June 22, 2016
On a day in which the House Republicans are announcing their alternative health reform plan, House Democrats are staging a sit-in over gun laws, and the presumptive presidential nominees are firing insults at each other, it’s understandable if the annual issuance of the Medicare Board of Trustees report gets a little lost in the mix.
It’s a report quite worthy of attention, though, because its pages contain more than one call to action.
First, the trustees are now projecting that the Medicare program will reach insolvency in 2028, two years earlier than last year’s estimate. This is not an insignificant change. Think of the time required to enact comprehensive health reform, from the Nixon Administration’s efforts in the early 70s to the Affordable Care Act signing in 2010, or the decades spent trying to bring a prescription drug benefit to Medicare. Twelve years may seem like a considerable amount of time to make Medicare financially sustainable and reliable for future generations but, in legislative terms, it’s not long at all.
We need serious discussions on how to modernize and strengthen Medicare. The successes of the Medicare Advantage and Medicare Part D prescription drug programs provide sound examples lawmakers can use in shaping the future. Those programs have utilized consumer choice and competition as drivers to provide high-quality care at reasonable costs. And, in fact, the Congressional Budget Office has concluded that bringing those choice-and-competition qualities to Medicare as a whole would reduce program spending and beneficiary out-of-pocket costs.
The Medicare Trustees report sends a clear signal that this discussion shouldn’t wait.
Another important aspect of the trustees report concerns the Independent Payment Advisory Board (IPAB). Many expected projected spending levels in this year’s report to trigger IPAB into action. That wasn’t the case, although that threshold is expected to be reached next year. Congress shouldn’t wait until then to make this bad idea go away for good.
Over 500 organizations representing patients, healthcare providers and employers have written to Congress already, pointing out that a mechanism which shifts power from elected representatives to unelected appointees would do significant damage to Medicare beneficiaries and the healthcare system as a whole. By making harsh, arbitrary cuts to Medicare payments to healthcare goods and services instead of focusing on bringing greater value to the program, quality and access would be adversely affected.
No, the Medicare trustees didn’t flip the switch to activate IPAB this year, but it’s an imminent problem and it needs to be addressed sooner rather than later.
April 04, 2016
As we’ve seen, there has been a steadily increasing level of discussion and enthusiasm surrounding precision medicine. The Healthcare Leadership Council (HLC) has remained engaged in this conversation, given the expertise and involvement of its members. HLC hosted a briefing on Capitol Hill last April on the subject, in which Bio-Reference Laboratories, New York-Presbyterian Hospital/Columbia University Medical Center and Mayo Clinic detailed the benefits that have already been realized, and the potential that has yet to be reached. They each shared stories of how targeted therapy transformed the lives of patients in ways that conventional medicine could not. Although the cost of sequencing will continue to benefit and see increased usage from price declines, early genetic testing has allowed for immediate diagnosis and treatment, bypassing the costly trial and error approach. Our member experts all agreed that one organization alone cannot succeed in integrating genome based knowledge into personalized care.
Last year the Precision Medicine Initiative (PMI) was announced by the National Institute of Health (NIH). This year the White House hosted a PMI Summit, in which President Obama both participated and partnered with the NIH in an educational tweet chat that answered questions from the public regarding the initiative. During this chat, NIH Director Francis Collins cited a paradox, “Only by studying populations at scale can you really understand individual differences.” The PMI Cohort Program is currently working towards collecting one million or more participants that reflect the diversity of our country.
Precision medicine is an area that would directly benefit from the ability to collect, store and share data electronically. In order to see real success, harmonization of data privacy laws is a necessary next step. Diverse state privacy regulations regarding patient information accompany HIPAA laws, adding to the complexity of sharing data in a way that would improve the quality of patient care. Federal rules for research subjects intersect with additional privacy policies that are also burdensome to the healthcare system. The ability to utilize any data gathered from partnering facilities is an important function, and dialogue between the federal government and states is needed to ensure this is feasible across the country. This is a field of health policy we have discussed fully in the Healthcare Leadership Council’s recently-released “VIable Options: Six Steps to Transform Healthcare Now” policy recommendations. The U.S. is on the cusp of a new era in healthcare, and the flow of health data is a crucial part of it.
March 23, 2016
We’ve long maintained that Medicare can be a stronger program, both in terms of protecting the health of its beneficiaries and in improved cost-efficiency, if it did a better job emphasizing prevention, diagnosis and early treatment, emulating many of the lessons being demonstrated every day in the private sector.
To the credit of HHS Secretary Sylvia Burwell, the Medicare program is now moving in this direction in a very significant way.
Today, Secretary Burwell announced that the Obama Administration will propose new rules this summer that would have Medicare provide coverage for diabetes prevention programs. She cited a YMCA program that has enabled participants to cut their body weight by an average five percent, thus reducing the propensity for diabetes, a disease with extremely high incidence rates among the elderly. Early interventions can prevent the need for more expensive healthcare services to treat diabetes symptoms, thus reducing Medicare expenditures.
HLC has long argued that Medicare should pay for services such as health coaching, aiding beneficiaries in practicing better dietary and exercise habits, as well as new technological innovations to help those with diabetes and prediabetes better monitor their health conditions. We, in fact, sponsored a briefing for congressional staffers on the subject last year.
Secretary Burwell’s announcement today heralded an important new direction for the Medicare program. In her words, the federal government is transitioning from “treating the sick to preventing the illness.” We applaud her actions.
March 10, 2016
There is an event taking place next week that I would like to spotlight and recommend. The National Pharmaceutical Council (NPC) is hosting a webinar on comparative effectiveness research (CER) and its potential effects on healthcare decision-making. The webinar is taking place on Monday, March 14 from 2 to 3 p.m., ET. You can register here.
In the webinar, NPC will be discussing the results of its sixth annual survey of healthcare stakeholders regarding CER and its possible impact. Each year, the Council solicits the views of health care associations, payers, government officials and experts in academia to ascertain how and to what extent CER may be used to shape healthcare decisions and also to better understand the roles of different organizations in the public and private sectors in determining the direction of healthcare research as well as its funding and dissemination.
In the continued movement to strengthen health system value, comparative effectiveness research is an important factor to understand. Ideally, this work can help clinicians better understand how new treatments can have an optimal effect on their patients.
The webinar will feature experts from NPC and Academy Health, as well as Dr. Joe Selby, the executive director of the Patient-Centered Outcomes Research Institute. Healthcare organizations would do well to tune in.
February 19, 2016
It’s a notion we’ve heard a fair amount during the presidential campaign, this idea that Medicare should ‘negotiate’ prescription drug prices. (There’s a very good reason I put ‘negotiate’ in quotes. We’ll get to that in a moment.) The concept reached all new levels of visibility in recent days when the leader in the polls on the Republican side told MSNBC’s “Morning Joe” program, “We don’t negotiate. We don’t negotiate….If we negotiated the price of drugs, Joe, we’d save $300 billion a year.”
I’m not going to devote this post to litigating the $300 billion boast. The Washington Post has already done that by giving it “Four Pinocchios” on its lack-of-truthfulness scale. It is, of course, a mathematical impossibility to save $300 billion annually from a Medicare Part D prescription drug program that spends less than $80 billion per year. A candidate making that claim has ventured into loaves-and-fishes territory.
But that particular absurdity notwithstanding, let’s discuss the proposal coming from the current presidential race leaders in both parties that the heavy hand of the federal government should be involved in drug pricing. There are some myths attached to this idea that, in any reasonable debate, shouldn’t be shunted aside.
Myth #1 – In the Medicare program today, there are no negotiations to reduce drug prices.
This, of course, is patently untrue. Prices in the Medicare Part D program are determined through a negotiation process involving private health plans and pharmacy benefit management (PBM) companies. PBMs handle millions of individual pharmaceutical transactions yearly and have the bargaining power to achieve reasonable and realistic pricing.
The proof here is in the proverbial pudding. Average monthly premiums for enrollees in the Part D program have, according to the Centers for Medicare and Medicaid Services, remained stable at an affordable level for the past five years.
Myth #2 – Federal government involvement in Medicare drug pricing is a pro-consumer idea.
Proponents of federally-dictated drug pricing make it seem all so simple, that if the government takes over drug price negotiations then Medicare prices will drop to the level of the Veterans Administration. They don’t, however, explain the tradeoffs that come with this kind of policy change. When you arbitrarily lower prices, you invariably restrict accessibility. In the VA, for example, nearly one-fifth of the 200 most commonly prescribed drugs are not on its national formulary. As noted in a paper by the Center for Medicine in the Public Interest, the vast majority of drugs not made available to VA patients are accessible within Medicare Part D prescription drug plans.
This is why the Congressional Budget Office has traditionally been reluctant to ascribe any real savings to the concept of federal price negotiations within Medicare, because of the unlikelihood that lawmakers will tell their senior citizen constituents that many of the drugs on which they depend will no longer be available to them.
And let’s not forget that artificial price controls on pharmaceuticals have an inevitable impact on research and development of new therapies, an unacceptable outcome when devastating (and costly) chronic illnesses like diabetes and heart disease are affecting millions.
Myth #3 – We need hard-nosed federal negotiators sitting at the table with pharmaceutical company executives to push down prices.
The mental image of two sides bickering over numbers from their respective sides of a table is a fallacy. The reason I put ‘negotiate’ in quotation marks is because there really is no such thing. The federal government establishes pricing levels and drugmakers must agree to meet those prices in order to be in the Medicare Part D formulary. This has two effects – (1) the aforementioned restricted access to therapies and (2) the end of competition in the Part D program. Today, plans compete with each other to provide greater value to enrollees. With a single federally-set pricing level, the benefits of consumer choice and competition are lost.
The good news here is that there are ways to address healthcare costs while, instead of hurting patients and consumers, actually elevating care quality and bolstering innovation. The Healthcare Leadership Council unveiled a series of proposals this week to accomplish those goals and I’ll be discussing these in more details in a series of forthcoming posts. Watch this space.