Changing the way doctors are paid could save over $1 trillion in health care costs, but physicians can’t do it on their own. One of the ways health insurers can help is by joining together to facilitate payment reform, says a study by UnitedHealth Group.

The Affordable Care Act promises a greater emphasis on price transparency in the hope that knowledge of what services cost will encourage better decisions on the part of consumers.

“This reasoning, however, relies on the tenuous assumption that consumers incorporate price information rationally,” according to findings in the Journal of Consumer Research.

In the research article, which involves an analysis of a set of studies, two patient groups interpret what the price of flu shots means for the risk of getting the flu.

One group is told that the shot is $25; the other, $125. Everybody is told that insurance covers the shot, but the consumers told that it costs $25 think that the risk is greater and that they should get it.

“Specifically, consumers believe that lower medication prices signal greater accessibility to anyone in need, and such accessibility thus makes them feel that their own self-risk is elevated, increasing consumption,” says “Price Inferences for Sacred Versus Secular Goods: Changing the Price of Medicine Influences Perceived Health Risk,” which is scheduled for the April 2013 issue of the journal.

Consumers consider most health care services to hold “sacred” value, “one that a moral community implicitly or explicitly treats as possessing infinite or transcendental significance.”

Such goods do not function in the marketplace the way that other goods do. “We differentiate sacred and secular goods by their lifesaving status — a cancer medication that could prevent death would be considered sacred, while a cosmetic medication that could prevent wrinkles would be considered secular.”

One might intuitively conclude that when people are given a choice between two “sacred” goods, they would consider the higher-priced medication to be more needed, but that isn’t the case; consumers actually believe that low prices signal high need.

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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.