Buy Me Some Peanuts and Cracker Jack But Please Watch Your Utilization Rates

MANAGING EDITOR’S MEMO

Baseball is life, T-shirts inform us. Not because the game is something to be cherished and celebrated — though true fans are enthralled — but because every time you think you have it figured out, you learn that you don’t. (Maybe the shirts should say, “Baseball is love.”)

For years, I’ve felt that all health services could be fully covered, with much to spare, if our technological growth had stopped in the 1970s. Of course, many of us would be dead for lack of the advances in treatment that have come our way in recent decades. Then I looked at other industries. For instance, technological advances seem to cut the cost of computers and phones.

Or do they? If you manufacture something that costs a dollar a unit to create, what would you have to charge if 10,000 people wanted it? If it costs $5 to make, what could you charge 10 million people and still make a handsome profit?

Our cover story looks at lab costs. Contributing editor Joseph Burns reports that utilization spurs an increase in spending as much as the cost of the tests. Economics has as much to do with psychology as with statistics. One health plan says that the cost per test has stayed about the same, but that test utilization is driving spending up by 8% to 10% annually, twice that of overall medical costs, which have been rising 4% to 5% annually.

In Medicare, clinical lab tests rose by an average of 5.6% annually from 2003 through 2012, including a sharp increase in spending of 9.1% in 2012.

No matter what happens in a baseball game, even if that event is something longtime fans have never seen before, as the crowd files out of the stadium, what really matters is what’s on the scoreboard.

Maybe managed care is life, too.

Meetings

Customer Analytics & Engagement in Health Insurance Chicago December 4–5, 2014
Pharmaceutical and Biotech Clinical Quality Assurance Conference Alexandria, VA December 4–5, 2014
6th Semi-Annual Diagnostic Coverage and Reimbursement Conference Boston December 4–5, 2014
9th Semi-Annual Medical Device Coverage and Reimbursement Conference San Diego December 5, 2014
8th Annual Medical Device Clinical Trials Conference Chicago December 8–9, 2014
HealthIMPACT Southeast Tampa, FL January 23, 2015

Our other journal

P&T Journal for October 2014

FEATURES

The Clinical Trial Model Is Up for Review

Pyrazinamide-Induced Hyperuricemia

Lung Cancer Research Is Taking On New Challenges

Medical Applications for 3D Printing: Current and Projected Uses

PIPELINE PLUS

Steady Progress on Parkinson’s Disease

DEPARTMENTS

MEDICATION ERRORS

Telling True Stories Is an ISMP Hallmark

PRESCRIPTION: WASHINGTON

FDA Accepts Its First Biosimilar Application

New Drugs/Drug News/New Medical Devices

Pharmaceutical Approval Update

DRUG FORECAST

Edoxaban: an Investigational Factor Xa Inhibitor


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