Vignettes Illustrating the Pricing Problem For Consumers Gerard Anderson PhD Professor Main Findings Despite many restructurings of the US and other health systems prices remain the primary reason why the US spends more ID: 935902
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Slide1
It’s Still the Prices Stupid with Four Vignettes Illustrating the Pricing Problem For Consumers
Gerard Anderson, PhD,
Professor
Slide2Slide3Main FindingsDespite many restructurings of the US and other health systems - prices remain the primary reason why the US spends more
on
health
care than any other country
On key measures of health care resources per capita (hospital beds, physicians, and nurses), the US still provides significantly fewer resources compared to other industrialized countries
The main difference from 15 years ago is the growing differential between public and private sector prices in the US
Private sector prices are approximately double the public prices
Hospitals and physicians will adjust their costs to the revenues they receive so as private sector prices increase so do costs
Slide4How Higher Prices Affect ConsumersFour vignettes can explain how consumers are effected by high prices
Helping Amish negotiate what they will pay for a premature baby
Is my anesthesiologist in network?
Paying for ultra expensive drugs
Paying for drugs while having multiple chronic conditions
What can be done in each case?
Slide5The AmishAn Amish leader has a member whose child was born prematurely and incurred a $1.2 million hospital charge
The Amish do not believe in insurance and always pay their bills in full
He believed the bill was much too high and wanted to know what an insurer would pay
I ended up negotiating the Medicaid rate for him with the hospital CEO
–
80% discount
Solution - Hospitals and physicians should not be permitted to charge 5 times what it cost to provide care or what they routinely accept from insurers
Slide6ColonoscopyI had a routine colonoscopy at Hopkins
I knew the hospital and gastroenterologist were in network
Hopkins could not tell me the name of anesthesiologist because they are assigned that morning
Anesthesiologists have have highest markup over what Medicare pays and the most OON
Most likely to be owned by private equity
She walked in when I was about to have the procedure, which is the perfect time to interview an anesthesiologist over price and credentials
Limit OON bills to a percent of Medicare
Slide7SpinrazaA Hopkins physician who is worked his entire career on children with muscular atrophy came into my office
He told me there is a new drug on the market whose cost is $750,000 in the first year and $350,000 in subsequent years
People in East Baltimore cannot afford even minimal cost sharing
What can he do?
Hopkins allocates $4 million to help a few babies get the drug
Now there is a new drug for muscular atrophy that is a cure but cost $1.6 million
The challenge is promoting R&D while making the drugs affordable to both patients and
payors
The US should pay similar rates to other countries and limit price increases post launch like other countries
Slide8Multiple Chronic Conditions 20% of Medicare beneficiaries have 5+ chronic conditions
They take an average of 16 different drugs per year and incur large bills for prescriptions
The Medicare program has coverage gaps at the beginning , in the donut hole, and the beneficiary pays 5% in the catastrophic phase
For the beneficiary dependent solely on social security drug cost can be 25% of their income
A cap on OOP spending at $2000 is needed
Slide9Role of the ConsumerThe Amish leader simply wanted to pay what was reasonable
I wanted to pay the doctor the in network rate
The doctor wanted the patient to pay something the patient could afford for the drug
The social security recipient with multiple chronic diseases wanted to pay a reasonable portion of their income for drugs