DCMedical News: Thursday, November 15, 2018
DCMedical News-DCMN
Washington, D.C.
Thursday, November 15, 2018
DCMedical News is published every day either the House or the Senate is in session. See scheduled sessions at the bottom of this newsletter. Subscribe to ensure continued receipt of your copy.
THE BIG STORY TODAY IN HEALTH CARE:
Drugs and the International Pricing Index: HHS Secretary Azar at the Commonwealth Fund International Symposium on Health Care Policy Wednesday: “I’ve described today how the American system offers flexibility and room to innovate in many ways, but obviously, the way Medicare pays for these drugs has not been one of them. We have looked for alternative ways to introduce a market-based competitive pricing model, but there don’t appear to be feasible options besides some form of reference-price indexing. Nor do we believe we should set our prices using some form of health technology assessment or other centralized assessment of value that purports to discern some objective determination of the value of a product. Instead, we’ve chosen the most market-driven index we could come up with: the prices at which drug companies voluntarily choose to sell their drugs to a basket of comparably placed peer countries to the United States. Besides being a dynamic index, relying on other major payers to determine what price manufacturers can bear, the international price index also provides incentives for manufacturers to balance out the burden of innovation. This may well mean that, as our prices drop, other countries’ prices rise. In the long run, it will be to the benefit of every country, and all of our citizens, to have a drug-pricing system that is driven by fair competition and negotiation, not by freeriding off of one country’s policies.” (Emphasis in italics added, complete prepared remarks here.)
HOSPITALS AND OTHER HEALTH CARE FACILITIES
The New York Times Discovers That When Hospitals Merge Prices Go Up: The front page of the business section (here) reports on a study undertaken for the Times indicating price increases from 11% to 54% in the years following hospital mergers. Numerous publications and peer reviewed journals have indicated the same results. The Times notes that in the Obama administration antitrust officials were generally absent from hospital and health care mergers, and that “State officials generally looked the other way.” The story quotes the state-funded “Advocate” for consumers in Connecticut as feeling powerless to impact the merger transactions. However, the “Advocate” works with the very same agency which has approved each of the consolidations which have allowed the merger of 30 hospitals into two hospital networks for the entirety of the State.
In the Trump administration, an Executive Order calling for more competition in health care (here) was primarily concerned with competition and choices among types of health insurance plans. However, the EO of 10-12-2017 also said “My Administration will also continue to focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system.”
The Times report notes that “not only have big consolidations continued, the behemoths have further cemented their reach in some regions by gobbling up major doctors’ and surgeons’ practices.”
Unmentioned in the Times study are other important issues which arise in hospital and health system consolidation. These include: (1) the role of health system and hospital executive compensation (generally goes up on both sides of the merger transactions); (2) the role of regulatory complexity and opacity (especially expensive and productivity-compromising hospital information systems) in creating the “need” for consolidation; and (3) some evidence (here) that hospital combinations, rather than leading to the higher quality attributed to the larger acquiring institution (partly a result of advertising), leads instead to declines in quality secondary to autarchy, size and diffusion of responsibility.
DRUGS & DEVICES
Outcome-Based Payment for Drugs: Michigan (approval letter here) joins Oklahoma in having CMS approval for outcome-based payment for drugs in the Medicaid programs of those states. If benchmarks are not reached, additional discounts are due.
R&D: A new PwC study shows health care “On track to be the No. 1 industry for global research and development spending,” moving ahead of computing and electronics in the next two years. But, is innovation overrated? The PwC study (www.strategyand.pwc.com/innovation) notes a significant number of “high-leverage innovators” in the health field. These are companies that did better financially than their industry groups on key measures, while spending less on research and development as a percentage of sales. Twenty-three of these 88 “high leverage innovators” were in health care, including Medtronic, Fresenius and Thermo Fisher.
READINGS AND REFERENCES
MedPAC Reports: Reports from the November 1-2 meeting of the Congressional Advisory Committee on Medicare, including the meeting transcript (here); report on Long Term Care hospitals (here); modernizing the Medicare-Dependent Hospital Program (here); modifying the “A-APM” (Advanced Alternative Payment Models) program (here); promoting greater integration of Medicare and Medicaid in the dual eligibles program (here); and two reports on the Medicare Advantage program, on the quality bonus program (here) and the integrity of encounter data (here).
EVENTS & MEETINGS
Nov. 15
8:30 a.m., AHRQ Meeting of National Advisory Council for Healthcare Research and Quality, 5600 Fishers Lane, Rockville, MD, contact: Karen.Migdail@ahrq.hhs.gov
Noon: Rural Health Information Hub and National Organization of State Offices of Rural Health, Access to Healthcare in Rural Communities,” accessed through #RuralHealthChat.
Noon: CMS Webinar on Year 3 Quality Payment Program Final Rule Overview, information and registration here.
Nov. 16
9:30 a.m. to 11:45 a.m., The Century Foundation, Health Affairs, the Commonwealth Fund, present a star panel (e.g. Wagner Dean Sherry Glied on Medicare-Like Plans for the 2020 Health Reform Debate) on “Health Reform: From the Midterms to 2020,” National Press Club, announcement here.
Nov. 27
9:00 a.m., The American Enterprise Institute for Public Policy Research (AEI) holds a discussion on "The new Medicare physician payment regulation: What does it mean for physicians and patients?" Seema Verma, Robert Berenson, AHIP, AMA. Contact: 202-862-5829 mediaservices@aei.org
9:00 a.m., Duke Margolis Center on “Root Causes of Drug Shortages and Finding Enduring Solutions,” Washington Marriott Metro Center, (McClellan, Gottlieb, FDA panel), agenda here.
Nov. 28
10:00 a.m., Senate HELP Committee Hearing: Reducing Health Care Costs: “Improving Affordability Through Innovation,” 430 Dirksen Senate Office Building, announcement here.
Nov. 29
The “Office of the National Coordinator” annual meeting, continuing November 30, two day tentative agenda (Jared Kushner!) here.
8:00 a.m. to 11:00 a.m., STAT Plus correspondents in a discussion of drug pricing, at Hogan Lovells
in Washington, information at https://www.statnews.com/conversation-drug-pricing-2019/?utm_source=STAT+Newsletters&utm_campaign=bb45b691af-STATPlus_1113_event_subs_COPY_01&utm_medium=email&utm_term=0_8cab1d7961-bb45b691af-149691333
Dec. 4
9:00 a.m., CMS sponsors a “Town Hall” meeting “To discuss fiscal year (FY) 2020 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS).” Registration required by 11-19-2018, Federal Register notice here.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
November publication dates: 16, 26, 27, 28, 29, 30
December publication dates: 3, 4, 5, 6, 7, 10, 11, 12, 13, 14
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com