Affordability Advocacy Agenda

AHA will incorporate principles that promote improved value into our ongoing policy and advocacy activities.

Individuals, employers, government and payers are seeking greater value for their health care dollars. Concerns around the affordability of health care will only grow as overall health care spending continues to rise.

Health systems and hospitals are working hard to advance affordability by transforming the way health care is delivered in our communities. We are redesigning the delivery system, improving quality and outcomes, managing risk and exploring new payment models, and implementing operational solutions to improve patient outcomes and efficiency. But we cannot do it alone. It will take a real effort by everyone involved – insurers, businesses, hospitals, physicians, nurses, employers and individuals. Importantly, it also will take changes in public policy.

In order to make health care more affordable, the AHA is working with Congress, the Administration, the courts and other agencies to push forward our strategic commitments toward: access, value, partnerships, well-being and coordination. Below are some of our key advocacy initiatives to lower the cost of health care.

Improve Access to Health Care Coverage

An individual’s ability to obtain health insurance is a key driver in making health care more affordable to consumers. Additionally, the pool of individuals with coverage needs to be large enough to spread insurance risk and keep premiums down. The AHA believes that we must maintain coverage for all individuals currently receiving benefits, as well as protect affordable coverage for as many Americans as possible. This is particularly true for the 20 million Americans who have gained coverage through the Affordable Care Act (ACA), including millions of our most vulnerable citizens – children, the disabled, those with pre-existing conditions and the elderly. The ACA must not be repealed without a simultaneous replacement guaranteeing adequate coverage.

Additionally, the AHA is working to ensure the stability of the Health Insurance Marketplaces, which allow more than 12 million consumers to purchase coverage. Without marketplace plans, consumers cannot access the federal premium tax credits and cost-sharing reductions that help make coverage affordable. The AHA is advocating for policies to attract both insurer and consumer participation in the marketplaces, such as maintaining funding for the cost-sharing reduction subsidies and continuing a reinsurance mechanism. Moreover, in order to increase the affordability of coverage and prevent individuals from being priced out of the market, we urge Congress and the Administration to maintain critical consumer protections, such community rating and the essential health care benefits.

States that have expanded Medicaid consistently show that expansion generates savings and revenue. The AHA supports efforts to encourage every state to expand Medicaid coverage, whether through increased federal financial support, or state-specific Medicaid waivers. In addition, we urge Congress to extend funding for the Children’s Health Insurance Program (CHIP) to ensure critical health coverage for vulnerable children.

Lower Drug Prices

The high cost of prescription drugs is putting a strain on Medicare, Medicaid and the entire health care system. A recent analysis of drug pricing data found that inpatient hospital drug costs increased more than 38 percent per admission between 2013 and 2015, with large unit price increases for both low- and high-volume drugs, as well as for both branded and generic drugs[i]. Such sudden and excessive price increases threaten access to and the affordability of critical drug therapies for patients.

The AHA is working with a number of stakeholders, including insurers and consumers, to raise awareness of and develop solutions to help rationalize drug prices while still supporting innovation. The AHA is urging Congress and the Administration to ensure fair and sustainable drug pricing through a number of policy proposals intended to spur competition, develop value-based pricing mechanisms, increase transparency, and promote provider and patient access to lower-cost medications.

Specifically, these drug pricing policies call for: fast-track generic applications; deny patents for “ever-greened” products; increase oversite and deem presumptively illegal “pay-for-delay” tactics; limit orphan drug incentives to true orphan drugs; disallow co-pay assistance cards; increase disclosure requirements related to drug pricing, research and development; allow providers and patients to reimport certain drugs; require mandatory, inflation-based rebates for Medicare drugs; implement stricter requirements on direct-to-consumer advertising; remove tax incentives for drug promotion activities; test changes to the federally-funded Part D reinsurance program; develop Medicare-negotiated value-based payment arrangements; and vary patient cost-sharing for certain drugs based on demonstrated value. For more detail visit: http://www.aha.org/content/16/aha-drug-policy-recommendations.pdf.

Reduce Regulatory Burden

Today’s health care system is rife with administrative burden. The hospital field faces duplicative regulation and compliance burdens, along with myriad requirements from insurance plans, each of which have different claims processing, recordkeeping and medical necessity requirements. A recent AHA study found that health systems, hospitals and post-acute care providers spend nearly $39 billion a year on administrative costs – cost not associated with the delivery of patient care – to support compliance with federal regulations[ii]. This equates to nearly $7.6 million annually for an average-sized community hospitals.

A reduction in administrative burden will enable providers to focus on patients, not paperwork, and reinvest resources in improving care, improving health and reducing costs. The AHA has shared a set of general recommendations to reduce administrative requirements without compromising patient outcomes. These include strategies such as aligning regulatory requirements within and across federal agencies and programs, providing concise guidance and reasonable timelines to implement new rules, and ensuring certain laws are flexible enough to support different patient populations and communities. Additionally, we have provided a set of recommendations for immediate regulatory relief, such as canceling Stage 3 of meaningful use, suspending the mandated submission of electronic clinical quality measures, and streamlining quality measurement.

These recommendations, and others, are more fully described in AHA letters to President Trump, The Centers for Medicare & Medicaid Services (CMS) and Congress, available at www.aha.org/relief.

Support Payment and Delivery System Reforms

Over the past several years, CMS has created a number of programs to test new approaches to payment and care delivery. These efforts include multiple accountable care organization (ACO) initiatives, advanced primary care models, and episode-based payments such as the Bundled Payments for Care Improvement (BCPI) program. These programs encourage providers to move away from fee-for-service toward integrated and innovative delivery models that may improve care and lower cost. Currently, America’s health systems and hospitals are adapting to the changing health care landscape and new value-based models by eliminating silos and replacing them with a continuum of care to improve the health of their communities and overall affordability. Standing in the way of success, however, are portions of the Anti-kickback Statute, the Ethics in Patient Referral Act (also known as the “Stark Law”) and certain civil monetary penalties. The AHA urges Congress to create a safe harbor under the Anti-kickback Statute to protect clinical integration arrangements so that physicians and hospitals can collaborate to improve care. Additionally, we support eliminating compensation from the Stark Law to return its focus to governing ownership arrangements.

Allow Hospital Realignment

Hospitals are reshaping the health care landscape by striving to become even more integrated, aligned, efficient and accessible to the community. To support these changes, it is important to standardize the merger review process between the two federal antitrust agencies. The Federal Trade Commission has frequently used its own internal process to challenge a hospital transaction, an option not available to Department of Justice, which increases the time and expense of defending a transaction and the likelihood of an outcome that favors the agency. To help rebalance the merger review process, the AHA is urging the Senate to pass the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act (S. 2102).

Enact Liability Reform

The high costs associated with the current medical liability system not only harm hospitals and physicians, but also their patients and communities. Across the nation, access to health care is being negatively impacted as physicians move from states with high insurance costs or stop providing services that may expose them to a greater risk of litigation. The Congressional Budget Office and others have found that medical liability reform could save $50 billion over 10 years, depending on the policies implemented.

To help make health care more affordable, the current medical liability system must be reformed. As such, the hospital field is working to advance the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act (H.R. 4771), which would reduce health care costs and promote access to quality, affordable health care for all Americans. It is based on the proven model of reform enacted decades ago in California. We also will work to advance other proposals that will deliver meaningful medical liability reform.

For more information on AHA’s Advocacy Agenda visit www.aha.org

[i] NORC at the University of Chicago, Final Report, Trends in Hospital Inpatient Drug Costs: Issues and Challenges, Oct. 2016 [ii] Regulatory Overload, Assessing the Regulatory Burden on health Systems, Hospitals and Post-acute Care Providers, Oct. 2017

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