Category: Drug Prices & Regulations

Do Higher Priced Hospitals Deliver Higher Quality Care?

Posted on by John C. Goodman

This NBER Working Paper says it depends on whether there is competition.

In markets with more hospital competition, going to higher-priced hospitals raises spending by approximately 53 percent and lowers mortality by 47 percent. By contrast, in concentrated hospital markets receiving care from a high-priced hospital also raises spending by 54 percent, but has no impact on patient outcomes.

And the higher spending in competitive markets is worth it:

Such hospitals spend approximately $1 million per life saved. Assuming that the individuals in the research sample live for another nine years, this is cost effective relative to the Environmental Protection Agency’s $8.7 million benchmark estimate of the value of a statistical life.

Unfortunately, the trend in the overall market is for more concentration and less competition.

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The FTC wants to Know if Middlemen Increase Drug Prices

Posted on by Devon Herrick

The Federal Trade Commission (FTC) is opening an investigation into the business practices of pharmacy benefit managers (PBMs). PBMs have been in the hotseat for quite some time. Executives from the largest PBMs were recently called to testify before Congress to explain whether their business practices lead to higher drug prices. In the latest inquiry, the FTC announced it will require the six largest PBMs to provide a range of information and business records on operations.

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Is it OK for Apple and Walmart Associates to be on Medicaid?

Posted on by Devon Herrick

The CEO of L.A. Care Health Plan recently blogged about walking into an Apple store in downtown Los Angeles and discovering the sales associate who assisted him was a client. L.A. Care is a purveyor of both Medicaid managed care plans and Obamacare plans sold on the Covered California health insurance marketplace. He was aghast when the sale associate said she was covered through Medi-Cal, the California Medicaid program.

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Monday Links

Posted on by John C. Goodman

Biden’s fix for the “family glitch” would leave members of the same family in different health plans.

Banning menthol cigarettes may do more harm than good.

Treating drug use as a health problem instead of a criminal law problem is working well in some prisons.

Trustees: Medicare will be insolvent in six years.

Did the Biden administration secretly negotiate with foreign governments to obviate the intellectual property rights of Covid vaccine producers?

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