First, some personal news: I’m joining the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center as a senior fellow.
It’s an unparalleled opportunity to work with some of the folks thinking hardest about value in the health care system, and I couldn’t be more excited to get to work with Peter Neumann and his incredible team to peel back the onion (or, more accurately, the value flower).
I have a deep belief, as a communicator, that how we talk about value, especially the value of medicines, is critical to building the kind of understanding that will allow for a better, a more thoughtful, and a more equitable approach to health care.
The folks at Tufts share that belief, and the plan is to work with them to explore the connections between how industry and others present issues of value, access, pricing, and reimbursement and how that communication is received by the wider world.
Tufts will provide an outlet for me to explore these ideas in a more rigorous fashion, and that work will run in parallel with Reid Strategic’s other priorities. I’ll continue my consulting — please reach out if you have a pricing/value knot I can help untie — and Cost Curve will continue to arrive, unabated, in your inbox.
I’m grateful to Peter and Josh Cohen for the opportunity.
At the root of a lot of the frustrations with the 340B program is that we just don’t understand whether it works.
The word “works” is doing a lot of work in that previous sentence. Hospitals would suggest that anything that pads their revenue helps ensure their sustainability, and that’s all the proof needed to show that 340B “works.”
But I suspect most Americans, if you sat them down and explained the whole deal, would suggest a different standard: 340B works when vulnerable Americans get better access to better care. You could even come up with some statistical measures: are more uninsured patients getting served? Are they getting flu shots? Smoking cessation counseling? Pap smears?
Anyway: there is a new study in JAMA Health Forum that looks directly at those standards when it comes to Federally Qualified Health Centers, which are required to provide free- or low-cost care and where the uninsured and Medicaid patients constitute more than 70% of the patient load.
And it turns out that more 340B dollars flowing to those entities (as measured by the number of locations) means more uninsured patients getting served, more flu shots, more pap smears, and so on.
The study highlights a couple of issues.
One is that not all the providers in the 340B program are created equal. FQHCs and, probably, public hospitals are out there using 340B dollars to directly improve the lives of patients. The large, nonprofit hospitals are not. (Or, at least, there is no evidence to suggest they are, and there appears to be zero desire on the part of those hospitals to provide any evidence of their own.)
That raises reasonable questions about whether there ought to be a better standard by which we allocate 340B discounts. I don’t think there is a person in the country who objects to what FQHCs are doing. The “nonprofit” hospitals, on the other hand? Plenty of reasons to be skeptical.
The second, related, issue is one of transparency. If we had more and better detail about how many 340B dollars were flowing to hospitals and how those dollars were being used, we could make smarter policy choices about how to ensure that the $50 billion+ in 340B profits were flowing in the best possible direction.
But, again, the hospitals are going to fight tooth and nail to ensure that kind of data never gets generated.
I may go at this in more depth later, but the CBO has a worthwhile report on all of the bad drug-pricing policy options** that are floating around DC right now.
To be clear: it’s worthwhile because it’s good to have all of the bad ideas defined in one place. And it’s worthwhile because it makes clear that there is no magic bullet that can bring transformative savings.*** The analysis itself is not particularly worthwhile, especially when the CBO starts talking about innovation.
** Plus one option that’s not bad: ensuring that generic and biosimilar competition is not impeded.
*** The one policy that the CBO thinks has the potential to have anything more than a marginal impact is international reference pricing. And the CBO probably isn’t wrong. If we want to have the same prices as Greece, it would probably save a ton of money. But it would also mean Greek levels medical innovation, which is not in any patient’s best interest.
Elsewhere:
Another thing worth more exploration is the coming rise in patient cost-sharing in Medicare drug plans. This STAT story gets at the wave that’s about to hit Medicare Advantage, where deductibles are going to become a popular way of ensuring that the plans remain profitable. There is almost certainly going to be more to come here.
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