Good morning ... Wishing a speedy recovery to First Lady Melania Trump, whom the White House says will be hospitalized for the rest of the week to recuperate from a kidney procedure.
HHS Secretary Alex Azar taking press questions. Photo: Chip Somodevilla/Getty Images
HHS Secretary Alex Azar implicitly pushed back yesterday on some of the “meh” reviews that initially greeted the White House’s big plan to lower drug prices.
Reality check: Yes, there are some potentially significant outcomes on the table here. The catch is that there are no assurances they’ll actually happen.
On negotiations, Azar was talking about moving some drugs from Medicare Part B, which pays fixed prices, to Medicare Part D, where private companies negotiate discounts.
The same applies to rebates. Azar very much sounds like a man who's seriously gunning for pharmacy benefit managers’ rebates — the current system for negotiating bulk discounts on drugs.
The bottom line: If at the end of all this, Azar’s most ambitious scenarios all come to pass — if PBMs are negotiating discounts for every drug Medicare covers, yet are no longer able to collect fees and rebates based on the high sticker prices of those drugs — it will be hard to deny that the Trump administration took a serious swing at drug prices.
In 1979, the U.S. was in the middle of the pack, worldwide, in terms of per capita health care spending and life expectancy. But then in 1980, we broke away and started on the trajectory we're on today — much higher spending and deteriorating outcomes.
So, what was so uniquely bad about 1980? Health care economist Austin Frakt has some possible answers in the New York Times' Upshot.
Spending: Multiple experts told Frakt they think the high inflation of the 1970s contributed to rising health care costs worldwide, but that the U.S. simply had weaker tools in place to constrain those costs.
Life expectancy: Experts say U.S. life expectancy started to fall after 1980 largely because income inequality began to accelerate and the U.S. didn't keep up with the rest of the world's investments in social safety-net programs.
Companies that supply medical equipment say Medicare’s plans to boost their payments isn't a giveaway, but rather a reflection of the reality that small companies serving remote areas have been crushed by the program’s competitive bidding system.
Flashback: Medicare designed a competitive bidding program several years ago to control costs for durable medical equipment — things like wheelchairs and oxygen tanks.
What they're saying:
All-payer rate setting is what all the cool kids are talking about in health policy, and Maryland is the hipster who was into it before it became mainstream. Yesterday, the state announced that it's expanding its all-payer system, broadening its reach beyond hospitals.
How it works: Maryland limits total state spending on hospital care, and it says that approach has saved the federal government more than $580 million so far.
Former Senate Majority Leader Harry Reid had a tumor removed from his pancreas yesterday, according to a statement from his family. That’s a chilling bit of news considering that pancreatic cancer has one of the lowest survival rates of any form of cancer.
The importance of early detection: If Reid beats the odds, it’s likely because of early detection. The statement says his doctors caught it early, and sometimes that can make a difference. In most cases, pancreatic cancer isn’t caught until it has already spread, but it is treatable when caught early.
What we're watching today: Senate health committee hearing on the 340B drug discount program (10 am; livestream).