Notes from Joe, October 2020

Notes from Joe

Improving Access to Care While Lowering Costs
By Joe Pugliese

All of the recent news, including the hearings about our potential new Supreme Court Justice, highlight that people are worried, concerned, and fixated on the cost and access to health care and of course, since it’s an election year, people want to know who to blame. The short answer is all of us, but then it gets more complicated.

As the chart below highlights – the cost of healthcare has not slowed down in any detectable fashion. The average premium for family coverage has risen 55 percent since 2008 — about twice as fast as wages, which are up 26 percent, and three times as fast as inflation, up 17 percent over a decade.

The cost of care raises access issues not just for the hemophilia community but for everyone. Historically the community has focused on access but been silent on the cost of care. I would argue that unless you have unlimited resources (typically expressed as dollars), there is a direct link between the two. It may not manifest itself in your specific situation, but if you spend $1,000,000 when you could have done just as well spending $700,000, someone suffers.

It certainly is not that we do not spend enough money on healthcare; as the chart below shows we out spend everybody by a wide margin. Despite this we get worse results also by a wide margin compared to Organization for Economic Co-operation and Development (OECD) countries, which includes Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. It is not that we need to try to do more with less, it is we should be doing more with the more we already spend.

Several years ago, I met with a former Medicaid Director to get advice on how to approach his state to include HTCs as providers. I explained how utilizing the HTC network as one of the pharmacy providers could save the state more than $8 million on 400 patients. Of course, it would also provide much needed funding for the comprehensive care model, which is clearly the gold standard for treating bleeding disorder patients. He said and I paraphrase, “do you know how big my budget was (insert 100s of millions of dollars)? Saving $8 million would not be worth my time.” I think that comment neatly summarizes why we spend so much and get relatively little for the money we spend. The $8,000,000 would buy 400 families of four health insurance for a year. If the hemophilia community paid $.01 less per unit and passed that penny on, we would save $50,000,000 per year or buy health insurance for 2,631 families.

We do not need Congress to pass a bill and we do not need the executive branch to try to impose dramatic new drug pricing policies. What we could do starting tomorrow is insist that patients be able to access treatments at a federally-supported HTC. Today, HTCs have about 20-25% of the market, despite providing clinical care for nearly 100% of the most severely affected patients, and despite the fact that the payer team routinely can show brokers and health plans savings of 20-30% over the specialty pharmacy that is presently shipping replacement product to the patient. If we could simply double our present market, which by the way would help fund expanded staffing and services to benefit even more patients with more bleeding disorders, we could reduce annual costs of care by $80,000 x 4,000 patients or $320 million, which would buy 16,842 families health insurance for a year. We would not have to switch products; we could keep and the strengthen the comprehensive care team that patients rely on for care.

What we DO need Congress and agency policymakers to do is to support the original intent of the 340B program, which is to stretch scarce federal resources and help fund clinical care. For the rest of the year, I’ll share more specific ideas of what we need to be doing. If you have any ideas, please share them with me.

Also in this Issue…

Legal Update
· The ABCs of Indirect Cost Rates

Washington Update

Payer Update
· Payer Trends: What You Need to Know

Alliance Update
· Community Relations Update – October 2020
· Join Our Growing Hemophilia Alliance Team
· 2021 Meeting Schedule