Health plan consolidation is giving the industry the mass it needs to do this year what was predicted last year, but didn't happen: boost premiums substantially to prop up the bottom line.Hewitt Associates, the consulting firm, predicts nationwide premium hikes of 7 to 10 percent, up from last year's average 3.7-percent increase.

Glimpses of what's happening seem to back that up. The Federal Employee Health Benefits Plan faces a 10.2-percent rise. Kaiser Permanente is boosting premiums as much as 20 percent, depending on the customer, as it tries to stem a loss that reached $127 million during the first nine months of 1998. Kaiser's Northeast division alone bled $40 million during the third quarter. Last month, Kaiser said it would phase out its international operations to retrench in the U.S.

Weiss Ratings says 68 percent of Blues plans lost money on underwriting during the first half of 1998; Highmark, of Pennsylvania, led the way with a $79 million six-month deficit. Four HMOs in Colorado lost $34 million during the first nine months of 1998, according to the Colorado Managed Care Newsletter. In Florida, HMOs broke even in the first half of the year, after posting $66 million in losses in 1997, according to Florida Managed Care Review by consultant Allan Baumgarten; even so, state officials tripled HMOs' cash reserve requirement, effective Jan. 1.

A report, Beyond HMOs, prepared by the Corporate Research Group in New Rochelle, N.Y., says that premium hikes will spur revenue growth of 15 percent for health plans and point them toward recovery. The report also predicts further shedding of unprofitable Medicare and Medicaid contracts.

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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.