BEA Finds Drug Price Increase Differences With And Without Rebates Factored In
An interesting study from the Bureau of Economic Analysis (BEA), which set out to study whether annual drug price increases are different when factoring in rebates between drug makers and pharmacy benefits managers (PBMs) or health plans. The BEA compared claims data with rebate estimates from 2007 to 2020.
It found something very interesting. Retail pharmacy prices increased by 9.1% each year. Negotiated prices, which include rebates, grew a more modest 4.3% per year. The issue here is that rebates do not regularly make it in full or sometimes even in part from the pockets of PBMs to either employer groups or to patients at the point of sale. Pointing to this is the fact that in 2016, patient out-of-pocket spending rose while negotiated cost growth largely remained flat. The increase in out-of-pocket costs is likely attributable to growing deductibles and co-insurance, which are often set based on list price.
All this shows the need to reform our opaque drug supply channel and eliminate rebates through drug price negotiations.
#drugpricing #ira #branddrugmakers #pbms
OliverWyman Says MA Plans Can Learn From What MA’s Forerunner Went Through
Excellent analysis by OliverWyman on the current plight of Medicare Advantage (MA) and how MA plans can learn from what Medicare+Choice (MA’s precursor) went through. As OliverWyman notes, in the late 1990s Medicare+Choice also faced rising medical costs and lower reimbursements.
At the time, lawmakers capped reimbursement increases at 2% annually due to the Balanced Budget Act (BBA). Healthcare inflation grew between 5% and 10% annually. As such, many private plans exited or reduced their footprint in Medicare+Choice. Contracts shrank from nearly 350 to 147. But plans that prioritized margins over growth survived. That is a bit what we see today. When rate hikes were generous, MA plans expanded with abandon. With lower rates, they are pulling back and realigning benefits as we go into 2025 and beyond.
I will have a deeper look at this analysis in an upcoming blog.
OliverWyman analysis: https://www.oliverwyman.com/our-expertise/perspectives/health/2024/aug/pressure-building-on-medicare-advantage-time-to-act-is-now.html
#medicareadvantage #margins
https://www.beckerspayer.com/payer/the-lesson-medicare-advantage-plans-can-learn-from-the-90s.html
New Uninsured Study May Have Election Year Ramifications
I have made the case that healthcare could be a decision-making issue in some swing, battle-ground states. A recent study notes that the uninsured rate went up under Donald Trump and down under Biden. This was tied to Trump’s anti-Exchange and anti-Medicaid policies versus Biden’s pro-expansion agenda. The study notes that battlegrounds Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin saw major increases in their uninsured rates.
#coverage #aca #obamabcare #exchanges #medicaid #trump #biden #election2024
Vermont Now Wants Waiver To Import Drugs From Canada
Canada is the latest state to ask the Food and Drug Administration to import drugs from Canada using a Trump-era regulation. The drug lobby dislikes importation and Canada is worried it could impact its supplies.
(Article may require a subscription.)
#drugimportation #drugpricing
Healthcare Labor Shortage Projected by 2028
Mercer says aging and lagging labor trends will create a shortage of over 100,000 critical healthcare workers by 2028. Certain states and specialties will be hit the hardest. Mercer projects a deficit of 73,000 nursing assistants. New York, New Jersey, and Tennessee are likely to experience the largest labor shortages. California, Pennsylvania, and Texas are projected to have a surplus of healthcare workers.
#healthcare #shortages
https://www.healthcaredive.com/news/healthcare-worker-shortage-2028/725865
— Marc S. Ryan
