Implementing the Affordable Care Act: state approaches to premium rate reforms in the individual health insurance market.

The Affordable Care Act protects people from being charged more for insurance based on factors like medical history or gender and establishes new limits on how insurers can adjust premiums for age, tobacco use, and geography. This brief examines how states have implemented these federal reforms in their individual health insurance markets. We identify state rating standards for the first year of full implementation of reform and explore critical considerations weighed by policymakers as they determined how to adopt the law's requirements. Most states took the opportunity to customize at least some aspect of their rating standards. Interviews with state regulators reveal that many states pursued implementation strategies intended primarily to minimize market disruption and premium shock and therefore established standards as consistent as possible with existing rules or market practice. Meanwhile, some states used the transition period to strengthen consumer protections, particularly with respect to tobacco rating.

Protecting uninsured patients from high hospital charges: lessons from California.

Key findings. (1) In 1997, the amount California hospitals billed uninsured patients was more than twice the amount hospitals received from Medicare for the same services. By 2010, billed charges had grown to be five times what Medicare paid, which trans­lated into a gap of more than $10,000 per day in the hospital. (2) Five years after the passage of the state's Hospital Fair Pricing Act, most California hospitals had financial assistance policies in place to make care more affordable for the state's uninsured population. (3) As of 2011, 81 percent of California hospitals reported charging low-income uninsured patients prices that were at or below Medicare rates. (4) While not required by the law, nearly all California hospitals reported offering free care to uninsured patients with incomes at or below 100 percent of poverty.

A new reimbursement system for innovative pharmaceuticals combining value-based and free market pricing.

Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system. The aim of this article is to suggest a modification to the current reimbursement system in Sweden where payment for pharmaceuticals is split between the regional and national levels. The system is expected to make new innovative pharmaceuticals accessible to a larger number of patients and provide more consumer surplus without reducing the producer surplus. In short, the county councils pay the marginal cost of production while the state pays for the innovation.

Impact of drug price adjustments on utilization of and expenditures on angiotensin-converting enzyme inhibitors and angiotensin receptor blockers in Taiwan.

BACKGROUND: A previous study has suggested that drug price adjustments allow physicians in Taiwan to gain greater profit by prescribing generic drugs. To better understand the effect of price adjustments on physician choice, this study used renin-angiotensin drugs (including angiotensin-converting enzyme inhibitors [ACEIs] and angiotensin receptor blockers [ARBs]) to examine the impact of price adjustments on utilization of and expenditures on patented and off-patent drugs with the same therapeutic indication. METHODS: Using the Taiwan's Longitudinal Health Insurance Database (2005), we identified 147,157 patients received ACEIs and/or ARBs between 1997 and 2008. The annual incident and prevalent users of ACEIs, ARBs and overall renin-angiotensin drugs were examined. Box-Tiao intervention analysis was applied to assess the impact of price adjustments on monthly utilization of and expenditures on these drugs. ACEIs were divided into patented and off-patent drugs, off-patent ACEIs were further divided into original brands and generics, and subgroup analyses were performed. RESULTS: The number of incident renin-angiotensin drug users decreased over the study period. The number of prevalent ARB users increased and exceeded the cumulative number of first-time renin-angiotensin drug users starting on ARBs, implying that some patients switched from ACEIs to ARBs. After price adjustments, long term trend increases in utilization were observed for patented ACEIs and ARBs; a long-term trend decrease was observed for off-patent ACEIs; long-term trend change was not significant for overall renin-angiotensin drugs. Significant long-term trend increases in expenditures were observed for patented ACEIs after price adjustment in 2007 (200.9%, p = 0.0088) and in ARBs after price adjustments in 2001 (173.4%, p < 0.0001) and 2007 (146.3%, p < 0.0001). A significant long-term trend decrease in expenditures was observed for off-patent ACEIs after 2004 price adjustment (-156.9%, p < 0.0001). Expenditures on overall renin-angiotensin drugs showed long-term trend increases after price adjustments in 2001 (72.2%, p < 0.0001) and 2007 (133.4%, p < 0.0001). CONCLUSIONS: Price adjustments did not achieve long-term cost savings for overall renin-angiotensin drugs. Possible switching from ACEIs to ARBs within individuals is evident. Policy makers should reconsider the appropriateness of the current adjustment strategies applied to patented and off-patent drugs.

Cost analysis for reimbursement-rate setting of hospital pharmaceutical services in Thailand.

OBJECTIVES This study aimed to develop a hospital pharmaceutical service model, together with a costing template for unit cost analysis and to analyse unit costs of hospital pharmaceutical services. METHODS The study was designed on the basis of activity-based costing. A model of the services was set up by consensus of the working group. Pharmaceutical services among the study hospitals were standardised. A Microsoft Excel-based costing template was developed. Finally, the costing template was used for the unit cost analysis. Sensitivity analysis and descriptive statistics were used for further analysis. KEY FINDINGS Four general and seven regional hospitals participated in the study. Hospital pharmaceutical services were divided into nine supporting activities and nine patient-service activities. Unit costs of drug dispensing per prescription by regional hospitals were approximately double that of general hospitals. In contrast, the cost of aseptic dispensing per item in regional hospitals was lower than those in general hospitals. In comparing the unit costs from standard labour costs with those from actual labour costs, both increases and decreases were found. CONCLUSIONS Costing and the use of Microsoft Excel can be applied to the development of a costing template for unit cost analysis of hospital pharmaceutical services. This programme can provide accurate unit costs for services. The results can be used when considering pharmacy service reimbursement, efficiency and service development.