A study, “Variation in Generic Dispensing Rates in Medicare Part D,” published in the November 2020 issue of The American Journal of Managed Care® (AJMC®), identifies significant variations in generic dispensing rates across Medicare Part D plans, revealing that many plans continue to favor higher-cost brand name drugs over available generic alternatives. The researchers found that if all Part D plans achieved the generic dispensing levels of the highest-performing quartiles, the program could potentially save billions of dollars in annual spending. In his testimony before the Senate HELP Committee, Ryan Long of the Paragon Health Institute cites this study to argue that current misaligned incentives and "rebate traps" often discourage the use of lower-cost medications. By referencing these data, the testimony highlights how increasing generic and biosimilar competition—and ensuring plan designs do not block their uptake—is a critical mechanism for lowering drug prices for both seniors and taxpayers.
The study, “The Unintended Consequences of Medicare’s Wage Index Adjustment on Device-Intensive Hospital Procedures,” published in the March 2022 issue of AJMC demonstrates how Medicare’s hospital wage index adjustment inadvertently penalizes facilities for device-intensive procedures because the formula applies labor-cost adjustments to the entire payment, including the nonlabor cost of the medical device. Research shows that since the cost of high-tech devices is uniform across the country, hospitals in low-wage areas—primarily rural facilities—are underpaid for these procedures compared with their actual expenses. The Niskanen Center references this study to argue that the current wage index formula exacerbates geographic health care disparities and creates a financial disincentive for rural hospitals to adopt advanced medical technologies. By highlighting these "unintended consequences," the Niskanen Center supports the case for policy reforms that would decouple fixed equipment costs from regional labor market adjustments to ensure rural patients maintain access to modern surgical care.
This study, “Accountable Care Organizations Are Increasingly Led by Physician Groups Rather Than Hospital Systems,” published in the May 2020 issue of AJMC, tracks a notable shift in the Medicare Shared Savings Program, finding that accountable care organizations (ACOs) are increasingly being led by independent physician groups rather than hospital systems. The researchers highlight that these physician-led ACOs often achieve greater savings and better performance outcomes than hospital-led counterparts, largely because they lack the financial incentive to maintain high inpatient volumes. The Paragon Health Institute references this study in its report on the hospital cost crisis to argue that physician-led models provide a critical, lower-cost alternative to the trend of hospital-driven consolidation. By citing these data, the institute emphasizes that policy should encourage these independent models to foster competition and counter the soaring prices often associated with large, vertically integrated hospital systems.
An article from AJMC.com, the website of AJMC, “Semaglutide Linked to Reduced Health Care Expenses for Patients With Obesity, HF, ASCVD,” highlights research presented at ObesityWeek 2024 demonstrating that semaglutide treatment leads to significant annual medical cost savings for patients with obesity and comorbid heart failure (HF) or atherosclerotic cardiovascular disease (ASCVD). The study found that initiating the drug resulted in a total cost reduction of over $7500 for patients with HF and $9200 for patients with ASCVD, primarily driven by a sharp decline in expensive inpatient hospitalizations. Becker's ASC Review referenced these specific economic findings in their report, "Cardiology and GLP-1s: 5 things to Know," to emphasize how these medications are shifting the financial landscape of cardiac care. By citing these data, Becker's underscores the emerging role of glucagon-like peptide-1 receptor agonists not just as weight-loss tools but also as critical interventions for reducing the high clinical and economic burdens associated with chronic cardiovascular conditions.
