Industry Trends

On January 17, 2013, nearly 3 years after its initial proposed rule, the US Department of Health and Human Services (HHS) issued the long-awaited and much-anticipated Health Insurance Portability and Accountability Act (HIPAA) “omnibus” rule, extending the scope of the privacy law beyond healthcare providers to their business associates and subcontractors, and adding increased penalties for noncompliance.1

On December 12, 2012, Secretary of Health and Human Services (HHS) Kathleen Sebelius mused in her blog on the progress made by health plans toward the establishment of the health insurance exchanges, which will open the world of health insurance to many currently uninsured, as well as insured, Americans. States can choose to establish their own exchange, enter into a state-federal partnership, or default to an exchange that will be set up and run by the federal government, under the auspices of the HHS Secretary.

Value-based reimbursement represents a fundamental shift in the way health plans pay providers for care. Rather than creating incentives for providers to deliver high-quantity care—a downside of the fee-for-service (FFS) model—value-based reimbursement aims at creating incentives for providers to achieve high-quality care.1,2 Because value-based reimbursement is focused on driving healthcare value, improved population-based outcomes are an expected result.1,2

In our previous article, we outlined the importance of choosing a specialty pharmacy that is able to implement clinical and utilization management programs to maximize patient outcomes and minimize the waste associated with specialty pharmaceuticals.1 Those crucial capabilities prevent unnecessary plan expenditures on specialty medications. Each specialty medication covered by a payer is a substantial investment in a patient’s healthcare, often costing $20,000 to $200,000 or more annually.

Specialty pharmaceuticals are quickly commanding a growing share of prescription market share dollars and consequently a greater amount of attention from payers. It is becoming increasingly important for payers to fully understand the nuances of cost control within the specialty pharmacy space before developing a contracting and formulary strategy for specialty pharmaceuticals.

Payers generally assert that in the face of rising costs they will manage pharmaceuticals more tightly. However, many restrictions that they say they will initiate never become widespread. Why not? Payers may offer a restrictive benefit design, but often employers and other plan sponsors are reluctant to select such designs for their employees. To understand the benefit landscape, we need to look to payers as well as employers.

Incorporating new research findings into medical practice can take almost 2 decades according to estimates from the Institute of Medicine. Even when new research is published, clinicians tend to apply this knowledge inconsistently. The problem is most common in outpatient settings, particularly when providers are dispersed and have few opportunities to work in organized care teams in which new research may be more readily discussed and disseminated.

On October 31, 2011, President Obama directed US regulators to take actions that would help ameliorate the ever-critical shortage of drugs.1 Drug shortages exist in several therapeutic areas—most prominently in oncology and the problem does not appear to be abating on its own. Most shortages involve cancer and leukemia drugs, anti-infectives, anesthetics, emergency medicine drugs, antihypertensives, and electrolytes. The problem has become an increasing concern for all healthcare stakeholders patients, physicians, pharmacists, payers, and manufacturers.

Douglas Moeller, MDPayers and providers are looking to “bundled payments” as the payment reform most likely to deliver cost-savings and drive positive outcomes. Bundled payment generally refers to a lump sum paid to providers for a predefined episode of care.

Because of new reform-driven medical loss ratio requirements, now more than ever health plans’ primary lever on profitability is to reduce administrative costs. Rethinking utilization management (UM) processes, especially those that require payer–provider collaboration, could provide excellent targets for health plans to reduce their administrative costs and inappropriate medical costs.

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