John Marcille

John Marcille

I remember when, back in the early 1990s, the physician community went ballistic over the threat, and in some cases the actuality, of payment by capitation. It was bad — bad for the docs, perhaps, but very, very bad for patients. And docs were just looking out for their patients.

Capitation, as we all know, creates a perverse incentive on the part of the doctor to shortchange the patient. If it's professional capitation, he hustles the patient out as quickly as he can, so as to maximize throughput (see as many patients as possible in the shortest amount of time). If it's global capitation, where the physician's practice is at risk for all or most services, there's a tendency to undertreat.

They conveniently forgot that the fee-for-service system (still going strong in 2007) had its own perverse incentives, to which capitation was a reaction.

With all the intellectual capital working on the problem of provider compensation, you'd think we'd have eliminated all this perversity, but no, we haven't, and in fact it is near center stage and is really intertwined with the star of the show: The Incredible Rising Cost of Health Care.

Tom Reinke's cover story looks at what payment systems are competing for the attention of Medicare and private health plans, and finds a lot of interest in an evolution of the diagnosis-related group in which providers (not necessarily just the hospital) would be paid a more or less flat fee for treating a patient at a particular stage of disease (forgive me for oversimplifying). How the providers would divide that fee would be their challenge.

Of course there's more to it than that, but it's an attractive idea, and there seems to be a fair amount of interest in it. What perverse incentives does it incorporate?

We may have to wait and see.

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.