John Marcille

John Marcille

There are things to be said in favor of defined contribution (DC) financing of personal heath care, and writer Tom Reinke rounds them up neatly in his cover story. Chief among these are (1) that getting rid of the defined benefit plan would allow employers to know exactly what their costs would be, since they set their own costs that don’t depend on providers and insurers, and (2) that the giant base of consumers would do a better job of keeping costs down than the present system has done.

If I were working at an insurer, I’d really perk up. The implication is that companies, by switching to DC plans, would be giving up their self-funded plans, letting employees loose to buy insurance on the much-heralded individual-market exchanges. I said insurance: a giant shift from self-funded plans back to insurance for practically everyone. Insurance companies would again take the risk — and take the premium they would get for doing that. And they’d be selling to individuals. No volume discounts necessary, no negotiating on what’s covered and what isn’t.

There is little doubt that DC plans would be a godsend to many employers. Still to be discussed is what role the employer would have if it had no negotiating and financing role, since it still has an interest in keeping workers healthy. If its workforce were susceptible to certain diseases because of environmental or selection factors, crafting programs to prevent or control those diseases might be tricky when the workers are members of dozens or scores or even hundreds of health plans.

And don’t forget that the National Institute for Retirement Security found that defined contribution pension plans are much less efficient than defined benefit retirement plans in increasing wealth. Extended to health care, does this mean that, instead of controlling costs, they would increase even faster (not counting the other factors of technology creep, etc)?

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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.