Re­duc­ing costs a ‘pri­or­ity’ for Trump, law­mak­ers

Modern Healthcare - - News - —Alex Kacik and Su­san­nah Luthi

Pres­i­dent Don­ald Trump laid down a marker in this State of the Union ad­dress last week, declar­ing health­care costs the “next ma­jor pri­or­ity for me.”

He’s not alone.

“If the pres­i­dent fo­cuses on re­duc­ing health­care costs and makes that our tar­get, rather than a seem­ingly per­pet­ual ar­gu­ment about Oba­macare, that will be a big ser­vice to the coun­try, be­cause that’s what we’re try­ing to do,” Sen. La­mar Alexan­der (R-Tenn.) said.

With cost and trans­parency dom­i­nat­ing the de­bate, it was a pretty rough week for the in­dus­try.

Drug prices

Dur­ing the State of the Union, Trump put sig­nif­i­cant heft be­hind HHS’ pro­posed ref­er­ence-price model, declar­ing it un­ac­cept­able that Amer­i­cans pay higher drug prices than peo­ple in other coun­tries. He wants Congress to pass leg­is­la­tion that “takes on the prob­lem of global freeload­ing and de­liv­ers fair­ness and price trans­parency.” Se­nate Fi­nance Com­mit­tee Chair Chuck Grass­ley (R-Iowa) wel­comed the call to ac­tion, but warned that pol­i­cy­mak­ers will “have their work cut out” for them given Big Pharma’s war chest.

Hospi­tal prices

While drug­mak­ers are tak­ing the brunt of the hits in Wash­ing­ton, hos­pi­tals are not off the hook. In fact, a study re­leased last week sug­gested that hospi­tal prices are the main driver of health­care spend­ing in­fla­tion. For in­pa­tient care, hospi­tal prices grew 42% from 2007 to 2014 while physi­cian prices rose 18%, ac­cord­ing to re­searchers who stud­ied the Health Care Cost In­sti­tute’s claims data for peo­ple with em­ployer-spon­sored in­sur­ance from Aetna, Hu­mana and Unit­edHealth­care. Sim­i­larly, for hospi­tal-based out­pa­tient care, hospi­tal prices in­creased 25% while physi­cian prices grew 6%, ac­cord­ing to the Health Af­fairs study. About 33% of to­tal health­care spend­ing is di­rected to­ward hospi­tal care, trans­lat­ing to about 6% of to­tal GDP, ac­cord­ing to CMS data. Health­care in­fla­tion in the U.S. is pro­jected to grow by an av­er­age of 5.5% an­nu­ally from 2017 to 2026, ul­ti­mately reach­ing $5.7 tril­lion by 2026, the CMS es­ti­mated.

Sur­prise billing

A bi­par­ti­san ef­fort to curb the prac­tice of sur­prise billing picked up steam last week. Six sen­a­tors, led by Bill Cas­sidy (R-La.) and Mag­gie Has­san (D-N.H.), penned a let­ter to a broad swath of insurers, em­ploy­ers and providers ask­ing insurers how their out-of-net­work pay­ments com­pare with Medi­care rates and provider charges. The sen­a­tors also probed whether fix­ing one area could risk rais­ing costs over­all, ask­ing for data to show whether tying an in­sur­ance plan’s out-of-net­work rate to an av­er­age of provider charges would drive up pre­mi­ums. Hos­pi­tals were asked to show the per­cent­age of their earn­ings from emer­gency care and spe­cialty depart­ment treat­ment that comes from bal­ance billing. The sen­a­tors also sought the per­cent­age of spe­cialty care given to pa­tients at an in-net­work hospi­tal that is billed as out-of-net­work.

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