Drug Prices Hit Hospitals Hard

Consumers aren’t the only ones getting pounded by skyrocketing drug prices. The American Hospital Association (AHA) just released a report that says hospitals are getting slammed too.

From the New York Times:

Consumer groups and insurers were already complaining loudly about drug costs. Now hospitals are turning up the volume as well, leaving the pharmaceutical industry more politically isolated.

A study released Tuesday by the two biggest hospital lobbying groups found that overall, hospitals’ average annual inpatient drug spending increased by more than 23 percent between 2013 and 2015.

The NORC study for the American Hospital Association and the Federation of American Hospitals found higher prices were primarily responsible for the spending increase, not the quantity of medications used.

Forbes wrote, “According to the AHA, 90% of the hospitals that participated in the survey said the scope and unpredictability of rising drug prices is having a moderate to severe impact on their ability to manage budgets.”

Fox News Health quoted Scott Knoer, chief pharmacy officer at the Cleveland Clinic, as saying:

“The system is clearly broken. The (pharmaceutical) industry has proven time and time again it can no longer regulate itself.”

Calling the recent spate of price increases “egregious,” Knoer said there’s no way hospitals can get on top of it. When the price of one drug stabilizes, another zooms up. “It’s like playing whack-a-mole,” he said.

According to Becker’s Hospital Review, there are four key takeaways in the report.

  • Researchers noted price increases seemed random, inconsistent and unpredictable.
  • (As noted earlier) More than 90 percent of hospitals surveyed in the analysis reported drug prices holding a moderate to severe impact on their ability to manage hospital budgets.
  • Researchers examined the unit prices of drugs classified as “high spend” medications — based on volume, price or both — and found large price increases in this medication category.
  • Medicare reimbursement cannot keep up with rapidly increasing inpatient drug prices due to delays in updating the pharmaceutical price index.

Share your thoughts on the results of the study and whether rising prescription drug prices are affecting the hospital(s) and people in your community. Finding innovative solutions to this ongoing issue will be key if we hope to take the next step toward our long-term goal of one day making Arizona the Healthiest State in the Nation!

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