Insight, analysis & opinion from Joe Paduda

Sep
28

Ugly ugly ugly

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.


Sep
27

Health Advocates – was the price too high?

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.

Continue reading Health Advocates – was the price too high?


Sep
27

Workers comp’s top problem drug

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”.

Continue reading Workers comp’s top problem drug


Sep
25

California Blue Cross gets hit and concedes.

The PR and financial fallout from the recent reports of inappropriate retroactive denial of coverage is starting to take its toll on California’s Blue Cross plan. From Fierce Healthcare comes the latest news; the State of CA has levied a $200,000 fine against BX for their actions in one specific case.
And that’s just one case. Reports indicate there are as many as 19 more.
What does this mean for you?
If David is doing battle with Goliath and the venue is the court of public opinion, you’d best bet on the little guy.


Sep
24

Zurich – St Paul merger. Not.

OK, for the last and final time, Zurich and StPaul-Travelers are not merging, one is not acquiring the other, there are no due diligence conversations going on, books have not been exchanged, and whatever else I can say to convince the rumour hounds that this one has no basis in fact.
Could they merge at some point in the future? Perhaps. But there are no substantive discussions going on today, and there would be if the two companies were thinking about doing a deal.
How do I know? And do I know with 100% certainty? No to the latter, but 95% yes. As to sources, colleagues in both organizations have been denying this for months, and StPaul-Travelers went so far as to issue a denial. And a pretty firm one at that.
Sheesh. I wonder if Oliver Stone is behind all this nonsense…


Sep
21

Blue Cross – Brand v. Underwriting

The Blues have decided to get smart. Perhaps not smart, but at least smarter. Blue Cross of California’s much-publicized PR disaster arose when the LATimes published an article decrying the plan’s policy of trying creative ways to cancel policies for individuals who had the nerve to ask BX to pay for their medical problems.
Actually, the problem arose when the State of CA took legal action against BX.

Continue reading Blue Cross – Brand v. Underwriting


Sep
20

BWC – now it’s getting really disgusting

If you have yet to shower, you may well need one after reading this.
Just in time for election season, another chapter in Ohio Bureau of Workers’ Comp scandal is heading for court. The latest news comes from the Toledo Blade, which reported last week that the BWC’s CFO is alleged to have accepted bribes from brokers for investment firms eager to invest the Bureau’s funds.

Continue reading BWC – now it’s getting really disgusting


Sep
18

Site updates

We’ve made two changes to Managed Care Matters.
Least obvious to most will be the change in color of hypertext links; we are now using blue, which is more easily read by folks w certain types of color blindness. Thanks to friend Terry Reardon for the suggestion. (he’s a color blind orthopedic surgeon, who assures me that is not an occupational limitation…)
We’ve also added another step in the commenting process, asking submitters to enter a bit of text to verify they are a human and not a @#$%^&*&^%$^&**))*%%$## spam bot. Sorry for the extra step, but I can’t go thru 200 spams a day looking for your pearls.


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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