SUMMARY: Prescription drugs in the United States rank as the most expensive by a long shot, a report published this week has found, with the average cost of medications in the US exceeding the global median price by some 300 percent. Between 2012 and 2016 alone, the price of insulin nearly doubled, forcing many Americans to search for other routes to access it. But a trip to the hospital can force you into bankruptcy.
Trump is taking on hospitals. His new proposed regulation would require hospitals to disclose and update details, including gross charges, cash prices, and negotiated rates, for thousands of services. They must also explain in plain English how much a basket of 300 common services (things like MRI scans or hip replacements) will cost, including any extras and hidden charges.
According to The Economist, hospitals accounted for nearly a third of America’s health-care costs in 2017, far more than the share of much-maligned drugmakers. The country has over 6,000 hospitals. Only 1,300 or so are private for-profit institutions; the rest are non-profit or government-run. The lack of an overt profit motive has done little to rein in prices, however. Hospital costs have risen at an annual rate of close to 5%, compared with below 1% for drug prices. Nor has a charitable mission dampened the ambition of bosses at big hospital chains; seven-figure salaries are not unheard of at those with revenues exceeding $500m a year. They have also been on an acquisition binge. The number of deals has jumped from around 55 a year between 2002 and 2009 to 90 or more these days. Since 2018 non-profit hospitals have been the acquirers in three-quarters of the transactions.
Cancer is hurting patients financially
Cancer patients are 2.5 times more likely to file for bankruptcy after they are diagnosed, according to the Fred Hutchinson Cancer Research Center, based in Seattle.
Among the financial pain points are the high tab for therapies, out-of-pocket insurance costs and loss of work during and after treatment, said Dr. Veena Shankaran, clinician and co-director of the Hutchinson Institute for Cancer Outcomes Research.
Drug Spending and Medicare
Americans spend more on pharmaceuticals per capita than any other country in the Organization for Economic Co-operation and Development (O.E.C.D.).
Existing laws require the Medicare program to cover most drugs, no matter how much they cost, and prevent the federal government from using the full weight of its purchasing power to negotiate the best possible deal for its beneficiaries. (Medicare is the largest prescription drug purchaser in the world, by far.) Some of those protections exist for good reason; without legally binding mandates, the program might refuse to cover crucial but expensive medications. But they have also enabled drugmakers to hike prices — well beyond inflation, for years on end — without justification or penalty.
Medicare Spending On Drugs:
1ne: Medicare’s share of the nation’s retail prescription drug spending has increased from 18% in 2006 to 30% in 2017.
2wo: Prescription drugs covered under both Part B and Part D accounted for 19% of all Medicare spending in 2016.
3hree: Ten drugs accounted for 17% of all Part D spending in 2016 (including both Medicare and out-of-pocket spending).
4our: Prescription drugs accounted for $1 in every $5 that Medicare beneficiaries spent out-of-pocket on health care services in 2016, not including premiums.
5ive: Many proposals to reduce prescription drug costs enjoy broad support among Democrats and Republicans.
Are prescription drug costs an issue? Yes, but our whole healthcare system is “an issue”. It’s an issue because healthcare is too damn profitable. There is no reason on earth why the government should not negotiate drug prices with drug companies for Medicare. It’s going to happen it’s only a matter of when.