John A. Marcille

John A. Marcille

Anyone who's ever said that government should be run as a business doesn't understand government — or business. Governments provide services. That's a job as sloppy as collecting trash and one in which the bottom line isn't the only consideration. The government/managed care analogy may not be seaworthy when tossed upon the currents of logic, but there is at least this similarity: Managed care provides a service and also has masters other than the bottom line.

Every physician, HMO, hospital, lab, pharmacy and other participant in health care has a stake in how the total health care dollar is divided. Does increasing administrative costs a certain amount restrain medical costs to the degree that overall costs are not increased or, at least, increased at an acceptable rate? Can savings be generated with no decline in quality of care and extent of coverage? What is an administrative expense?

Some health plans speak apples while others speak oranges. If a DM program improves quality but doesn't lower cost, will one plan call it medical instead of administrative? And customary considerations of HMO administrative costs don't even take into account how much of the so-called "medical loss" (basically, what plans pay providers) is really administration.

Providers, for their part, all have administrative components, and while capitation cuts down some claims traffic, the hassles of utilization review, written referrals, chart review visits and all the other managed care control mechanisms do exist.

My feeling is that we're still swaying on the high wire, unable to really relate component administrative costs to changes in overall health care costs. And it's likely that different components will have different effects as managed care matures. For example, an HMO's contracting office might have contributed greatly to the organization's success over the past five years, but that won't be the case in the next five if fees have indeed hit rock bottom. Administrative costs are a slippery fish. No doubt about it.

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.