Fighting Specialty Drug Costs

drug-bottlesTo help control rising specialty drug costs, the National Business Group on Health has issued a lengthy report including 5 public policy recommendations they hope will educate the marketplace and encourage effective, strategic partnerships.

According to NBGH officials, plan design is the key to managing the use of specialty prescriptions as well as the costs. The report details progress resulting from the aggressive use of utilization review, case management and prior authorization for specialty drugs. Other measures yielding positive results are the design of a specialty tier into the benefits plan and taking measures to administer specialty prescriptions in a facility separate from the hospital. Prescriptions authorized by a hospital or billed under the medical benefit are harder to track and often more costly.

Responding to Growing Demand for Transparency

Experts agree that a lack of true price transparency has contributed significantly to the inefficiency in healthcare. Several websites compare the costs for certain procedures at varying hospitals, but it’s still very difficult, if not impossible, to make an informed choice when preparing for a non-emergency procedure. As a result, most people still go to doctors participating in a covered network and follow physician referrals when a specialist is required. In most cases, these choices are made without any knowledge of the cost.

Powerful Mobile Technology

Today, leading TPAs are providing self-funded health plan members with a variety of very powerful mobile transparency tools. One new mobile app enables members to identify fair pricing for more than 200 common procedures, including surgeries, imaging and diagnostic testing. By linking a rewards program, the app awards financial incentives when high quality, competitively priced providers are selected over those with lesser ratings.

Another software maker that describes a third of healthcare procedures as “shoppable”, has introduced a mobile app that enables plan members to search for physicians by procedure, location and price. This tool even goes beyond facts and figures to provide detailed descriptions of the procedure being searched. When members need further assistance, care navigators are available to provide online support via a live chat option.

Expert Administration Still Matters

While a totally open pricing system may never be possible in a business as complex as healthcare, TPAs are making self-funded health plans more transparent all the time. Strategies such as Reference Based Pricing and Concierge Health Advocacy are having a tremendous impact on cost and employee engagement. And while insurance carriers typically withhold claims data from fully insured groups, TPAs are experts at helping their clients put valuable claims data to work to identify cost drivers and manage chronic conditions in ways that help the plan avoid catastrophic claims in the future.

As the transition from volume to value-based healthcare continues, more responsibility will land in the hands of plan members. Smart employers know that a well-designed health plan can foster positive change and lower costs only if members understand their benefits. As long as self-funded plans, highly personal service and creative ideas are allowed to flourish, the number of engaged consumers capable of making economically wise healthcare decisions will continue to grow.

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Paid Sick Leave Bug Spreading

paid-sickAs if businesses in Illinois don’t have enough concerns, the General Assembly has introduced bills mandating a minimum of five (5) paid sick days per year for Illinois workers. Employees would be able to use the time to care for themselves or a family member, attend a medical appointment for themselves or a family member, miss work due to a public health emergency or because they or a family member has experienced domestic violence abuse. The bills were presented for a second reading earlier this spring, with no resolution to date.

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Healthcare Hiring Slows

healthcare-hiringThe Altarum Center for Sustainable Health Spending reports a significant drop in health hiring, pricing and spending during the first five months of this year. On average, 22,000 jobs per month were added by hospitals and ambulatory care facilities, compared to 32,000 per month during the same period in 2016. While the healthcare sector continues to be the biggest contributor to overall U.S. job growth, Founding Director Dr. Charles Roehrig expects the 3-year run of greater than 5% growth in overall health spending to end, mostly due to uncertainty over efforts to repeal and replace ACA and a smaller increase in overall spending by consumers.

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Fewer Working-Age Americans

dg-workersWith statistics showing that 10,000 baby boomers will turn 65 each day from now until 2030, the impact on our workforce will be dramatic. When the last of the baby boomers reach age 65 in 2029, nearly 25% of our population will be 65 or older. This is up from about 15% today. While 62% of Americans are between the ages of 18 and 64 and considered to be of working age, this percentage will drop to 58% by the end of the next decade. While this poses growing problems for Social Security and Medicare in the U.S., many other countries face even bigger challenges.

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Protecting Your Health Information

health-benefitsWhile health information is protected in doctors’ offices, hospitals and other healthcare institutions, that simply isn’t the case in the online world. The Department of Health and Human Services warns that HIPAA privacy regulations do not apply to information you reveal on social media, in emails and web searches or when using health apps. The unfortunate fact is that information you provide when using these applications is fair game, often being gathered by data aggregators for sale to insurers, employers and others.

Another problem is that the privacy policies included by websites contain pages of small print and are seldom read. Too many people just assume their information is protected, click “accept” and move on. In 2014, the State of California adopted a law that extends HIPAA-like protection to online medical information, requiring medical apps to meet the same standards of confidentiality required by healthcare providers. Many believe that with more and more medical information moving online, it’s time for other states to follow.

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Bundled Payments Yielding Good Results

bundled-paymentsIn a previous newsletter, we discussed bundling introduced by Medicare which focuses on orthopedic and cardiac procedures. Through the mandatory initiative for comprehensive care for joint replacements (CJR), which became policy in 2016, some 800 hospitals are participating in the program.

While some sources report the results of bundling as mixed, Medicare reports that joint replacement payments increased by approximately 5% nationally, but decreased 8% for BPCI participants. One large health system achieved a 20.8% episode decrease and another reported a significantly shorter prolonged length of stay – a sign of fewer complications resulting from surgery.

Providers, both acute and post-acute, shared in the savings and indications are that post-acute savings were achieved because their care was bundled, placing these providers at risk. Even though efforts to repeal and replace or modify the Affordable Care Act are on hold, more healthcare providers and payers can be expected to embrace bundling going forward.

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