http://www.vox.com/science-and-health/2016/11/30/12945756/prescription-drug-prices-explained
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There isn’t much evidence that Americans use an inordinately high amount of prescription drugs. It’s just that when we buy prescription medications, we pay more for the exact same product.
Not everyone was on board, however. Rep. Lloyd Doggett (D-Texas) voted against the measure because he said that though the bill attempts to address the need for research funding, it doesn’t guarantee the money: “There may be bipartisan agreement, but there is not a bipartisan advancement.”
He also said the revised version of the bill grants all of big pharma’s “wish lists” and doesn’t tackle rising drug costs. Indeed, Doggett said it was appropriate that the medical cures bill is packed into a larger measure called the Tsunami Warning Bill because people who rely on lifesaving drugs and want to fill a prescription have been “buried in one wave, after another wave, after a giant wave of pharmaceutical price gouging. Whether it’s an EpiPen for a child who is going to have an allergic reaction, whether it’s for insulin for someone who is diabetic and relies on that insulin, whether it’s an oncology drug that costs over $100,000, it is wave after wave of a tsunami of price gouging.”
Drug prices continue to bedevil the economics of the U.S. healthcare system in a variety of ways.
Prescription drug prices rose 7 percent between September 2015 and September of this year, according to a new report (.pdf) from the Altarum Institute’s Center for Sustainable Healthcare Spending. No other category rose more than 2.9 percent. Hospital prices rose just 1.2 percent, although that’s up significantly from the 0.7 percent annual increase between September 2014 and September of last year.
Meanwhile, Altarum’s healthcare spending report (PDF) tells a slightly different story. Prescription drug spending rose only at a 4.5 percent annual rate between September 2015 and August of this year. That’s down from the 7.2 percent growth rate from September 2014 to 2015, and the 12.4 percent rate between August 2013 and 2014.
However, hospital spending grew at a 6.6 percent annual rate in September, up from 3.4 percent between September 2014 and 2015. That’s higher than the overall 5.5 percent growth rate.
That dovetails with forecasts that U.S. healthcare spending will reach 20 percent of the gross domestic product (GDP) by the middle of next decade. According to Altarum, it currently amounts to 18.2 percent of GDP. But another report suggested that the Affordable Care Act will actually cut healthcare spending over the long term by $2.6 trillion.
The report, which is closely read by many healthcare policy experts but gains little attention in most media circles, raised some concerns from advocacy groups.
The election outcome itself could create more problems for the ACA. The insurance plans sold on the law’s exchanges have already experienced substantial losses due to adverse selection, leading many insurance companies to pull back on their participation. The prospect of a Trump administration steering ACA implementation may be enough to convince some of the insurers still offering products on the exchanges in 2017 to rethink their plans. If more insurance companies head for the exits, the exchanges could become even less stable than they already are.
The “replace” part of “repeal and replace” has always been the tricky part for ACA opponents, and that will also be true for the incoming Trump administration. During the campaign, Trump offered only the vaguest outline of a plan that wouldn’t come close to serving as a starting point for a workable proposal. The ACA, for all of its problems, brought many low-income households into insurance coverage, through an expansion of the Medicaid program and through heavy subsidization of the insurance plans offered on the exchanges. Unless Trump wants to preside over a massive increase in the number of Americans without health insurance during his presidency, he will have to offer a plan that ensures households with low incomes can secure health insurance in some new way.
With Donald Trump headed to the White House and his party firmly in control of Congress, Republicans will finally have a chance to prove what they’ve been saying all along: that they can produce a better version of healthcare reform than the Affordable Care Act.
It’s clear that the ACA is as imperiled as it has ever been. Trump has fervently vowed to repeal it–and with Republican control of both chambers of Congress, he may well get his wish. After all, the law’s most visible component, the exchanges, are on shaky ground as it is, with premiums rising and some health insurers retreating from the marketplaces.
Plus, President Barack Obama’s last attempt at convincing Republicans to work on fixing the ACA–not repealing it–fell on deaf ears even before the party’s resounding victory Tuesday.
What gets lost in all the talk about the ACA’s uncertain future, though, is the fact that while some insurers have struggled to make a profit in the individual marketplaces, there are other aspects of the law to which they have become quite attached.
Take Medicaid expansion, an idea championed by Democrats (and even once embraced by Vice President-Elect Mike Pence) that has been a boon to insurance companies in the form of lucrative managed care contracts. Some companies that specialize in slimmed-down Medicaid plans have also thrived on the exchanges where others have floundered.
Then there’s the ACA’s provisions that encourage the transition to value-based payments, which insurers have embraced and largely retooled their business models to reflect. Accountable care organizations, for example, have sprung up like wildfire, producing promising results for some companies.
A wholesale repeal of the ACA would also erase the law’s historic gains in reducing the uninsured rate. Though many of the newly insured have turned out to be costlier to cover than expected, such a move would still rob insurers of millions of new customers.
The question, then, becomes what will replace the law–and that’s where it gets interesting.
Trump has a plan, but it is short on details. Perhaps most visibly, he has advocated for selling insurance across state lines–a timeworn GOP talking point that many experts agree is not feasible. He would also repeal Medicaid expansion and convert Medicaid federal matching funds into a block grant, the latter of which would drastically cut Medicaid funding and coverage.
One analysis from The Commonwealth Fund says that his plan could add nearly 20 million peopleto the ranks of the uninsured, and even more if his Medicaid proposals come to fruition.
http://www.politico.com/story/2016/11/obamacare-defenders-vow-total-war-231164
Shell-shocked Democrats on Capitol Hill are preparing to make a fight for Obamacare their top priority in the opening days of the Trump administration, with leading advocacy groups ready to wage “total war” to defend President Barack Obama’s universal health care program and his domestic policy legacy.
“We’ve got the battle of our lifetime ahead of us,” Ron Pollack, executive director of advocacy group Families USA, said the day after Donald Trump was elected on a pledge to repeal the Affordable Care Act, which now the law that covers 22 million people. “We’re going to have a huge number of organizations from all across the country that will participate in this effort.
The road to repeal is more complex than Trump acknowledged on the campaign trail. The law is baked into the health care system, touching every American’s life and a fifth of the economy.
But with the Republican sweep of both the executive and legislative branches, expectations for big and bold action are high.
With much about President-elect Donald Trump’s health-care agenda still unclear, the health-care industry’s initial response to his election has been scattered. Hospital stocks were down. Health insurers’ stock prices were mixed. Pharmaceutical and biotech stocks, on the other hand, got a big bump.
Trump’s clearest policy position in health care has been his commitment to repealing the Affordable Care Act and replacing it with another policy. But the responses to his election varied in large part because the details of exactly what would replace the Affordable Care Act and how that transition would occur have been vague. Without knowing those details, it’s hard for investors to have a clear response, said Benjamin Isgur, a leader in the PwC Health Research Institute.
“These health organizations are like large ships, and you can’t turn them on a dime,” Isgur said. “When you think back to what it took to get ready for the ACA, for many health-care companies, it was two to three years of developing plans and provider networks and marketing plans. . . . There’s a lot of work that is required to implement any new program.”
California voters rejected a closely watched ballot initiative aimed at capping how much most state-funded health insurance programs pay for prescription drugs, a possible bellwether of the lack of political appetite for more widespread policies to tackle high drug prices.
State agencies would have been barred from paying more than the U.S. Department of Veterans Affairs does for prescription drugs. VA gets at least a 24 percent discount off the average manufacturer’s price of a drug and is insulated against price hikes larger than inflation.
Proposition 61 was losing with just 46 percent of the vote Wednesday morning, with more than 90 percent of precincts reporting.
The ballot measure was narrowly constructed and would have applied to an estimated 4.4 million people. Still, it had attracted national attention and $109 million in opposition funding, led by the pharmaceutical industry.
It was, in many ways, a test of Sen. Bernie Sanders’s (I-Vt.) sway and of the viability of a key piece of his agenda, which has involved repeated attacks on the pharmaceutical industry over drug pricing. He appeared at last-minute rallies in Sacramento and Los Angeles on Monday to support the measure, called Proposition 61.
The findings suggest the market shifts are triggering entities such as medtech and pharma companies to bust out of their former molds, beyond products such as pills, to adopt customer-centric service solutions.
CEOs should look toward innovative business models that can help them monetize emerging opportunities, according to Frost & Sullivan Transformational Health Industry Analyst Kamaljit Behera.
“Collaboration and open-source innovation are key ingredients for future restructuring,” Behera stated. “Companies such as Apple, Google, IBM Watson and Intel will continue to compete outside their domain, forcing traditional healthcare companies to change their dominant business models.”
The company further pointed toward Walmart looking to become a primary health provider and Medtronic’s Diabetes Management’s move to an intelligent-based solutions business model, and suggested the use of “actionable health outcome data” will form the basis of the industry landscape. The future can expect to see more around crowdsourcing, mass customization, open innovation and data collection based on customer preferences – with scalability being the most critical factor for success, according to Behera.
The growing demand for value has indeed been providing some counterbalance against increasing healthcare costs, a PricewaterhouseCoopers’ (PwC) report similarly found earlier this year, with demand for consumer friendly services adding to the mix.
HENRY KOTULA 