On October 15, 2018, Health Affairs hosted a forum in Sacramento called “Improving Care for Californians.” Two unifying themes emerged from the three panels. First, there is a growing tension between integration and consolidation in health care. Some panelists presented data that demonstrated that integrated health delivery networks often provide better and more integrated care, but that when healthcare delivery markets become highly concentrated, prices tend to increase. Second, the panelists discussed substantial improvements in healthcare in California, but all agreed that substantial work remains to be done to improve …

By: Leah S. Gray, Student Fellow A Texas high school teacher recently made headlines after getting a $108,951 bill when a heart attack sent him to an out-of-network hospital. The ambulance rushed Drew Calver to the nearest emergency center, which his insurance did not cover, leaving him with an astronomical surprise medical bill. Unfortunately, surprise medical bills are becoming a ubiquitous part of health care in America. The question is: why? Most people have insurance, but insurance doesn’t cover everything. So when Calver was treated at an out-of-network facility, his insurance …

Within the past few months, federal agencies passed two major healthcare regulations that could have significant consequences to the healthcare market. The Department of Labor (DOL) issued a final rule on Association Health Plans (AHPs) that expands the definition of “employer” under the Employee Retirement Income Security Act (ERISA), and the Departments of Health and Human Services (HHS), Labor, and Treasury issued a final rule that expands access to short-term, limited-duration coverage plans (STLDs). The two plans should not be conflated with each other as they offer health insurance coverage …

On September 17, California’s Office of Statewide Health Planning and Development (OSHPD) released a revised set of proposed regulations to implement the California Drug Transparency Law (SB-17) passed in 2017. SB-17 mandates when drug manufacturers must report information to purchasers and to OSHPD, specifically 60 days prior to increasing the price of a drug product more than 16%[1] and when releasing a new drug to the market with a price that exceeds the threshold of a specialty drug under Medicare.[2] (For more details on SB-17 and the lawsuit filed against …

*Update: This post was written before the end of the 2018 legislative session. For the most recent count of states that passed these legislation, see the Spotlight on 2018 State Drug Legislation Summary: The Year in Review or download our Summary Chart. Prescription drug spending remains an important issue to many Americans. According to a poll by the Kaiser Family Foundation, the affordability of prescription drugs is the top health care priority for voters.[1] In response to public outcry, many states have taken up the mantle of improving affordability and …

*Update: This post was written before the end of the 2018 legislative session. For the most recent count of states that passed these legislation, see the Spotlight on 2018 State Drug Legislation Summary: The Year in Review or download our Summary Chart. In the most recent legislative sessions, states have demonstrated they are increasingly willing to use their power to target prescription drug prices. In 2018, only two states with active legislative sessions, North Carolina and Alabama, did not consider legislation with the aim of reducing prescription drug costs. Of …

By: Megan O’Leary, Student Fellow CVS Health and Aetna Insurance defended their proposed vertical merger to the California Department of Insurance (CDI) on June 19. The Source attended the hearing and brings this report regarding the prospects and impact of the planned merger. Pursuant to the California Insurance Code, Commissioner Dave Jones was able to call the public hearing as it involves an Aetna subsidiary based in California. While the commissioner does not have direct approval authority over the merger, his input could have an impact on how other states …

In most markets, consumers can compare prices and shop for the items they want. For example, to buy a new pair of shoes, a consumer can typically drive to a shopping mall and choose from a number of stores. Each store typically carries a number of different styles and brands. The consumer might choose to pay $500 for a designer pair of heels or $25 for an inexpensive pair of tennis shoes. The consumer can also shop online and have the shoes shipped to his or her home. Regardless of …

On May 11, 2018, the Trump Administration released American Patients First, a blueprint to lower drug costs (the blueprint). The report details four challenges with the prescription drug market, including high list prices for drugs, high and rising out-of-pocket costs for patients, government programs that overpay for drugs due to the lack of negotiation tools, and foreign governments “free-riding” off of American investment in innovation. To address these challenges, the report also lays out four key strategies for reform, including a list of more than fifty recommendations with both immediate and …

Rising prescription drug prices concern nearly all Americans, with 80% reporting that drug prices are “unreasonable”. The problem of rising drug expenditures is particularly acute for state Medicaid programs, which provide health coverage for low-income and disabled Americans. Medicaid serves nearly one in five Americans including many with chronic conditions, and purchases about 10% of total prescription medications dispensed in the U.S.[1] Furthermore, Medicaid’s nationwide drug spending increased almost 50% between 2013 and 2016 (from $22.4 billion to $33.4 billion).[2] In a survey of Medicaid programs, 36 states reported increased cost containment efforts for prescription drugs …