The public sector will account for a record 49 percent of the nation’s health care spending by 2014, according to economists and actuaries at the Centers for Medicare & Medicaid Services. While Medicare Part D, to be introduced in 2006, will have little effect on overall health spending or spending on prescription drugs, it will result in a substantial shift in funding from Medicaid (cost shared by the federal government and the states) and the private sector to Medicare, according to actuaries at CMS.

"In 2004, the spending ratio for the public/private sector was ... about 45/55," says Stephen Heffler, director of the National Health Statistics Group in CMS’s Office of the Actuary, and one of the researchers in the study.

While the burden on the public sector to supply health care benefits to Medicare and Medicaid enrollees will increase, on the private side, a reevaluation of current forms of health insurance coverage may take place as growth in premiums continues to outpace growth in compensation, according to the researchers. This increase in spending could lead to heightened pressure to find ways to slow cost growth without compromising quality or access.

The researchers project a large shift in 2006 in payment responsibility for prescription drugs to Medicare from direct purchase by patients, from private health insurance, and from Medicaid. They forecast a minor rise in spending due to an increase in prescription drug use by Medicare beneficiaries that will largely be offset by lower prices. From 2007 to 2014, the researchers expect, aggregate prescription drug spending growth will decelerate despite the new Medicare drug spending. CMS projects that total prescription drug spending will grow 11.6 percent in 2006, of which 0.5 percent will be attributable to the implementation of Part D.

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group

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.