John A. Marcille

John A. Marcille

As we were going to press, huge managed care merger news broke. Anthem plans to purchase WellPoint for $16.4 billion, thereby creating the largest health insurer in the nation. This is the exclamation point to a story long tracked here and elsewhere: the continuing merger of plans that are part of the Blue Cross and Blue Shield Association.

Meanwhile, UnitedHealth Group, currently the largest insurer, plans to buy Mid Atlantic Medical Services for about $2.7 billion in cash and stock. That still keeps WellPoint (by which name the merged Blues entity will be known) out in front, with about 26 million members, compared to the 20 million members UnitedHealth will have after its transaction goes through. (Regulators in the states involved must approve both deals.)

Reaction inside and outside the industry was swift and intense. What about competition? The companies will together provide insurance to about 46 million members, or 27 percent of U.S. residents who have private health insurance.

The AMA's President Donald Palmisano, MD, worries that this will lead to "a health care system dominated by a few publicly traded companies that operate primarily in the interest of shareholders."

The Wall Street Journal has a rosier view and hopes that the mergers lead to "greater standardization and simplification of an enormously complex system."

We wish the same, as our cover story this month on practice variation illustrates just how much the system could use such standardization.

For instance what are the chances of a Medicare enrollee experiencing an ICU admission in his or her last six months of life in Sun City? Well, that depends, according to a study cited in our story. In Sun City, Ariz., only 14 percent of decedents had an ICU admission. In Sun City, Calif., 49 percent did.

We assume — we hope and pray — that a health plan present in both cities would take a long, hard look at that discrepancy. And then do something 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.