MANAGED CARE February 1997. ©1997 Stezzi Communications

In late January, President Clinton proposed Medicare spending reductions over the next six years totaling $138 billion, a figure he characterized as "a halfway point" between his own final target last year of $116 billion and the $158 billion the GOP put on the table last year after at first insisting on $270 billion. The impact of the downward revisions (don't call them "cuts") would fall on HMOs, hospitals and to a lesser extent physicians.

Republican leaders welcomed the proposal, not stressing, for the moment, their onetime plan to make beneficiaries bear some of the burden.

But won't the Medicare commission, so highly touted during the election, be deciding these things, you ask? Maybe not. The players are pulling back from that once-hot idea — Clinton included.

In the Senate, Joseph Lieberman, a Connecticut Democrat, and Bill Frist, M.D., a Republican from Tennessee, also are concerned about health care quality, and not just Medicare. These senators wonder if federal regulation could have the unintended effect of discouraging innovation.

The federal government, Lieberman noted, buys more than 40 percent of all U.S. health care through Medicare, Medicaid and other programs. "How can we judge whether quality is going up or down?" he asked.

In the same meeting, Democratic Sen. Jay Rockefeller of West Virginia decried instances of legislators "playing doctor" — but warned providers that the only way to prevent it was to provide more uniformity of service.

Preserving Medicaid, of course, is the second administration theme. That program's annual growth rate, double-digit in the early 1990s, has sputtered back to about 7 percent and should maintain that level into the next century.

Some say the program does not even need to be "restructured," although it is still in the throes of being kicked back to the states (remember the block grant versus no block grant debate?). Should those who have advocated tinkering with the Consumer Price Index get their way, giant swags of deficit would be sheared away with the stroke of an accountant's pen. Pressure on Medicare and Medicaid would be somewhat assuaged.

The third presidential drumbeat will be helping the uninsured — look for a replay of last year's idea of providing six months of health insurance for eligible unemployed workers.

At the top of the list will be the more than 10 million uninsured children in the country. First, the 3 million eligible for Medicaid will be urged to get on board, with another million put on the rolls over the next four years. That leaves at least 6 million uninsured. Politicians in both parties, including Senate Majority Leader Trent Lott of Mississippi and Democratic Sen. Edward M. Kennedy of Massachusetts, are scrambling to get them some coverage.

Senate Minority Leader Thomas Daschle of South Dakota has a plan, costing up to $4 billion a year, to give a tax credit to families with annual incomes of up to $75,000. Kennedy is to cosponsor a bill to provide vouchers to purchase child-only coverage and coverage for pregnant women, at a cost of up to $9 billion.

The Republicans think they have been cast as the bad guys in this issue and are determined not to be naysayers, although they are keeping a steely eye out for attempts to expand health care coverage to all Americans and some say their opponents are using children as the opening wedge. Their own proposals — such as requiring recipients of the earned income tax credit to buy health insurance for their children — have a chilly ring. The Democrats are offering such cuddly solutions as giving the states the money to buy the policies and a refundable tax credit for poor families. Just think — all this is just beginning!

— Jean Lawrence

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.