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Employers, Insurers Expect More for Money

MANAGED CARE August 2009. © MediMedia USA
Editor's Memo

Employers, Insurers Expect More for Money

John Marcille
MANAGED CARE August 2009. ©MediMedia USA

John Marcille

You get what you pay for. ” Too often, that’s a justification for high prices. Yes, the Jaguar is a nice car, but with the quality-control problems that it had until recently, were you really getting what you paid for?

Employers are growing increasingly savvy about what they get for their money, and so are insurers. Linda Cahn’s article on how to negotiate with PBMs over coverage of specialty pharmaceuticals is a good example, as it can apply to insurers as well as employers. And the piece by F. Randy Vogenberg, RPh, PhD, describes another approach to getting more value from the biotech budget.

Lola Butcher tells us how payers are succeeding in wringing more value from their imaging budgets, with some cooperation from providers.

You may want to start with Martin Sipkoff’s cover story. He discusses the very concept of value in health care and gives a very simple-to-grasp formula from Denis Cortese, MD, head of the Mayo Clinic. Then he goes on to describe development in value-based insurance design, which is drawing greater interest from employers, health plans, and the federal government, since it holds the promise of using price to encourage quality. Don’t charge everyone the same price for a drug or procedure; set the price for the individual patient based on whether the therapy will make a big difference in his condition. Most effective therapies get the lowest prices.

This of course is one of those scenarios where you’d like to avoid churning. If you are reducing cost-sharing to encourage use of a particular therapy, you want that patient to be around for the payoff — fewer visits to the emergency department, for example. Real attention to quality, which the federal government is also promoting in its comparative effectiveness program, seems to be a good idea for anyone paying the bills.