Ordinarily, this Compensation Monitor department describes changes in the various payments to providers, folks who work at health plans, and others in the health care industry, but this month, we use compensation as it is usually understood in civil court. From 2000 to 2004, the amount that major malpractice insurers have collected in premiums has more than doubled, yet their payouts for compensatory damages have remained essentially flat.

Nice work if you can get it!

Physicians are vociferous in their complaints about malpractice premiums, and according to the Center for Justice and Democracy, a consumer advocacy group, maybe they have good reason.

In the report "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry," the group found that major carriers increased their net premiums by 120.2 percent, but their net claims payments rose by only 5.7 percent.

In fact, the insurers took in approximately three times as much in premiums as they paid out in claims. Payouts as a percentage of premiums fell from 69.9 percent to 33.6 percent on a net basis.

During the same period, there was a 25 percent decline in the incurred-loss ratio — the amount the insurers estimated they would pay out in the future divided by the premiums they earned.

The report analyzed the performance of each of the 15 largest medical malpractice insurers in the United States, as rated by A.M. Best, the principal rating service for the insurance industry.

Source: Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry, Center for Justice and Democracy, July 2005

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.