A quick roundup of the issues driving the healthcare reform conversation.
Week in Review
HEALTH EXPENDITURES Healthcare spending will hit $7.7 trillion by 2032.
Quick takeaway: Growing demand for care, swelling enrollment in Medicare, and record numbers of insured patients are driving this growth.
Digging deeper: Annual spending on healthcare in the U.S. grew 7.5 percent last year and is projected to grow 5.6 percent per year for the next decade, outpacing expected annual inflation of 4.3 percent.
At its current rate, healthcare expenditures will represent nearly 20 percent of our overall gross domestic product by 2032, up from 17.3 percent in 2022.
What it means: A closer look at the numbers provides valuable insights to lawmakers, regulators, and other stakeholders as they continue to wrestle with how to contain spending.
Over the next eight years, hospital spending alone is expected to grow at an average rate of 5.7 percent, also eclipsing the annual rate of inflation over that period. Last year, hospital spending rose 10.1 percent according to the National Health Expenditure Projections released. Controlling projected growth in hospital spending is critical to overall healthcare affordability.
UNAFFORDABLE Healthcare is now unaffordable for nearly half of all Americans.
Quick takeaway: A growing number of people in this country now struggle to afford access to quality healthcare and prescription drugs.
Digging deeper: According to the latest report from the Healthcare Affordability Index, which tracks how many people have skipped medical care or been unable to fill prescriptions due to cost in the last three months, overall affordability has dropped to a record low of 55 percent since the index was first launched in 2021.
What it means: The downturn is largely attributed to two groups – adults aged 50 to 64 and those aged over 65. It’s this second group that’s troubling, since Medicare eligibility begins at that age.
Among all the age groups studied, adults under 50 reported being the least able to afford healthcare at just 47 percent, a five-point drop in affordability since 2022.
HOSPITAL MARKUPS A new therapy costs significantly more when administered in a hospital.
Quick takeaway: Medicare claims for CAR-T treatments received in a hospital setting cost more than those delivered elsewhere.
Digging deeper: In a recent study, researchers examined Medicare claims for CAR-T therapy. Of the 391 claims reviewed, 79 percent of patients received treatment in the hospital, with the remaining 21 percent receiving it in an outpatient setting. The average price for the hospital claims was $498,723 compared to $414,393 outside of the hospital – a difference of $84,330.
What it means: CAR-T therapy is becoming a more frequent treatment option for Medicare patients with certain types of cancer. But, changes in CAR-T treatments can result in therapies being pushed earlier as a form of treatment, impacting where patients receive that therapy, which, according to researchers, has significant cost implications.
Rx R&D Drugmakers recoup the cost of developing new products much faster than they’d have us believe.
Quick takeaway: A new study shows that the majority of new drugs make back the average cost of research and development (R&D) within a decade.
Digging deeper: Big Pharma has long pointed to the upfront investment and cost of innovation as justification for the astronomical launch prices of new drugs. They hide behind this R&D defense to manipulate the patent system, exploiting regulatory exclusivities to shield themselves from competition, while enjoying generous market protections.
New data debunks much of this rhetoric, showing that, despite the drug industry’s claims to the otherwise, most companies recoup their investment within ten years of their drug being approved and brought to market.
What it means: Understanding the revenues earned by drugmakers on new products is important, say experts. These insights, along with data on business costs, inform discussions on how to better incentivize investment in innovation, while ensuring affordability for patients and the healthcare system.
Spotlight
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