It’s hard to believe that it’s been one year since Going Below the Surface was launched, timed with a conference on health spending. Since then, the health care spending conversation has only gained momentum, and we’ve made strides to elevate the evidence-based conversation through this platform, a “Considering Health Spending” initiative with Health Affairs and a forum of industry voices. Thank you all for digging deeper with us, and we look forward to even more to come in 2019. In the meantime, let’s keep this conversation going: Drop us a line or tweet using #GoingBelowTheSurface.
CMS’ Crystal Ball: Accelerated Growth on Health Spending Expected (2018 National Health Expenditure Numbers Are Out)
The Centers for Medicare and Medicaid Services (CMS) has released the official National Health Expenditure (NHE) numbers, published in Health Affairs, which project health care spending will accelerate over the coming eight years as the population ages and the prices for medical services grow. Health spending rose by 4.4 percent since last year, a faster rate than the broader economy. According to these projections, spending will continue to gain momentum, increasing by 5.5 percent, on average, between 2018 and 2027, and hitting $6 trillion in 2027.
Why It Matters: Lingering impacts from the Great Recession may have led many to believe that health spending was under control, but the economic turnaround, combined with aging baby boomers, will drive spending at an accelerated rate over the next decade. Now is the time to ask the difficult questions and address unsustainable spending head on.
From Theory to Practice: Paying for Cures
Curative therapies are a double-edged sword. The cutting-edge innovation these therapies promise can cure patients living with life-threatening or costly chronic diseases, but they may require equally innovative financing solutions that the current U.S. health care system is not built to handle. Earlier this month, patient advocates, regulators and industry representatives descended on Washington, D.C., for “Paying for Cures: Ensuring Patient Access and System Sustainability,” a day-long conference hosted by the MIT Center for Biomedical Innovation NEWDIGS Initiative, to explore how the system can catch up with these innovative curative therapies. Ideas discussed included efforts such as Louisiana’s monthly payment model — or “Netflix model" — for hepatitis C drugs and milestone-based rebates. At the conclusion of the event, the MIT-based Financing and Reimbursement of Cures in the US (FoCUS) consortium released a series of large-scale policy and practice recommendations for financing these new and upcoming curative treatments, including the creation of a new type of organization — the Orphan Reinsurer Benefit Manager — to address the financial challenges created by one-time therapies. Learn more about the topics discussed and potential solutions in the National Pharmaceutical Council's comprehensive summary of the event.
Why it Matters: The discussion about one-time cures is about to go from a theoretical conversation to a practical necessity as a wave of transformative therapies prepares to enter the market. Because there’s no “one-size-fits-all” solution when it comes to instituting payment and reimbursement practices for innovative therapies, efforts such as NEWDIGS are critical in parsing the relatively small evidence base to innovate around defined performance metrics and new financing approaches as quickly as industry innovates around gene and cell therapies.
What We're Reading
Building a more efficient health care system requires understanding the driving factors of low-value, high-cost spending, rather than slashing spending broadly. Let’s take a closer look at the latest research to better understand the high-cost patient population, as well as what to keep an eye on as health care spending continues to be a priority for policymakers.
- Characteristics and Spending Patterns of Persistently High-Cost Medicare Patients Figueroa JF, Zhou X, Jha AK. January 2019, Health Affairs. Less than 30 percent of Medicare fee-for-service beneficiaries who were defined as “high cost” in 2012 remained so persistently over the subsequent two years, according to this recent analysis. Persistently high-cost patients had greater relative spending on outpatient care and medications, while very little of their spending was related to preventable hospitalizations. Health care systems and policymakers can use this patient population information to better target spending reductions and care improvements over time.
- Targeted Treatment: Addressing the Complex Needs of High-Need, High-Cost Patients Jean-Baptiste D. January 16, 2019, Mathematica Policy Research. Characteristics of high-need, high-cost (HNHC) patients are complex, and go beyond analyzing medical claims data. As more focus is placed on outcomes-based payment models, it’s critical for the health care community to better understand the full spectrum of HNHC patients’ needs and help address the social and behavioral needs that contribute to chronic conditions.
- Three Hot Topics for the Health Policy Research Community In 2019 Simpson L, January 24, 2019, Health Affairs Blog. Heading into the 2020 election cycle, three topics will continue to be front and center on the policy stage: health care spending, delivery system transformation and persistent public health challenges.
- To Get More Bang for Your Health-Care Buck, Invest in Innovation Carino T. January 24, 2019, Health Affairs Blog. “As policymakers look to take swift action to control drug spending, they should proceed with caution. Drug prices are only part of the picture. As Wamble and colleagues note, a discussion of price is incomplete without consideration of the benefits that accrue to individuals, their families, and society.”
Dialogues on Health Care Spending
Have you heard about events or activities related to health care spending? Let us know so that we can share the information with our readers.
- Webinar: Low-Value Care 101: Identify, Measure, Reduce, Report: Join A. Mark Fendrick, MD, executive director of the Center for Value-Based Insurance Design, and Beth Bortz, president and CEO of the Virginia Center for Health Innovation, on Feb. 28 at 2 p.m. ET to discuss initiatives to address low-value care. They will share current progress in the areas of identifying and measuring low-value care and delve into innovative strategies to use that information to reduce and report low-value care.
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