Weekend update

Congress remains in session on Capitol Hill this week.  Last Friday, the health subcommittee of the House Energy and Commerce Committee held a hearing on the topic of mental health parity.  The Hill reports on the hearing here.

Robert Pear wrote in the New York Times this morning about Dartmouth’s decision to withdraw its accountable care organization from the Medicare Advantage program.

An evaluation for the federal government found that Dartmouth’s accountable care organization had reduced Medicare spending on hospital stays, medical procedures, imaging and tests. And it achieved goals for the quality of care. But it was still subject to financial penalties because it did not meet money-saving benchmarks set by federal officials.
“We were cutting costs and saving money and then paying a penalty on top of that,” said Dr. Robert A. Greene, an executive vice president of the Dartmouth-Hitchcock health system. “We would have loved to stay in the federal program, but it was just not sustainable.”

In contrast to the private sector, the Medicare program, whose governing laws resemble the Internal Revenue Code in complexity, is not very nimble. It concerns the FEHBlog that red tape generated by the Affordable Care Act and federal government procurement regulators could create similar difficulties for the FEHBP.  

The New York Times also reported last week on efforts by prescription benefits manager Express Script to control the spiralling costs of anti-inflammatory drugs.

Insurers and employers — who pay the bulk of the cost for drugs — say that a bigger financial shock has come from a largely overlooked source: expensive anti-inflammatory medications like Humira and Enbrel, drugs taken by millions of people for conditions like rheumatoid arthritis. In recent years, the prices of the medications have doubled, making them the costliest drug class in the country by some calculations. 

Now, one of the most powerful forces on the side of drug payers is pushing back. On Thursday, Express Scripts, the nation’s largest drug benefits manager, changed its recommendations to insurers and employers, saying they should cover fewer drugs for many inflammatory conditions. The idea is that the new limits will force drug companies to lower their prices, saving insurers and employers money.

No doubt other PBMs are taking similar steps.

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