Today's News

About insurance:

Health Law Could Be Hard to Knock Down Despite Judge’s Ruling: Comments are coming quickly about the ACA ruling discussed yesterday in my special weekend posting. Many legal commentators think Judge O’Connor erred in his logic in arriving at his decision declaring the ACA unconstitutional. I am concerned, however that inaccuracies are clouding these analyses. Two are noteworthy in this NY Times article. First, the article states that the “tax penalty was effectively eliminated when Congress reduced its amount to zero in the tax legislation enacted last year. “ This statement is factually incorrect. As my quotation yesterday notes, the penalty was not reduced to zero it was eliminated. This distinction is important since if a penalty amount (even zero) were still on the books it could be raised in the future and thus still linked to a mandate. The second error concerns Congressional intent when it repealed the penalty. Critics say that Congress did not intend to invalidate the whole law by this repeal. Two facts should give pause to this conclusion. First are the strong efforts by Congress in 2017 to repeal the ACA (remember Senator McCain’s thumbs down gesture that saved the law?) Second is the fact that the repeal of the penalty was part of a reconciliation bill- which can only change funding/tax provisions, NOT policy issues.
We will need to see where the inevitable appeal of the decision goes, For now, it is business as usual.

Read this NY Times article

CMS Report: Retail Drug Spending Slowed in 2017: The Office of the Actuary of CMS reported that drug spending grew by 0.4 percent in 2017 to $333.4 billion. Drug costs are about 10% of total healthcare spending. Recall that total costs are a function of price, volume and intensity (such as new technology-which can be either more or less expensive). The reasons for this slow growth are reduced volumes and increasing number of generics- both in the face of higher prices for branded drugs.
Read the announcement

Novartis weighs reinsurance tie-up to fund ultra-expensive drugs: Novartis is exploring a novel way to help customers pay for expensive new therapies- through purchasing reinsurance for the excess costs. While interesting, recall that insurance coverage is one reason healthcare expenses are so high. This problem was pointed out several decades ago by Professor Burt Weisbrod in his classic article The Healthcare Quadrilemma. We need solutions that decrease costs, not ones that provide a clever way to allow increasing them.

Read about this exploration in the Financial Times
Also read about it here (if you can’t access the Financial Times)

About pharma:

IFPMA Updates Ethics Code to Ban Gifts from Drugmakers: The International Federation of Pharmaceutical Manufacturers & Association called for a ban on gifts and promotional aids for prescription drugs in any country where its members operate. The strictness is exemplified by the fact that: “Providers can accept pens and notepads in the context of company organized events, but only as necessary to take notes during the meeting and without the names of any specific medicines.” It appears the rest of the world is catching up to American standards.

Read the announcement
Read the code

Centene wants its PBM to move from rebates to net pricing. That could be the new normal: Centene is now joining CVS and possibly other Pharmaceutical Benefit Managers to change its financial model. Insurers contract with PBMs to provide and manage their pharma benefits. PBMs make money in two ways: administrative charges and rebates/discounts from pharma manufacturers. These companies are now offering their customers predictable “net pricing, “ which means the customer (including patients) receive the benefits of the discounts and rebates the PBMs receive. This new method should enhance transparency- assuming the process is audited accurately and the results are made available.

Read about this change in pricing

About healthcare IT:

Docs don’t routinely report patient symptoms in EHRs: The title of this article was only one finding of the original study, but is very important. Many people with whom I have spoken who study this issue have pointed out that lack of symptom recording in medical records is a key reason for diagnostic errors. It is commonly held wisdom in medicine that if you ask the right questions, patients will tell you what is wrong with them about 80% of the time. We really need to talk to patients more and develop aids to recording their symptoms.

Read the report