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What Drives Spending and Utilization on Medicaid Drug Benefits in States?

December 20, 2014 Comments off

What Drives Spending and Utilization on Medicaid Drug Benefits in States?
Source: Kaiser Family Foundation

Medicaid is one of the country’s biggest payers for prescription drugs, but because prescription drugs have accounted for a small share of total Medicaid spending, Medicaid’s pharmacy benefit policies have not been at the top of mainstream healthcare policy debate. However, with the approval of new specialty drugs, such as the Hepatitis C treatment Sovaldi, states are mindful that the price tag for the Medicaid drug program could increase significantly. While states have implemented many cost-saving policies targeting their Medicaid prescription drug benefits, there remains room for additional cost savings, better management, and improved health outcomes. To ensure appropriate policy for this central benefit and achieve these goals, it is important to understand which drugs are most frequently prescribed and which drive spending.

Using state drug utilization data, as well as an industry drug database, this issue brief examines trends in Medicaid drug prescriptions and drug spending before rebates from 2010 through 2012.1 As part of the Medicaid drug benefit, manufacturers provide rebates to the state and federal government. However, rebates are based on proprietary data and they are not available to the public at the drug level. As a result we are unable to include them, or use this data to calculate total Medicaid drug spending. After presenting this analysis, we place these findings in the context of policy discussions. Key findings of the analysis include:

  • Comprising 35% of prescriptions and 34% of spending before rebates in 2012, Central Nervous System Agents, a class of drugs that include pain killers, antidepressants, and antipsychotics, constitute the largest share of Medicaid drug utilization and spending. Within this drug class, pain killers and fever reducers represent a third of utilization.
  • Specialty drugs account for just two percent of drug utilization in 2012, but they comprise 28% of drug spending. This share increased from 2010 when they totaled 24% of drug spending before rebates. The specialty drug share of total drug spending varies at the state level.
  • Brand-name drugs account for a disproportionate amount of drug spending. In 2012, they accounted for 20% of Medicaid drug prescriptions but 76% of spending. In the past three years, the share of Medicaid drugs that are generic has risen slightly, possibly due to a number of blockbuster brand drugs losing their exclusivity and facing generic competition in the past several years.
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CBO’s 2014 Long-Term Projections for Social Security: Additional Information

December 19, 2014 Comments off

CBO’s 2014 Long-Term Projections for Social Security: Additional Information
Source: Congressional Budget office

Social Security is the federal government’s largest single program. Of the 59 million people who currently receive Social Security benefits, about 71 percent are retired workers or their spouses and children, and another 10 percent are survivors of deceased workers; all of those beneficiaries receive payments through Old-Age and Survivors Insurance (OASI). The other 19 percent of beneficiaries are disabled workers or their spouses and children; they receive Disability Insurance (DI) benefits.

In fiscal year 2014, spending for Social Security benefits totaled $840 billion, or almost one-quarter of federal spending; OASI payments accounted for about 83 percent of those outlays, and DI payments made up about 17 percent. Each year, CBO prepares long-term projections of revenues and outlays for the program. The most recent set of 75-year projections was published in July 2014. Those projections generally reflect current law, following CBO’s 10-year baseline budget projections through 2024 and then extending the baseline concept for the rest of the long-term projection period. This publication presents additional information about those projections.

Fact Sheet: Charting a New Course on Cuba

December 19, 2014 Comments off

Charting a New Course on Cuba
Source: U.S. Department of State

Today, the United States is taking historic steps to chart a new course in our relations with Cuba and to further engage and empower the Cuban people. We are separated by 90 miles of water, but brought together through the relationships between the two million Cubans and Americans of Cuban descent that live in the United States, and the 11 million Cubans who share similar hopes for a more positive future for Cuba.

It is clear that decades of U.S. isolation of Cuba have failed to accomplish our enduring objective of promoting the emergence of a democratic, prosperous, and stable Cuba. At times, longstanding U.S. policy towards Cuba has isolated the United States from regional and international partners, constrained our ability to influence outcomes throughout the Western Hemisphere, and impaired the use of the full range of tools available to the United States to promote positive change in Cuba. Though this policy has been rooted in the best of intentions, it has had little effect – today, as in 1961, Cuba is governed by the Castros and the Communist party.

We cannot keep doing the same thing and expect a different result. It does not serve America’s interests, or the Cuban people, to try to push Cuba toward collapse. We know from hard-learned experience that it is better to encourage and support reform than to impose policies that will render a country a failed state. With our actions today, we are calling on Cuba to unleash the potential of 11 million Cubans by ending unnecessary restrictions on their political, social, and economic activities. In that spirit, we should not allow U.S. sanctions to add to the burden of Cuban citizens we seek to help.

See also: Announcement of Cuba Policy Changes (John Kerry, Secretary of State)
See also: Briefing on Changes in U.S. Policy Toward Cuba (Roberta S. Jacobson, Assistant Secretary, Bureau of Western Hemisphere Affairs)

New From the GAO

December 19, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Fair Labor Standards Act: Extending Protections to Home Care Workers. GAO-15-12, December 17.
http://www.gao.gov/products/GAO-15-12
Highlights – http://www.gao.gov/assets/670/667603.pdf

2. Federal Emergency Management Agency: Opportunities Exist to Strengthen Oversight of Administrative Costs for Major Disasters. GAO-15-65, December 17.
http://www.gao.gov/products/GAO-15-65
Highlights – http://www.gao.gov/assets/670/667607.pdf

3. Department of Homeland Security: Continued Action Needed to Strengthen Management of Administratively Uncontrollable Overtime. GAO-15-95, December 17.
http://www.gao.gov/products/GAO-15-95
Highlights – http://www.gao.gov/assets/670/667618.pdf

4. Tax-Exempt Organizations: Better Compliance Indicators and Data, and More Collaboration with State Regulators Would Strengthen Oversight of Charitable Organizations. GAO-15-164, December 17.
http://www.gao.gov/products/GAO-15-164
Highlights – http://www.gao.gov/assets/670/667596.pdf

5.   State and Local Governments’ Fiscal Outlook: 2014 Update. GAO-15-224SP, December 17.
http://www.gao.gov/products/GAO-15-224SP
Podcast: http://www.gao.gov/multimedia/podcasts/667597

6.   Dodd-Frank Regulations: Regulators’ Analytical and Coordination Efforts. GAO-15-81, December 18.
http://www.gao.gov/products/GAO-15-81
Highlights – http://www.gao.gov/assets/670/667634.pdf

7.   Electronic Submissions in Federal Procurement: Implementation by the Army Corps of Engineers and Department of the Interior’s Bureau of Reclamation. GAO-15-253R, December 18.
http://www.gao.gov/products/GAO-15-253R

8.   Federal Food Safety Oversight: Additional Actions Needed to Improve Planning and Collaboration. GAO-15-180, December 18.
http://www.gao.gov/products/GAO-15-180
Highlights –  http://www.gao.gov/assets/670/667657.pdf

Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)

December 19, 2014 Comments off

Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)
Source: Heritage Foundation

In 2014, federal spending reached $3.5 trillion and the deficit was $486 billion. Compared with trillion-dollar deficits following the Great Recession, this presents a small and temporary improvement in the nation’s fiscal situation. However, this minor improvement does not mean that government can stop cutting back on spending. As the figures and graphics in this report show, that would be the wrong conclusion to draw.

The national debt will still reach nearly $18 trillion this year and it already exceeds 100 percent of gross domestic product (GDP). Publicly held debt (that is, debt borrowed in credit markets, excluding Social Security’s trust fund), is alarmingly high at three-quarters of GDP. Without further spending reforms, rising debt threatens to impede growth, harm Americans’ economic opportunities, and even threaten the nation’s security.

Deficits fell in 2014 because President Obama and Congress raised taxes on all working Americans, the economy saw some improvement which helped to bring in more revenue, extended unemployment benefits were allowed to expire, and spending cuts from sequestration and spending caps under the Budget Control Act of 2011 took effect.

Congress should not take this short-term and modest deficit improvement as a signal to grow complacent about reining in exploding spending. Existing spending cuts and tax increases will not prevent deficits from rising next year, and before the end of the decade exceeding $1 trillion again. Driving this is federal spending, which is projected to grow by 66 percent by 2024.

New Report Proposes Better Outcomes, Lower Costs for State and Local Governments Through User Fees

December 19, 2014 Comments off

New Report Proposes Better Outcomes, Lower Costs for State and Local Governments Through User Fees
Source: Cascade Policy Institute

A new report released by Cascade Policy Institute suggests numerous ways state and local governments can lower the costs of public services through judicious, targeted use of “user fees,” rather than relying on general taxation. Resurrecting User Fees in Public Finance: A Prescription for Lowering the Cost and Improving the Fairness of Public Services was authored by Randall Pozdena, Ph.D. Pozdena is president of QuantEcon, Inc., an Oregon-based consultancy.

The share of personal income collected as revenue by state and local governments has doubled since 1945. Oregon and other U.S. state governments obtain approximately 75 percent of this revenue through broad-based taxation and 25 percent from fees levied on the beneficiary of the service.

This report details the theoretical and practical advantages of reducing reliance on broad-based taxation in favor of user charges. It reviews the economic philosophy of reliance on user charges versus broad-based finance and the findings of the public finance literature.

Retirement Benefit Decisions by City and County Governments

December 19, 2014 Comments off

Retirement Benefit Decisions by City and County Governments
Source: Center for State & Local Government Excellence

Key findings:

  • Workers who work a full career in their city or county can expect a retirement income of between 45 and 80 percent of their pre-retirement income.
  • Career employees of local governments who participate in Social Security can expect retirement income replacement rates of 20 to 30 percentage points higher than employees whose governments do not participate in Social Security.
  • These and other variations mean that many local workers will need to be disciplined about participating in savings plans, outside of their primary plans, to meet their retirement security goals.
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