John A. Marcille

John A. Marcille

When I asked Senior Editor Frank Diamond to do this month's cover story on risk adjustment, I was intrigued by the concept. Measure the sickness of populations — even individual patients — so that payers, plans and providers can set rates more scientifically.

I knew there was considerable dispute about how advanced this "science" was, but this was a case in which my optimism overpowered my skepticism. Noting that Medicare is about to jump on the risk adjustment bandwagon, Frank uses the Field of Dreams metaphor. "They could easily be saying something like, 'If you build it, it will come to you' — the 'it' being the technological wherewithal to make risk adjustment work."

Starting in 2000, HCFA plans to use inpatient utilization data from one year to predict the cost of all services for patients in Medicare+Choice the ensuing year. As one of our experts points out, "That's quite a jump." And even if technology advances to the point where HCFA can also use clinical encounter data from physicians' offices, there will always be some risk that risk adjustment doesn't tell the entire story. Another of our experts reminds us that, at best, we might be able to predict 25 percent of health care costs.

Yet risk adjustment, if it works as advertised, will be more equitable and should encourage more emphasis on quality as a basis of competition. The ones who stand to lose are those who benefit unfairly now by avoiding sicker members/patients.

The pain involved in making such a system work is largely self-induced. While other industries seized on "information technology," health care lagged. While patient charts are still largely handwritten, HCFA's need for encounter data might speed up the inevitable (there, I've said it) progression to computerized records. Information allows medicine to improve, and will help improve systems for financing and delivery of care as well. Let's hope the data we are collecting is good enough for Medicare's risk-adjusted system for 2000.

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.