Insight, analysis & opinion from Joe Paduda
The annual Medicare physician price cut season is on us. Next year’s reduction will average 5%, although payments for office visits (evaluation and management codes) will increase by up to 30%, but reimbursement for other procedures will be slashed up to 20%.
Don’t expect this to actually happen; every year the Medicare reductions are reversed by Congress. And this year will be no different. I’d expect Congress will do something to reverse the cuts, at least in part.
Jason Shafrin of Healthcare Economist fame is hosting this edition of HWR. Jason’s measured, analytical style makes for intriguing perspective on this week’s contributions.
Retail pharmacy chain CVS is buying pharmacy benefit manager Caremark in a deal that will create a really big vertically integrated drug company.
Here’s what is behind the deal.
CVS wants more control over its customer base, and with more and more consumers buying their drugs through PBMs, they get more control by creating the industry’s biggest PBM. As I’ve noted before, the market power of PBMs will only increase as Part D becomes the primary force driving retail drug purchasing behavior.
CVS decided that rather than be at the end of the supply chain, it had to move up if it was to control its destiny.
United HealthCare’s bare-knuckle approach to contracting may cost it members. Employers in the San Francisco bay area are deciding to go with other health plans as UHC experiences ongoing difficulties in recruiting and retaining docs.
One of UHC’s competitors is aggressively pursuing UHC customers by offering to sign them up at the same rates UHC was charging.
Finding malfeasance, mismanagement, incompetence, or just plain fraud related to workers comp is pretty easy if you confine your search to Ohio. The latest comes from the Plain Dealer in a report on vocational rehab companies that have benefited enormously from their cozy relationships with managed care firms.
The world (at least the very small part of it that I inhabit) has been buzzing about Wal-Mart’s announcement that it will be pricing almost 300 generic drugs at $4 for a 30 day supply. Newspapers, private equity firms, PBMs, drug manufacturers, insurers, policy makers, and politicians are all rambling on about the various significant impacts this will have on the world, among them improving the lives of the uninsured.
I don’t get it.
Continue reading Wal-Mart’s $4 drugs – much ado about not much
In one answer to the question, where did Ohio’s Workers Comp premiums go?, the answer is to a contractor building Tommy Noe’s house on Lake Erie.
Noe, the defendant in a criminal trial, is alleged to have used workers comp funds set aside as reserves to pay future claims to help pay for his 4200 square foot house on Lake Erie. And another one in the Florida Keys, both of which were worth a million bucks each.
If anyone has photos of these places, let me know.
Coventry announced their third quarter earnings this week, and much of the news was good. Health plans have been experiencing declining medical loss ratios and strong pricing, resulting in solid profiits and increasing revenues, and Coventry’s results mirror the industry.
Before diving into the FH WC business, a caveat. Coventry is a very well-managed company. They run a very solid business, understand the group health, HMO, and Medicare businesses better than most, and have consistently delivered excellent results.
But, while all is good in group health, Medicare and Medicaid land, the same can’t be said for the First Health workers comp business.
The soft market, that’s what.
While I’m somewhat reluctant to cite bomb-thrower Robert Hunter of Americans for Insurance Reform, he does make a good point. AIR’s recent pronouncement that the med mal crisis appears to have abated in large part due to the underwriting cycle is correct.
My take is the med mal crisis is largely an invented one. Yes, it is a problem for specific specialties and in specific areas. But it is NOT due to large jury awards; it is a result of insurance cycles and pricing.
In what has to go down as perhaps the least surprising news of the political season, big pharma is panicked that Democrats are going to take over Congress.
Panicked may be too mild a word.