The CMS Cost-Control Lab Is Actually Increasing Health Spending. Oof

This Congressional Budget Office report on the Center for Medicare & Medicaid Innovation makes for fascinating reading. As background, CMMI was created as part of the Affordable Care Act, designed to be a laboratory for testing ways to bring health care costs down.

But that didn’t happen, as the CBO documents. CMMI actually drove net spending higher: the savings that CMMI pilots generated ($2.6 billion) were dwarfed by the spending on those programs ($7.9 billion). CBO suggested that the pattern is likely to persist going forward.

As with any discussion of health spending, caveats and explanations abound. But the most powerful way to think about cost-savings in general is that every dollar of savings to the health system is a dollar that comes out of someone’s pocket, somewhere along the chain. No one wants to lose that dollar, and CMMI has not been able to overcome that basic financial reality.

The Inflation Reduction Act is going to change the way that drugs are managed by insurance plans and PBMs. This isn’t really a statement of opinion. The benefit design for seniors in Medicare Part D is going to be fundamentally redesigned, and that’s going to fundamentally change the incentives for insurance companies.

So it’s worthwhile to start thinking about how those different incentives will show up for patients, which makes this Hayden Consulting Group white paper a must-read.

In essence, it asks the question: in a Medicare program where insurance plans are responsible for a greater share of drug costs, how will those plans change their approach to limit risk and boost savings?

Here’s what Hayden suggests will happen. Plans will consider:

This is one of the more important untold stories of the IRA, and Hayden presents a fairly dark -- but well-reasoned -- picture of what will happen when all of the pieces of the law click into place. (The Hayden paper also looks at why having lots of available therapeutic alternatives is important, and that’s a worthwhile reference, too.)

Others have presented sunnier, if more Pollyannaish, ways to think about the same set of circumstances, in which price-controlled medicines drive down prices across entire therapeutic areas.

Regardless of whether you’re wearing your rose-colored glasses, there seems to be a quiet consensus that payers are going to play all kinds of formulary games that are almost certainly going to boomerang back to patients and providers.

• As a reminder, lots of stuff is happening on the IRA front between now and Monday.

  • It’s possible we’ll get a decision on a preliminary injunction in the Chamber of Commerce case.

  • Drugmakers will have to affirm that they’ll participate in negotiations by Sunday and submit data by Monday. This is all unsurprising process stuff, but the media is treating it as news. It’s worth reading mostly for the bombast. (Merck, for instance, is participating “under protest.”)

  • Registration for the public listening sessions has to happen by Monday.

  • Ditto for submission of public comments.

  • ICER is going to drop some sort of report, designed for CMS consideration, about Eliquis and Xarelto on Monday.

•  Sen. Bill Cassidy sent letters to the Cleveland Clinic and Bon Secours asking how much 340B cash they’re raking in and whether they’re using any of it to help patients. It’s proof of the power of journalism, extending the great work of the New York Times and the Wall Street Journal in exposing those hospital systems.

• Elsewhere in the members-of-Congress-sending-letters department, health plans received some correspondence on the subject of prior auths.

• The PBM bill that the Senate Finance Committee endorsed over the summer has been formally introduced. I’m not sure that’s really a big deal, beyond being another drop in the deluge of legislative activity around the topic.

• This JAMA Health Forum piece connects doctors who received payments from drugmakers with the use of higher-priced macular degeneration medicines. (Here’s STAT’s coverage.) This is a tricky one: the cheap option is compounded Avastin, which isn’t approved for eye use, so I feel like care should be taken not to drag docs who choose to use the FDA-approved options.