John A. Marcille

John A. Marcille

Every year, it seemed, I heard at least one speaker at some conference who lamented that managed care companies spent far less than their brothers in other industries, and that this was shortsighted. It sounded reasonable. After all, if "managing" is what a managed care organization does, if it doesn't just pay the bills, the more info you have about what you are managing, the better job you might be able to do.

Well, it seems that with the last few years of premium inflation, MCOs have not just been funneling that new money (what's left after higher medical costs) into CEO salaries or shareholder dividends. Some of them have been investing in IT, a term we all now recognize faster than "information technology."

At least, that was my impression when I assigned our cover story on predictive modeling. I'd started to receive a lot of signals that IT spending, particularly for medical management, had increased, and particularly in the realm of predictive modeling, which has the promise to really target that 20 percent of cases — you know the 80–20 rule. Except that some PM vendors assert that they are able to identify the absolute highest-cost cases before they break the bank.

And what do you think? Cap Gemini Ernst & Young comes along with a report, Managed Care Measures: Results of the 2002 Managed Care Benchmarking Study, that bears this out. E&Y reports that spending on medical management in 2002 was more than a third higher than in 1999. And what a surprise: There's a lovely graph indicating that higher spending on medical management is associated with lower medical loss ratios. Same with pharmacy management. IT is now, in fact, a bigger part of most MCOs' administrative costs than sales and marketing.

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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.