Insight, analysis & opinion from Joe Paduda
Health Wonk Review is up and sprinting. Despite a hint of chill in the air here in New England, the darn thing is growing like a weed. I attribute that to the hothouse conditions that exist in today’s health care policy environment.
Thanks to all who submitted entries; a few did not make the cut as they were not remotely on-topic. Those that did make the cut represent the best of health policy blogging.
Continue reading Health Wonk Review – the Harvest Moon edition
Ohio’s Bureau of Workers Comp (BWC) could take a lesson from the State of Washington’s own workers comp fund. While the two state funds have some similarities, their results are quite different.
How different? Read on…
Florida is one of, or perhaps the only, state to have as an official elected position a state CFO. The incumbent is supposed to oversee state spending, review state contracts and investigate insurance fraud among other functions. Florida’s CFO is also part of the four person cabinet along with the governor, attorney general, and Commission of Agriculture and Consumer Affairs.
Obviously, the CFO would have a broad and deep impact on the state’s insurance industry, the provision of same, and purchase of insurance by the state. That makes it interesting for we insurance types.
As a drugstore.com customer, I received an email (along with a few hundred thousand other folks) from the company’s CEO last week. The email was their response to the recent announcement by Wal Mart that they were cutting prices to below $4 for a month’s supply of almost three hundred generic drugs.
The net is the folks at drugstore.com claim to provide prices that are already lower than Wal Mart’s for the equivalent supply.
For readers interested in workers comp, news from Effect Measure to whet the appetites of litigators looking to subrogate workers comp claims.
It seems that the highest levels of the Federal government were intimately involved in publishing information about the safety, or lack thereof, of the air around the WTC in the days after 9/11. And by all accounts they got it wrong.
Liberty Mutual, among other workers comp insurers, was, and is, on the risk for many of the people affected by the clouds of noxious substances resulting from the Towers’ collapse. Perhaps they are already subpoena-ing away…
I was going to post a blistering riposte to an amazingly lousy article in the NYTimes (registration required), but Matt Holt beat me to it.
The Times article says words to the effect that the reason health care costs so much is because it makes us live longer. Boy is that misinformed, superficial, ineptly researched, and just plain wrong.
Health care costs so much in the US because prices are high and practice pattern variation prevails and there are too many uninsured and cost-shifting is rampant and Congress and the White House would rather grand stand about Terry Schiavo than address real problems.
Good work Matt.
Payer-provider interactions are getting downright pugnacious. Perhaps a more accurate characterization is the big health plans and health care systems are raising pugnacity to new levels.
Denver is the scene of one highly public row featuring United Healthcare and HCA’s HealthOne, one of the largest health care systems in the Denver metro area. The ongoing contractual dispute has led to lots of nastiness:
– termination of the UHC-HealthOne contract,
– filing of a temporary restraining order on the part of UHC to force HealthOne to enable UHC members to access some HealthOne facilities, and
– efforts by HealthOne to tightly control UHC case managers’ access to their facilities after reports that case managers were tring to get UHC patients to transfer out of HealthOne facilities.
This is not an isolated issue. Recent disputes have arisen in Rhode Island, Tennessee, and western Florida. Notably, several of the more contentious battles are between UHC and HCA.
Hospital and facility costs are the largest single contributor to health care cost inflation, and hospitals’ negotiating power, and willingness to use same, has grown significantly in recent years. It’s likely that the recent announcement that HCA will be bought out by private investors will lead to an increase in the number and intensity of contractual battles.
What does this mean for you?
As United and others seek to constrain medical inflation, and hospitals work to maintain their margins in the face of increasing numbers of uninsured patients expect to see more of these battles hit the news around the country.
Medicare Set-Aside (MSA) vendor Health Advocates (HAI) has been sold to drug supplier Amerisource Bergen (ABC) for about four times projected 2006 revenues, or $83 million. Yes, that seems awfully pricey, but HAI is also quite profitable, with margins above 50%.
Based on an EBITDA multiple in the 5x – 6x range, the price doesn’t seem quite so outrageous.
Actiq, the lollypop pain killer, is rapidly becoming the biggest problem drug in workers comp. FDA approved only for treating cancer pain, the potent narcotic is now on most payers’ top 5 drug list (ranked by dollars spent).
There are likely several factors that have enabled a drug clearly not approved for musculo-skeletal conditions to achieve this high “honor”.
Kaiser Permanente, one of the oldest and largest HMOs, is going to offer PPOs, high deductible plans, and plans with Health Savings Accounts. This marks a significant change by the big HMO, one that at first seems odd.
But from a business perspective it makes a lot of sense, for two reasons