Managing seniors with chronic conditions might get a little easier as the Centers for Medicare & Medicaid Services reports that the doughnut hole is shrinking, thanks to a deal reached by the Obama administration and pharmaceutical companies as part of the Affordable Care Act.

Of course, this being an election year, the story will probably not end there, and the numbers might be disputed. Closing the gap in coverage under Medicare Part D — where beneficiaries have to pay for their drugs for a period between where their regular coverage ends and catastrophic coverage begins — is something that causes concern among all players.

As we reported in November 2009, “The doughnut hole has been a bad idea for the drug companies as well as beneficiaries because ... the companies have discovered that once a Medicare beneficiary reaches the doughnut hole and starts paying for his drugs entirely out of his own pocket ... he either shifts to generic drugs or stops taking his medications altogether” (Read “Everybody Wants to Close the Doughnut Hole” at http://bit.ly/woyAmR).

Pharmaceutical companies will pay $85 billion over the next 10 years to reduce the costs of the doughnut hole to members. CMS says that in 2011 “seniors and people with disabilities who reached the coverage gap in Medicare Part D coverage automatically received a 50 percent discount on covered brand-name drugs and a 7 percent discount on generic drugs.”

It is hoped that the discounts will continue to grow until the doughnut hole is closed. There’s no hassle factor for the beneficiaries; they simply buy drugs at the pharmacy and receive the discount automatically.

“In 2011, about 3.6 million Medicare beneficiaries benefited from discounts on prescription drugs in the doughnut hole coverage gap,” says CMS. “These seniors and people with disabilities received more than $2.1 billion in discounts, or an average of $604 per beneficiary.”

Many of these drugs are for chronic conditions.

Here are some of the drugs seniors and people with disabilities saved on:

  • Blood sugar lowering drugs — about $300 million
  • Triglyceride and cholesterol lowering drugs — about $260 million
  • Asthma and other lung related (non-cancer) disease drugs — about $230 million
  • Drugs used to lower blood pressure — about $120 million
  • Psychiatric drugs — about $102 million
  • Drugs used to prevent platelets from clotting blood — about $195 million
  • Anti-dementia drugs — about $109 million
  • Anti-depression drugs — about $73 million
  • All other drug therapeutic uses — about $627 million

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.