PE: Is it inevitable that the US will have to adopt a more European-type model, where Medicare is the single major player and
other payers just follow its lead?
TS: I think that private payers are actually waiting for that—on a range of issues from oncology management to dealing with biosimilars.
There's certainly a desire among private payers to use what Medicare does as cover. But Medicare's not taking action at the
pace that some would hope, so some large private payers will probably lead the way on certain issues.
I don't think the US healthcare system will ever get to a point where there is a single dominant player. There will always
be a lot of private players because of the desire to maintain competition. As a result, the US healthcare system will remain
fragmented, despite consolidation that is taking place right now in the private sector. And while the government is prohibited
from making coverage decisions based on cost, the Part D payers—Part D being implemented by private plans—do make formulary
decisions based on cost.
JH: The European countries are appreciating their leverage—they're less afraid to do so, and there's more of a political or governmental
agreement to do so. But given the US marketplace and political landscape, I don't believe Medicare will ever get that kind
TS: Medicare has tried cost-containment policies in the past, such as the concept of "least costly alternative," to try to manage
their reimbursement rates. But a couple of court decisions have said that Medicare doesn't have the authority to do that.
So it would require legislative action to gain that authority, and following the reforms and the amount of political capital
that was spent to get those through, I don't see something as controversial as letting Medicare make decisions based on price
happening any time soon.
JH: I don't see that happening in our lifetime or in any lifetime, probably. Fairly or not, it smacks too much of this great
political statement of Big Brother stepping in, and that's viewed as so fundamentally un-American.
PE: With that note of agreement on the one thing that is certain not to happen, I will conclude this conversation. Thank you very