Pharma Looks to Change the Healthcare Cost Conversation

Amidst the continuing clamor for government action to curb prescription drug prices, a more collaborative effort aims to broaden the debate to consider the full range of healthcare services and rates that affect spending in this area. The National Pharmaceutical Council (NPC), a pharma-funded research organization, is partnering with the independent journal Health Affairs to examine the root causes of rising healthcare outlays in the United States. This two-year program will support academic and professional research projects and commentaries to be published and disseminated online by the journal.

The initiative kicked off formally last week at a Washington, DC conference on healthcare spending. A main topic was the impact of identifying and reducing unnecessary or excess care, a tricky task, as seen in the variety of ideas for curbing health outlays across populations and interest groups. Leading researchers differ on how much unnecessary care drives up overall costs, and the impact of plans and payers denying coverage for expensive new therapies or procedures.

Mollyann Brodie of the Kaiser Family Foundation pointed out that individual consumers are eager to cut their own healthcare bills, but not national support for health programs. The public assigns high value to the health services they receive and doesn’t agree that the US spends too much on healthcare, as compared to, say, education or infrastructure repair.

All parties regard this project as an opportunity to move away from “pointing fingers and blame” and toward more constructive strategies. Health Affairs editor-in-chief Alan Weil noted that government officials were talking about the “unsustainable” rise in healthcare spending back in the 1980s, and that recent shifts to paying for value, over volume, have not brought fundamental change. With the nation now spending some $3 trillion a year on healthcare, critical thinking is needed on how well market forces and regulators allocate those resources. Key issues are whether current prices for surgery, hospital stays, drugs, and devices are appropriate or too high; whether healthcare spending is crowding out other social programs such as education, police, and firefighters, or infrastructure repair; and whether the nation can afford new cures for poorly treated diseases.

NPC Chief Science Officer Robert Dubois acknowledged that the discussion will address drug costs, but hopes the agenda also includes the high savings from generic drugs. Dubois says he will be satisfied if the project generates a richer conversation on the many factors that contribute to high outlays on healthcare and not just that drugs cost too much.

Meanwhile, employers that pay much of the nation’s healthcare bills are looking to have a greater impact on the system. The recent announcement that Amazon, JP MorganChase, and Berkshire Hathaway are joining together to seek ways to reduce spending on healthcare for their one million employees generated huge excitement for its potential to generate some bold new ideas. Yet, a long history of promising health reform proposals that bear little fruit over the long-run has also generated skepticism and fear that any savings gained by these large corporations will only disadvantage small companies and individuals struggling to find affordable coverage in the market.