rexroad

7 ms·

1.
US GLP-1 spending went from $57M to $71.7B in 5 years. We modeled what's next(andrewrexroad.substack.com)
3 points by rexroad 5mo ago|0 comments
2.
by rexroad 5mo ago
Author here. This is Issue #6 of The American Healthcare Conundrum, a data-driven newsletter that analyzes CMS cost report data to find where U.S. healthcare dollars actually go. For this issue I downloaded all 5,480 hospital cost reports f
3.
We analyzed 5,480 hospital cost reports. Supply spending varies 3-7x(andrewrexroad.substack.com)
8 points by rexroad 5mo ago|1 comments
4.
by rexroad 6mo ago
CMS now requires hospitals to publish machine-readable price files under the Hospital Price Transparency Rule (effective 2021, enforcement added 2022). Compliance rates are technically high. The problem is the files run tens of thousands of
5.
by rexroad 6mo ago
Agreed on the diagnosis: the inpatient hospital market does not function as a competitive market. Patients arriving by ambulance do not shop on price. Insurance insulates consumers from marginal cost. Regulatory and capital barriers prevent
6.
by rexroad 6mo ago
For-profit structure is part of the problem but not all of it. Issue 3 analyzed 3,193 hospitals using CMS HCRIS FY2023 cost reports. For-profit hospitals do have the highest cost-to-charge markups: 4.11x median. But nonprofits are 2.46x, an
7.
by rexroad 6mo ago
The direction is right. Total US healthcare spending is $4.87T for 335M people ($14,570/capita, CMS NHE 2023). Japan's per-capita is $5,790, with the highest life expectancy in the world and lowest infant mortality in the OECD. Th
8.
PBMs Extract $30B/Year from Drug Prices (Data Analysis)(andrewrexroad.substack.com)
1 points by rexroad 6mo ago|1 comments
9.
by rexroad 6mo ago
Thanks for sharing the OSU piece, good read. A few things it surfaces that complicate the "discount cards help patients" narrative: discount card companies still contract with PBMs to set pricing, they don't bypass them entir
10.
by rexroad 6mo ago
Your example captures two distinct extraction mechanisms in one transaction. The $25 to $125 gap is spread pricing: the PBM pockets the difference between what they pay the pharmacy and what they bill the plan. The deductible non-applicatio
11.
by rexroad 6mo ago
Author here. Issue #4 is now live — pharmacy benefit managers. Three companies process 80% of US prescriptions. The FTC spent two years investigating them and documented $7.3B in specialty drug markups at PBM-owned pharmacies alone. Ohio&
12.
by rexroad 6mo ago
The NHS prices in the Issue #2 analysis are not subsidies. They are the generic reimbursement rates from the UK Drug Tariff after patent expiry on each molecule. Apixaban (Eliquis) costs £1.16 per 30-day supply on the Drug Tariff. That is w
13.
by rexroad 6mo ago
The data supports this. The AMA's 2024 Prior Authorization survey found 93% of physicians report PA requirements delay medically necessary care. Twenty-nine percent reported a PA delay causing a serious adverse event for a patient. Sev
14.
by rexroad 6mo ago
The RAND Round 5.1 study (2023) puts US commercial insurer payments at 254% of Medicare rates for identical procedures. That's the mechanism behind the international gaps — it's not complexity or quality, it's that commercial
15.
by rexroad 6mo ago
Thank you for the feedback and support! I've added some charts to the repo and have charts in the substack.
16.
by rexroad 6mo ago
Personal experience with specific interventions reflects something real: US cancer survival rates, cardiac procedure outcomes, and access to cutting-edge treatments are genuinely strong for people with good coverage. That's not dispute
17.
by rexroad 6mo ago
Fair point about KPI gaming, and it's a real problem in value-based care. But the fix in Issue #3 (commercial reference pricing at 200% of Medicare) is a price cap, not a quality incentive structure, so it doesn't directly create
18.
by rexroad 6mo ago
Your example captures two distinct extraction mechanisms in one transaction. The $25 to $125 gap is spread pricing: the PBM pockets the difference between what they pay the pharmacy and what they bill the plan. The deductible non-applicatio
19.
by rexroad 6mo ago
Those figures are in the right range, and the full picture is larger. The CMS NHE 2023 data puts total US healthcare administration at roughly $1.1-1.7T annually (depending on methodology), building on Woolhandler and Himmelstein's 202
20.
by rexroad 6mo ago
The Dutch model is a useful counterexample to the argument that you need a single-payer structure to contain costs. Netherlands uses regulated private insurers with community rating and risk equalization, yet achieves per-capita spending we
21.
by rexroad 6mo ago
The obesity adjustment is worth quantifying. US adult obesity: 42% (CDC). UK: 28%, Australia: 31%, Germany: 22%. Those gaps are real, but they don't explain a 2.5x per-capita spending differential. The Commonwealth Fund's 2021 ana
22.
by rexroad 6mo ago
Correction on ownership breakdown: A CMS cost report expert flagged that my CTRL_TYPE mapping in the HCRIS processing script was wrong — I had for-profit and nonprofit hospital categories swapped. The corrected figures: for-profit hospitals
23.
by rexroad 6mo ago
The wage adjustment is worth testing with data. Japan's GDP per capita on a PPP basis is roughly $47,000 versus the US at $80,000, a 1.7x income gap. The per-capita healthcare spending gap is $14,570 vs $5,790, a 2.5x ratio. Healthcare
24.
by rexroad 6mo ago
Those figures are consistent with what Issue #5 (still a couple weeks out) of this series computes from CMS NHE 2023 data and OECD health statistics. The 10-peer OECD average lands at $884 per capita, putting the US at 5.6x. Scaled to 335M
25.
by rexroad 6mo ago
The rebate pass-through rule (effective 2028) is a real step, and worth tracking. But rebate retention is one of six extraction mechanisms the Big 3 PBMs use. The FTC's Interim Reports I and II (2024-2025) documented $7.3B in specialty
26.
by rexroad 6mo ago
Thanks for the meta-analysis reference. The 141-259% range tracks with what I see in the HCRIS data. The variance across hospitals is enormous — even within the same bed-size category, the P75/P25 ratio for cost-to-charge is 2.5-3.4x.
27.
by rexroad 6mo ago
The MLR incentive question is one I'm digging into for a future issue. The short version: the ACA's 80/85% MLR floor was supposed to constrain overhead, but vertical integration changed the math. When UnitedHealth's Optu
28.
by rexroad 6mo ago
The cross-subsidy argument is one hospitals use to justify high commercial rates: "Medicare underpays, so we have to make it up on commercial." The HCRIS data lets you test this. If cross-subsidization were the full story, you&#x2
29.
by rexroad 6mo ago
You're right that there's no single bad actor, and that's exactly the framing of this series. Each issue isolates one mechanism with one savings estimate. The 254% figure is RAND's. What I added is the HCRIS cost-to-char
30.
by rexroad 6mo ago
Author here. The 254% figure comes from RAND Round 5.1. I built a Python pipeline on CMS HCRIS cost reports (FY2023, 3,193 hospitals) to compute cost-to-charge ratios by ownership type. The surprising finding: nonprofit hospitals have a med

More ›