The goals from a health care policy perspective is reduction of costs for patients and society and improved access to quality care. But is this possible to achieve all when considering the exponential increases in the average annual costs of care/patient over the past 40 years and the one third increase in copayments in the United States in about three years in the US where the country’s health care costs far exceed those of every other country?
A domino effect is apparent: increased costs have real societal effects; treatments cost more than patients, employers, and taxpayers can afford; medication adherence decreases and nonadherence costs billion in avoidable health care costs. And innovation has been shown in multiple economic studies to be the major force in cost increases, not increased productivity on the part of the physicians and their increased revenue.
“The economics are complex,” Dr. Parke said. “The health care market is inefficient, and Medicare seems to be a maze of inequalities in drug pricing and valuing of services.”
A prime example was a 15% decrease in cataract surgery payment because of the effect of endocyclophotocoagulation, a glaucoma procedure, on the reevaluation of the entire family of codes.
“This is an example of the intersection of innovation and cost,” he noted.
New pricing approaches are being looked at with an eye toward value-based pricing, in which the pricing is linked to the value achieved by a new drug; indication-specific pricing is another avenue of consideration, that is, when a drug or device is indicated for treatment of two diseases and achieved better results in one disease, the pricing potentially may change accordingly.