If a patient is in an HMO, chances are that both patient and health plan are in a big city. Metropolitan areas with a population of one million or more hold 37 million out of the total national HMO enrollment of 53.9 million, a leading health care publisher reports.

Another 12.9 million are covered by HMOs in smaller cities and towns — urban centers with populations of one million or less.

InterStudy Publications analyzed 301 metropolitan areas (defined by the Census Bureau) and calculated that 26.3 percent of big-city residents are in HMOs.

In smaller health care markets, HMO penetration hovers around 16 percent.

Sixty-nine cities claim HMO penetration greater than 25 percent. Topping this year's list are: Sacramento; Rochester, N.Y.; Oakland, Calif.; Buffalo and the combined Portland, Ore., and Vancouver, Wash.

Metropolitan areas with the most HMOs include Los Angeles (22), Miami (18), Anaheim/Santa Ana, Calif. (15) and Riverside/San Bernardino, Calif. (13).

Large markets with highest HMO penetration (%)

Sacramento, Calif. 60.5
Rochester, N.Y. 56.5
Oakland, Calif. 51.7
Buffalo, N.Y. 49.8
Portland, Ore./Vancouver, Wash. 46.1


Common sense tells us that having primary care doctors monitor patients with serious chronic illness extra-carefully should result in better outcomes for patients and lower expenses for the health plan.

Now the Veterans Affairs Cooperative Study Group on Primary Care and Hospital Readmission informs us, in an article in the New England Journal of Medicine [May 30, 1996], that heavy-duty primary care might not be doing these patients any good at all.

Studying 1,936 veterans with diabetes, heart failure and chronic obstructive pulmonary disease at nine Veterans Administration hospitals, the randomized controlled trial found that the patients who had intensive primary care had 36 percent higher readmission rates and 16 percent more days in the hospital than patients in the control group.

"At a minimum, the intervention increased costs; at worst, it may have made patients sicker," the journal observed in an editorial. "We are forced to entertain the heretical view that the doctrine of the value of early intervention may be wrong. Instead of conferring benefit, closer scrutiny of the patients simply led to more medical care and perhaps to harm," possibly by giving practitioners more opportunity to detect and treat problems, leading to a "clinical cascade" of diagnosis, treatment and hospitalization that does not serve the patient.

The only positive thing that the researchers could say was that even if they weren't made any healthier, patients who received intense primary care were more satisfied with their care than those in the control group.

Prescription Solutions, a pharmacy benefit manager owned by PacifiCare Health Systems, has put its formulary on the Internet's World Wide Web — apparently the first to be posted there.

PacifiCare physicians may connect to this list of about 500 "preferred" drugs, but they need a password, which they can obtain by calling Prescription Solutions. "Our goal is to provide physicians with quick and timely access to information about medications on our formulary," says Jeff Herzfeld, Pharm.D., M.B.A., a vice president at Prescription Solutions of Cypress, Calif. PacifiCare's web site, which has a section about Prescription Solutions, is http://www.phs.com.

Gordon Norman, M.D., M.B.A., regional medical director of PacifiCare's northern California region, says the online formulary may create a dialogue between doctors and Prescription Solutions on how best to update and manage the formulary.

Whether physicians will see any benefit from Internet access compared with examining a printed formulary remains to be seen. One benefit is that changes in the formulary would be instantly available without needing to be mailed.

Once again diabetes patients are the focus of disease management initiatives. This time, though, the chronic condition isn't being managed through individual HMO or pharmacy benefit manager programs. Rather, a joint effort led by the American Diabetes Association and Pfizer Inc. will offer a program to managed care plans throughout the country.

The Diabetes Control Network (DCN) was developed to diagnose, maintain and improve the health of the 16 million diabetics and reduce the long-term costs by working with managed care organizations. Already, about 25,000 patients and 20,000 physicians are participating.

The network, which is overseen by Pfizer, is designed to reach out to managed care organizations as well as patients and physicians. DCN says it offers managed care plans the latest in diabetes care, including practice guidelines, advanced data collection and analysis and customized interventions.

For primary care physicians the network offers continuing medical education materials and check-off patient charts that include screening aids for kidney, heart, eye and foot problems.

It's slowly getting easier for payers to evaluate some aspects of the performance of physicians and HMOs. In addition to the National Committee for Quality Assurance's HEDIS project, the Foundation for Accountability (it shortens it to FACCT) has advanced a set of preliminary quality measures.

Similar to the NCQA, a now-independent managed care industry spinoff that inspects HMOs and grants or denies approval, FACCT evaluates health plans and will publish reports that can be used by consumers and employers.

Unlike HEDIS, which looks at a broad set of indicators, FACCT concentrates on examining a few areas such as specific medical conditions, patient satisfaction and reduction in patients' unhealthy behaviors.

So far the quality measures address three common conditions — diabetes, breast cancer and depression. Other conditions that will be added include asthma, coronary artery disease and lower-back pain. FACCT will add others until it has a complete quality report card, which could be available by 1998.

FACCT is a coalition of special interest groups such as the American Association of Retired Persons and the AFL-CIO, plus purchasers such as AT&T, American Express, the Department of Defense and the Health Care Financing Administration, which oversees Medicare.

— Paul Wynn

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.