This Week in Healthcare Reform: October 16th, 2020

A look at how the coronavirus has changed our health care delivery landscape; rebates don’t increase premiums in Medicare Part D; meanwhile, prescription drug prices continue to drive up overall spending; and, a new study puts a price tag on what modifiable health behaviors cost us.

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Week in Review

COVID Changes: The coronavirus health crisis has left an indelible mark on our health care delivery model.  You’d be hard-pressed to find any corner of our system left untouched by the pandemic.  Perhaps nowhere has this been felt more than in the coordinated response to better identify and address the unmet health needs exposed by COVID-19 in underrepresented communities across the country.  Separately, from an administrative standpoint, deadlines were pushed back and reporting burdens were eased by the Centers for Medicare & Medicaid Services (CMS) for value-based payment models, increasing flexibility for providers as they weathered the financial and logistical challenges imposed by the coronavirus.  In terms of the actual delivery of health care services, ambulatory surgery centers (ASCs) have come to serve a vital function with hospitals having to reengineer their operations to focus on COVID diagnostics and treatment.  In fact, ASCs have since shown themselves to not only increase patient safety, but generate cost savings, as well.  As innovations continue to be brought to bear in our larger response to the health crisis, so, too, does our appreciation for the toll that the pandemic and subsequent economic turmoil have taken on the mental health and well-being of so many populations.  In recognition of World Mental Health Day last Saturday, the World Health Organization (WHO) highlighted the urgent need to increase funding in this chronically underfunded health sector.  Finally, as efforts ramp up towards the development and distribution of a vaccine, experts have begun to shine the public health spotlight on the role that vaccines will play in our ability to better manage the impacts of COVID-19. 

Rebates: There’s been a lot of talk surrounding drug rebates and the role that pharmacy benefit managers (PBMs) play in the prescription drug distribution chain.  Political rhetoric aside, PBMs and their ability to use rebates to exact price concessions from Big Pharma on behalf of large employers, unions, insurers, and the government, do, in fact, save consumers money.  Accordingly, experts have not shied away from stepping up to defend PBMs from the baseless attacks that minimize their importance and attempt to dismiss their efforts to negotiate lower prices – all the more critical against the backdrop of the coronavirus pandemic.  They’ve also worked to counter the anti-rebate narrative – advanced primarily by the pharmaceutical industry – with data-based facts pointing to billions of dollars in additional out-of-pocket costs and increased premiums for beneficiaries should rebates be eliminated from the Medicare Part D prescription drug program.  It’s this last bit that holds particular relevance less than three weeks away from Election Day, as seniors and voters have expressed concern over the prospect of rebates being eliminated from Part D and consequently driving up premiums.

Rx Costs: With all of that in mind, it’s worth pointing out that what’s really driving the conversation surrounding PBMs and rebates is the larger recognition that prescription drug prices are on an unsustainable trajectory.  Further, as evidenced in an analysis released last month, drug prices are actually rising at a rate outpacing all other health care services – which should really come as no surprise, given that outrageous price spikes have been a routine occurrence for Big Pharma since the issue really came to light five years ago.

Modifiable Risks: According to a new study, modifiable health risks added $730 billion to health care spending in this country as recently as a few years ago.  Researchers determined that in 2016 those behaviors, including smoking, obesity, and high blood pressure, accounted for 27 percent of the $2.7 trillion spent on health care that year.  Additionally, these modifiable, treatable risks were strongly linked to costly medical conditions, such as cardiovascular disease, diabetes, and cancer. 


With so much uncertainty still rippling out across every facet of our health care system, experts weigh-in on the forces that will likely define what the future of health care looks like in this country.

Stay safe and be well.

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