What can be lost in the hullabaloo over consumer-directed health plans are the facts that only a relatively small amount of people have so far signed on, and some experts remain skeptical about the ultimate effectiveness of these benefit packages. Forinstance, a Commonwealth Fund report says that CDHPs might actually worsen outcomes (and therefore be less cost-effective in the long run) and that the managed care industry would do much better if emphasis were placed upon quality instead.

"New studies are finding wide variations of cost and quality across hospitals and physicians, yet few private insurers, managed care plans, or public programs reward superior quality or efficiency," says the report "Will Consumer-Directed Health Care Improve System Performance?" which also notes that about 1 million people are enrolled in CDHPs as compared to the 160 million U.S. residents who are covered by traditional employer-sponsored benefits.

One effort that does reward quality, the NCQA-sponsored "Bridges To Excellence" program, is expected to involve 45,000 physicians who contract with six California health plans. They will be paid from a bonus pool of $40 million to $60 million. But this pay-for-performance program, while getting very good reviews in many quarters, is met with some skepticism by many physicians who point out that the ratings are based on data from claims.

Under such a system, Alexander Ruggieri, MD, assistant professor at the Mayo Clinic, tells the Wall Street Journal, a physician who doesn't prescribe ACE inhibitors for heart-failure patients who are allergic to the drugs may find himself out of the running.

"I would be labeled a bad doctor because the claims on my patient with heart failure would not be matched with a corresponding claim for an ACE inhibitor," Ruggieri says.

Still, despite this weakness, the Commonwealth Fund believes that attempting to measure quality is worth the effort, and can reap better results than a shift to CDHPs.

"If consumer-directed care is used primarily as a tool for shifting costs from employers to employees, it will quickly be discredited," says the report. "Instead, the long-term strategy should focus on identifying, demanding, and rewarding performance from providers, with positive incentives for consumers taking a complementary role."

The report is based on a compilation of articles and lectures at a conference on CDHPs in September 2003 that was hosted by the Commonwealth Fund and the Robert Wood Johnson Foundation.

"These findings suggest the need to look beyond reductions in utilization or spending to examine whether these reductions are appropriate and whether they may lead to adverse health consequences," the report says.

Managed care should also be wary from a business standpoint, say the authors.

"It seems clear that consumer-directed health plans enjoy favorable risk selection, which may lead to increasing market segmentation, with lower-income and sicker individuals served by managed care plans and higher-income, healthier individuals enrolled in new plans," the report states. "As a result, enrollment in managed care plans could undergo a long-term decline while premiums for these plans steadily increase."

(See the feature story "Consumer-Directed Care Bets Against Human Nature".)

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.