In 2011, high medical claim costs, the aging population, and changes brought about by health care reform are all going to contribute to a health care cost increase that will be higher than in any of the past five years. Hewitt Associates, the human resources consulting and outsourcing company, projects an 8.8 percent average premium increase for employers, compared to 6.9 percent in 2010 and 6 percent in 2009.

“These data should be seen as an alarm and a rallying cry,” says Jim Winkler, managing principal in Hewitt’s health management consulting practice. “At a certain level it’s an indictment of our collective inability to control health care costs.”

In the analysis, when cost by plan type was broken out, health maintenance organizations saw an increase of 7.8 percent in 2010, point-of-service plans had a jump of 6.9 percent, and preferred provider organizations saw an increase of 6.3 percent.

Hewitt forecasts that in 2011, purchasers will have average cost increases of 8.5 percent for PPOs and POS plans. They will see an average cost increase of 9.4 percent for HMOs. That means that from 2010 to 2011, the average cost per single member for major companies will increase from $8,671 to $9,408 for PPOs; $9,373 to $10,254 for HMOs; and $9,747 to $10,575 for POS plans.

Another factor driving the cost increase, says the analysis, is the amount of charges for, and frequency of, catastrophic claims. The analysis also cites a slower pace of hiring, which leaves employers with slightly older workforces that are more prone to costly medical conditions.

The outlook appears bleak, but Winkler says that “there’s clearly an opportunity for health plans to ramp up their game, and the more that plans can develop measurably effective programs that can help mitigate those costs, employers are going to be interested. Organizations that can come up with those ideas will create opportunities for revenue growth, especially if they can prove that their solutions work.

“The rallying cry is for employers, health plans, and individuals to start thinking and acting differently to find ways to reduce the rate of cost increase, he says. Despite passage of health reform, we had high cost before and we have high cost after. It doesn’t matter if the bill promotes the use of health exchanges — or any other programs. If the employer model falls apart, we’ve got a big problem.”

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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.