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The Inflation Reduction Act (IRA) had many provisions to reduce consumer pricing across many industries. For health care, the IRA was perhaps most known for allowing Medicare to negotiate drug pricing, but the legislation included other measures as well. KFF Health News published a piece that describes one man's frustration with high prescription drug costs and his role in influencing the IRA with regards to drug costs for Medicare patients.

The Inflation Reduction Act (IRA) had many provisions to reduce consumer pricing across many industries. For health care, the IRA was perhaps most known for allowing Medicare to negotiate drug pricing, but the legislation included other measures as well. KFF Health News published a piece that describes one man's frustration with high prescription drug costs and his role in influencing the IRA with regards to drug costs for Medicare patients.

Some of the other measures besides allowing Medicare to negotiate pricing include reducing the limit that Medicare patients might pay when paying for their own medications. Other measures limit the pricing of insulin and free vaccines for lower-income patients. While Medicare patients should benefit from having to pay less for medications, those measures seem to push costs around, either to the insurers (which then increase monthly premiums) or to the government. Allowing Medicare to negotiate pricing appears to be the only measure to actually reduce costs to the overall healthcare system.

The article notes that one pervasive issue is that medications in the US cost significantly more than the same medications in other countries -- maybe more than ten times as much. As prescription drug costs mount -- whether for patients or for the government -- perhaps there will be additional efforts to reduce the pricing differential across countries.

KFF Health News published an article describing a conflict between Anthem Blue Cross and UC Health. More than half a million patients could be affected (needing to find new healthcare providers) if the two large organizations do not come to an agreement. From a commercial perspective, these types of conflicts are understandable: one side wants to be paid more and the other side wants to not pay as much as has been demanded. The two large organizations engage in brinkmanship to gain larger concessions.

KFF Health News published an article describing a conflict between Anthem Blue Cross and UC Health. More than half a million patients could be affected (needing to find new healthcare providers) if the two large organizations do not come to an agreement. From a commercial perspective, these types of conflicts are understandable: one side wants to be paid more and the other side wants to not pay as much as has been demanded. The two large organizations engage in brinkmanship to gain larger concessions.

An underlying problem that exacerbates the problem is the consolidation of the industry within fewer, but larger, organizations. Having many, smaller buyers and sellers would allow for much more robust price discovery. As it is, "Stremikis noted that as mergers occur in the health industry, patients are left with fewer choices. Any time there are disputes, disruptions are felt more widely."

While larger organizations might theoretically achieve some economies of scale, "A KFF analysis found widespread evidence that consolidation of health providers leads to higher health care prices for private insurance. The same brief from 2020 found some evidence suggesting that large, consolidated insurance companies are able to obtain lower prices from providers, but that has not necessarily led to lower premiums for patients." Concentration of market power into just a few organizations rarely seems positive for consumers.

Should the same service be compensated differently if performed in a clinic versus in a hospital? Hospitals think that services performed in their facilities should be compensated more, and they have been receiving higher payments for many years. KFF Health News published an article that gives an overview of some recent legislative efforts to even out the payments (known as site-neutral payments, since under this arrangement, the payment amount should not vary depending on the facility in which the service is rendered).

Should the same service be compensated differently if performed in a clinic versus in a hospital? Hospitals think that services performed in their facilities should be compensated more, and they have been receiving higher payments for many years. KFF Health News published an article that gives an overview of some recent legislative efforts to even out the payments (known as site-neutral payments, since under this arrangement, the payment amount should not vary depending on the facility in which the service is rendered).

Hospitals have argued that keeping their facilities open is very costly. Additionally, since they must be willing to accept emergencies, they need to staff for a certain patient volume, even if that patient volume does not materialize. To cover these costs, hospitals have relied on higher payments for the same services that can be performed at clinics. With a quick glance, the logic presented by hospitals might be plausible, but hospitals expect higher payments even for services rendered at clinics that they have bought. Instead, a more fair compensation scheme should equalize the payments for services, regardless of facility, and hospitals who provide emergency medical care should probably be paid a fixed amount every month. Under the current arrangement, hospitals generate more income and can use that income to buy out clinics, further increasing the cost of medical care.

The federal government has looked at various ways of reducing prescription drug costs, including allowing Medicare to negotiate with pharmaceutical companies. KFF Health News reported on an effort by the federal government to invalidate patents held by drug manufacturers.

The federal government has looked at various ways of reducing prescription drug costs, including allowing Medicare to negotiate with pharmaceutical companies. KFF Health News reported on an effort by the federal government to invalidate patents held by drug manufacturers.

Before this effort, competitors (e.g. generic drug manufacturers) needed to pay to challenge patents protecting medicines that they wanted to produce. Apparently, in those cases, challenging some medication patents would automatically trigger a delay for the challenger's FDA approval process. It is unclear why that delay was made into policy. Theoretically, by invalidating some of these patents, the federal government is lowering the cost for makers of generics to offer more affordable alternatives.

KFF Health News published a follow-up article on a patient's frustration with the practice of prior authorization. The article gives the background that "Prior authorization was conceived decades ago to rein in health care costs by eliminating duplicative and ineffective treatment. Not only does overtreatment waste billions of dollars every year, but doctors acknowledge it also potentially harms patients." However, the practice can also be abused to the benefit of insurers by denying legitimate medical care. Unfortunately, it seems that patients have little recourse when denied medical care, other than to appeal to the court of public opinion.

KFF Health News published a follow-up article on a patient's frustration with the practice of prior authorization. The article gives the background that "Prior authorization was conceived decades ago to rein in health care costs by eliminating duplicative and ineffective treatment. Not only does overtreatment waste billions of dollars every year, but doctors acknowledge it also potentially harms patients." However, the practice can also be abused to the benefit of insurers by denying legitimate medical care. Unfortunately, it seems that patients have little recourse when denied medical care, other than to appeal to the court of public opinion.

KFF Health News had previously reported on the federal government's effort to reform the practice, in part by reducing the time that insurers have to respond to prior authorization requests. However, it seems that there should probably be an independent agency or panel which includes medical expertise to help adjudicate differences in opinion on what constitutes legitimate medical care.