John A. Marcille

John A. Marcille

Remember the op-ed pieces back in 1997 when the Balanced Budget Act was passed? Many of them warned that such a worthy goal could not be achieved without pain. Then the economic boom really took hold, and we thought that the surplus could help us avoid making many of the tough choices.

"Congress didn't realize how all the components of the technical formula were going to interact," says Karen Ignagni, president of the American Association of Health Plans, who is featured in Senior Editor Frank Diamond's cover story.

Two examples: The blended-rate formula that BBA uses for M+C is calculated by combining the national-average Medicare+Choice capitation rate and the local area specific rate. The problem is that the national-average rate is weighted based on total Medicare enrollment across all counties, even though not all counties have Medicare+Choice enrollees. The AAHP wants the blend to be based on M+C enrollment, not Medicare fee-for-service enrollment.

The BBA also requires that M+C payments for patients treated at academic medical centers be paid, not to the health plans, but directly to the centers. How would the plans recover the money? The theory was that they'd do so by negotiating lower payment rates to the centers for such services rendered. What was not foreseen was the huge increase in hospital mergers and the greater bargaining power vis-à-vis health plans that resulted.

There's an effort to save M+C by increasing payments to the program, so that they at least equal the increases seen in fee-for-service Medicare. This is much needed for the sake of the poor elderly who have come to rely on M+C as their best shot at quality health care. Still, money alone can't solve all of Medicare+Choice's woes, and structural problems will need to be addressed.

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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.