Payment incentives and the use of higher-cost drugs: a retrospective cohort analysis of intravenous iron in the Medicare population.

OBJECTIVES: Medicare Part B payment methods incentivize the use of more expensive injectable and infused drugs. We examined prescribing patterns in the context of intravenous (IV) iron, for which multiple similarly safe and efficacious formulations exist, with wide variations in price. STUDY DESIGN: We conducted a retrospective cohort analysis of IV iron utilization and payment in the Medicare population between 2015 and 2017. METHODS: This analysis used a national, random 20% sample of Medicare fee-for-service beneficiaries with Part B claims for IV iron between January 2015 and December 2017-a period before, during, and after a national shortage of iron dextran. This sample included 66,710 Medicare fee-for-service beneficiaries with at least 1 Part B claim for IV iron. RESULTS: The greatest increase in utilization occurred in the most expensive iron formulation, ferric carboxymaltose; its market share rose from 27.4% of use in 2015 to 47.7% in 2017. The use of a less expensive formulation, iron dextran, decreased from 26.7% to 18.7% over the same period. An alternative payment model in Maryland hospitals was associated with markedly less utilization of ferric carboxymaltose, accounting for 4.7% of IV iron utilization in Maryland hospitals. CONCLUSIONS: There was an increase in the dispensing of a higher-priced IV iron formulation associated with a shortage of a less expensive drug that persisted once the shortage ended. These findings in IV iron have broader implications for Part B drug payment policy because the price of the drug determines the physician and health system payment.

Moving Toward High-Value Health Care: Integrating Delivery System Reform into 2020 Policy Proposals.

Issue: Delivery system reform has been a focus of regulatory and legislative policy to date, but it is unclear how policymakers will integrate reforms into their plans for 2020 and beyond. Goal: To present and evaluate options for integrating delivery system reform into upcoming legislative proposals. Methods: Literature review. Findings and Conclusions: Policymakers should integrate delivery system reform into their 2020 plans to continue driving value in the health care system. Several options exist for promoting delivery system reform either through a state-based block grant approach or federal public plan approach. We identify three main principles that are critical for success of reform efforts: information sharing and infrastructure, flexibility to innovate, and alignment and stability of efforts.