Will 2004 be a healthy year for health insurers? Despite a few caveats, the answer seems to be yes, according to a recent report by Standard & Poor's, the big rating agency. Operating performance is expected to be strong this year, thanks to moderating medical costs and rate increases that are forecast to run between 10 percent and 12 percent, on average. That's a bit lower than the 15 percent average seen in recent years.

Nonetheless, the sector is considered to have a more favorable credit outlook.

As of December, 30 health insurers merited a stable rating, compared with 35 the previous year. Yet the number of insurers with positive ratings climbed to eight, up from five. And the number of negative reviews was nearly flat.

"Pricing has, generally, exceeded the underlying cost trends," says Joseph Marinucci,a S&P credit analyst. "On the whole, you can say things are improving."

Certainly, earnings are rising and some insurers are using capital build-ups to make acquisitions. As a notable example of consolidation, he points to the planned merger between Anthem and Wellpoint Health Networks.

But there are a few variables to keep a close eye on. In particular, there's the increasing likelihood of long-term pressures from health care providers, consumers, and employers — a triple whammy, of sorts, with an overt political twist.

As Marinucci points out, it remains possible that state regulators will continue to pressure not-for-profit insurers to keep a lid on rates. This will eventually reverberate up the food chain, forcing price competition on the for-profit insurers.

Meanwhile, class-action lawsuits will continue against several national insurers; the ratings agency doesn't view these as such a big threat now that settlements were reached with some 700,000 doctors last year.

And while the prescription-drug program for Medicare won't have an immediate impact on insurers, the development is a positive. "Initially," says Marinucci, "it will stabilize the marketplace."


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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.