Going Below the Surface E-newsletter: February 2019
February 26, 2019
It’s hard to believe that it’s been one year since Going Below the Surface was launched, timed with a conference on health spending. Since then, the health care spending conversation has only gained momentum, and we’ve made strides to elevate the evidence-based conversation through this platform, a “Considering Health Spending” initiative with Health Affairs and a forum of industry voices. Thank you all for digging deeper with us, and we look forward to even more to come in 2019.
In the meantime, let’s keep this conversation going: Drop us a line or tweet using #GoingBelowTheSurface.
The Centers for Medicare and Medicaid Services (CMS) has released the official National Health Expenditure (NHE) numbers, published in Health Affairs, which project health care spending will accelerate over the coming eight years as the population ages and the prices for medical services grow.
Health spending rose by 4.4 percent since last year, a faster rate than the broader economy. According to these projections, spending will continue to gain momentum, increasing by 5.5 percent, on average, between 2018 and 2027, and hitting $6 trillion in 2027.
Why It Matters: Lingering impacts from the Great Recession may have led many to believe that health spending was under control, but the economic turnaround, combined with aging baby boomers, will drive spending at an accelerated rate over the next decade. Now is the time to ask the difficult questions and address unsustainable spending head on.
Curative therapies are a double-edged sword. The cutting-edge innovation these therapies promise can cure patients living with life-threatening or costly chronic diseases, but they may require equally innovative financing solutions that the current U.S. health care system is not built to handle.
Earlier this month, patient advocates, regulators and industry representatives descended on Washington, D.C., for “Paying for Cures: Ensuring Patient Access and System Sustainability,” a day-long conference hosted by the MIT Center for Biomedical Innovation NEWDIGS Initiative, to explore how the system can catch up with these innovative curative therapies.
Ideas discussed included efforts such as Louisiana’s monthly payment model — or “Netflix model” — for hepatitis C drugs and milestone-based rebates. At the conclusion of the event, the MIT-based Financing and Reimbursement of Cures in the US (FoCUS) consortium released a series of large-scale policy and practice recommendations for financing these new and upcoming curative treatments, including the creation of a new type of organization — the Orphan Reinsurer Benefit Manager — to address the financial challenges created by one-time therapies. Learn more about the topics discussed and potential solutions in the National Pharmaceutical Council’s comprehensive summary of the event.
Why it Matters: The discussion about one-time cures is about to go from a theoretical conversation to a practical necessity as a wave of transformative therapies prepares to enter the market. Because there’s no “one-size-fits-all” solution when it comes to instituting payment and reimbursement practices for innovative therapies, efforts such as NEWDIGS are critical in parsing the relatively small evidence base to innovate around defined performance metrics and new financing approaches as quickly as industry innovates around gene and cell therapies.
Building a more efficient health care system requires understanding the driving factors of low-value, high-cost spending, rather than slashing spending broadly. Let’s take a closer look at the latest research to better understand the high-cost patient population, as well as what to keep an eye on as health care spending continues to be a priority for policymakers.
Have you heard about events or activities related to health care spending? Let us know so that we can share the information with our readers.