Talking Points: 7 October 2024

A quick roundup of the issues driving the healthcare reform conversation.

Week in Review

CONSOLIDATION Hospital consolidation continues to dramatically reshape healthcare delivery.

Quick takeaway: Nearly half of all metropolitan areas in this country are now controlled by one or two large health systems.

Digging deeper: According to a new study, inpatient care was solely dominated by one or two hospital systems in 47 percent of metropolitan areas. Other takeaways include:

• In 82 percent of these areas, one or two health systems controlled more than 75 percent of the market
• 19 percent of metropolitan areas were dominated by a single health system
• Almost every area (97 percent) had highly concentrated markets for inpatient hospital care

What it means: Approximately one-third of all health spending in the U.S. goes towards hospital care alone. And, with data showing that consolidation in the industry leads to higher prices, there’s growing alarm that that share of overall spending is only going to go up.

Rx PATENTS Drugmakers exploit the patent system to block competition.

Quick takeaway: By manipulating patents on existing drugs, pharmaceutical manufacturers keep lower cost alternatives from entering the market.

Digging deeper: Specifically, drugmakers have increased the number of “use codes” (brief descriptions of a type of patent claim) they submit to the Food and Drug Administration’s (FDA) Orange Book, which serves as a resource listing for all the patents secured by manufacturers for FDA approved products.

By submitting multiple use codes for specific products, brand-name drugmakers make it exceedingly difficult for would-be generic rivals to successfully challenge these patents.

A new analysis found that, since 2017, the total number of use codes for all patents in the Orange Book grew 35 percent. Further, between 2001 and 2017, that number increased 521 percent.

What it means: By preventing competitors from bringing lower-cost generic alternatives to market, drugmakers are able to protect their profits, while driving up costs for consumers.

Rx PATIENTS The majority of older Americans now take a prescription drug.

Quick takeaway: Nearly nine out of ten adults over 65 in the U.S. took a prescription medicine between 2021 and 2022.

Digging deeper: Whether for conditions like heart disease, arthritis, or diabetes, an estimated 89 percent of older adults rely on medications to manage their health. But, more of them are finding it harder to afford them.

According to a 2019 poll, approximately one-quarter of Americans age 65-plus reported difficulty affording their prescription drugs. A separate study from last year found that one in five don’t take their medication as prescribed due to cost. And, just this year, another survey showed that nearly half of all adults over the age of 50 have skipped filling a prescription – or know someone who has – because they couldn’t afford it.

What it means: Rising drug costs impact patients’ ability to access the medicines they need. This lack of medication adherence can have serious consequences for the nearly two-thirds of Americans who fail to take their medicines as prescribed, including worsening symptoms, risk of hospitalization, and increased healthcare costs.

MA VALUE Medicare Advantage plays an increasingly critical role in safeguarding the future of Medicare.

Quick takeaway: The Medicare Advantage (MA) program has distinguished itself from original Medicare Fee-for-Service (FFS) by offering beneficiaries access to enhanced care coordination – including supplemental benefits – while saving them and the government money.

Digging deeper: With 35 million American seniors – more than half of all eligible beneficiaries – projected to be enrolled in MA plans next year, it’s clear that the program is as popular as ever. Here are a few reasons why:

• On average, MA beneficiaries save $2,500 annually compared to those enrolled in FFS
• 38 percent of seniors enrolled in MA plans live on annual incomes of $25,000 or less
• MA enrollees have fewer readmissions, fewer preventable hospitalizations, and lower rates of high-risk medication use than FFS enrollees

Research has also established that the life of the Medicare program could be extended up to 17 years if FFS were used at the same level as MA.

What it means: With Open Enrollment starting next week, eligible beneficiaries have the option to select between MA and FFS – and, as the data shows, more seniors are choosing MA plans. That’s why it’s so important that lawmakers protect the program for future generations.

Spotlight

The Health Action Network includes everyday Americans—families, workers, businesses, patients, providers, neighbors, and friends. We are working together because we support market-based solutions that offer better healthcare choices and help build a stronger economy. The Health Action Network is an Elevance Health, Inc., initiative.