Medical group practices that are owned by hospitals or integrated delivery systems (IDS), or are just affiliated with them, are no more immune to cost increases and pressure on payment rates than are their physician-owned practice counterparts. New data indicate that total operating costs per full-time equivalent (FTE) physician in IDS medical group practices increased from $272,454 in 2001 to $295,417 in 2002, while total medical revenue increased from $415,900 to $434,498 during the same period.

In contrast, multispecialty physician-owned practices did slightly better. Total operating costs grew by 5.5 percent and total medical revenue grew by 6.3 percent, according to the Medical Group Management Association's Cost Survey for Integrated Delivery System Practices: 2003 Report Based on 2002 Data

The physician-owned practices probably have a more diverse specialty mix than the hospitals. Hospital groups tend to be primarily comprised of primary care physicians, while the physician groups may have an array of physician specialties that enjoy higher margins. Other factors that influence these outcomes in physician-owned groups include more aggressive cost containment, greater provider productivity, and the incentive of ownership.

"Practices, whether they are physician-owned or hospital-affiliated, are likely going to be more aggressive in negotiating private reimbursement in the future; that includes the hospitals that may have accepted lower outpatient reimbursement to maintain inpatient reimbursement levels," says Dan Stech, director of survey operations at MGMA.

Costs outpace revenue in integrated delivery systems

SOURCE: COST SURVEY FOR INTEGRATED DELIVERY SYSTEM PRACTICES: 2003 REPORT BASED ON 2002 DATA, MEDICAL GROUP MANAGEMENT ASSOCIATION.

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.