Employers’ health costs could increase as much as 9% this year, according to a study of 126 insurers and/or plan administrators by Buck Consultants. “The actual increase in rates will also depend upon the underlying claim experience,” says Harvey Sobel, a Buck principal and consulting actuary who co-wrote the study. And it will depend on whether that employer is self-insured and on other factors. Yes, it is complex.

The slight slowdown in the rate of increase is not much solace for cash-strapped employers and workers, according to Buck’s “National Health Care Trend Survey.” The study points to one of the conundrums of living at a time when the technology is constantly improving. “While technology may ultimately be the key to containing health care cost increases, research and development costs often result in higher initial costs for these services.”

But there are other factors.

“This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” says Harvey Sobel, a Buck principal and consulting actuary, co-author of the survey. “Even though the decline is good news, most plan sponsors still find 8%–9% cost increases unsustainable.

“Health plans will need to continue to look for ways to help plan sponsors control costs, including through better utilization management, provider reimbursement rates, and selection of high quality providers.”

Another problem, the report tells us: “Providers — particularly hospitals — have consolidated into hospital systems, giving them greater bargaining leverage with managed care organizations. As a result, these providers have been able to negotiate higher fees.”

Sobel says, “Health plans will need to continue to look for ways to help plan sponsors control costs, including through better utilization management, provider reimbursement rates, and selection of high quality providers.”

Real and projected cost increases

Source: “National Health Care Trend Survey,” Buck Consultants, May 2014

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.