A quick roundup of the issues driving the healthcare reform conversation.
Week in Review
Rx PRICES Drugmakers raise prices on hundreds of products.
Quick takeaway: More than 700 drugs have already seen average price increases of 4.5 percent this month.
Digging deeper: As previously highlighted, pharmaceutical manufacturers wasted no time, ringing in the New Year by doing what they do every January – namely, hiking up the prices on hundreds of their products.
So far, 775 drugs have had their prices go up in January, including new weight-loss drugs, Ozempic and Mounjaro.
What it means: Worried stakeholders point out that these price increases are arbitrary and place undue strain on our healthcare system, while jeopardizing access to life-saving medicines for millions of Americans.
These price hikes also highlight the unilateral pricing power that Big Pharma wields, not just over the pharmaceutical supply chain, but over the health and well-being of patients across the country.
CHARITY CARE Hospitals fall short of their charity care obligations.
Quick takeaway: Research continues to show nonprofit hospitals failing to meet community benefit standards.
Digging deeper: As a condition of their tax-exempt status, nonprofit hospitals are required to offer financial assistance (free or discounted care, or “charity care”) to low-income patients, in addition to engaging in other activities to promote community health.
However, these facilities are coming under increased scrutiny for falling well short of these commitments, as well as aggressively going after patients for payments and paying massive, multi-million dollar salaries to their executives.
What it means: It’s estimated that nonprofit hospitals’ tax-exemptions are worth about $28 billion – 44 percent of their net income. Meanwhile, these same health systems’ median charity care provided as a percentage of operating expenses fell to just 0.99 percent in 2022.
MEDICAID + SDoH States invest in addressing social health drivers.
Quick takeaway: State Medicaid programs are working to cover the costs of non-medical care for high-risk enrollees in order to minimize health disparities and reduce long-term spending.
Digging deeper: Medicaid recipients encounter significant barriers to care as a result of social determinants of health (SDoH), such as lack of transportation, economic instability, and food insecurity.
But, states are increasingly exploring how investments in the SDoH space can not only help alleviate some of the issues, but bring down healthcare costs in the long run.
What it means: As covered in a previous newsletter, Medicaid’s growing focus on the impact that social health drivers have on an individual’s overall health and well-being has led to greater investment by Medicaid managed care organizations, as they seek to operationalize a programmatic approach to SDoH.
SITE NEUTRAL Healthcare prices vary widely depending on where procedures are performed.
Quick takeaway: Hospital outpatient prices for common medical services are substantially higher – and, rising faster – than prices for those same services delivered at other locations.
Digging deeper: A new study puts a finer point on the importance of site neutral payments, which hold that payments for medical services should be the same, irrespective of where that service is performed.
Why this matters is that the price for these services are much higher when they’re billed as having taken place in a hospital.
According to the results of the analysis, hospital prices were as much as five times higher compared to ambulatory surgery centers (ASCs) or physician offices. Not only that, hospital prices are also increasing much more rapidly (27 percent) than prices at ASCs (11 percent) or physician offices (2 percent).
What it means: Lawmakers in state capitals across the country have taken up the issue, such as in Indiana, where legislation was passed last year targeting hospitals’ “dishonest billing.”
Federal lawmakers are also working to address the issue, with both the House and Senate working to advance hospital billing reform legislation.
Spotlight
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