American consumers and policymakers are increasingly concerned about the high cost of prescription drugs. According to the Kaiser Family Foundation, one in four people taking prescription drugs report difficulty affording their medication. There is bipartisan support for policies that could help lower drug prices and their burden on consumers. Legislation has been introduced and regulatory actions have been advanced to promote competition among drug manufacturers and slow the growth of prices.

Optum Rx, one of America’s largest pharmacy benefit managers (PBMs) sent a letter to drug companies outlining several demands the companies must meet if they seek to lower list prices for their medicines. This would put another obstacles in the path of lowering drug prices.

The letter was sent to several drug manufacturers. In it, Optum demanded a couple of things: 1) at least seven quarters notice before a company reduces its list prices, and 2) equivalent rebates off of lowered prices as compared to existing prices. The message is unclear whether Optum wants rebates to stay the same or the same percentage of a price. But either way, drug companies are unhappy with the letter, since many companies are looking to lower list prices for certain drugs. Additionally the letter was high handed and Optum seems like it is attempting to dictate the terms of various projects.

HCCI’s annual reports examine year-over-year and 5-year cumulative trends in health care spending for individuals with employer-sponsored insurance, segmented by health care service category. Downloadable tables and interactive tools allow for further exploration of the data that power these reports.

This year’s report found that average annual health care spending for individuals with employer-sponsored insurance increased to an all-time high of $5,641 in 2017, despite little change in the utilization of services overall. While overall spending growth slowed in 2017 compared to 2016, the report finds that prices continued to drive rising costs.

Many things affect your health. Genetics. Lifestyle. Modern medicine. The environment in which you live and work.
But although we rarely consider it, the degree of competition among health care organizations does so as well.

Markets for both hospitals and physicians have become more concentrated in recent years. Although higher prices are the consequences most often discussed, such consolidation can also result in worse health care. Studies show that rates of mortality and of major health setbacks grow when competition falls.

Hospital prices are the main driver of U.S. healthcare spending inflation, and that trend should direct any policy changes going forward, according to a new study. 

For inpatient care, hospital prices grew 42% from 2007 to 2014 while physician prices rose 18%, according to researchers who studied the Health Care Cost Institute’s claims data for people with employer-sponsored insurance from Aetna, Humana and UnitedHealthcare Group. Similarly, for hospital-based outpatient care, hospital prices increased 25% while physician prices grew 6%, the new Health Affairs study found. 


In 2010, CMS established the Hospital Readmissions Reduction Program under the ACA. Two years later, the government began fining hospitals with high rates of readmission within 30 days of a hospitalization for pneumonia, heart attack, or heart failure. But a study finds the program may have led to more patient deaths. “Why are policies that profoundly influence patient care not rigorously studied before widespread rollout?” the researchers ask. “[W]e remain uncertain about whether it has had unintentionally deadly consequences. That should be a bracing reminder that before we are seduced by promising but untried ideas, we need to first demand robust evidence that they will not harm patients.” 

For decades, we’ve talked and talked and talked about the high cost of American health care. But we haven’t done anything about it. As the above chart shows, the problem has gotten so bad that, today, hospital spending reduces the average family’s take-home pay more than do federal taxes.

Overall, as a country, Americans spent $1.2 trillion on hospital care in 2018. That’s over $3,600 for every man, woman, and child in the U.S. The Centers for Medicare and Medicaid Services project that, by 2026, hospital spending will rise to $1.8 trillion: over $5,300 per person.

In the wake of Republicans failing to repeal and replace Obamacare and the Democratic takeover of the House, where will the health care debate go from here?

No important health care legislation will come out of this gridlocked Congress. But the run-up to the 2020 presidential campaign will produce at least a Democratic health care plan out of the nominating process.

People 65 and older accounted for over one third of U.S. medical spending. Yet despite the fact that government pays for 65% of the elderly’s medical expenses, the burden of health spending (out-of-pocket expenses as a percentage of income) is much higher among the elderly than among those below age 65. You might suppose that a policymaker in 2008 would look at these data and conclude that if there is a crisis in affordability within the U.S. population, it lies among the elderly. 

Gallup polls have been asking some big picture questions about the major dimensions of health system performance–quality, coverage, costs and access–for nearly two decades now. This allows me to show you a long time series of trends that leave little doubt that despite many lofty promises made for Obamacare (or the high hopes of its proponents), Obamacare essentially left American health the same or worse on quality, coverage, costs and access . I found literally no evidence in these data that it made things better.