Industry Trends

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.

Arecent report from the American Enterprise Institute suggests that better utilization of generic drugs in the Medicaid population could save that federal program and the states much-needed funds, by eliminating unnecessary utilization of the more expensive brand-name drugs for which appropriate generic substitutes are available.1

The release of the proposed new rules for accountable care organizations (ACOs)1 has elicited diverse reactions. The Centers for Medicare & Medicaid Services (CMS) encourages healthcare providers, suppliers, and Medicare beneficiaries to submit comments on the rules, which CMS will seriously consider before releasing the final rules on June 6.2 The ACO program will be launched on January 1, 2012.1

In recent years, the patient-centered medical home (PCMH)—often referred to in its abbreviated form, the “medical home”—care delivery model has become one of the hottest topics in healthcare. Based on a holistic, patient-centric approach, the PCMH represents a methodology aimed at fostering increased collaboration among healthcare stakeholders. As such, the PCMH is widely believed to offer perhaps the best hope to transform and improve the system as a whole.

Comparative effectiveness research (CER) received a boost last year by the Patient Protection and Affordable Care Act as an approach that will help to identify best therapies and will also work to reduce costs by improving outcomes when best therapies are used.

Finding ways to care for chronically ill Americans is quickly becoming one of the singular most critical healthcare challenges of our nation. Nearly 1 of 2 Americans has diabetes, heart disease, or another chronic disease.1 Millions more are at risk, and this generation of youngsters may be the first in history to have poorer health at an earlier age and lower levels of longevity than their parents.2

The outlook for generics for the next 4 or 5 years continues to shine, judging from patent expiration dates for many of the topselling drugs. The generics “pipeline,” therefore, practically ensures that the past several years’ trend of increasing market share for generics will continue with a vengeance.

In September 2010, the US Food and Drug Administration (FDA) conducted a webinar for the media to review the basic information concerning FDA’s approval of generic drugs1 in an attempt to promote the public’s understanding of generics and dispel common misconceptions about this growing branch of pharmaceutical products that are surrounded by a veil of confusion and controversy.

The Patient Protection and Affordable Care Act (PPACA)1 and the Health Care and Education Reconciliation Act2 of 2010 may be the first steps in the process of federal healthcare reform, but many of the provisions of the PPACA represent further movement on a path that has been laid out over the past decade by policymakers in the public and the private sectors—the historical aim of increasing value in healthcare.

A report prepared by IMS Health for the Generic Pharmaceutical Association (GPhA) and released in July 2010 shows that the utilization of generics substituted for brand-name products has been making great leaps since 2006.1 The report spans the decade from 2000 through 2009, comparing the rate of generic utilization in each of the past 10 years, and highlighting the exponential rate increase in the past 4 years (Table 1).1

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