There was a time when provider-sponsored organizations were the government's great hope for the spread of managed Medicare. But less than three years later, the nation's only Medicare PSO is cashing it in.

And no PSO applications are pending with the Health Care Financing Administration.

Albuquerque, N.M.-based St. Joseph Healthcare sponsored the only PSO to earn a HCFA waiver of state licensure requirements. Now, St. Joseph's PSO is among the Medicare+ Choice plans that will cease operations Dec. 31. And the refrain is familiar: Blaming low capitation rates, St. Joseph officials say they can't afford to lose any more than the $6 million already gone since the program went live last year.

PSOs are a risk-sharing venture involving physicians and hospitals. Comfortable with risk at the time it began operations and no stranger to low Medicare capitation rates, St. Joseph officials told Managed Care in November 1998 they expected the PSO to break even "a few years down the road."

As for the lack of PSO applications, health care observers say providers are holding back for many reasons, capitation rates aside. By some estimates, PSOs should be prepared to run a medical-loss ratio of over 100 percent the first year. Add high capitalization costs, and you get a sense that only those with deep pockets — a rarity among providers these days — need apply.

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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.