Thursday, March 29, 2018

Drug Channels News Roundup, March 2018: Copay Accumulators, Cancer Drug Costs, Physician Employment, and Insurer Profits

It’s technically spring here at Drug Channels' worldwide headquarters in lovely downtown Philadelphia. While the last snowdrifts melt into memory, please enjoy this month’s selection of noteworthy news stories. You’ll learn:
  • Why copay accumulators are making national news
  • How hospitals are doubling cancer drug costs
  • Fun facts about the massive shift to hospital-employed physicians
Plus, a joke (I think) about how a major health insurer makes money.

P.S. Join the nearly 5,400 people who follow me at @DrugChannels on Twitter. I share links to crucial news and reports that you should know about.

Those coupons people use for expensive meds are starting to count for less, Marketplace

In January, I published Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. It has become the most widely read story in Drug Channels’ 12-year history.

The bad news about accumulators is spreading. The story linked above spanned a two-part broadcast on National Public Radio’s Marketplace. Listen to the portion titled “The pushback against drug coupons,” which is linked in the middle of the web page.

In the story, you’ll hear Juliana Keeping, whose five year old son has cystic fibrosis. She said: “A solution that’s going to financially cripple families like mine and many others is the wrong solution. Gimme a break.” Exactly.

Two other notable stories about copay accumulators:
Expect more to come.

Hospital chemo carries higher price tag than the office, Oncology Practice

This article summarizes a research letter from the journal JAMA Oncology. It shows that drugs and other services cost much more at hospitals than they do at physician offices. For drugs, total reimbursement during a 6-month treatment episode was lower in offices ($43,700) than in hospital outpatient departments ($84,660). Here’s a summary chart of the results:

[Click to Enlarge]

Hospital executives and hospital-employed physicians love to blame manufacturers for drug prices, yet they somehow neglect to consider their own hospitals’ role in massively marking up drug costs. Will the new Amazon/Berkshire/JPMorgan venture dare to tackle this obvious cost-raising distortion?

Updated Physician Practice Acquisition Study: National and Regional Changes in Physician Employment, 2012-2016 , Physicians Advocacy Institute

Vertical integration is occurring throughout the U.S. healthcare system. Consider some startling facts from the Physicians Advocacy Institute’s latest study. Between 2012 and 2016:
  • The share of physicians employed by hospitals grew, from 26% of physicians in 2012 to 42% of physicians in 2016. (See chart below.)
  • The number of physician practices owned by hospitals doubled, from 36,000 practices in 2012 to 72,000 practices in 2016.
  • The share of physician practices owned by hospitals also doubled, from 14% of practices in 2012 to 29% in 2016.
[Click to Enlarge]

I suppose these trends are not surprising given the cancer drug pricing discrepancies shown above.

Health Insurance CEO Reveals Key To Company’s Success Is Not Paying For Customers’ Medical Care, The Onion

The Onion does it again! ‘nuff said.

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