John Doe went to the doctor in 2007, and again in 2008. Health insurers, pharmacy benefits managers (PBMs), and third-party administrators (TPAs) noticed a difference because the increase in what it cost them to provide care was less steep than what they saw last year.

That’s because the cost of medical and prescription claims filed by Doe’s doctor and pharmacy did not rise as precipitously in 2008, according to the 2008 Segal Health Plan Cost Trend Survey.

The biggest slowdown, according to the report, is in prescription drug coverage costs — to levels similar to medical coverage — for the second consecutive year. This is a decrease of nearly nine percentage points since their high of 19.5 percent in 2003.

“Prescription trend rates have gone down,” says Eileen Flick, vice president and director of Segal’s Health Technical Systems. “So the 2008 projected increase in cost for preferred provider organization/ point of service (PPO/POS) plans without a prescription benefit is 10.5 percent, while the retail costs for prescription drug carve-out are at 10.7 percent. This shows that prescription trend rates are very similar to medical coverages.” Trend is defined as the forecasted change in the health plans’ per capita claims cost determined by MCOs, PBMs, and TPAs.

Inflation appears to be the biggest contributor to overall medical costs, according to the report. It will account for about 60 percent of the increase of costs seen by PPOs.

Drug price inflation will continue to be a major driver of costs because of the ongoing focus on development and marketing of specialty drugs, according to the report.

Source: 2008 Segal Health Plan Cost Trend Survey.

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.