John A. Marcille

John A. Marcille

For all of its charts, numbers, and equations, economics often seems more art than science, better tracked by rain-dancers than prognosticators. It is so intertwined with the wiles and whims of human beings — be they suppliers or demanders — that the intangibles of psychology or free will keep throwing wrenches into the works.

Senior Editor Frank Diamond's cover story goes out on a limb that looks very much like a trend line to say that the HMO industry is essentially recession-proof. It makes this call with the help of history, as if that's any guide, and in the words of experts, as if that's any comfort. To put it bluntly: We could be wrong, but if we had to bet....

Many of the issues health plans and physicians will have to grapple with in the next decades may be dictated by the biggest macroplayer of them all — the consumer.

"The market has actually, in some regards, become almost too competitive for comfort and consumers are getting ever, ever better deals," says Uwe Reinhardt, Ph.D., a professor of health economics at Princeton University. "It is getting very hard to carve monopolies out of this. You need monopolies to have profits."

Even if the consolidation in the managed care industries make some of the big players look something like monopolies, there are enough competing insurance mechanisms around to give them a real challenge, and cost-control, still what employers seek, is what HMOs will have to deliver again, as they did in the early 1990s. Can they make a profit and put a lid on premiums simultaneously? Good question. Will their efforts result in, after a slack season, tightened control on utilization and provider compensation? I ask you, is that also a good question? Or merely a rhetorical one?

Cost control shows up throughout this issue, notably in the articles on formulary administration, ER observation units in hospitals, and fraud detection.

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.