Medicare’s recent adoption of penalties for readmissions offered hospitals a new incentive to shift some patients returning within 30 days of their discharge to observation status. A patient stay labeled “observation” doesn’t count as a readmission, allowing hospitals that might otherwise be fined for having too many readmissions to skirt the penalty'.
The structure of keeping patients as OUTPATIENTS rather than INPATIENTS has been discussed in detail. For our US seniors trying to use PRE-PAID MEDICARE SAVINGS ACCOUNTS----we are seeing more and more seniors being pushed to OUTPATIENT status for ordinary health procedures. Below we see the reason-----seniors pay higher CO-PAYS AND DEDUCTIBLES for out-patient added to rising costs of MEDICARE INSURANCE PREMIUMS. So, basically, our US seniors are getting NONE OF THEIR HEALTH SAVINGS from MEDICARE ----global health systems are simply being allowed to design operations that will have seniors footing as much costs as any 99% citizen with a private health insurance plan.
'But the patient loses since the cost sharing requirements for outpatient services are much higher than they are for inpatient. But then who ever said that health care reform was to benefit patients'?
The health rankings per state saying MASSACHUSETTS for example ranks top in COST SAVINGS----means it has installed structures that maximize global health system PROFITS----at the expense of its 99% of MA citizens especially its SENIORS.
Should You Waive Copayments?
One of the most consistently asked questions is, should I waive copayments when requested by a patient?
Usually the patient will tell you that their other physicians and therapists waive their copayment so you should also waive copayments for them. Many times, they will also ask you to waive their deductibles, especially in the beginning of the year when most deductible reset. This is especially true now that copays and deductibles are increasing to their highest rates in history as insurance companies try to minimize their expenses.
The best advice is to not waive copayments as a practice policy. Medicare allows you to waive copayments under certain circumstances. Private payers generally do not allow you to waive copayments. Be sure to check your contract with each payer to make sure what their policy is for waiving copayments. The consequences can put your practice in jeopardy.
Should you waive copayments for Medicare patients?
Most Medicare policies concerning the treatment of copayments and deductibles are included in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Before HIPAA, Medicare treated copayments and deductibles similar to private payers.
HIPAA concluded that free services are likely to influence a patient to receive some other paid services and should be considered a form of remuneration. Since offering remuneration to patients is illegal, waiving copayments and deductibles are illegal. However, HIPAA did allow certain waivers to remuneration to patients and allow practices to waive copayments and deductibles if:
- The waiver is not offered as part of any advertisement of solicitation.
- The practice does not routinely waive copayments or deductible amounts.
- The practice waives the copayments or deductible amounts after:
- The patient can show financial hardship. Financial Hardship should be defined by the practice in a written policy and must be applied equally to all patients.
- The practice fails to collect copay or deductible amounts after making reasonable collection efforts.
- A health plan type of waiver not applicable to individual or group providers.
So, under Medicare, if you occasionally waive copayments to those who can demonstrate financial hardship, you will be within the law. But you cannot routinely waive copayments or advertise that you waive copayments. So when a Medicare patient asks you to waive your copayments, you should inform them that this practice is illegal
Should you waive copayments for Private Payer patients?
When Private Payer Insurance Companies set a copayment or deductible amount as part of their Insured’s policy, they are counting on the copayment or deductible to cause a pattern of behavior. Simply stated, high copays are designed to make sure the patient goes to the doctor when they have a real problem, not every time they have an ache or pain. Similarly, high deductibles are designed to make sure the patient gets treated and released from care instead of using their health insurance for maintenance treatments. If you agree to waive copayments or deductibles, you are removing the incentives set by the insurance company and may be increasing the amount of care to the patient and the cost to the insurance company. This might be considered fraud based on your contract with the insurance company.
Most private payers do not allow you to waive copayments or deductibles.
It is always best to check your contract to see if you are allowed to waive these fees and under what circumstances you are allowed to waive these fees. If you want to reduce the fees paid by the patient, the best way to do this would be to reduce your fee so both the patient and the insurance company pay less. This will not reduce any copayments that must be collected at full value. If the patient is truly having financial hardship, you may decide to treat the patient pro-bono. Again, you should check your contract with the private payer to make sure this is allowed and you should have written practice policy that is uniformly administered to all patients.
Conclusion – Do NOT waive copayments
When a patient asks you to waive their copayments or deductibles, it is best to inform them that this practice is illegal and not endorsed by you nor your practice. If they threaten to go to another therapist who will waive their copay or deductible, you are better off letting them go to another therapist. On top of the legal issues, you are also working for free or greatly reduced fees when you waive copays and deductibles. Wouldn’t you rather have a patient paying his fair share rather than a patient receiving free services? You owe it to yourself and your practice to be fiscally responsible and protect it from possible fraud charges by refusing to waive copayments unless it is justified by financial hardship.
Our US seniors are now paying a private annual Medicare premium ranging as any private health insurance plan from $1000-2000 a year AND seeing co--pay and deductible costs rise. The cost to health system for out-patient may be LOWER---COST---but the cost to consumers are rising.
This same dynamic of course hits our 99% of WE THE PEOPLE having to purchase PRIVATE health insurance. The operational structures that are soaking SENIORS through MEDICARE are soaking our adults with private plans.
Below we see 2018 news article----printed after MASSACHUSETTS was ranked top in HEALTH COSTS----shouting that those cost savings are sure not hitting consumers or businesses made to supply health insurance to employees. Now, businesses will not have long to complain because AFFORDABLE CARE ACT has a goal MOVING FORWARD of having all 99% of US WE THE PEOPLE on a WORLD HEALTH ORGANIZATION UNITED NATIONS global labor pool third world structure of health care. Businesses will not offer health plans-----and citizens will simply have preventative care offered at any FOREIGN ECONOMIC ZONE OVERSEAS.
How does MASSACHUSETTS contain COSTS to health systems to rank #1? Remember, MA has its own global hedge fund IVY LEAGUE medical corporation ---in HARVARD'S MA GENERAL-----not PUBLIC. This global health system operates just as MAYO CLINIC----JOHNS HOPKINS----having nothing to do with US quality health care access----totally a PROFITEERING GLOBAL HEALTH SYSTEM. No matter how many times these global health systems say THEY DO NO HARM----they are killing our US 99% with lack of access today especially our US seniors.
Harvard Medical School
Massachusetts General Hospital is the original and largest teaching hospital of Harvard Medical School, where nearly all of our physicians are faculty members.
For almost two centuries, Mass General has been affiliated with Harvard Medical School. The hospital also serves as a site for the principal clinical experience as well as a number of other clerkships. Mass General is committed to ensuring that Harvard Medical School students have a positive educational experience and achieve their objectives while rotating through the hospital.
BIZJOURNAL and this smiling face representing BUSINESSES having to insure employees KNOW corporations will not be doing so VERY SOON. We can keep allowing global banking 1% to PRETEND they are building a developed nation US quality health system when really building third world FOREIGN ECONOMIC ZONE structures ----but why not GET RID OF ALL GLOBAL BANKING 5% FREEMASON/GREEK players pushing all these policies forward!
Government & Regulations EDITORIAL/OPINION
Viewpoint: Mass. health care legislation must contain costs for employers, consumers
By Matt Hollister / Christopher Carlozzi – CEO, Hollister Insurance Brokerage Inc. /
State Director, National Federation of Independent Business
Jul 20, 2018, 5:39am
In a recent poll, Massachusetts voters were rightly proud of what the commonwealth has done to lead the nation in ensuring people have access to high-quality health care. But they are understandably concerned about our inability — so far — to effectively control ever-rising health care costs.
WE NEVER BELIEVE MARYLAND POLLS---DON'T BELIEVE MASS POLLS ------
Employers share these concerns.
Rising health care costs impact an employer’s ability to offer raises and other benefits to workers and limit the ability to grow companies and hire additional staff. Rising costs also make it harder for Massachusetts employers to compete for talent with employers from other states; those employers can offer higher wages because health care costs are not eating into their bottom lines. While the Massachusetts economy is strong, Massachusetts employers’ confidence is down in June due to an impending trade war with China and key U.S. trading partners, along with recent legislative initiatives related to family-and-medical leave, an increase in the minimum wage, and a new assessment on Massachusetts employers to fund shortfalls in MassHealth.
Massachusetts employers had this new assessment imposed on them with the understanding that Gov. Baker’s proposed MassHealth reforms would be taken up by the Massachusetts House and Senate in health care cost-control legislation moving on Beacon Hill. Unfortunately, the House and Senate have failed to address significant reforms to MassHealth. The unsustainable growth in this program prevents investments in other important priorities, such as improving the state’s transportation system and ensuring our kids are getting the best education they can. The bills also do little to control overall health care costs and, in fact, will raise costs, driving premiums even higher. This is a sad commentary on our efforts to control health care spending in the commonwealth, and it underscores the urgent need to rein in the growth of MassHealth.
The most costly and troubling parts of the House and Senate bills are the attempts to address the issue of price variation — the differences in what hospitals are paid. Each house’s solutions will raise premiums for employers and consumers and should be rejected by the conference committee.
The issue of price variation has been well documented in our marketplace, with Massachusetts having far greater differences in what hospitals get paid than almost any other state. Attorney General Martha Coakley first documented the issue of price variation more than eight years ago, when she noted that certain hospitals use brand, size and geographic isolation to drive higher prices, with no correlation to quality or patient acuity. For Massachusetts health plans and employers, this and subsequent reports documented the need for more market-based tools to help health plans drive care to lower-cost providers.
THIS IS WHY BIZJOURNAL PUBLISHED THIS COMMENT FROM A CONCERNED BUSINESS OWNER-----STATING THE NEED FOR MORE MARKET-BASED TOOLS---MARKET-BASED TOOLS ARE WHAT HAS US HEALTH CARE COSTS AND FRAUDS SOARING.
For community hospitals paid on the low end, they have advocated a statutory rate floor — a minimum amount that hospitals could be paid in Massachusetts. This could add $180 million annually in new health care spending. Without an offset to account for the added costs, such a proposal is exactly the wrong solution, as Massachusetts already has among the highest health care costs in the nation, second only to Alaska. This proposal will only exacerbate that distinction.
COMMUNITY HOSPITALS PAID AT LOW END WHILE GLOBAL HEALTH SYSTEMS LIKE HARVARD GET HIGH END FUNDING-----HOW ANTI-FREE MARKET IS THAT??????
While the House bill does not establish a rate floor, per se, the legislation includes a provision establishing a one-time assessment, originally pegged at a staggering $450 million in new money and then reduced to $330 million before leaving the House floor. This assessment would be paid mostly by the state’s not-for-profit health insurers, and in smaller part by the highest-paid hospitals. While there are criteria to help prioritize funding among hospitals, there is no requirement that community hospitals meet any quality-improvement metrics or patient satisfaction criteria. The bill’s language says that the assessments can’t be passed on to employers by way of increased rates, but such a promise is illusory.
With most of the local health plans having operating losses due to the changing landscape of the Affordable Care Act, rising drugs prices and new technologies, health plans will indeed be allowed to build these assessments into premiums if they face solvency concerns, and can also pass them on to self-insured customers as part of fees. Placing a reserves assessment on carriers is dangerous public policy. Reserves are statutorily required and are in place to protect consumers, employers, employees, hospitals, doctors and vendors if a plan has unexpected losses.
Health plan reserves should not be used to fund unrelated activities.
The House bill does nothing to address documented price variation. The bill simply awards vast sums of money to community hospitals, with no requirement that they seek to improve care. Make no mistake about it: This provision will indeed increase costs for employers and consumers and will risk destabilizing the health care sector. It should be rejected.
The Senate bill will also increase costs — it establishes a minimum payment for hospitals, but because it fails to offset costs with a maximum payment to hospitals, this one provision could after three years add at least $265 million in new spending, raising health insurance rates to over $1 billion in five years.
To date, the efforts put forward by the House and Senate have failed to contain health care costs, and, if significant changes are not made to the bills currently in conference committee, employers and consumers will continue to see costs rise, with no relief in sight.
On behalf of the employers we serve, we recommend that any effort to address price variation be done sensibly and be cost neutral. For instance, if hospitals are paid a statutory minimum amount, it must be linked with a rate ceiling so that any increase for low-paid providers is offset by cost savings accrued from the highest-paid providers. In this way, we can be assured that costs will not increase for employers and consumers. A target growth cap like that in the Senate proposal is not sufficient in this regard. The conferees must also not include language granting all hospitals a rate increase if one hospital gets a rate increase, and they must close loopholes to ensure that hospitals in wealthy systems aren’t unjustly enriched by these new provisions.
Any final proposal must promote competition and not destabilize our health plans or others in the health sector.
We will continue to oppose health care cost-control legislation that actually increases costs for employers and consumers and jeopardizes Massachusetts’ competitiveness.
When TEXAS global banking 1% BUSH/CLINTON neo-liberals/neo-cons being very proud the 99% of Texas citizens are not covered by health insurance because they cannot afford health insurance in TEXAS----it is for two reasons. First, Texas is most aggressive in filling the state with global labor pool immigrants not earning enough to purchase private insurance ----not qualifying for MEDICARE OR MEDICAID----all while paying PAYROLL TAXES funding both programs. TEXAS allows its global labor pool immigrant workers to be covered by WORLD HEALTH ORGANIZATION UNITED NATIONS FOREIGN ECONOMIC ZONE preventative care only health insurance. No matter how loudly states like CA, MD, MA, NY pretend they are covering our new to US 99% immigrants ---they are not. As Texas, all states saying immigrants are receiving MEDICAID are actually simply accessing WORLD HEALTH GLOBAL LABOR POOL insurance coverage.
Below we see what all US 99% WE THE PEOPLE know-----most US citizens are paying through one operational structure or another------$10,000 a year on health care. That is AMAZING and it is pure PROFITEERING.
"the average American spent $9,596 on healthcare" in 2012, which was "up significantly from $7,700 in 2007."
We are seeing US health care costs to CONSUMERS sky-rocketing as STATE RANKINGS FOR HEALTH COSTS rank lower costs to global health systems meaning higher PROFITS. Now, our US 99% are seeing wages driven to third world levels even white collar professionals being pushed to what is for US LIVING WAGE poverty line----$30,000 ---40,000 with most US citizens around $20,000. Those former global banking 5% freemason/Greeks having spent a few decades on SOCIAL SECURITY DISABILITY are given less than $20,000.
"Health care spending per person is expected to surpass $10,000 in 2016 and then march steadily higher to $14,944 in 2023."
For most US 99 % adults----cost of health care insurance is half or more of annual income. So, $15,000 a year in 2023-----what is that to US citizens earning a few hundred thousand? Well, if our global banking 5% freemason/Greek players think they will still be earning that much in MOVING FORWARD BACK TO DARK AGES-----we have swampland in Florida to sell.
Here's how much the average American spends on health care
10:52 AM ET Fri, 23 June 2017
The House's version of the health care bill, the Better Care Reconciliation Act of 2017, was at last unveiled on Wednesday, with profound and far-reaching potential repercussions for how Americans are able to access and afford health insurance. Currently, Americans pay $3.4 trillion a year for medical care (and, unfortunately, don't get impressive results).
What the average American spends a year
According to the most recent data available from the Centers for Medicare and Medicaid Services (CMS), "the average American spent $9,596 on healthcare" in 2012, which was "up significantly from $7,700 in 2007."
It was also more than twice the per capita average of other developed nations, but still, in 2015, experts predicted continued sharp increases: "Health care spending per person is expected to surpass $10,000 in 2016 and then march steadily higher to $14,944 in 2023."
Indeed, average annual costs per person hit $10,345 in 2016. In 1960, the average cost per person was only $146 — and, adjusting for inflation, that means costs are nine times higher now than they were then.
Here's how that breaks down
According to eHealthInsurance, for unsubsidized customers in 2016, "premiums for individual coverage averaged $321 per month while premiums for family plans averaged $833 per month. The average annual deductible for individual plans was $4,358 and the average deductible for family plans was $7,983."
That means that, last year, the average family paid $9,996 for coverage alone, and, if they met their deductible, a total of just under $18,000. Meanwhile, an average individual spent $3,852 on coverage and, if she spent another $4,358 to meet her deductible, a total of $8,210.
These figures do not take into account any additional co-insurance responsibility she might have. In addition to co-pays and deductibles, an increasing number of plans now require co-insurance payments, which require that, even once you meet your deductible, you continue paying some percentage of all costs until you hit your out-of-pocket maximum.
How age factors in
Young people, who are expected to benefit from lower premiums should the GOP repeal-and-replace efforts succeed, already pay the least. But even their costs can be considerable, depending on where they live. In 2016, the financial data site ValuePenguin found that the average costs for coverage for a 21-year-old go from $180 a month in Utah, plus a $2,160 deductible (potentially $4,320 a year, total), to $426 a month in Alaska, with a $5,112 deductible (potentially $10,224 a year, total).
As a reminder, 72 percent of young millennials, aged 18-24, have less than $1,000 in their savings accounts and 31 percent have nothing saved at all.
What OBAMA and Clinton neo-liberals call HEALTH SAVINGS ACCOUNTS for young adults are simply the same PAYROLL TAXES our baby boomers paid for several decades now unable to access those health savings accounts. So, all this will hit our young adults growing older much harder than hitting our aging baby boomers seniors today----all this lack of access will eliminate US developed nation health care quality care for 99% of our US WE THE PEOPLE black, white, and brown citizens MOVING FORWARD health care for only the global 1% and their 2%. This statement below is INSULTING---as if any amount of health savings a young adult could accumulate will transfer to actual quality health access.
'As a reminder, 72 percent of young millennials, aged 18-24, have less than $1,000 in their savings accounts and 31 percent have nothing saved at all'.
This week's discussion on operational public policy simply wants to show the mechanisms global banking 5% freemason/Greek player pols are installing NOW while using terms called COST SAVINGS-----making it sound like consumer savings while that stat is looking as global health system cost savings MAXIMIZING CORPORATE PROFITS.
MARYLAND ranks top in COST SAVINGS for the above reasons----it ranks LOW on ACCESS for those same reasons. VA, DE, WA, CA all rank LOW on ACCESS for these same reasons. All global banking 1% Clinton neo-liberal states looking just like TEXAS---only FAKING THE DATA.
Let's look at the OUTCOMES RANKING ----ask HAWAII how it is tops in COST SAVINGS for global health system profits-----ranked LOW in ACCESS but somehow creates FAKE DATA saying its OUTCOMES are top? We can ask raging global banking 1% Clinton neo-liberal GABBARD pretending to be OUR REVOLUTION populist leader while being that OUR REVOLUTION for only the global 1%----you know, just like Bernie Sanders and Jill Stein. We see VT and MA home of Bernie and Jill with these same DATA SKEWS.
One of the biggest factors in HEALTH OUTCOME is driven by massive and systemic frauds and corruption still allowed to soar especially for our low income citizens which of course represent a super-majority of our US citizens----growing to US 99% of citizens black, white, and brown citizens.
by Mark Reutter12:53 pmAug 10, 2018
Millions misused by former manager at Baltimore Social Services, audit alleges
Period covered by the audit coincides with the tenure of agency head Molly McGrath Tierney, who resigned last August
The OUTCOMES are FAKE DATA because the criminality in our public health system is still raging----whether MA, CA, WA, IL----or TX, AL, FL.......OUTCOMES cannot be happening when communities are not receiving social services spending. We discussed this a few days ago as above.
What Are Population Health Outcomes?
Many health improvement models have identified two broad outcome goals: increasing overall or mean population health and eliminating disparities within the population. The outcomes component of our population health model is shown in the left hand side of the figure below (1,2).
For overall or mean population health, two components are displayed: mortality (length of life), and health-related quality of life, or morbidity. Healthy People 2010 defined health-related quality of life as "a personal sense of physical and mental health and the ability to react to factors in the physical and social environments (3)." Simply put, one goal of population health improvement is to increase years of life and the quality of those life years.
Another goal is to reduce the differences or disparities in these health outcomes among different subgroups in the population (4). The figure indicates a number of subgroups that are associated with significant differences or disparities in both mortality and health-related quality of life. Those featured here are race/ethnicity, socioeconomic status (SES), gender, and geography. Many other subgroups besides these are associated with population health disparities. All differences are not necessarily of policy interest or are equally important in all situations (5).
It is important to note that in this figure each quadrant is arbitrarily sized equally, as are the components within disparities (i.e., race/ethnicity, SES, geography, and gender). The relative importance of each cell is not a research question but a value choice for different nations, states, or other population groups to make. Some may focus more on years of life and others more on the quality of those years. Some may think that socioeconomic disparities are the most important while others could prioritize disparities of gender or geography. In the Health of Wisconsin Report Card, an overall grade for health disparity was given based on a multidomain index across four disparity domains (6).
How in the world do we get OUTCOME data in US when all oversight and accountability structures in health care have been dismantled by AFFORDABLE CARE ACT and we are told these global health systems will SELF-REGULATE?
While US citizens are being told they now need to buy PHARMA insurance since MEDICARE is being dismantled without MEDICARE PART D----PHARMA-----US FOREIGN ECONOMIC ZONES as all US cities will operate as those overseas----and there will be NO regulation of global health systems OR global PHARMA----they will simply release FAKE DATA saying everything is SUCCESSFUL
Today's US national media and national NGOs tied to writing health care articles are using data direct from the same global health systems and PHARMA having spent these few decades of ROBBER BARON FRAUDS----believe HEALTH OUTCOME DATA? OH, REALLY???????
We'll believe in SANTA and the TOOTH FAIRY ---but not a deregulated global health system allowed to create corporate DATA.
US drug pricing: could the industry regulate itself?
Pharmaceutical price hikes are nothing new, but increased criticism has instilled a new sense of social responsibility, at least for some companies. Chris Lo considers whether industry self-regulation could play a larger role in future US drug pricing
Back in September 2016, with the US presidential election in full swing and drug prices high on the public agenda, Allergan made an announcement that showed something rare in the pharmaceutical industry – restraint on prices.
Allergan CEO Brent Saunders emphasised the ‘social contract’ it shares with patients – patients understand the cost of developing new drugs, so the contract goes, and drug makers acknowledge that medicines must be priced in a way that makes them accessible to those who need them.
OH, REALLY MR SAUNDERS? WE KNOW THE PUBLIC WANTS PUBLIC RESEARCH CREATING PHARMA AS ALL LAST CENTURY LEADING TO COST-CONTAINING PRICES-----WE SEE NO 'SOCIAL CONTRACT' WITH GLOBAL PHARMA.
“Those who have taken aggressive or predatory price increases have violated this social contract,” Saunders wrote in a blog at the time. “I don’t like what is happening, and despite the fact that it is hard to speak out publicly on this, now is the time to take action to spell out what this social contract means to me.”
Making friends and influencing people:
Allergan’s 10% price cap So what does the pharma-patient social contract mean to Saunders and Allergan? On drug prices, the short version is that the company has made a commitment to limit price increases on its drugs to once a year, and each increase will be restricted to no more than 10%. The company also pledged to not needlessly hike prices on drugs that are approaching the end of patent protection.
Saunders’ comments generated a wave of good publicity for Allergan, and as this year’s January drug price increases have shown, the firm’s self-imposed 10% price increase cap has caught on in the industry more widely. Allergan itself raised prices across its portfolio at a rate of 9.7% or less, but others have followed suit. Amgen upped the price tag on its blockbuster rheumatoid arthritis drug Enbrel by 9.7%, and the likes of AbbVie, Teva, Cellectis and Insys also kept price hikes under 10%.
“In 2017 and at the beginning of this year, we have seen companies restricting the price hikes, and especially at the beginning of this year sticking to Allergan’s pledge,” says GlobalData healthcare analyst Alice Stevens. “From 2013 to 2015, the average price increase was 20% a year for pharmaceutical products, whereas the average price increase this year was 8.7%.”
So what does this voluntary 10% limit mean in practice, and can the industry persuade the American people and political system that it can be trusted to self-regulate on pricing?
IT MEANS 99% WE THE PEOPLE DO NOT BELIEVE A WORD OF SKEWED CORPORATE DATA.
Staving off government-imposed price controls
While the Allergan-led price hike limit might have curtailed US price increases for now, critics have argued that a 10% annual limit doesn’t necessarily translate to true restraint, and only seems so in comparison to the excesses of the past.
“The 10% price increase limit is problematic, given that a drug can double in price in seven years with 10% annual price increases,” says Dr Walid Gellad, associate professor of health policy at the University of Pittsburgh School of Public Health. “We do not want to condone 9.9% annual price increases as reasonable in any way. Right now it's hard to know if industry gestures are making a difference versus just seeing regression to the mean – in terms of slower price increases – after a few years of large increases.”
Will Holley, spokesman for the Campaign for Sustainable Rx Pricing (CSRxP), which campaigns for reduced drug prices on behalf of American physicians, hospitals and health insurers, agrees.
“10%, or 9.9% or whatever it might be, price increases are ten times CPI [consumer price index] inflation, so it’s tough to see that as restraint. Maybe a 10% increase in the price of aspirin isn’t a huge impact, but if you look at Humira for example, the best-selling drug in the world, it’s been estimated that the 9.X% price increase that AbbVie took on it this year is going to cost the US healthcare system a billion dollars. So the percentage doesn’t always tell the whole story.”
Pharma price capping is more a product of political expediency than a social contract
The price rises of some players that haven’t subscribed to Allergan’s social contract – Pfizer and Celgene increased their prices by 19.8% and 27.5%, respectively, in 2017 – reveal the limitations of piecemeal industry self-regulation. For many observers the price cap, conceived at a time when outrage over price gouging was threatening to reach critical mass, represents a savvy, PR-driven move to pre-empt the possibility of more far-reaching drug price reform at the federal level.
“The pharma industry has this self-enforced price hike cap, and it’s hoping it’s enough to avoid legislative reform,” says Stevens. “I think as the year goes on, revenues might take a hit – then we may see a lot of breakaway from this promise, depending on the individual companies’ needs, so I don’t think it’s likely to stick.”
Stevens’ view that pharma price capping is more a product of political expediency than a social contract would seem to be corroborated by statements reportedly made by AbbVie during a meeting with pharma analysts from Leerink Partners in September. According to Leerink Partners, during the meeting AbbVie stated that “the intensity of the drug pricing debates and political risks is waning, and...the company now sees little risk of significant changes in drug price regulation in the US, at least for the foreseeable future.” The firm reportedly noted that it may “revert to more than one price increase per year and to double-digit increases in 2018 and beyond”.
More than just list prices
Of course, list prices are only part of the story, as industry trade associations such as the Pharmaceutical Research and Manufacturers of America (PhRMA) are keen to emphasise. The US system of reimbursement is incredibly complex and somewhat opaque, and the discounts and rebates offered to health systems and pharmacy benefit managers (PBMs) aren’t necessarily passed on to the patient.
“Perhaps one of the reasons they do not want to talk about rebates is because they do not always directly share those rebates with patients at the point of sale,” wrote PhRMA vice president of public affairs Robert Zirkelbach in a blog post last year. “Unlike care received at a hospital or physician’s office, insurance companies require patients with high deductibles and co-insurance to pay the full list price for their medicine, even if their insurer receives a significant discount.”
The US system of reimbursement is incredibly complex and somewhat opaque
While CSRxP’s Holley acknowledges the complexity of reimbursement and the need for more transparency, he contends – unsurprisingly, given that CSRxP’s membership includes health insurers and PBMs – that this industry argument is an intentional “muddying of the waters”.
“At the end of the day, no matter the rebates and discounts, if the drug costs $135,000 a year, rebates, discounts and negotiations can only go so far,” he says. In March, health insurance giant UnitedHealthcare announced that it would pass on rebates to a portion of its customers on certain employer-sponsored health plans, kicking off another self-regulation debate over whether the healthcare industry can create more transparency and fairness without the need for government oversight.
ISN'T UNITED HEALTH CARE TOP GUN US HEALTH FRAUD CORPORATION THESE FEW DECADES OF CLINTON/BUSH/OBAMA? INDEED, LET'S TRUST THEM TO SELF-REGULATE.
Blocking generic competition
Another key driver of drug prices is pharma companies’ efforts to extend patent protection for their blockbuster products far beyond their original periods of market exclusivity. Despite Saunders’ ‘social contract’, Allergan recently found itself under the spotlight after a particularly unusual patent protection scheme, in which the company transferred the patent rights for dry-eye drug Restasis to the sovereign St. Regis Mohawk native American tribe, which then attempted to block generic competition. The US Patent Trial and Appeal Board denied the motion.
Other methods of patent protection and ‘pay-to-delay’ deals are more mundane, but potentially just as damaging to generic and biosimilar competition, which is a sure-fire method of driving down prices across the board.
“[Humira’s] patent actually expired in 2014, but [AbbVie] was able to tie the product up in so many patents – I think it’s got over 100 patents protecting different aspects of the product; tiny things, but if you’re a smaller biosimilar company, you can’t fight stuff like this,” says Stevens. “We’ve seen the company make a deal for biosimilars not to launch until 2023. That’s almost ten years after the original patent expired.”
The CREATES Act […] would take a small step towards deterring companies from blocking generic competition
This is an area where there is a real prospect of regulatory reform. The CREATES Act, currently being considered for inclusion in the government’s omnibus spending package, would take a small step towards deterring companies from blocking generic competition, and the US Food and Drug Administration under Scott Gottlieb is working to accelerate the development of generics. “We expect to take additional steps this year to promote competition; to help reduce drug prices and improve access to medicine for Americans,” Gottlieb wrote in January.
OH, REALLY SCOTT? HOW WILL THAT BE DONE AS US FOOD AND DRUG IS PARTNERED WITH GLOBAL HEALTH CORPORATIONS AND PHARMA WRITING TRANS PACIFIC TRADE PACT HAVING A GOAL OF KILLING THE GENERICS INDUSTRY?
Nevertheless, at the moment any major overhaul of drug pricing in the US seems like a distant prospect, and as pharma companies are likely to do the minimum necessary to avert that threat, there is little incentive for the industry to implement bolder self-regulation on pricing.
With a powerful pharma lobby to set the terms of the conversation in Washington and seemingly little political will to pursue radical reforms, the industry will see little need to change its course drastically. A credible threat of top-down change on pricing might be a shot in the arm for American healthcare, if only to drive firmer action to control costs under the existing system.