Monday News and Views

Healthcare Dive reports that two large Catholic healthcare systems, Dignity Health and Catholic Health Initiatives, have closed their merger agreement by forming a nonprofit health system called CommonSpirit Health. "The $29 billion system will serve 21 states with more than 700 care locations and 142 hospitals. The company also includes research, virtual care and home health capabilities."

Healthcare Dive also reports that Amazon's Pill Pack company appears poised to engage in a nationwide rollout. Pill Pack provides customers with personalized, ready to use, prescription pill packs. The FEHBlog thinks it's a whale of an idea.

David Friend, managing director at BDO Consulting, said Amazon's move with PillPack represents a threat to both traditional pharmacies and PBMs. Ultimately, "they're going to cut out the pharmacy business and the PBMs," Friend, told Healthcare Dive. "If they cut the prices enough, consumers are going to say, 'why should I have to go through more complexity and pay more?'"

The FEHBlog's favorite healthcare quality consultants, Discern Health, have released their notes on CMS's Quality Conference. Check them out.

Speaking of conferences, mhealthintelligence.com discusses what's on tap for next week's big HIMSS conference which focuses on digital health. The conference will be held in Orlando. Focus will be placed on telehealth. Employee Benefit Adviser offers some guidance on how to build utilization of employer sponsored telehealth programs. "The missing piece of the puzzle is employee education, Matthew Herrera, assistant vice president of strategic partnerships at benefit provider Careington International, said. If employers aren’t advocating for the healthcare strategy, they shouldn’t be surprised by its lack of success."

Last but not least, Forbes columnist Avik Roy offers his perspective on the Trump Administration's initiative to end prescription drug rebate programs in Medicare and Medicaid.

As a result, any discounts that [prescription benefit managers] PBMs negotiate with drug manufacturers would have to apply to the “list price” that patients using those drugs pay, instead of being transmitted in the form of rebates that reduce everyone’s premiums.

The likely result, over time, should be that list prices in the future look more like the net prices of today, as rebates get converted into direct price discounts. That should mean lower out-of-pocket spending and better patient adherence to medications, especially for seniors enrolled in Medicare Part D prescription drug plans.

Most importantly, the end of PBM rebates in Medicare Part D should lead to higher utilization of low-cost generic and biosimilar drugs, as PBMs will no longer have an incentive to favor branded drugs in their formularies, unless those branded drugs compete with generics on price.