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What We’re Watching: February 5, 2019


Drug pricing is expected to be a major theme during tomorrow’s State of the Union address.

What we’re saying: We’re focused on creating competitive markets to address both drug pricing and shortages. In fact, we are continuing to achieve developments with Premier’s ProvideGx company to create a marketplace for shortage generic drugs. We think President Trump will discuss the following regulatory issues tomorrow.

  • Creating a competitive Medicare Part B marketplace
  • Increasing Medicare Part D and Medicare Advantage plan flexibility to negotiate lower prices
  • Limiting use of rebates to undermine market competition
  • Promoting more use of value-based contracts
  • Increasing FDA throughput of generics, biosimilars and competitive new drugs


The Agency for Healthcare Research and Quality (AHRQ) and CMS announced that hospitals achieved a 13% reduction in hospital-acquired conditions (HACs), preventing 20.5K hospital deaths and saving $7.7B from 2014-2017. Clostridium difficile Infections (C-diff) and adverse drug events saw dramatic reductions, falling by 37% and 28% respectively.

What we’re saying: Hospitals are hard at work to provide excellent patient care, especially those we’re working with. The administration commended programs like Premier’s Hospital Improvement Innovation Network (HIIN) and quality improvement collaborative. Over the past two years, Premier’s HIIN and quality improvement collaborative members have avoided thousands of HACs and readmissions, and millions in costs.


Last week, HHS Deputy Secretary Eric Hargan spoke out on the core elements of the administration’s “Regulatory Sprint to Coordinated Care.” As part of that sprint, HHS is pushing for new alternative payment models that will incent providers to take on 2-sided risk.

What we’re saying: We expected as much, as HHS has alluded to rolling out new risk-based payment models in the near future. As an industry, we’ve seen that when these models are done right, patient outcomes are improved and healthcare spending is reduced. Take Premier’s Bundled Payment Collaborative results where members of CMS’ total joint replacement and oncology care bundled payment models outperformed their peers by ≈30%. In a world of value-based payment, these risk-based models will grow increasingly popular. The key is for health systems to take ownership, learn how to navigate them and build capabilities for success.


A reminder to all that Premier will have a big presence at HIMSS next week in Orlando.

What we’re saying: We’re excited to see old friends and make new ones. Swing by and say hello at booth #459. Let us know if you’d like to set up an interview, a briefing and/or a demo.


What We’re Watching is a weekly blog focused on the current events Premier is following and their relevance to the work of Premier and its members.

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