MANAGED CARE December 1998. ©1998 Stezzi Communications

Fueled by slowdowns in both private- and public-sector spending, health care expenditures in the U.S. rose 4.8 percent in 1997 — the lowest rate of increase since the government began keeping statistics in 1960. (See charts) But the Health Care Financing Administration, which released the tallies last month, warned that higher medical inflation was likely to return in the not-too-distant future.

The slowdown in the growth rate was slightly more discernible than that of 1996, when medical inflation clocked in at 4.9 percent. Private-sector expenditures rose 4.3 percent, up a tick from 1996's 4.2-percent rate, but a 5.3-percent public-sector increase was down from a year ago, when the rate was 5.7 percent. Total 1997 expenditures of $1.1 trillion accounted for 13.5 percent of gross domestic product, lowest since 1992.

Individual components of the data bear close scrutiny. HCFA says spending for prescription drugs increased 14.1 percent last year, while the 5.3-percent out-of-pocket spending increase was greater than overall private-sector inflation for the first time in a decade. And HCFA reiterated its prediction of earlier this year that overall health care expenditures are likely to double by 2007.

HCFA says that a steady drop in freestanding home-health services can be chalked up, in part, to Medicare fraud-and-abuse detection activities.

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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.