Managed Care



Contributing Voices
Neil Minkoff, MD

Germany is the third biggest drug market in the world, with $42 billion spent on pharma products in 2012. Germany allows its insurers to work together to negotiate with pharmaceutical companies to create one price for all Germans. There’s the official list price, which is made public, and the proprietary discounted price. The German public price list is used widely in Europe and Japan for drug pricing and negotiations.

The German government is looking to make the discounts public knowledge as well. This is designed to reduce margins for suppliers and pharmacies, so that they base their margins off of the true prices, rather than list. The pharmaceutical companies are concerned that the release of the discounts will eat into their revenue from the other countries that use the current public list, which seems to me to be tacit admission that the discounts offered elsewhere aren’t as aggressive as the ones Germany’s pooled insurers can get.

This comes after the aggressive actions of Germany’s Institute for Quality and Efficiency in Healthcare, which is the equivalent of Britain's National Institute for Health and Care Excellence (NICE). They’ve been aggressive about looking for deeper value before allowing products access to the German market, which seems largely cost driven.

My concern is how this affects the U. S. market.

It is widely believed that the American health care system subsidizes the markets where access is more limited and prices are set. For example, Britain just worked with pharms to hold the NHS spend on brand drugs flat over the next two years, so growth in that market is limited. The pharma companies' need for growth means that they will be raising prices elsewhere to support flat trend in the UK.

That why it seem inevitable to me that the US government will step in. The global pharma market is far from free. It is a messy amalgam of single-payer, third party payers, supplemental plans, private insurers and the U.S. Centers for Medicare & Medicaid Services. As health care costs continue to rise in the U.S. a convenient target will be drugs that are available in other countries for a fraction of the American price.

Neil Minkoff, MD, is medical director of MediMedia Managed Markets and also an independent health care consultant

Contributing Voices
Steven Peskin, MD

"Welcome to Moe's"  is the warm and friendly greeting of the staff at one of my favorite cantinas — Moe's Southwest Grill, where a rice bowl and iced tea set me back just $9 and change. But for one woman who underwent Mohs surgery for a very minor lesion that may not have required the Mohs procedure and the subsequent plastic surgery repair, her bill for the day was over $25,000, as reported in a January 18, 2014 New York Times article titled "Patients' Costs Skyrocket; Specialists' Incomes Soar".

In the article, the Times journalist Elizabeth Rosenthal notes:

"Use of the surgery has skyrocketed in the United States — over 400 percent in a little over a decade — to the point that last summer Medicare put it at the top of its “potentially misvalued” list of overused or overpriced procedures. Even the American Academy of Dermatology agrees that the surgery is sometimes used inappropriately"

In this instance, the patient, a professor at the University of Central Arkansas, pushed back on the $25,000-plus charges, and, after months of wrangling, Baptist Health Medical Center reduced the bill to around $5,000, with the largest component of the reduction being the plastic surgeon's fee -- from $14,407 to $1,375 (Still a nice paycheck for what was likely less than an hour of time!).

The patient subsequently went to a dermatologist at the University of Arkansas who said that she likely did not need "such an extensive procedure." The patient's final comment in the article: "It was like, "Take your purse out, we're robbing you'"

Welcome to Mohs!

Steven R. Peskin, MD, MBA, FACP, is associate clinical professor of medicine at the University of Medicine and Dentistry of New Jersey – Robert Wood Johnson Medical School, and is governor of the American College of Physicians, New Jersey South.

Contributing Voices
Craig Keyes, MD, MBA

I once had a patient with HIV who refused to take his medication. His noncompliance was not because he lacked information about his illness or because he didn’t understand why it was important to take his medications. He knew full well that he would die without taking them.

After doing a little digging, I learned that the reason was personal. He was afraid to tell his partner about his diagnosis. Not only was he afraid to admit that he had been unfaithful, he worried that his partner would leave him. My experience with this patient was a valuable lesson for me that medicine is not what I thought it was.

I realized that the practice of medicine is not just about a series of clinical decisions based on evidence-based practices. It is also about helping people to change their behaviors, whether they need to take their meds, lose weight, or quit smoking. If we want to achieve optimal outcomes, then it is part of our job as care providers to help people identify and address personal barriers to healthy behavior change.

Contributing Voices
Steven Peskin, MD

The memory tape of the golden oldie from Lovin' Spoonful was playing in my head before watching Dr. Eric Topol’s interview with Dr. Paul Offit about his recently published book, Do You Believe in Magic? The Sense and Nonsense of Alternative Medicine

The book tackles with rigor and vigor the lack of evidence for assertions and testimonials made by celebrity physicians, politicians, and stars of the small and big screen regarding the benefits for megadoses of vitamins, various nutraceuticals, and misuse of FDA-approved drugs, such as prolonged IV antibiotics for chronic Lyme Disease. Indeed, some of these may actually harm the person.

To me, the most fascinating part of this debunking of pseudo-science is the power of the placebo. Offit acknowledges the ability of the human being to heal itself. Through the connection of mind and body and conscious or unconscious thought affecting neurobiological or neurohormonal up or down regulation, we have remarkable abilities to positively or negatively impact our immune system, our perception of pain, blood circulation, digestion, and other vital functions that may profoundly help or harm our health and well being.

Just as the vaccines stimulate an immune response that prepares the body to defend itself from a viral or bacterial attack, we have the ability to autoregulate in other ways to heal ourselves. Not magic, but magical!

Steven R. Peskin, MD, MBA, FACP, is associate clinical professor of medicine at the University of Medicine and Dentistry of New Jersey – Robert Wood Johnson Medical School, and is governor of the American College of Physicians, New Jersey South.

Contributing Voices
Paul Terry

January 1, 2014 marks the most monumental day in the history of American health policy. The individual insurance mandate, the sunsetting of underwriting as we know it, and the planned obsolescence of the term “pre-existing conditions” in insurance all presage a fundamentally different era for access to health care. Of the 5.7% of those in the individual market, .6% will not be eligible for financial help if they want to continue buying in the individual market. In exchange, starting today, up to 47 million nonelderly uninsured will be eligible for new and/or more affordable health insurance. The good news is that there is no turning back from this miracle arrival. The bad news is there is no starting over either. The stork delivered it with warts and all.

Contributing Voices
Frank Diamond

Health reform means that much of what health insurance plans did is being taken on by providers. An obvious example is the Choosing Wisely campaign, an effort by physician professional organizations to cut down on overtreatment and overtesting.

Contributing Voices
Jessica Cherian, PharmD, RPh
Jessica Cherian, PharmD, RPh

Nowadays, every turn of a newspaper page, click of a media page on the Internet, or flip to a news channel brings us to an update, or more likely a criticism, of the public exchanges. With all of the attention on this side of the exchanges, we might be forgetting about the private exchange.   The private exchange serves as a channel for individuals and employers to purchase health insurance that is separate from the newly opened public exchanges developed under the Patient Protection and Affordable Care Act.

 The biggest difference between the two stems from the fact that government subsidies aren’t available to those choosing to purchase health insurance from the private exchange. This explains why much of the news regarding private exchanges focuses on the group market, as employers that choose to participate in a private exchange provide employees with an subsidy to be used toward the purchase of health insurance, a method also known as defined contribution.

Contributing Voices
Craig Keyes, MD, MBA

It seems many of us have some preconceived ideas of what new Medicaid members will look like: They’ll be older, sicker, higher utilizers of services and, more challenging to care for.

But when we take a closer look at populations that will qualify for Medicaid over the next several years, a different picture appears. Chances are the new Medicaid member is going to be that part-time waiter at your favorite local restaurant or the young woman with a toddler and another on the way who decided to go back to school.

Contributing Voices
Tom Ewers and Munzoor Shaikh

Tom Ewers and Munzoor Shaikh of West Monroe Partners discuss the ins and outs of pre-close integration planning for health care payer mergers and acquisitions.

The M&A process should begin by clearly defining both the acquisition strategy, type of acquisition (Leverage Business Model (LBM) or Re-invent Business Model (RBM)) and the overall approach to integrating the two companies. Acquirers should then hone in on which consolidation and collaboration opportunities need to be pursued to generate the expected benefits. Then, they should define a clear investment thesis and operating model to help formulate the integration approach, thus completing their pre-close homework.

Next, payers should transition to the operational and IT diligence steps within the integration lifecycle. These efforts begin by building a diligence and integration team with expertise in a number of different disciplines that cover the target organization’s key capabilities and represent stakeholders from the potential acquirer.

As the strategy and pre-close phases come to an end, initiating pre-close integration planning is the next step to reach a successful transaction outcome. This is especially important for payers because not only do they tend to have specialized claims processing, but also there are various new requirements and forces at play today given the advent of the Health Insurance Exchanges (HIX). Plan early to provide clear “Day-1” direction and to set stakeholder expectations.

Contributing Voices
Paul Terry

The recent Health and Productivity Conference sponsored by the National Business Group on Health (NBGH) signaled the arrival of what social scientists have long held as vital to the success of wellness: a balance between personal and organizational engagement in health.



2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014
6th Semi-Annual Diagnostic Coverage and Reimbursement Conference Boston December 4–5, 2014
Customer Analytics & Engagement in Health Insurance Chicago December 4–5, 2014
Pharmaceutical and Biotech Clinical Quality Assurance Conference Alexandria, VA 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