Health Affairs Studies Explore Insurer Consolidation and Cancer Drug Spending

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<p>Two studies supported by The Commonwealth Fund are featured in the May issue of <em>Health Affairs</em>:</p><ul>
<li>Richard Scheffler and Sherry Glied explore the ramifications of <a href="/publications/journal-article/2016/may/differing-impacts-market-concentration-affordable-care-act">consolidation and competition</a> in the health insurance marketplaces. While consolidation may generate less competitive prices for consumers, the health care law gives states a powerful bargaining chip: the ability to design their marketplaces. California, for instance, chose to selectively contract with plans—meaning it could exclude insurers from its marketplace—and directly negotiate premium rates. In areas with high levels of insurer consolidation, California had lower premiums. In contrast, New York, which allowed all insurers to participate, had higher premiums in areas with fewer insurers. In a related <a href="…; target="_blank">op-ed article</a> in today’s <em>New York Times</em>, the authors say: “The choice between regulation and competition is a false one. To best manage our health care system, we will need both.”</li>
<li>Looking across nine countries, Sebastian Salas-Vega and Elias Mossialos found that the <a href="/publications/journal-article/2016/may/cancer-drugs-provide-positive-value-nine-countries-united">prices of—and spending on—cancer drugs</a> rose between 2004 and 2014. In the U.S., growth in spending is not driven primarily by consumption—which is key to improving patient outcomes—but by high drug prices. All nine saw an improvement in patients’ health outcomes, yet there was wide variation in the value that countries attained. For example, the U.S. saw a $32.6 billion net positive return from cancer drug instance, yet lagged far behind other countries, suggesting there is an opportunity to improve value in the U.S. oncology drug market. </li>
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