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Rising drug prices have frequently made the headlines over the last few years. There have been different proposals on how to address the issue, including introducing legislation to allow Medicare to negotiate pricing. NPR reported on the current administration's recent proposal: to include drug prices from around the world when calculating the reference price. Apparently, Medicare currently pays for drugs at 106% of the average US sales price of the drugs. Since drugs in the US are often much more expensive than the same drugs in other countries, including the prices of drugs from around the world may dramatically lower the amount that Medicare pays for drugs.

Rising drug prices have frequently made the headlines over the last few years. There have been different proposals on how to address the issue, including introducing legislation to allow Medicare to negotiate pricing. NPR reported on the current administration's recent proposal: to include drug prices from around the world when calculating the reference price. Apparently, Medicare currently pays for drugs at 106% of the average US sales price of the drugs. Since drugs in the US are often much more expensive than the same drugs in other countries, including the prices of drugs from around the world may dramatically lower the amount that Medicare pays for drugs.

The price discrepancy by nation is a form of price discrimination that allows pharmaceutical companies to set prices according to what each country might tolerate, giving them higher revenue than what they would get if they were allowed to set only one global price. Patient advocates have previously proposed a workaround by allowing the importation of drugs from other countries. This current proposal is another approach that would dramatically affect the price gap.

The Kaiser Family Foundation conducted a survey that asked people to identify which issues are important to them in the upcoming election. 30% of the respondents indicated that healthcare was the most important issue (71% of the respondents rated it as "very important"). This finding is perhaps not surprising given the backdrop of the rising health insurance premiums and the controversy around the Affordable Care Act. What is interesting, though, is that mandating coverage for preexisting conditions is so popular that Republican lawmakers are apparently toning down their rhetoric. Clearly, health is important to people and the rising costs of healthcare poses a problem.

The Kaiser Family Foundation conducted a survey that asked people to identify which issues are important to them in the upcoming election. 30% of the respondents indicated that healthcare was the most important issue (71% of the respondents rated it as "very important"). This finding is perhaps not surprising given the backdrop of the rising health insurance premiums and the controversy around the Affordable Care Act. What is interesting, though, is that mandating coverage for preexisting conditions is so popular that Republican lawmakers are apparently toning down their rhetoric. Clearly, health is important to people and the rising costs of healthcare poses a problem.

The survey was conducted among approximately 1,200 adults with a roughly even split of party identification (among Democrat, Republican, and independent). The survey also includes an interesting breakdown of how people from different party identifications felt about various issues.

Kaiser Health News reported on CMS's (Medicare) announcement that for the first time since the health insurance exchanges created by the Affordable Care Act became active in 2014, the average health insurance premium on the exchanges has dropped. While the average premium for individual health coverage dropped only 1.5 percent, it is significant that premiums have dropped at all, especially given two years of "double-digit price hikes."

Kaiser Health News reported on CMS's (Medicare) announcement that for the first time since the health insurance exchanges created by the Affordable Care Act became active in 2014, the average health insurance premium on the exchanges has dropped. While the average premium for individual health coverage dropped only 1.5 percent, it is significant that premiums have dropped at all, especially given two years of "double-digit price hikes."

Not surprisingly, different people attribute the drop to different reasons. One sentiment is that premiums have risen so much over the last couple of years that these plans are now quite profitable. Apparently, the plans are so profitable that new companies will offer plans, expanding people's options.

Kaiser Health News released the results of their annual Employer Health Benefits Survey. Nothing stood out to be as particularly surprisingly, but there were a few notes of interest. First, the average annual premiums for employer-sponsored health insurance rose 3% for single coverage and 5% for family coverage, both outpacing inflation and wage increases. Secondly, about a third of the covered employees at the surveyed firms were on a high-deductible plan (almost twice the number of employees covered by HMOs). The average annual deductible among covered workers was $1,350, meaning that employees still need to pay a fair amount if medical services are needed (outside of preventative care).

Kaiser Health News released the results of their annual Employer Health Benefits Survey. Nothing stood out to be as particularly surprisingly, but there were a few notes of interest. First, the average annual premiums for employer-sponsored health insurance rose 3% for single coverage and 5% for family coverage, both outpacing inflation and wage increases. Secondly, about a third of the covered employees at the surveyed firms were on a high-deductible plan (almost twice the number of employees covered by HMOs). The average annual deductible among covered workers was $1,350, meaning that employees still need to pay a fair amount if medical services are needed (outside of preventative care).

With insurance premiums growing faster than inflation, healthcare continues to become more and more expensive. At some point, the industry will need to change to better contain costs, but it is unclear what exact mechanism(s) will be instrumental to that change.

In another example of how a good system of incentives can be hard to craft, Kaiser Health News reported on Congress mandating that CMS ease its penalties for hospitals serving low-income patients whose readmission rates are too high. Originally, the policy was to penalize all hospitals whose readmission rates are too high (with the rationale that if a hospital does a sloppy job on a procedure, causing patients to return to the hospital within 30 days, then those hospitals should be paid less). Parts of the medical community argue that low-income patients can easily land back in the hospital for reasons outside of the hospitals' control (such as patient inability to afford medication), thus unfairly penalizing hospitals. Understandably, putting additional financial strain on hospitals that serve low-income patients raises the question of whether those communities will face reduced access (e.g. if some of those hospitals close).

In another example of how a good system of incentives can be hard to craft, Kaiser Health News reported on Congress mandating that CMS ease its penalties for hospitals serving low-income patients whose readmission rates are too high. Originally, the policy was to penalize all hospitals whose readmission rates are too high (with the rationale that if a hospital does a sloppy job on a procedure, causing patients to return to the hospital within 30 days, then those hospitals should be paid less). Parts of the medical community argue that low-income patients can easily land back in the hospital for reasons outside of the hospitals' control (such as patient inability to afford medication), thus unfairly penalizing hospitals. Understandably, putting additional financial strain on hospitals that serve low-income patients raises the question of whether those communities will face reduced access (e.g. if some of those hospitals close).

The question in this discussion is one of risk-adjustment (with low-income patients having worse health outcomes on average than higher-income patients). The new policy evaluates each hospital in the context of one of five peer groups. It will be interesting to see how long this framework of five peer groups holds. Perhaps some providers will argue for a rural vs. urban distinction, or ask for some other type of risk-adjustment.