Health affairs
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The pressure to contain health expenditures is unprecedented. In England a flattening of the health budget but increasing demand led the National Health Service (NHS) to seek reductions in health expenditures of 17 percent over four years. The spending cuts were to be achieved through improvements in service quality and efficiency, including reducing the use of ineffective, overused, or inappropriate procedures. ⋯ However, changes in the rates of all examined procedures varied widely across commissioning organizations. Our findings highlight some of the challenges of making major budget cuts in health care. Reducing ineffective spending remains a significant opportunity for the US health care system, and the English experience may hold valuable lessons.
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Comparative Study
Treating age-related macular degeneration: comparing the use of two drugs among medicare and veterans affairs populations.
While new biologics have revolutionized the treatment of age-related macular degeneration-the leading cause of severe vision loss among older adults-these new drugs have also raised concerns over the economic impact of medical innovation. The two leading agents are similar in effectiveness but vary greatly in price-up to $2,000 per injection for ranibizumab compared to $50 for bevacizumab. We examined the diffusion of these drugs in fee-for-service Medicare and Veterans Affairs (VA) systems during 2005-11, in part to assess the impact that differing financial incentives had on prescribing. ⋯ Beginning in 2009 the less expensive bevacizumab became the predominant therapy for Medicare patients, accounting for more than 60 percent of injections. For VA patients, the distribution of injections across the two drugs was relatively equal, particularly from 2009 to 2011. Our analysis indicates that there are opportunities in both the VA and Medicare to adopt more value-conscious treatment patterns and that multiple mechanisms exist to influence utilization.
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Widespread adoption of generic medications, made possible by the Hatch-Waxman Act of 1984, has contained the cost of small-molecule drugs in the United States. Biologics, however, have yet to face competition from follow-on products and represent the fastest-growing sector of the US pharmaceutical market. We compare the legislative framework governing small-molecule generics to that which regulates follow-on biologics, and we examine management tools that are likely to be most successful in promoting biosimilars' adoption. ⋯ Many authors have raised concerns that competition under the biologics act may be weaker than that posed by small-molecule generics under Hatch-Waxman, in part because of legislative choices such as the absence of market exclusivity for the first biosimilar approved and a requirement that follow-on manufacturers disclose their manufacturing processes to the manufacturer of the reference product. Provider skepticism and limited competition from biosimilars will challenge payers and pharmacy benefit managers to reduce prices and maximize uptake of follow-on biologics. Successful payers and pharmacy benefit managers will employ various strategies, including tiered formularies and innovative fee schedules, that can control spending by promoting uptake of biosimilars across both the pharmacy and medical benefits.
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In the twenty-three states that have decided against expanding Medicaid under the Affordable Care Act, uninsured adults who would have been eligible for Medicaid and have incomes at or above the federal poverty guidelines are generally eligible for Marketplace (insurance exchange) premium tax credits and plans with generous benefits. This study compared estimated out-of-pocket spending for care and premiums, as well as the financial burdens they impose, for the families of these adults under two simulation scenarios: obtaining coverage through a silver plan with subsidized cost sharing and enrolling in expanded Medicaid. ⋯ Larger reductions would be seen for families with smokers, who under Medicaid would no longer be subject to Marketplace tobacco user surcharges. Medicaid expansion may offer a greater opportunity than access to Marketplace insurance to promote the financial well-being of previously uninsured low-income adults.