Mergers and acquisitions have allowed hospitals to call the shots in negotiations with health plans the last several years. Now, there's indication that the party may soon be over, thanks to the intervention of employers. The California Public Employees' Retirement System has managed to keep HMO premium increases in line with what's going on nationally by refusing to do business with 38 of the most costly hospitals in the Blue Shield of California HMO network. And what goes on in California....

"CalPERS has put a stake in the ground that tells hospitals to play by their rules or lose their business," says Paul Fronstin, director of the health research and education program at the Employee Benefits Research Institute. Expect similar stands across the country. CalPERS has long been a barometer of what can and cannot be done concerning health insurance.

"This is, in many ways, a bellwether action by CalPERS, which marks ... where many large employers and health plans are going," Peter Lee, CEO of the Pacific Business Group on Health, tells the Los Angeles Times.

The CalPERS board approved a plan that includes an average HMO premium increase of 11.4 percent for 2005, the first time it has been near the estimated national average in three years. If the pension fund had not dropped the 38 hospitals, the increase would be more like 14.4 percent, say CalPERS officials. Overall, CalPERS expects to spend $4 billion on health insurance next year.

The move is expected to cut spending for the nation's third-largest purchaser of health care by $36 million in 2005, then save CalPERS about $50 million annually beginning in 2006.

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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.