Employer-sponsored health care has evolved a lot over the past 20 or so years. Towers Perrin, in its annual Health Care Cost Survey, reviewed key trends in health care costs, enrollment, plan design, population health, prescription drugs, retiree medical benefits, and other areas from 20 years ago as a way to better understand future trends. To no one’s surprise, the health care landscape has changed significantly. Here’s a summary of the findings:

20 YEARS AGO TODAY THE FUTURE
Average annual cost increase: 15% Average annual cost increase: 6% U.S. medical costs will continue to outpace inflation
Americans spent $558 billion on health care Americans are projected to spend $2.6 trillion on health care in 2009 Americans are projected to spend $4.3 trillion on health care in 2017
Nation’s health bill was paid by:
  • Government — 41%
  • Private insurers — 38%
  • Individuals — 21%
2009 projections:
  • Government — 46%
  • Private insurers — 42%
  • Individuals — 12%
2017 projections:
  • Government — 49%
  • Private insurers — 41%
  • Individuals — 11%
65% of private sector employees had employer-based retiree medical coverage 47% of large employers subsidize retiree medical costs Within the next 10 years, it is anticipated that 90% of private sector retirees will pay the majority of the cost of their health care coverage
Plan type market share:
  • Indemnity — 62%
  • PPO — 13%
  • HMO — 20%
  • POS — 5%
  • ABHP—N/A
Plan type market share:
  • Indemnity — 2%
  • HMO — 26%
  • POS — 15%
  • ABHP — 10%
In five years, we anticipate ABHPs will be offered by 80% of employers and will be the primary medical option for 50% of that group
$40.3 billion spent on prescription drugs More than $188.5 billion spent on prescription drugs U.S. prescription drug spending is projected to increase to $446.2 billion in 2015, a 138% increase in 11 years
Average price of a prescription: $22.00 Average price of a prescription: $75.00 Employers will continue to band together to form prescription drug purchasing pools to increase their purchasing power through higher volume and shared expertise   

Source: Towers Perrin, “2009 Health Care Cost Survey”

ABHP = Account-Based Health Plans

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.