Last Week in Healthcare Reform: November 15th, 2021

A new analysis finds that hospitals are making a lot of money on outpatient drugs; meanwhile, a separate study shows that better hospital efficiency would lead to billions of dollars in savings for Medicare; beneficiaries enrolled in Medicare Advantage plans have lower COVID hospitalization and mortality rates; and, a reminder to consumers that the annual open enrollment periods for Medicare and on the exchanges are underway.

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Week in Review

Hospital Rx: As highlighted in last week’s newsletter, the issue of hospitals marking up the prices of the drugs they administer is starting to draw increased attention in the evolving conversation surrounding healthcare cost drivers.  That focus was only ratcheted up last week when a new analysis was published showing that hospitals charge private insurers and cash-paying patients “considerable markups” on a number of highly-used outpatient drugs, such as oncology treatments.  Appearing in JAMA Internal Medicine, researchers determined that, depending on the drug, insurers are paying hospitals several times more than what’s paid by Medicare, an upcharge that ultimately drives up premiums for other consumers.  In fact, according to the analysis, the median rate paid by commercial insurers at one hospital for a drug used to treat a range of autoimmune conditions was 800 percent of what Medicare would’ve paid for the same drug.

Hospital Inefficiency: Separately, another study takes a look at hospital cost-efficiency across the country.  Conducted by the Lown Institute, the analysis represents the first-ever attempt by the healthcare think tank to rank hospitals in this manner.  While the data provided some useful insights, such as how wildly the cost of care can vary between hospitals – even within the same city, perhaps none was greater than the conclusion that the Medicare program would save as much as $8 billion a year if hospitals were more efficient.

MA & COVID: Recent data shows that beneficiaries enrolled in Medicare Advantage (MA) plans last year had a 19 percent lower rate of hospitalizations for COVID-19 during the first nine months of the pandemic compared to those with fee-for-service (FFS) Medicare coverage.  The brief, commissioned by the Better Medicare Alliance, also found that the FFS Medicare population experienced a higher mortality rate than MA beneficiaries.  Among the takeaways from the analysis, MA plans outperformed FFS in a number of categories, including the ability to get diagnostics, continued treatment for ongoing conditions, and access to telehealth.

Open Enrollment: With that in mind, stakeholders continue to urge Medicare-eligible beneficiaries, and consumers in general, to explore their health coverage options now that the annual open enrollment periods for, both, Medicare and the Affordable Care Act’s insurance exchange marketplaces are underway.  For Medicare, that includes a look at key dates ahead of the 7 December deadline, as well as step-by-step guides to the process.  As for the exchanges, given all the flexibilities and incentives that have been enacted to ease enrollment during the pandemic, it’s understandable that consumers might be a little confused as to their options.  But, not only has access to more options gone up heading into the 2022 plan year, but premiums have also gone down.

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