Insight, analysis & opinion from Joe Paduda
Perhaps the insurance industry sees the scandals in Washington as a challenge, a motivating factor, a red flag thrust in front of the industry. How else to explain the daily news on malfeasance and wrongdoing on the part of insurers? Criminal indictments, revelations of unethical behavior, news of commission padding, retroactive rejection of applications, and sleazy products have all hit the mainstream media this year, and the latest may be the biggest yet.
Ezra Klein is hosting the latest edition of Health Wonk Review, bringing his trademark trenchant style to the carnival of policy posts.
The announcement that healthplan semi-giant CIGNA is getting into the workers comp pharmacy benefit management business is stirring up a good bit of interest.
I don’t get it. Further, the press release has so many factual and inferential errors that it makes me wonder what CIGNA was thinking.
Kudos to USAToday for publishing a pretty good article on variations in practice patterns related to back surgeries. In a front page story today, the paper that has been derided by some as “McNews” explores the issues surrounding the explosion in the number of spinal fusions.
The reporting is balanced, insightful, and thorough, a bit of a surprise coming from a paper that prides itself on short sentences, really short words, and lots of color, not depth and nuance.
Noted throughout the article is the primary problem – no one knows how many spinal fusions are the right number, and there is significant disagreement among stakeholders re when a patient should have surgery. (free registration required) That’s all true, and that’s where workers compensation comes in.
Continue reading Workers’ Comp – the answer to the spinal fusion question
Dr. Biill McGuire, Chairman and CEO of United HealthGroup (UHG), is leaving the company. In an answer to the old question, “how much is too much?”, the answer is “$1.5 billion“.
This is, of course, the value of stock options that Dr. M received from UHG over the course of his career, a substantial portion of which were backdated to ensure he received the maximum possible payout.
Dr Mark McClellan has left his post as administrator for the Center for Medicare and Medicaid Services (CMS). On his way out he talked about the future of the Medicare program, his views on the benefits of market-based competition, and his prediction that we are in what will be known as the biomedical century.
McClellan has garnered relatively positive reviews from across the political and editorial spectrum. By all accounts he is smart, dedicated, and a good person. That last is from a reader who knows the family and respects them. While that may all be true, I’m afraid McClellan missed a great opportunity. While he has worked diligently to promote data collection, quality and performance monitoring, and investigations of pay for performance, I have not seen much direct attention paid to practice pattern variation.
That’s a big miss.
CorVel’s stock has enjoyed a resurgence of late, and is currently trading near it’s 52 week high. Yes, earnings have rebounded from a few tough quarters, although revenues remain essentially flat. What’s really driving the numbers?
My recent post on the battles between large health plans and hospitals/health systems generated a good bit of debate. One comment deserves special attention; “the other Joe” notes that the western PA landscape is marked by a combination health care system/health plan that dominates the region. While this type of vertical integration has been tried many times in the past with rather limited success, this version looks to be much better positioned to succeed.
But as the other Joe points out, there are significant costs associated with that “success”, costs that are borne by the system/plan’s employees, payers, insureds, patients, and employer customers.
A reader asked several excellent questions about when and under what circumstances direct contracting makes sense. That’s when an employer contracts directly with health care providers.
My take is an employer has to have at least 750 lives in one area – plant, school, city government, facility, etc. in order to have any buying power at all. And 750 may well be on the low end.
As to whether a partially self-insured employer, say one with a specific deductible of $50,000, should do this, I’d say yes. The vast majority of bills will come from members with total costs well under the $50,000 limit.
Lastly, direct contracting takes expertise and patience. Knowledge of provider payment mechanisms and expectations, an understanding of the related legal issues, an intimate understanding of the local provider community, and really good employee relations are the bare necessities. Without these, stick with a “regular” health plan.
If you’re still wondering why drug costs are going up so far so fast, here’s another reason. Direct to consumer advertising costs. Big pharma increased their spending on advertising by 9% in the first half of 2006.
Expect total spending on DTC advertising to hit $5 billion this year.
No wonder prices have jumped this year.
