In the January issue, New England Medical JournalUsing 2020-2021 Blue Cross Blue Shield data, researchers James Robinson, Ph.D., MPH, and his colleagues found that patients with cancer, inflammatory diseases, or hematologic disorders may be less likely to receive injected drugs. Presented findings from an analysis of insurance company drug spending. How cell defects affected hospital price increases and how their share of insurer drug spending differed between hospitals eligible and ineligible for the 340B Drug Pricing Program and independent practices.
Part 3 of our interview with Mr. Robinson discusses the need for commercial insurance reform to reflect changes to Medicare under the Inflation Control Act (IRA), and how the 340B drug pricing program has strayed far from its original purpose of getting people the drugs they need. Talk about what you’re doing. It remains in the hands of low-income patient populations, and there is an ongoing battle to pay for it among patients, insurance companies, hospitals, and pharmaceutical companies.
transcript
With the upcoming limits on Part D drugs for Medicare patients under IRAs, do you expect Part B drug usage to increase again?
My research focused only on commercially insured people. And it should be noted that this problem is solved by Medicare itself, since Medicare only pays him a 6% markup on his ASP. [average sales price]—That’s what doctors, hospitals, 340B hospitals and other hospital health care providers are paid. You get 6%. That’s in contrast to the 200%, 300% price hikes you see in the private sector. So Medicare can protect itself, thank you very much. And now, changes to Part D of the Inflation Control Act provide additional protections for Medicare beneficiaries. This is generally a very good thing because these drugs are drugs that reach the catastrophic zone. There were many of these drugs.
Even if Medicare were paying a 6% markup, because of these dynamics that we’ve been talking about, insurance companies continuing to raise prices, Medicare is paying a 6% markup at a very high price. You’re often paying a markup. I would like to conclude that consumer cost sharing changes, reforms for Medicare patients are still a good thing and are still necessary. And we need people with commercial insurance to do the same.
What policy recommendations do you think will emerge from these findings, and how might they address ethical concerns?
One problem concerns overextension of the 340B program. The 340B program began as a way to get expensive medicines to poor people. It has now become just a huge source of revenue for hospitals, including those that primarily treat non-poor people. But with political constituencies now entrenched, there is a big fight over whether the 340B program can be returned to its rightful place: as a program for poor and low-income people. . That’s the main purpose.
The second is that this relates to a larger debate around site-of-care pricing, first in Medicare and then in the commercial world. And hospitals charge much more than independent physicians and other health care providers for pharmaceutical as well as similar non-pharmaceutical services.
Actually, paper is coming out. American Managed Care Journal®, if you’ve heard of that journal, we talked about this topic in April, focusing on outpatient surgery, which is surgery, not drugs, and not surprisingly, hospital outpatient surgery costs more than stand-alone outpatient surgery. has been shown to be much higher. We also looked at the incidence of complications and surgical complications, as it is sometimes argued that hospitals for surgery have higher prices but higher quality, but we did not find any difference in quality.
One of the things that attracted me to the world of pharmaceuticals as a research subject is that the medicines that come off the manufacturing assembly line and the medicines that end up at hospitals are exactly the same. Therefore, by definition, there was no difference in quality. I’ll go to the clinic soon. It’s exactly the same thing. Therefore, in this pharmaceutical world, high prices are not compensated for by high quality.
How might your findings impact the negotiating strategies of 340 billion hospitals, community oncology clinics, and drug companies in setting drug prices?
I think the main impact will be on insurance companies. That’s because insurance companies pay hospitals much higher reimbursement prices than the acquisition prices hospitals pay for the exact same drugs. I think what insurance companies are actually doing is feeling like they don’t have much bargaining power with hospitals. Hospitals have successfully consolidated, and now insurance companies cannot leave hospital systems or communities alone. So what they’re trying to do is direct patients to seek treatment outside of hospital clinics. We see this in the surgical world as well. You can see it here too. And some of that is indisputable. If you go to a doctor’s office and the prescribed medicines are all the same, why go to a hospital clinic?
On the other hand, in some parts of the country, hospitals now own all physician practices, leaving patients with few real options. And some of these insurance programs require patients to travel even more. Some of them will be good and will be transferred to home drips. Home infusions can be a great solution for patients at a low cost and can be done at home. But I think we’re seeing a tug of war between insurance companies, hospitals, pharmaceutical companies, and really patients.
From a perverse perspective, they may be helping insurers increase their out-of-pocket costs in an effort to keep patients away from hospitals. What we don’t want, of course, is to be burdened with costs and pre-approvals. In many cases, patients do not receive their medication at all, which is a problem.
