This Week in Healthcare Reform: March 19th, 2021

Hard-learned lessons one year into the coronavirus pandemic, including a worsening of the loneliness epidemic; stakeholders continue to point out why the rebate rule is the wrong prescription for combatting high drug prices; and, a reminder of where our healthcare spending goes.

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Week in Review

COVID Year 1: Last week saw the world mark one-year since the coronavirus was officially declared a pandemic.  Over the course of the intervening months, while the shortcomings in our healthcare system have been laid bare, there have also been encouraging signs that point to a reimagined model of care delivery and reimbursement that better meets the needs of an evolved and evolving consumer and patient population.  Perhaps the area in which this has felt most immediately resonant is in our recognition of the critical role that social determinants of health play in a person’s overall health and well-being.  Elsewhere, the pandemic has exposed longstanding health inequities that have contributed to vastly different health outcomes for historically disadvantaged populations across the country.  Additionally, the growing reliance on telehealth has helped remove barriers to mental health services.  While it remains to be seen which of the changes ushered in by COVID-19 might be permanent, experts believe that the pandemic provides a rare opportunity to improve public health, writ large.  Beyond any innovations, though, due attention is also being paid to what healthcare issues will likely drive the policy conversation as we look to turn the page.

Loneliness: On a separate but related note, there’s growing concern that the coronavirus has also worsened the loneliness public health crisis that had already started to garner attention before the pandemic.  According to new research, feelings of isolation are on the rise, with 36 percent of respondents in a Harvard University study of nearly 1,000 Americans saying that they’d felt lonely “frequently” or “almost all the time or all the time” in the previous four weeks.  That represents a significant increase over the 25 percent who recalled experiencing similar feelings in the two months prior to the pandemic.  Public health experts warn that loneliness has a very real impact on health outcomes, citing research establishing loneliness and social isolation as risk factors for mortality.

Rebate Rule: Despite the Administration’s delay to the harmful, expensive, and Big Pharma-backed “rebate rule”, there’s growing concern that, absent legislative action, the proposal will eventually find its way to implementation, resulting in billions of dollars in premium increases for Medicare Part D beneficiaries and added burdens for taxpayers.  In an effort to prevent this from happening, stakeholders have continued to draw attention to just how misguided the rebate rule ultimately is, putting out infographics, publishing opinion pieces, and recording podcasts.  The unifying message is simple: the rebate rule is the wrong prescription for rising drug prices.  As a reminder, pharmacy benefit managers (PBMs) use rebates in their negotiations with pharmaceutical manufacturers to extract savings for consumers, health plans, and government programs.  Essentially, rebates are a powerful check against drugmakers’ pricing power.  Analysts estimate that the elimination of rebates would not only increase Medicare Part D premiums by 25 percent but would add $170 billion or more in costs to the program that taxpayers would be on the hook for – all while handing Big Pharma a bailout worth more than $100 billion.

Healthcare Spending: An updated analysis takes a closer look at exactly where our healthcare spending goes.  Researchers examined spending trends across a handful of categories dating back to 1960 and through 2019.  According to the data, hospitals continue to account for the biggest chunk of spending at over $1.2 trillion per year (pre-pandemic).  Physicians and clinics are next, clocking in at just over $770 billion, with prescription drugs rounding out the top three at $370 billion.  That trend analysis piggybacks off a separate healthcare spending analysis performed by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary and released at the end of last year in which total healthcare spending was found to be 17.7 percent of the nation’s gross domestic product.  Of that total, CMS actuaries determined that spending on hospitals, physicians and clinical care, and prescription drugs altogether accounted for 61 percent of all healthcare spending in 2019.


A recent blog post highlights the comparative value of the Medicare Advantage program over traditional fee-for-service Medicare, focusing on the popular program’s ability to not just deliver lower spending, but better value for beneficiaries.

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