HealthCare Roundtable e-News – December 11, 2018

US Healthcare Spending Hits $3.5 Trillion, But Growth Slows for Second Year in a Row

National healthcare spending grew at a rate of 3.9 percent to reach $3.5 trillion in 2018 — comparable to spending in 2017 and a drop from 2016, where spending grew by 4.8 percent, according to CMS. Spending for both private health insurance and Medicaid also slowed this year, with Medicare remaining relatively flat, the report stated. Projections from CMS earlier this year suggested spending would rise to 5.3 percent due to rising prices of medical goods, services, and Medicare costs. 

The $3.5 trillion total, which translates to $10,739 per person, is an average across the entire population. The reality of the data in the report is that the sickest patients largely account for most of the costs, with 5 percent of the population accounting for nearly half of total spending, according to AP News

The report identifies several factors that have affected spending growth this year, with the three largest including goods and services, hospitals and physicians, and retail drugs. The report noted 2018 as having the slowest increase in drug costs since 2012, and identified the tightening of opioid prescriptions as a factor for slowed growth this year.

“Retail prescription drug spending growth slowed in 2017 primarily due to slower growth in the number of prescriptions dispensed, a continued shift to lower-cost generic drugs, slower growth in the volume of some high-cost drugs, declines in generic drug prices, and lower price increases for existing brand-name drugs,” said the report. (InsideHealthPolicy).

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New Trump Administration Report Pushes Consumer-Driven Coverage Policies

On December 3rd, the Trump administration released a report calling for greater drug and healthcare price transparency, highlighting over 50 recommendations for ways Congress and agencies can implement new policies and better support patients. The legislative proposals in the report aim to empower patients shopping for healthcare to make direct payments to providers outside of their insurance through of Health Savings Accounts. (InsideHealthPolicy). 

HHS Secretary Alex Azar supplemented the report by speaking to the costliness of the US healthcare system, emphasizing that patients “have been removed from decision-making, insulated by third-party payment systems from any incentives that could drive down the cost of care.” Azar also spoke about the effects that third-party payment systems have on inhibiting consumers and patients, and the importance of enabling patients to become more informed about their healthcare and treatment options. 

Many employers lack access to pricing information because of privacy restrictions; however, the report is hopeful that small employers forming association health plans under the administration’s new rule “may be able to gain the market power necessary to leverage providers into these pricing arrangements.” the report says.

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Obamacare Sign-Ups Down as Open Enrollment Deadline Approaches

Only 3.2 million people have signed up for Obamacare in 2018, compared to 3.6 million this time last year, according to figures released by CMS on Thursday. The results from the report are leaving many ACA supporters concerned, with the tallied number of consumers down nearly 18 percent year over year. 

A few factors are considered to be behind the lag; earlier this year, the individual mandate that penalized people who refused to get health insurance was removed as part of the Trump administration’s tax overhaul. The administration also loosened restrictions on buying thinner plans that don’t meet Obamacare standards but can be more cost-effective for many individuals. 

Some pro-ACA Democrats have spoken out against the Trump Administration’s efforts to undermine Obamacare and have blamed the lower enrollment numbers on those efforts. Others have opposed this view and suggested that the strong economy has enabled more individuals to find jobs with other forms of coverage. 

Numbers are likely to increase as the Dec. 15 deadline approaches, where many will apply for benefits just as the open enrollment period comes to a close. In addition to those numbers, customers who automatically choose to renew their plans are also not counted in the enrollment total until after the period has ended.

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Manchin Looks to Trump on Reviving Bipartisan Obamacare Deal

In a meeting last week, Sen. Joe Manchin (D-WV) and President Trump discussed reviving a bipartisan agreement reached last year that aims to reduce ACA premiums and stabilize the healthcare market. The deal had fallen apart when both parties were unable to come to an agreement on the restrictions surrounding abortion funding. 

“I said he’s the one who can make a difference,” Manchin told reporters last Wednesday, describing his conversation with the president. Manchin did not describe in detail what Trump’s reaction was, beyond saying, “I think he’s going to look at it; I hope he does.” Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) were key players in the first round of conversations aiming to reach an agreement last year. There is still no resolution on whether to include abortion restrictions in the ACA fix; however, Sen. Murray last week called for additional conversations aiming to revive the deal and reach an agreement on the issue. The recent midterms shakeup in Congress will also likely lead to additional requests from the side of the Democrats.

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