John A. Marcille

It is ironic and instructive that HMO stock prices are climbing in the expectation that the industry can return to profitability and give investors what they want.

Common sense says that the best way to give owners what they want is for the industry to give its customers what they want, or to look at it negatively, at least not to give them what they don't want. The game is that the larger-than-customary premium hikes being negotiated this year will not be so large as to infuriate employers. As of press time, CalPERS, representing California public employees (our interview with Margaret Stanley, CalPERS's health benefits administrator, begins on page 39), was infuriated over Kaiser Permanente's proposed 12-percent premium boost, but was putting out the word that some kind of compromise was in the offing.

The Big Squeeze, this month's cover story, refers primarily to the squeeze on health plan profits that, author Peter Wehrwein suggests, may be letting up. Make no mistake: The pressure may slacken, but it won't disappear. Cost, not quality, is uppermost in purchasers' minds, and they will not easily settle for higher health care cost inflation, even if it means better care. They want their cake, and want to eat it too.

The industry knows it must deliver better care (not just the perception of better care, which it has failed miserably to do) that will reduce employers' indirect costs, if it is to get away with price hikes. It can no longer rely on muscling doctors around, because now that inpatient days are down and physician compensation levels have been cut, it needs their creative, positive participation. Physicians do want to be involved that way, but many have a bad taste in their mouths from past dealings with the system. We all understand the concepts of managed care now. In one form or another, managed care is our future. If HMOs can satisfy their constituencies, they'll survive the squeeze. If not, managed care will reinvent itself.

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.