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May 25, 2018
CBO checkup of the ACA: Not doing so hot

The ACA has not been repealed and replaced, but this week's Congressional Budget Office report puts some numbers to the unraveling (or, say Trump administration critics, the sabotage) of some parts of the law, especially in the nongroup (aka individual) market.
 
This year, says the CBO, a monthly average of about 15 million Americans under age 65 are expected to have nongroup coverage, 9 million of whom will have purchased a policy through an ACA exchange. That's a million fewer people with ACA exchange policies than last year. 
 
And between this year and next, a whopping 3 million fewer Americans in the nongroup market will buy health insurance coverage, according to the CBO. 
 
Reasons? Most obviously, premium increases: a 34% increase between last year and this year for a "benchmark plan," and a projected 15% increase from this year to next. The end of the individual mandate is, of course, another factor. 
 
2027 --that seems eons away. Still, the CBO projections go out that far. In this report, CBO's actuaries project that 35 million (or 13% of the population under age 65) will be uninsured in 2027 compared with the 29 million (11%) who were uninsured this year. 
But Milliman has some good news about health care spending

What can $28,166 buy? 
 
Sixty percent of a year's tuition at Harvard. About half of the higher-priced Telsa Model 3s that are currently available.  And, according to the Milliman Medical Index that came out this week, health care costs for a typical family of four covered by an average employer-sponsored PPO plan. 
 
Milliman says that $28,166 is an increase of $1,222 over the 2017 cost and that for the last 10 years, costs have been ratcheting up at an average rate of just over $100 per month. 
 
There is, however, a good news department. 
 
Milliman says the annual rate of increase of 4.5% is the second lowest in 18 years and that increases in prescription drug expenditures are down for the third year in a row. The actuarial consultant credits some of the valued-based care arrangements for slowing down the growth rate in health care costs. "Consumerism" and reduced use of the hepatitis C drugs have helped bend the drug trend. 
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Global payment to hospitals is working in Maryland, but...

Maryland, which pioneered innovation in hospital payment for decades, launched a statewide global payment program in 2014. Joshua Sharfstein and Elizabeth Stuart at Johns Hopkins and Joseph Antos at the American Enterprise Institute took a look at the results so far in an opinion piece published in JAMA this week (full text is available here).
 
Global payment does seem to have put the brakes on hospital spending on a per-capita basis (a 1.53% increase per year vs. overall economic growth in the state of 3.58%--and economic growth is used as a benchmark). 
 
But this furls the brow: in the Medicare population, hospital admissions are down but emergency department visits are up. 
 
A next phase is in the works in Maryland that would attempt to tackle total cost of care, not just the hospital portion, report Sharfstein, Stuart, and Antos.
Kalydeco: When a medical miracle is a cost-effective dud

Jeff Levin-Scherz went over the Kalydeco (ivecaftor) numbers this week in a blog post for  Managing Healthcare Costs. In sum, for the 20% of the cystic fibrosis patients for whom it's effective, Kalydeco cuts hospitalizations by 60% and annual spending on hospitalizations by $10,567. Levin-Scherz doesn't hold back: he calls it a "miracle drug." But even miracles can't be cost effective when priced at $311,000 per year. Besides, notes Levin-Scherz, the only drugs that produce true cost savings are contraceptives and pediatric vaccines.
Keytruda stays on a roll

In the increasingly crowded scrum for immune checkpoint inhibitor dominance, Merck's Keytruda (pembrolizumab) is emerging as a victor.
 
The company issued a press release this week that trumpeted the results of an interim analysis of a phase 3 trial of Keytruda as a first-line treatment for metastatic squamous non-small cell lung cancer. The drug hit both its overall survival and progression-free survival endpoints, Merck told the world. 
 
It's just a press release but the full data is expected to be presented next month at the ASCO meeting.
 
The headline on John Carroll's story for Endpoints News was enthusiastic: "Merck crushes Keynote-407 study in frontline lung cancer, hitting co-primaries and setting up another quick OK."
 
Carroll reports that Merck has 753 Keytruda trials underway.
Maybe not such a massacre

Many of us dread old age because of the risk of dementia. Well, maybe we can fret just  a little less. 
 
Recent data show that Americans have, on average, a dozen years of good "cognitive health" to look forward to once they turn 65. Furthermore, even when the cobwebs of cognitive impairment accumulate, people tend retain a sense of well being. 
 
Old age is a massacre, said Philip Roth, the great American novelist who died this week at age 85. Maybe Roth's is too grim of an appraisal of life in the senior lane. 
 
Peter Wehrwein
Editor 
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