Newsletter

Talking Points: 11 November 2024

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

Week in Review

HOSPITAL PRICES Hospital prices have increased at more than twice the rate of inflation since 2000.

Quick takeaway: These prices have led to substantially higher profits for hospitals.

Digging deeper: A new study shows that between 2000 and 2022, hospital service prices surged more than 220 percent.

While these price increases reflected slightly higher costs for these health systems, the primary result was increased revenues and profits.

What it means: Hospitals have claimed that higher prices were necessary due to labor shortages from the coronavirus pandemic. But, the research shows that hospital prices had been rising faster long before the COVID public health crisis.

Rx PRICES Drugmakers are solely responsible for what their products cost.

Quick takeaway: Stakeholders remind lawmakers and regulators that the pharmaceutical industry alone bears responsibility for drug prices.

Digging deeper: Drug manufacturers have worked hard to deflect blame for out-of-control prescription drug prices, pointing to others along the supply chain, such as pharmacy benefit managers (PBMs). 

One of the ways they do this is by deploying anti-competitive practices, like abusing the patent system to prevent more affordable alternatives from coming to market.

What it means: PBMs negotiate with drugmakers to lower drug costs for their customers. But, since those same drugmakers ultimately set the list price for those products, there can be little progress unless these companies first address those high prices.

MEDICARE ADVANTAGE Growth in Medicare Advantage is associated with lower overall spending in the Medicare program.

Quick takeaway: Increased enrollment in Medicare Advantage (MA) has contributed to lower than expected Medicare spending over the past decade.

Digging deeper: A new report details the relationship between MA enrollment growth and total Medicare spending. According to the analysis, increased enrollment in MA plans from 2012 to 2021 was estimated to generate savings in total Medicare spending of as much as $144 billion.

What it means: Given the scale of Medicare spending and the program’s solvency issues, there’s ongoing interest in understanding how to slow those spending trends.

At the same time, as covered last week, successive years of cuts to the MA program have exposed Medicare-eligible beneficiaries to the threat of higher costs, reduced access, and fewer benefits next year.

Rather than undermine the program with further cuts and other harmful changes, stakeholders are calling on policymakers to protect MA and provide greater stability for the millions of older adults and people with disabilities who depend on it.

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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.