Provider consolidation gets renewed scrutiny; PBMs work to keep insulin affordable for consumers; state budgets are improving – but, challenges remain; and, stakeholders point to health equity being a key value in value-based payment reform.
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Week in Review
FTC Oversight: Late last week, the Federal Trade Commission (FTC) announced that it would be studying the effects that hospitals’ acquisitions of physician practices and other consolidations between health systems have had on competition. The focus is part of a larger effort undertaken by the agency to better understand the impact of mergers in the space. While the FTC has traditionally zeroed in on how these activities affect health care prices, the agency has signaled that it’s broadening its approach to now include how consolidation ultimately influences wages. The announcement comes as all signs point to increased merger and acquisition activity amongst health care providers, catalyzed by the ongoing coronavirus pandemic, which experts predict will only continue. Meanwhile, a new analysis adds to the growing body of research that shows how hospital mergers increase costs, while reducing the quality of patient outcomes.
PBMs & Insulin: According to the findings from a recently-released study, the soaring price of insulin over the past decade is the result of market forces that have come together to drive up the price of a drug that hasn’t seen any significant improvement in its more than 100-year existence. Specifically, the report points to a handful of factors that have driven up the price of insulin in recent years, namely, the fact that only three manufacturers control the market, the lack of alternative insulins, and the abuse of patent extensions. The study goes on to highlight the important role that pharmacy benefit managers (PBMs) are playing to drive competition in the insulin market through the use of formularies and rebates.
State Budgets: The COVID-19 health crisis forced state legislatures across the country to quickly pivot as lawmakers scrambled to reprioritize their legislative focus to combat the pandemic, as they looked to contain the coronavirus’ devastating impact, while simultaneously working to map out economic recovery strategies. Against that backdrop, experts identified numerous issues facing state lawmakers heading into 2021, including increasingly pressing budgetary challenges. But, while most states still face revenue shortfalls, state budgets are in a better position overall than what had been forecasted over the summer, primarily owing to higher-than-expected revenues during the last few months of 2020, cuts and adjustments made by state governments, and federal aid. Nevertheless, it’s expected that the budget problems still faced by many states will likely persist into this year and beyond.
Health Equity & Value: The coronavirus has exposed a number of gaps in our health care system, especially as it relates to existing health inequities, with communities of color experiencing a disproportionate burden of infections and hospitalizations as the result of systemic, historic disadvantages, many of which correlate to higher rates of underlying chronic conditions. However, value-based payment structures have the potential to address those health disparities, say a growing chorus of experts and stakeholders. Specifically, they call for our health care system to concentrate on operationalizing equity-focused quality measures. Additionally, they say that payers and providers should emphasize payment and performance measurements aimed at reducing health disparities as they look to implement changes to their reimbursement model. Researchers have also started to examine the impact that value-based design can have on health inequities.
With the Biden Administration having already hit the ground running amidst unprecedented challenges, a new survey asks voters – in their own words – what they hope to see over the next four years. Separately, experts consider what a Democrat-controlled Congress might mean for the future of the Affordable Care Act.
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