2000_09 | NEWS:

MANAGED CARE September 2000. ©2000 MediMedia USA

NEWS AND COMMENTARY

Three New England States Form Drug-Buying Cooperative

Now that the governors of Maine, New Hampshire, and Vermont have agreed to form a prescription drug-buying cooperative, the hard work of fleshing out the plan begins. State health and insurance officialswill hire a pharmacy benefit manager to buy drugs and manage utilization. The group plans to solicit proposals from PBMs next month.

Political pressure to reduce out-of-pocket expense for people with minimal or no prescription coverage is intense in the three states, where there has been national publicity about pharmaceutical-buying expeditions to Canada.

But a lot of details must be worked out, and who gets what is likely to be the stuff of political theater. Who would benefit is unclear. The states would probably start with Medicaid, but in theory, the PBM could manage benefits for everyone.

WellPoint Product Makes New Bid For Working Poor

WellPoint Health Networks is trying to attract an underinsured, price-sensitive market: the working poor. WellPoint hopes its new low-cost plans will lure small employers and uninsured people who earn under 200 percent of poverty.

The product has a relatively rich catastrophic benefit and moderate limitations on routine care. It relies on high copayments to keep premiums to about 50 percent of the low-end plans on the market.

Key Texas Lawsuit Against HMO Now Off Court Docket

The first lawsuit against an HMO under Texas's health plan liability statute has been settled.

The case involved a man who was discharged from a psychiatric hospital against the advice of his physician, then committed suicide hours later. The family sued what was then NYLCare 65, its medical director, and a behavioral health carve-out company under the state's new HMO liability law.

Details are confidential, other than that the health plan admitted no wrongdoing. Both sides claim moral victories. The lawyer who brought the case, George Parker Young, says the publicity it brought served its purpose: Health plans in Texas, he says, are now less likely to overrule physicians' recommendations. The head of the Texas Association of Health Plans maintains the case was dropped because it was weak. The suit was to have been tried in state court in October.

Pending Affiliation Could Make Blues Group Biggest Not-for-Profit

An affiliation between the parent of Blues companies in four Pacific Northwest states and the operator of Blues plans in Illinois and Texas will create the nation's largest not-for-profit insurer. The Regence Group, as the new combined company will be called, will boast 10 million lives.

The deal is not a full-blown merger of assets, and no money will be exchanged. Under the affiliation, the new holding company will have a combined board, but individual Blues units will still operate under their local names. The deal is subject to regulatory approval in several states.

Officials say the move will bring the combined company administrative efficiencies it needs to compete. The same story has played out many times across the country, as larger Blues groups have gobbled up smaller independent affiliates having difficulty keeping up with commercial competitors.

Headlines on Deadline...

Chest X-rays do not save lives when used to screen for lung cancer, according to a 20-year study reported in the Journal of the National Cancer Institute. Mayo Clinic/NCI researchers found that imaging led to no reduction in mortality, but revealed many "clinically insignificant" tumors, inviting potentially unnecessary treatment.... "California, open your Golden Gate?" Only so we can leave, say physicians. State and county medical societies report a physician exodus, thanks to comparatively low capitation rates and the state's high cost of living. The Census Bureau confirms California dropped from 8th to 12th in the '90s in ratio of doctors to population.... Congress will consider restoring $21 billion in Balanced Budget Act cuts to Medicare providers over five years. Enough? Hospitals seek $25 billion, nursing homes want $17 billion, and health plans say they need $15 billion.... The Health Care Financing Administration will pay Medicare physicians about five percent more in the aggregate next year, thanks to higher reliance on RBRVUs. The upshot: Higher pay for primary care, less for specialties.... Direct-to-consumer pharmaceutical advertising will top $2 billion this year, for the first time, says Scott-Levin, the consulting firm.... Try it: An analysis in the Journal of Health Promotion suggests daily practice of transcendental meditation could prevent illness to the tune of $5 billion a year.

More cost-shifting in the pharmacy benefit: Copayments at new highs, while 3-tier formularies spread

The average copayment for preferred brands has cracked the $14 mark, while third-tier copayments average near $30. Four of every five health plans offer a three-tier benefit.

SOURCE: SPRING 2000 MANAGED CARE FORMULARY DRUG AUDIT, SCOTT-LEVIN, NEWTOWN, PA.