-drug-costs-in-the-u-s-are-a-crime

 

And just tweaking the system won’t solve the problem.

President Donald Trump has complained that U.S. drug companies are “getting away with murder.” For once the hyperbole is forgivable: It suggests he takes the problem of drug costs seriously and might be willing to do something about it. Unfortunately, his administration’s efforts up to now suggest the opposite.

The White House has proposed tweaks to government health-care programs. Some of these measures are worth trying — they could help at the margin — but tweaks aren’t enough. The underlying problem is drug prices that are indeed murderous: Americans and their insurers often pay many times what people in other developed countries pay for the same medicines. That’s what policy needs to confront.

The administration wants insurers participating in Medicare’s prescription-drug program, for instance, to share more directly with beneficiaries the discounts they arrange with drug companies. Out-of-pocket drug costs for some people on Medicare would be capped, and reimbursement for medicines administered by doctors would be trimmed. In Medicaid, a handful of states would be allowed to decline coverage for certain drugs, increasing their leverage in negotiating discounts.

Such changes could lower drug spending for some Medicare and Medicaid beneficiaries. But they miss the main point by shifting costs within the health-care system rather pressing down on the costs themselves. Unless this changes, the U.S. will continue to be overcharged for its drugs.

The companies often say that high U.S. prices pay for research into new lifesaving products. Leaving aside why U.S. patients should be asked to shoulder that burden for the entire world, the evidence shows that the argument is false: The premium companies collect in the U.S. market is substantially greater than the amount they spend on research and development.

State legislatures have aimed closer to the mark with efforts to expose the math behind price increases. Vermont, Nevada and California have new lawsrequiring that drug companies provide cost breakdowns to justify big price hikes on popular drugs (including, in Nevada’s case, drugs for diabetes). Several other states are considering doing the same.

Even if these laws stand — they’re being challenged in court — transparency gets you only so far. Pushing prices down will take stronger efforts from the federal government to increase competition.

One good way to do that is to speed the uptake of generics. Scott Gottlieb, commissioner of the Food and Drug Administration, has been pressuring drug makers to stop trying to extend the monopolies they’ve been granted (via FDA approval and patents) for brand-name drugs. But only Congress can forbid those practices, and it has yet to act on bipartisan legislation that would do the job. Trump could show he’s serious about lowering drug prices by urging Congress to pass the law.

Another way to boost competition would be to let people and pharmacies import some drugs from other countries with sound pharmaceutical regulation, such as Canada. Almost one in 10 Americans say they already do, despite the official prohibition.

The U.S. should also do what so many other countries do: negotiate. The Centers for Medicare and Medicaid Services ought to use its enormous purchasing power on behalf of the 42 million Americans in the Medicare drug-benefit program, ensuring that prices better reflect the drugs’ actual medical value. Again, for this to happen, Congress would need to change the law. Incredible as this will seem elsewhere in the world, the U.S. government has denied itself permission to apply pharmaceutical cost-benefit analysis and negotiate prices.

Trump is right to deplore the cost of drugs in the U.S. There’s no great mystery about the causes — and no doubt that much bolder measures than the administration has in mind will be needed to bring prices down.