Healthcare News of Note: 10 drugs account for a large share of Medicare Part D spending

• In total, Part D gross spending rose from $166 billion in 2018 to $216 billion in 2021. 
• In 2023, customer personal identifiable information costs organizations $183 per record and employee PII costs $181 per record. 
• Average length across all clinical notes increased 8.1%, from 4,628 characters in May 2020 to 5,002 characters in April 2023. 

Over the past few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.   

1. 10 top-selling drugs accounted for 22% of total Part D gross spending

“A small number of drugs account for a disproportionate share of Medicare Part D prescription drug spending, with the 10 top-selling drugs accounting for nearly one-fourth [22%] of gross Part D spending in 2021,” according to a July 12 report by KFF that analyzed CMS’s Medicare Part D Spending by Drug data set.

Report highlights

Additional report highlights include:

• Aggregate gross spending on the 10 top-selling drugs in 2021 increased from $22 billion to nearly $48 billion between 2018 and 2021.
• In total, Part D gross spending rose from $166 billion in 2018 to $216 billion in 2021.

Top 10 drug costs in 2021

The KFF review ofCMS’s data showed the spending from highest to lowest for the top 10 drugs in 2021:

“In 2021, Medicare Part D covered more than 3,500 prescription drug products, with total gross spending of $216 billion, not accounting for rebates paid by drug manufacturers to pharmacy benefit managers (PBMs),” wrote the authors. “The top 100 drugs, representing just 3% of covered drugs, accounted for 61% of total gross spending that year.”

For insight on future trends in federal drug spending, read the March 23 article “Healthcare News of Note: Medicare to negotiate reduced prices for 40 drugs by 2028, says study.”

2. Healthcare sees the highest data breach costs of all industries, says IBM report  

“Healthcare continues to experience the highest data breach costs of all industries, increasing from USD 10.10 million in 2022 to USD 10.93 million in 2023 — an increase of 8.2%,” according to a report recently published by IBM Security. The Ponemon Institute conducted the study, while IBM analyzed the data and wrote the report.

“Over the past three years, the average cost of a data breach in healthcare has grown 53.3%,” up more than $3 million compared to the average cost of $7.13 million in 2020, wrote the authors. They added: “Healthcare faces high levels of industry regulation and is considered critical infrastructure by the US government. Since the start of the COVID-19 pandemic, the industry has seen notably higher average data breach costs.”

Additional report highlights

Highlights from the 77-page report include:

• Costs per data breach for critical infrastructure industries such as healthcare, financial services, education and transportation exceeded $5 million, or $1.26 million more than the average cost of $3.78 million for organizations in other industries.

• Customer and employee personal identifiable information (PII), such as names and Social Security numbers, is the costliest information to have compromised. In 2023, customer PII costs organizations $183 per record and employee PII costs $181 per record.

HFMA cybersecurity insight

Additional resources on cybersecurity issues include:

• The November 2022 article “Healthcare’s cybersecurity stakes reach alarming levels” by Eric Reese, writer and editor with HFMA.
• The December 2022 column “Cybersecurity in healthcare has emerged as a national priority” by Gail Wilensky, a senior fellow at Project HOPE and a former administrator of the Health Care Financing Administration, now CMS.

3. Epic Research study: Providers writing longer notes despite coding changes to decrease documentation burden

“The average length of clinical notes has continued to increase over the last three years despite coding changes enacted in 2021 meant to reduce documentation burden,” according to a study conducted by Epic Research and published July 6.*

Study highlights

Additional study highlights include:

• Average length across all clinical notes increased 8.1%, from 4,628 characters in May 2020 to 5,002 characters in April 2023.
• The average time spent writing notes decreased 11.1% over the same period, from an average of 5.4 minutes per note to 4.8 minutes.

The authors surmised, “Even though average note length increased, most providers spent less time writing notes, which could help providers free up time for patient care or reduce work after hours.”

*Researchers evaluated 1.7 billion clinical notes written by 166,318 outpatient providers in the U.S. from May 2020 to April 2023.

Bonus HFMA content

Read “‘Concerns about access to care’ raised by OIG findings on prior authorization policies in Medicaid managed care” by Nick Hut, senior editor.

Join the Aug 30 webinar “CMS Proposed Changes to Hospital Transparency for 2024,” where HFMA policy director Shawn Stack will provide an insightful exploration of the proposed price transparency aspects of the 2024 rule on Medicare payments covering hospital outpatient services and ambulatory surgical centers.

Listen to the Aug. 2 Voices in Healthcare Finance podcast “Dr. Ronald Hirsch of R1 RCM discusses new Alzheimer’s drug Leqembi,” featuring Hirsch’s insights on key points to know about Medicare coverage of the new drug.