Pursuing Value-Based Prices for Drugs: A Comprehensive Comparison of State Prescription Drug-Pricing Boards.

Policy Points In the absence of federal action on rising prescription drug costs, we reviewed the details of five states that have enacted prescription drug-pricing boards seeking to lower drug prices based on products' value. Within these states, six such boards are currently authorized; they have similarities but vary in terms of structure, authority, scope, and leverage. As of June 2021, only one of the boards in our sample has conducted pricing reviews; legislators in other states can learn from the successes and challenges of existing boards. Prescription drug-pricing boards represent a novel and promising way to curb state spending and pay for value in prescription drugs but face legal and political barriers in implementation. CONTEXT: Rising prescription drug costs are consuming a growing proportion of state and private budgets. In response, lawmakers have experimented with a variety of policies to contain spending and achieve value in prescription drugs. As part of this series of reforms, some state legislatures have recently authorized prescription drug-pricing boards to address the high prices of brand-name prescription drugs and assess the value of those drugs. METHODS: We identified state prescription drug-pricing boards in the United States, defined as any agency authorized by a state legislature to review specific drugs and pursue value-based drug prices. To describe the characteristics of the boards, we obtained public records of authorizing legislation, guidance documents, and board meeting minutes. We compared the boards' powers and responsibilities and analyzed completed pricing reviews. FINDINGS: Six state drug-pricing boards in five states met our definition; their design varied substantially. Two of the boards (New York Medicaid and Massachusetts) have authority over drug rebates paid by state Medicaid programs, one (New York Drug Accountability Board) has jurisdiction over state-regulated commercial insurance, and another three (Maine, Maryland, and New Hampshire) oversee non-Medicaid, state-funded insurance. Three boards are authorized to require manufacturers to confidentially submit information related to the pricing and clinical effectiveness of reviewed drugs to inform value determinations. Only one board (New York Medicaid) had completed pricing reviews as of June 3, 2021. CONCLUSIONS: Boards' structure, scope, and statutory leverages to compel manufacturers to negotiate lower net costs are key factors that influence whether and to what extent boards can achieve cost savings for states. Though legal constraints may limit the effective reach of prescription drug-pricing boards, these agencies can enable states to address rising prescription drug costs, in part by virtue of their very existence. To overcome practical limitations, states seeking to implement similar policies can build on the experiences and designs of current boards.

Spending Patterns Among Medicare ACOs That Have Reduced Costs.

EXECUTIVE SUMMARY: This study aimed to examine whether specific cost categories were disproportionately affected by accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) achieving overall spending reductions, and whether there were demonstrable differences in spending patterns between "low"- or "high"-cost ACOs. Using financial data obtained from the Centers for Medicare & Medicaid Services for ACOs launched between 2012 and 2015, and employing a cross-sectional study design, we determined which cost categories were associated with overall reductions in ACO spending. Linear regressions were conducted to discern whether reductions in inpatient and skilled nursing facility (SNF) costs were driven by reductions in the number of admissions or in the cost per admission. Results showed that ACOs that reduced total per capita spending saw the largest percentage decreases in inpatient (-9%), hospice (-11%), and SNF (-16%) per capita costs, compared to ACOs that were unable to decrease costs between 2014 and 2015 (p < .05). Reductions in SNF and inpatient spending were driven by declines in the number of patients admitted, not the cost per hospitalization or SNF admission (p < .05). In 2015, ACOs in the highest decile of per capita spending spent more than double on each beneficiary compared to ACOs in the lowest decile ($16,672 versus $8,030, respectively; p < .05). ACOs in the lowest-cost decile spent more proportionally on outpatient and physician/supplier costs (p < .05). Thus, we determined that initial success in reducing the cost of care has been driven by reductions in inpatient costs due to a decline in the volume of patients admitted. Future studies should further investigate specific interventions that allow high-performing ACOs to achieve these cost reductions.

Financing the Primary Care Behavioral Health Model.

The PCBH model of integrated care blends behavioral health professionals into the primary care team, thereby enhancing the scope of primary care and expanding the range of services provided to the patient. Despite promising evidence in support of the model and a growing number of advocates and practitioners of PCBH integration, current reimbursement policies are not always favorable. As the nation's healthcare system transitions to value-based payment models, new financing strategies are emerging which will further support the viability of PCBH integration. This article provides an overview of the infrastructure necessary to support PCBH practice; reviews the current PCBH funding landscape; discusses how emerging trends in healthcare financing are impacting the model; and provides a vision for the viability of the PCBH model within the value-based financing of our healthcare system in the future.

Effects of the ACA on Health Care Cost Containment.

This brief reviews the evidence on how key ACA provisions have affected the growth of health care costs. Coverage expansions produced a predictable jump in health care spending, amidst a slowdown that began a decade ago. Although we have not returned to the double-digit increases of the past, the authors find little evidence that ACA cost containment provisions produced changes necessary to "bend the cost curve." Cost control will likely play a prominent role in the next round of health reform and will be critical to sustaining coverage gains in the long term.

Do the current performance-based schemes in Italy really work? "Success fee": a novel measure for cost-containment of drug expenditure.

BACKGROUND: Drug costs have risen rapidly in the last decade, driving third-party payers to adopt performance-based agreements that provide either a discount before payment or an ex post reimbursement on the basis of treatments' effectiveness and/or safety issues. OBJECTIVES: This article analyses the strategies currently approved in Italy and proposes a novel model called "success fee" to improve payment-by-result schemes and to guarantee patients rapid access to novel therapies. METHODS: A review of the existing risk-sharing schemes in Italy has been performed, and data provided by the Italian National report (2012) on drug use have been analyzed to assess the impact on drug expenditure deriving from the application of "traditional" performance-based strategies since their introduction in 2006. RESULTS: Such schemes have poorly contributed to the fulfillment of the purpose in Italy, producing a trifling refund, compared with relevant drugs costs for the National Health System : €121 million out of a total of €3696 million paid. The novel risk-sharing agreement called "success fee" has been adopted for a new high-cost therapy approved for idiopathic pulmonary fibrosis, pirfenidone, and consists of an ex post payment made by the National Health System to the manufacturer for those patients who received a real benefit from treatment. CONCLUSIONS: "Success fee" represents an effective strategy to promote value-based pricing, making available to patients a rapid access to innovative and expensive therapies, with an affordable impact on drug expenditure and, simultaneously, ensuring third-party payers to share with manufacturers the risk deriving from uncertain safety and effectiveness.

Trends in Managed Care Cost Containment: An Analysis of the Managed Care Backlash.

Consumer dissatisfaction with the quality and limitations of managed health care led to rapid disenrollment from managed care plans and demands for regulation between 1998 and 2003. Managed care organizations, particularly health maintenance organizations (HMOs), now face quality and coverage mandates that restrict them from using their most aggressive strategies for managing costs. This paper examines the effect of this backlash on managed care's ability to contain costs among short-term, non-federal hospitals between 1998 and 2008. The results show that the impact of increased HMO penetration on inpatient costs reversed over the study period, but HMOs were still effective at containing outpatient costs. These findings have important policy implications for understanding the continuing role that HMOs should play in cost containment policy and for understanding how effective the latest wave of cost containment institutions may perform in heavily regulated markets.

Medicaid home and community-based services: how consumer access is restricted by state policies.

State Medicaid programs have expanded home and community-based services (HCBS). This article compares trends and variations in state policies for Medicaid HCBS programs in 2005 and 2010. State limitations on financial eligibility criteria and service benefits have remained stable. Although the use of consumer direction, independent providers, and family care providers has increased, some states do not have these options. The increased adoption of state cost control policies have led to large increases in persons on waiver wait lists. Access could be improved by standardizing and liberalizing state HCBS policies, but state fiscal concerns are barriers to rebalancing between HCBS and institutional services.

[The relevance of multiple sclerosis drugs in private health insurance (PHI)]. / Die Bedeutung von Multiple-Sklerose-Medikamenten in der PKV.

The development of expenses and prescriptions in the pharmacotherapy for multiple sclerosis (MS) is examined on the basis of prescription data of 14 PHI firms. The drugs for the treatment of MS are among the most top-selling drugs in the PHI. From 2007 to 2012, the expenses increase 2.33-fold. The main cause is the increas of the prescription figures. In 2012, about 8,400 privately insured persons receive an MS drug. The prevalence of MS is 2.3 times higher in women than in men Impro ved diagnostic possibilities and expensive new drugs will lead to a dynamic cost de velopment in the next years.

[Beyond the horizon of health-care delivery - medical marketing]. / Neue Wirklichkeiten - Marketing und Chirurgie.

BACKGROUND: The progress in medical health care and demographic changes cause increasing financial expenses. The rising competitive environment on health-care delivery level calls for economisation and implementation of a professional marketing set-up in order to ensure long-term commercial success. METHODS: The survey is based on a questionnaire-analysis of 100 patients admitted to a trauma department at a university hospital in Germany. Patients were admitted either for emergency treatment or planned surgical procedures. RESULTS: Competence and localisation represent basic criteria determing hospital choice with a varying focus in each collective. Both collectives realise a trend toward economisation, possibly influencing medical care decision-making. Patients admitted for planned surgical treatment are well informed about their disease, treatment options and specialised centres. The main source of information is the internet. Both collectives claim amenities during their in-hospital stay. CONCLUSION: Increasing economisation trends call for a sound and distinct marketing strategy. The marketing has to be focused on the stakeholders needs. Concomitant factors are patient satisfaction, the establishment of cooperation networks and maintenance/improvement of medical health-care quality.

Navigating an ocean of information: how Community Care of North Carolina uses data to improve care and control costs.

Community Care of North Carolina's 14 networks use data analysis to provide relevant solutions that are responsive to unique regional environments. This article describes some of the ways that these networks use data to improve patient self-management, to meet providers' needs, to improve quality of care, and to control costs.

2012 ISMRM Lauterbur Lecture. MRI: from science to society.

In this 2012 ISMRM Lauterbur Lecture, my goal is to challenge the members of the ISMRM to think critically about how we approach our research. From the perspective of a leader of an academic health sciences center, which is also a health care delivery system, I address three specific questions: Are we developing great technologies? Are we advancing scientific knowledge? Are we advancing human health? Specifically, with respect to increasing pressure in health care to improve patient outcomes and lower costs, I ask members to consider how we select the areas of research we focus on and whether we have sufficiently prioritized research that assesses the impact of our MR methods on patient outcomes. For imaging research to meet higher standards of evidence-based medicine, multicenter consortia should be developed, potentially under the auspices of the ISMRM, and priority should be given to developing investigators with expertise in health services research.

Risk factors, causes, and the economic implications of unplanned readmissions following total hip arthroplasty.

In order to identify risk factors for readmissions following total hip arthroplasty (THA) and the causes and financial implications of such readmissions, we analyzed clinical and administrative data on 1583 consecutive primary THAs performed at a single institution. The 30-day readmission rate was 6.51%. Increased age, length of stay, and body mass index were associated with significantly higher readmission rates. The most common re-admitting diagnoses were deep infection, pain, and hematoma. Average profit was lower for episodes of care with readmissions ($1548 vs. $2872, P=0.028). If Medicare stops reimbursing for THA readmissions, the institution under review would sustain an average net loss of $11,494 for episodes of care with readmissions and would need to maintain readmission rates below 23.6% in order to remain profitable.

Paying for value: replacing Medicare's sustainable growth rate formula with incentives to improve care.

This brief sets forth a set of policy options to improve the way health care providers are paid by Medicare. The authors suggest repealing Medicare's sustain­able growth rate (SGR) formula for physician fees and replacing it with a pay-for-value approach that would: 1) increase payments over time only for physicians and other provid­ers who participate in innovative care arrangements; 2) strengthen primary care and care teams; and 3) implement bundled payments for hospital-related care. These reforms would be adopted by Medicare, Medicaid, and private plans in the new insurance marketplaces, with the goal of accelerating innovation in care delivery throughout the health system. Together, these policies could more than offset the cost of repealing the SGR formula, saving $788 billion for the federal government over 10 years and $1.3 trillion nationwide. Savings also would accrue to state and local governments ($163 billion), private employ­ers ($91 billion), and households ($291 billion).

Academic medicine in turbulent times.

Long respected as centers of research and educational excellence, many traditional academic medical centers (AMCs) realize that their research and educational missions will be difficult if not impossible to sustain, if all the federal funding cuts discussed in anticipation of the "fiscal cliff" occur. To set the context for this perfect storm, we will review the many issues that will affect all hospitals and then focus on the three that will disproportionally affect academic medical centers ... and keep "CEOs up at night." Aside from a case of CEO chronic insomnia, how do we expect AMCs to weather this perfect storm? Whereas the fundamental emphasis remains on highly specialized and complex care, AMCs are increasingly developing innovative approaches for managing patients across the continuum of care and strengthening their ability to manage patients with high-cost, chronic conditions.

Trends to watch in 2013.

New payment models, information technology and transparency move to the top of this year's agendas.

What happens when Medicare cuts hospital prices? Assessing the impact on inpatient discharges among the elderly.

Key findings. (1) Between 1995 and 2009, growth in Medicare inpatient prices varied widely across hospital markets. Faster growth typically occurred in less urban areas that had a large market share of for-profit hospitals. (2) By 2008-2009, elderly patients were going to the hospital at the same rate as in the mid-1990s, but their stays were much shorter, and they received much more intensive services. (3) Medicare price cuts, largely attributable to the Balanced Budget Act of 1997, were associated with a decrease in the num­ber of elderly discharges and a decrease in the number of staffed hospital beds, highlighting possible effects of hospital price cuts under health reform.

From HMOs to ACOs: the quest for the Holy Grail in U.S. health policy.

The United States has been singularly unsuccessful at controlling health care spending. During the past four decades, American policymakers and analysts have embraced an ever changing array of panaceas to control costs, including managed care, consumer-directed health care, and most recently, delivery system reform and value-based purchasing. Past panaceas have gone through a cycle of excessive hope followed by disappointment at their failure to rein in medical care spending. We argue that accountable care organizations, medical homes, and similar ideas in vogue today could repeat this pattern. We explain why the United States persistently pursues health policy fads--despite their poor record--and how the promotion of panaceas obscures critical debate about controlling health care costs. Americans spend too much time on the quest for the "holy grail"--a reform that will decisively curtail spending while simultaneously improving quality of care--and too little time learning from the experiences of others. Reliable cost control does not, contrary to conventional wisdom, require fundamental delivery system reform or an end to fee-for-service payment. It does require the U.S. to emulate the lessons of other nations that have been more successful at limiting spending through budgeting, system wide fee schedules, and concentrated purchasing.