The Affordable Care Act and rising healthcare spending were the main topics of conversation at America’s Health Insurance Plans Health Insurance Exchanges Forum and National Health Policy Conference, which were held March 8-10 in Washington, DC.
The Affordable Care Act (ACA) and rising healthcare spending were the main topics of conversation at America’s Health Insurance Plans Health Insurance Exchanges Forum and National Health Policy Conference, which were held March 8-10 in Washington, DC.
The pharmaceutical industry was a favorite punching bag as speakers lamented the high cost of medicines and discussed potential policy actions to make care more affordable for consumers.
Here are 5 key takeaways from the 2 meetings.
1. Pharma is the problem
Multiple speakers are laid the blame on the pharmaceutical industry for rising prices and the burden on consumers. There was even an entire panel devoted to shifting the prescription drug cost paradigm—and the panelists were angry about increasing drug prices.
“I’m not sure there has been any other issue that has or should grab our attention as much as prescription drug costs,” said Brad Wilson, president and CEO of Blue Cross and Blue Shield of North Carolina.
He added that for his company, pharmacy costs increased more than inpatient hospital stays, outpatient care, or physician office visits combined.
Diane P. Holder, executive vice president of UPMC, president of UPMC Insurance Services Division, and president and CEO of UPMC Health Plan, wondered if it wouldn’t take a miracle to make a difference in the pharmaceutical industry.
John Bennett, MD, FACC, FACP, president and CEO of the Capital District Physicians’ Health Plan, didn’t hold back, calling it “unethical, immoral, and unconscionable” that drug companies are taking “every penny of the future value” of curative drugs and using it to price the treatments.
“We’re seeing a huge moral dilemma today in how we price these drugs, but we have to face up to the fact that we simply cannot afford it.”
2. Consolidation is a huge challenge
Martin Gaynor, E.J. Barone Professor of Economics and Health Policy at Carnegie Mellon University, discussed challenges in US healthcare spending and placed a spotlight on consolidation. He pointed out that consolidation is not easily reversed, so if a merger occurs and competition is harmed or eliminated, it will be difficult to go back.
He added that he worries about leaving consolidation unchecked and realizing one day that all the various sectors in healthcare are highly consolidated by a small number of players, which will hinder any attempt to make progress.
“My fear is that we’ll have an even more expensive and less responsive healthcare system,” Gaynor said.
3. Transparency is a start, but must be done right
The cost of healthcare and of drugs in particular was a hot topic at the meeting, and transparency was brought up in more than 1 session. Bennett may have said it best: transparency “is a start. I’m not so optimistic that it will be enough.”
Len M. Nichols, PhD, professor of health policy and Director of the Center for Health Policy Research and Ethics in the College of Health and Human Services at George Mason University, discussed transparency around research and development costs. He explained that R&D costs for a drug don’t actually affect the price of that drug—the price of a drug is what the market will bear and the profits from that drug fund today and tomorrow’s R&D. As a result, trying to figure out what the R&D costs for a drug were is “a waste of time.”
Gaynor also touched on transparency as it relates to healthcare spending in general. He said that transparency is important and while only a small proportion of people are going to be responsive to price information, there are a couple of challenges.
“We are increasingly seeing more cost sharing—high deductible health plans that kinds of things—and encouragement for consumers to be more active shoppers and they literally can’t do that if they don’t have the information,” Gaynor said.
4. Changes to the ACA unlikely after the election
After James C. Capretta, a visiting fellow with the American Enterprise Institute (AEI), outlined the recent plan AEI released on how to improve healthcare and replace the ACA, he candidly admitted that there is unlikely to be a huge movement in health systems. If Hillary Clinton is elected, she will maintain the status quo and build on the ACA, and Capretta didn’t seem to confident if the Republican frontrunner, Donald Trump was elected.
“For a time I thought if an alternative candidate were elected perhaps this approach [the plan from AEI] would be something they would be thinking about,” he said. “For obvious reasons, I seem a little less confident about that.”
Candy Crowley, the former chief political correspondent for CNN, also discussed the outcome of the presidential election and its impact on healthcare. She also believed Clinton and Trump will be the nominees. Overall, she doesn’t expect much to change regardless of who wins and that the basics—mandated coverage, the healthcare marketplace, and subsidies—will be hard to undo.
“Obamacare has survived 2 giant legal challenges, 2 mid-term elections, and 1 general election,” she said. “I think it’s here to stay in its structure.”
5. State-based exchanges are in the best interest of the states
The executive directors of the Nevada and California state exchanges had nothing but good things to say about not being on the federally facilitated marketplace. The 2 states have a very different experience as state exchanges since Nevada has a much smaller population (2.839 million in Nevada vs 38.8 million in California).
Both executive directors touted the benefit of having local control of the insurance market thanks to the state exchange.
“Insurance is local,” said Bruce Gilbert of the Silver State Health Insurance Exchange. “Insurance is not federal.”
Peter V. Lee, Esq, of Covered California echoed that sentiment and that being a state exchange gives California a little more flexibility. One of consideration is to offer coverage on the exchange to undocumented citizens. They would not be eligible for subsidies, so the initiative wouldn’t use federal funds. But the benefit to the state is that some families are mixed with one parent being undocumented and the rest of the family legal. As a result, the whole family is afraid to get health insurance.