John A. Marcille

John A. Marcille

As our recent hurricane experiences prove, what government does, or doesn't do, matters a lot. Now, in health care, the prevailing wind may be starting to blow in the direction of tax reform.

In our cover story, Contributing Editor Martin Sipkoff writes about how some lawmakers, including Senate Majority Leader William Frist, think that it might be time to end the tax exclusion for job-sponsored health benefits. Employer-sponsored health care isn't going to disappear, but expect significant changes in the next few years — especially if tax code reform becomes reality.

One of those Sipkoff talked to is Uwe Reinhardt, PhD, James Madison Professor of Political Economy at Princeton. Reinhardt warns that tax reform raises questions. "I favor the complete elimination of this preference, just as do the folks at the Heritage Foundation and Mark Pauly," says Reinhardt. "They've just never explained to me exactly how — very concretely how — that would be done, step-by-step."

He asks: "Exactly how would one withdraw the tax preference? At the extreme, employers might be mandated to add what they now spend on health insurance premiums to the employee's taxable income on the W-2 form. But how much? Would it be an amount averaged over all employees — young and old, healthy and sick? Young workers might deeply resent having to pay taxes for something that really benefits not them but their older and sicker colleagues. We could, of course, risk-adjust the amount — say, add only $2,000 to the taxable income of a young worker and $12,000 or more to the income of an older sicker worker. Can you imagine the litigation this would trigger?"

Reinhardt concludes: "Am I missing something?"

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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.