That one region spends more on medical care than another doesn’t always translate into better health outcomes. What does make a difference is how those dollars are used, especially when it comes to hospital spending and care, according to a recent study in the Annals of Internal Medicine.

“A managed care executive, who helps build a plan’s provider network and member benefits may be reluctant to include higher cost providers in preferred tiers,” says John Romley, PhD, an author of the study and an economist at the Schaeffer Center for Health Policy and Economics at the University of Southern California.

“Our findings suggest that while regions spending more on health care generally produce no better care, specific types of medical spending, such as acute-care hospital spending, may save lives,” he says.

When hospitalized for a major acute condition — like heart attack, stroke, or pneumonia — patients were less likely to die in high-spending hospitals.

“At least for hospital care, from a managed care standpoint, there is some value, some bang for the buck,” says Romley.

He adds, however, that “we haven’t shown, with the data that we collected, that it’s the most cost-effective place to put your money. One shouldn’t assume that higher spending providers aren’t providing any value.”

Researchers reviewed discharge records for more than 2.5 million patients admitted to 208 California hospitals from 1999 to 2008 with 1 of 6 major medical conditions: heart attack, congestive heart failure, acute stroke, gastrointestinal hemorrhage, hip fracture, or pneumonia.

They found that as hospital spending went up, the risk of dying in the hospital from the condition that caused hospitalization went down.

For example, from 2004 to 2008, the researchers found that patients admitted for heart attack to the top-spending hospitals were 19 percent less likely to die than patients admitted to the lowest-spending hospitals.

From 1999 to 2003, patients admitted for heart attack were 9 percent less likely to die at the highest-spending hospitals than at the lowest-spending hospitals.

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.