Back when the Medicare Modernization Act was passed in 2003, it substantially reduced payment rates for chemotherapy drugs administered on an outpatient basis starting in January 2005. Big savings for payers, you might think. But what if physicians responded by prescribing more chemotherapy to make up for income that they lost because of the lower payments?

Some of those savings might not have materialized, says Mireille Jacobson, PhD, a senior economist at the Rand Corp.

Researchers at Rand looked into how these reductions affected the likelihood of receiving chemotherapy, how they affected the setting of chemotherapy for Medicare beneficiaries with newly diagnosed lung cancer, and how they affected the types of agents the patients received. Before January 2005, payment was determined using the average wholesale price; afterwards, the average sales price was used.

“The goal of the study,” says Jacobson, “was to follow any changes in the way cancer drugs are paid and to determine what implications the lower payment might have on treatment.” Society has the notion that physicians follow a higher standard than other people, but they can be just as influenced by payment and reward as anyone, she says.

The researchers followed a cohort of beneficiaries who had at least one claim with a lung cancer diagnosis in Medicare’s Outpatient or Carrier Files between 2003 and 2005. “There’s no screening for lung cancer,” says Jacobson. “Most people present fairly late in the game and usually the survival rate isn’t too high. There isn’t a clear treatment protocol for people at that stage.”

What was the likelihood that a new patient would be treated with chemotherapy in December 2004 (the old system) versus January 2005?

They found that before January 2005, 16.5 percent of patients received chemotherapy within one month of diagnosis. After implementation of the new payment system, chemotherapy treatment within one month increased 2.4 percentage points to 18.9 percent. This increase came almost entirely from treatment in physicians’ offices. Although 13 percent received treatment in a physician’s office within one month of diagnosis before January 2005, 15.3 percent did so afterward.

Jacobson explains that if the physician has a lot of treatment alternatives to choose from, other than chemotherapy, “maybe chemotherapy is less attractive and the physician is less likely to prescribe it.” On the other hand, if chemotherapy plays a significant treatment role, as in lung cancer, does the physician make up for the lost income by treating more patients? “That’s what we found happening with lung cancer patients,” she says.

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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.