Like many organizations, we have been tracking the expansion of Medicaid (/archives/2011/3/stressed-states-open-doors-medicaid-managed-care and /archives/2012/10/what-medicaid-expansion-under-aca-means-all-mcos).

The Affordable Care Act will make this huge piece of the health care system even bigger, says a study by the IMS Institute for Healthcare Informatics. Medicaid already accounts for 16 cents of every dollar spent on health care and that will swell to 20 cents by 2021. “The shared-cost model between states and the federal government, combined with the continuing weak economic climate and the impending expansion, had prompted many states to shift from historically fee-for-service payment models to managed care models, and several states with large Medicaid populations made such changes during 2011,” according to the study.

Brad Ryan, MD, general manager of IMS Health Payer and Provider Solutions, says that “Medicaid expansion and the sizeable cost increase are only part of the challenge. Drug cost is rising disproportionately, accounting for up to one third of total medical spend in some cases.” He adds that the entry of new plans and changes in other plans’ offerings are increasing the complexity of Medicaid.

IMS estimates that as much as $200 billion is wasted in the health care system each year thanks to suboptimal medication use.

“Generic substitution represents only a fraction of the opportunity, but nonadherence, antibiotic misuse/overuse, medication errors, and mismanaged polypharmacy are areas that must be addressed by plans more directly with patients and physicians,” says Ryan.

Medicaid spending growth has outpaced overall health spending

U.S. health and Medicaid growth, real and projected, 1997–2021

Medicaid spending growth

Medicaid spending as percentage of overall health spending

Medicaid spending as percentage of overall health spending

Prescription medications for beneficiaries under managed Medicaid have more than doubled since September 2011

National Medicaid prescription volume and share of Medicaid

National Medicaid prescription volume

Source: “Shift from Fee-for-Service to Managed Medicaid: What Is the Impact on Patient Care?” IMS Institute for Healthcare Informatics (, April 2013

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.