A report from Consumers Union, the not-for-profit publisher of Consumer Reports, says certain Blue Cross Blue Shield plans have set aside billions of dollars in surplus over the past decade. These plans are using the surpluses — mandated to ensure the payment of all medical claims — to fund business expansion and new products, according to the report.

These surplus funds are primarily built through premiums. The surplus can be used to moderate any premium increases, but Consumers Union found that some financially strong BCBS plans with large surpluses have continued to seek double-digit rate increases. The report cited Blue Cross Blue Shield of Arizona, which raised its individual market customers’ premiums between 14.5 percent and 19.4 percent in 2007, 13.1 percent and 15 percent in 2008, and 8.8 percent and 18.4 percent in 2009. That plan’s surplus grew from $648.3 million to $717.1 million, more than seven times the amount that regulators consider to be the minimum necessary for solvency protection.

One out of three Americans with private insurance coverage is insured by a Blue Cross Blue Shield plan, according to the report “How Much Is Too Much?”

“Non-profit Blue Cross Blue Shield plans maintain the appropriate reserves to provide a critical safety net to our members,” says Bob Kolodgy, chief financial officer at the Blue Cross and Blue Shield Association, “enabling them to ensure coverage now and in the future, in good times and during those of unanticipated disasters.”

The report says 7 out of 10 plans held more than three times the amount of surplus that regulators consider the minimum needed for solvency protection.

“Because non-profit BCBS plans lack access to capital markets available to other companies, we rely on our own reserves to make the investments needed to increase efficiency and develop capabilities that help us better respond to increasing medical costs — a key driver of rising premiums,” says Kolodgy.

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.