Comparing Insulin Prices in the United States to Other Countries: Updated Results Using 2022 Data.

Manufacturers' list prices for insulin have increased dramatically over the past decade in the United States. In this study, the authors present results from a comparison of U.S. and international prices for insulins using a price index approach. They compare prices for all insulins and different categories of insulin in the United States and 33 comparison Organisation for Economic Co-operation and Development countries. They present separate comparisons using U.S. manufacturer gross prices reflected at pharmacies and estimated manufacturer net prices after applying rebates paid by manufacturers. This study updates a prior RAND Corporation study, Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis, with more-recent data and includes new supplementary analyses, editorial changes, and updates to reflect the evolving insulin market landscape.

International Prescription Drug Price Comparisons: Estimates Using 2022 Data.

Understanding the extent to which prescription drug prices are higher in the United States than in other countries-after accounting for differences in the volume and mix of drugs-is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers. This study summarizes findings from comparisons of drug prices in the United States and other high-income countries based on 2022 data and presents results for specific types of drugs, including brand-name originator drugs and unbranded generic drugs, and from sensitivity analyses.

Variation in Estimated Surgical Procedure Times Across Patient Characteristics and Surgeon Specialty.

Importance: The time involved in performing a procedure is a key factor in determining physician payments by Medicare. However, there are long-standing concerns regarding the accuracy of the time estimates generated by the American Medical Association/Specialty Society Relative Value Scale Update Committee surveys that are used in the valuation process, and there have been calls to use other data sources to estimate procedure times. Objective: To compare estimated procedure times that come from claims with the times used in Medicare's valuation process. Design and Setting: Building off prior work using Medicare fee-for-service claims, procedure times were estimated from linked anesthesia claims data for 1349 different Current Procedure Terminology codes that are typically performed with anesthesia. All procedures in the nation performed in 2018 for Medicare fee-for-service beneficiaries were included in the analysis. These estimated times were compared with the times used in the valuation process. Analysis took place from February to November 2021. Main Outcomes and Measures: Estimated procedure times using anesthesia claims were compared with the procedure time used in valuation by calculating an estimated-to-valuation procedure time ratio for each code. The valuation procedure time is publicly reported by Medicare. The mean and median ratio are presented over all procedures and for select high-volume codes as well as by patient characteristics (age, sex, and risk score) and specialty of the physician performing the procedure. Results: Across 4.9 million procedures in this analysis, the mean estimated procedure time was 27% lower than the time used in the valuation process. There were notable exceptions, for which the mean estimated procedure time equaled or exceeded the valuation time including total hip arthroplasty (5% longer) and total knee arthroplasty (equal duration). Within a given code, older patients and those with more illness had longer procedure times. There was substantial variation across specialties in the percent difference between mean estimated and valuation procedure times ranging from gastroenterology (36% shorter) and ophthalmology (35% shorter) to cardiac surgery (2% longer) and thoracic surgery (7% longer). Conclusions and Relevance: Claims-based procedure times could be used to improve the accuracy of valuations for procedures.

Biosimilar Cost Savings in the United States: Initial Experience and Future Potential.

The Biologics Price Competition and Innovation Act (BPCIA), enacted as part of the 2010 Patient Protection and Affordable Care Act (ACA), authorized the U.S. Food and Drug Administration (FDA) to create a new regulatory approval pathway for biosimilars, which are biologic drugs that are very similar to already approved "reference" biologics in terms of potency, safety, and efficacy, but are manufactured by different companies. In the seven years since the ACA, many drug manufacturers worked to push new biosimilars through development and FDA review. As of July 2017, there were three marketed biosimilars and two more that were approved by the FDA but not yet marketed. BPCIA's shorter, lower-cost biosimilar approval pathway was designed to introduce competition among biologic manufacturers. This article estimates potential future savings from biosimilars in the United States, summarizes the experience to date with the first marketed biosimilar in the United States, and discusses key policy issues surrounding biosimilars. We estimate that biosimilars will reduce direct spending on biologic drugs by $54 billion from 2017 to 2026, or about 3 percent of total estimated biologic spending over the same period, with a range of $24 to $150 billion. While our estimate uses recent data and transparent assumptions, we caution that actual savings will hinge on industry and regulatory decisions as well as potential policy changes to strengthen the biosimilar market.

Associations Between the Patient Protection and Affordable Care Act Medicaid Primary Care Payment Increase and Physician Participation in Medicaid.

Importance: The Patient Protection and Affordable Care Act (ACA) increased 2013 to 2014 Medicaid payment rates for qualifying primary care physicians (PCPs) and services to higher Medicare payment levels, with the goal of improving primary care access for Medicaid enrollees. Objectives: To evaluate the payment increase policy and to assess whether it was associated with changes in Medicaid participation rates or Medicaid service volume among PCPs. Design, Setting, and Participants: This study used 2012 to 2015 IMS Health aggregated medical claims and encounter data from PCPs eligible for the payment increase practicing in all states except Alaska and Hawaii and included 20 723 PCPs with observations in each month from January 1, 2012, to December 31, 2015. Data are for professional services performed in ambulatory settings, including office, hospital outpatient department, and emergency department. Regression models were used to test whether outcomes differed in months subject to higher payment rates relative to months before the increase and after the expiration of the increase in some states. The models controlled for time-invariant physician characteristics and time-varying characteristics, such as Medicaid enrollment. Interaction terms were included to estimate differential associations in subgroups of states (eg, by Medicaid managed care penetration) and physicians (eg, by specialty). Main Outcomes and Measures: Physician-month records subject to higher Medicaid payment rates were flagged using state-specific implementation and end dates for the payment increase. Five outcomes were measured for each physician-month observation, including (1) an indicator for seeing any patients enrolled in Medicaid, (2) an indicator for seeing more than 5 patients enrolled in Medicaid, (3) the Medicaid share of total patients, (4) a count of new patient evaluation and management visits furnished to patients enrolled in Medicaid, and (5) a count of existing patient evaluation and management visits furnished to patients enrolled in Medicaid. Results: Among 20 723 PCPs, the payment increase had no association with PCP participation in Medicaid or Medicaid service volume. The estimated average marginal effects for all 5 outcomes were not statistically distinguishable from 0. This null result was robust to sensitivity analyses, including different time trend specifications and analyses focusing on the payment increase implementation and expiration time frames. Descriptively, the Medicaid share of patients increased by about 25% from 2012 to 2015, although the share did not increase differentially in states and months subject to higher payment rates. Conclusions and Relevance: The limited duration and design of the payment increase may have dampened its effectiveness. Future efforts to improve access through payment changes or other means can benefit from better understanding of the outcomes of this policy.

Shifts in Medicaid and Uninsured Payer Mix at Safety-Net and Non-Safety-Net Hospitals During the Great Recession.

EXECUTIVE SUMMARY: There has been ongoing concern regarding the viability of safety-net hospitals (SNHs), which care for vulnerable populations. The authors examined payer mix at SNHs and non-SNHs during a period covering the Great Recession using data from the 2006 to 2012 Healthcare Cost and Utilization Project State Inpatient Databases from 38 states. The number of privately insured stays decreased at both SNHs and non-SNHs. Non-SNHs increasingly served Medicaid-enrolled and uninsured patients; in SNHs, the number of Medicaid stays decreased and uninsured stays remained stable. These study findings suggest that SNHs were losing Medicaid-enrolled patients relative to non-SNHs before the Medicaid expansion under the Affordable Care Act (ACA). Postexpansion, Medicaid stays will likely increase for both SNHs and non-SNHs, but the increase at SNHs may not be as large as expected if competition increases. Because hospital stays with private insurance and Medicaid help SNHs offset uncompensated care, a lower-than-expected increase could affect SNHs' ability to care for the remaining uninsured population. Continued monitoring is needed once post-ACA data become available.

Early Impact of the Affordable Care Act Coverage Expansion on Safety-Net Hospital Inpatient Payer Mix and Market Shares.

OBJECTIVE: To examine the impact of the Affordable Care Act's coverage expansion on safety-net hospitals (SNHs). STUDY SETTING: Nine Medicaid expansion states. STUDY DESIGN: Differences-in-differences (DID) models compare payer-specific pre-post changes in inpatient stays of adults aged 19-64 years at SNHs and non-SNHs. DATA COLLECTION METHODS: 2013-2014 Healthcare Cost and Utilization Project State Inpatient Databases. PRINCIPAL FINDINGS: On average per quarter postexpansion, SNHs and non-SNHs experienced similar relative decreases in uninsured stays (DID = -2.2 percent, p = .916). Non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs (DID = 13.8 percent, p = .041). For SNHs, the average decrease in uninsured stays (-146) was similar to the increase in Medicaid stays (153); privately insured stays were stable. For non-SNHs, the decrease in uninsured (-63) plus privately insured (-33) stays was similar to the increase in Medicaid stays (105). SNHs and non-SNHs experienced a similar absolute increase in Medicaid, uninsured, and privately insured stays combined (DID = -16, p = .162). CONCLUSIONS: Postexpansion, non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs, which may reflect patients choosing non-SNHs over SNHs or a crowd-out of private insurance. More research is needed to understand these trends.

Simulated Effects of Policies to Reduce Diabetes Risk Among Adults With Schizophrenia Receiving Antipsychotics.

OBJECTIVE: Second-generation antipsychotics increase the risk of diabetes and other metabolic conditions among individuals with schizophrenia. Although metabolic testing is recommended to reduce this risk, low testing rates have prompted concerns about negative health consequences and downstream medical costs. This study simulated the effect of increasing metabolic testing rates on ten-year prevalence rates of prediabetes and diabetes (diabetes conditions) and their associated health care costs. METHODS: A microsimulation model (N=21,491 beneficiaries) with a ten-year time horizon was used to quantify the impacts of policies that increased annual testing rates in a Medicaid population with schizophrenia. Data sources included California Medicaid data, National Health and Nutrition Examination Survey data, and the literature. In the model, metabolic testing increased diagnosis of diabetes conditions and diagnosis prompted prescribers to switch patients to lower-risk antipsychotics. Key inputs included observed diagnoses, prescribing rates, annual testing rates, imputed rates of undiagnosed diabetes conditions, and literature-based estimates of policy effectiveness. RESULTS: Compared with 2009 annual testing rates, ten-year outcomes for policies that achieved universal testing reduced exposure to higher-risk antipsychotics by 14%, time to diabetes diagnosis by 57%, and diabetes prevalence by .6%. These policies were associated with higher spending because of testing and earlier treatment. CONCLUSIONS: The model showed that policies promoting metabolic testing provided an effective approach to improve the safety of second-generation antipsychotic prescribing in a Medicaid population with schizophrenia; however, the policies led to additional costs at ten years. Simulation studies are a useful source of information on the potential impacts of these policies.

Avoiding the Tragedy of the Commons in Health Care: Policy Options for Covering High-Cost Cures.

In this article, Mattke and his colleagues discuss the risk that strategic behavior by health insurers could unravel the market for curative therapies for chronic diseases. Because the cost of these cures is front-loaded but the benefits accrue over time, insurers might attempt to delay treatment or avoid patients who require it, in the hope that they might change insurers. The authors discuss policy options to remedy this potential free-rider problem through alignment of incentives at the patient level, coordination among payers, and government intervention. They present a framework to analyze policy options and real-world case studies. While implementing those policy options is far from easy, stakeholders need to collaborate in order to establish equitable mechanisms that fairly distribute the cost and benefits of high-cost cures.

Estimating Surgical Procedure Times Using Anesthesia Billing Data and Operating Room Records.

OBJECTIVE: The median time required to perform a surgical procedure is important in determining payment under Medicare's physician fee schedule. Prior studies have demonstrated that the current methodology of using physician surveys to determine surgical times results in overstated times. To measure surgical times more accurately, we developed and validated a methodology using available data from anesthesia billing data and operating room (OR) records. DATA SOURCES: We estimated surgical times using Medicare 2011 anesthesia claims and New York Statewide Planning and Research Cooperative System 2011 OR times. Estimated times were validated using data from the National Surgical Quality Improvement Program. We compared our time estimates to those used by Medicare in the fee schedule. STUDY DESIGN: We estimate surgical times via piecewise linear median regression models. PRINCIPAL FINDINGS: Using 3.0 million observations of anesthesia and OR times, we estimated surgical time for 921 procedures. Correlation between these time estimates and directly measured surgical time from the validation database was 0.98. Our estimates of surgical time were shorter than the Medicare fee schedule estimates for 78 percent of procedures. CONCLUSIONS: Anesthesia and OR times can be used to measure surgical time and thereby improve the payment for surgical procedures in the Medicare fee schedule.

Gaining Coverage Through Medicaid Or Private Insurance Increased Prescription Use And Lowered Out-Of-Pocket Spending.

A growing body of literature describes how the Affordable Care Act (ACA) has expanded health insurance coverage. What is less well known is how these coverage gains have affected populations that are at risk for high health spending. To investigate this issue, we used prescription transaction data for a panel of 6.7 million prescription drug users to compare changes in coverage, prescription fills, plan spending, and out-of-pocket spending before and after the implementation of the ACA's coverage expansion. We found a 30 percent reduction in the proportion of this population that was uninsured in 2014 compared to 2013. Uninsured people who gained private coverage filled, on average, 28 percent more prescriptions and had 29 percent less out-of-pocket spending per prescription in 2014 compared to 2013. Those who gained Medicaid coverage had larger increases in fill rates (79 percent) and reductions in out-of-pocket spending per prescription (58 percent). People who gained coverage who had at least one of the chronic conditions detailed in our study saw larger decreases in out-of-pocket spending compared to those who did not have at least one condition. These results demonstrate that by reducing financial barriers to care, the ACA has increased treatment rates while reducing out-of-pocket spending, particularly for people with chronic conditions.

Current and Projected Characteristics and Unique Health Care Needs of the Patient Population Served by the Department of Veterans Affairs.

The Veterans Access, Choice, and Accountability Act of 2014 addressed the need for access to timely, high-quality health care for veterans. Section 201 of the legislation called for an independent assessment of various aspects of veterans' health care. The RAND Corporation was tasked with an assessment of the current and projected demographics and health care needs of patients served by the Department of Veterans Affairs (VA). The number of U.S. veterans will continue to decline over the next decade, and the demographic mix and geographic locations of these veterans will change. While the number of veterans using VA health care has increased over time, demand will level off in the coming years. Veterans have more favorable economic circumstances than non-veterans, but they are also older and more likely to be diagnosed with many health conditions. Not all veterans are eligible for or use VA health care. Whether and to what extent an eligible veteran uses VA health care depends on a number of factors, including access to other sources of health care. Veterans who rely on VA health care are older and less healthy than veterans who do not, and the prevalence of costly conditions in this population is projected to increase. Potential changes to VA policy and the context for VA health care, including effects of the Affordable Care Act, could affect demand. Analysis of a range of data sources provided insight into how the veteran population is likely to change in the next decade.

Early Marketplace Enrollees Were Older And Used More Medication Than Later Enrollees; Marketplaces Pooled Risk.

Little is known about the health status of the 7.3 million Americans who enrolled in insurance plans through the Marketplaces established by the Affordable Care Act in 2014. Medication use may provide an early indicator of the health needs and access to care among Marketplace enrollees. We used data from January-September 2014 on more than one million Marketplace enrollees from Express Scripts, the largest pharmacy benefit management company in the United States. We compared the characteristics and medication use between early and late Marketplace enrollees and between all Marketplace enrollees and enrollees with employer-sponsored insurance. Among Marketplace enrollees, we found that those who enrolled earlier (October 2013-February 2014) were older and used more medication than later enrollees. Marketplace enrollees, as a whole, had lower average drug spending and were less likely to use most medication classes than the employer-sponsored comparison group. However, Marketplace enrollees were more likely to use medicines for hepatitis C and particularly for HIV.

Specialty Payment Model Opportunities and Assessment: Gastroenterology and Cardiology Model Design Report.

Gastroenterology and cardiology services are common and costly among Medicare beneficiaries. Episode-based payment, which aims to create incentives for high-quality, low-cost care, has been identified as a promising alternative payment model. This article describes research related to the design of episode-based payment models for ambulatory gastroenterology and cardiology services for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services (CMS). The authors analyzed Medicare claims data to describe the frequency and characteristics of gastroenterology and cardiology index procedures, the practices that delivered index procedures, and the patients that received index procedures. The results of these analyses can help inform CMS decisions about the definition of episodes in an episode-based payment model; payment adjustments for service setting, multiple procedures, or other factors; and eligibility for the payment model.

Specialty Payment Model Opportunities and Assessment: Oncology Model Design Report.

This article describes research related to the design of a payment model for specialty oncology services for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS). Cancer is a common and costly condition. Episode-based payment, which aims to create incentives for high-quality, low-cost care, has been identified as a promising alternative payment model for oncology care. Episode-based payment systems can provide flexibility to health care providers to select among the most effective and efficient treatment alternatives, including activities that are not currently reimbursed under Medicare payment policies. However, the model design also needs to ensure that high-quality care is delivered and that beneficial treatments are not withheld from patients. CMS asked MITRE and RAND to conduct analyses to inform design decisions related to an episode-based oncology model for Medicare beneficiaries undergoing chemotherapy treatment for cancer. In particular, this study focuses on analyses of Medicare claims data related to the definition of the initiation of an episode of chemotherapy, patterns of spending during and surrounding episodes of chemotherapy, and attribution of episodes of chemotherapy to physician practices. We found that the time between the primary cancer diagnosis and chemotherapy initiation varied widely across patients, ranging from one day to over seven years, with a median of 2.4 months. The average level of total monthly payments varied considerably across cancers, with the highest spending peak of $9,972 for lymphoma, and peaks of $3,109 for breast cancer and $2,135 for prostate cancer.

Specialty Payment Model Opportunities and Assessment: Oncology Simulation Report.

This article describes the results of a simulation analysis of a payment model for specialty oncology services that is being developed for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS). CMS asked MITRE and RAND to conduct simulation analyses to preview some of the possible impacts of the payment model and to inform design decisions related to the model. The simulation analysis used an episode-level dataset based on Medicare fee-for-service (FFS) claims for historical oncology episodes provided to Medicare FFS beneficiaries in 2010. Under the proposed model, participating practices would continue to receive FFS payments, would also receive per-beneficiary per-month care management payments for episodes lasting up to six months, and would be eligible for performance-based payments based on per-episode spending for attributed episodes relative to a per-episode spending target. The simulation offers several insights into the proposed payment model for oncology: (1) The care management payments used in the simulation analysis-$960 total per six-month episode-represent only 4 percent of projected average total spending per episode (around $27,000 in 2016), but they are large relative to the FFS revenues of participating oncology practices, which are projected to be around $2,000 per oncology episode. By themselves, the care management payments would increase physician practices' Medicare revenues by roughly 50 percent on average. This represents a substantial new outlay for the Medicare program and a substantial new source of revenues for oncology practices. (2) For the Medicare program to break even, participating oncology practices would have to reduce utilization and intensity by roughly 4 percent. (3) The break-even point can be reduced if the care management payments are reduced or if the performance-based payments are reduced.

Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement.

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0-0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies.