A Texas based physician sent this to us today:

Insurers Bid for State Medicaid Plans – This is interesting –  We just got a contract sent to us from United last week about this, wanting us to become providers in their ‘network’.  They’re probably preparing a bid to get some or all of this business in Texas.

 Where are all the providers going to come from to care for all these people if they’re only willing to pay Medicaid rates?  While I don’t know that to be the case,  maybe there’s some flexibility in what they’re willing to pay. 

 Wait until 2014 when all this takes effect.  If they can’t find providers for the Medicaid rates, and the state ends up having to pay higher rates to entice enough providers to see all these people, it will bust the state budgets.  Texas is short an estimated $20 B in the upcoming biennium.  It will be even shorter in 2013-2014.  There will be no choice except to raise taxes.  Texas will either have to create a personal income tax, raise the sales tax, or increase the business margins tax.   And every other state will be singing the same tune.  How’d you like to be living in California?

 Get ready.  The tsunami is coming.  Congress has done a masterful job of shoving the real costs of ObamaCare down to the states so the state legislatures can end up being the real bad guys by raising everyone’s taxes to cover the federal mandate.

 What a crock!!

Editor’s Note: See http://blog.riskmanagers.us/?p=4815

Doctor-Patient Relationship Compromised by Facebook?

I posted this on my Facebook today. Now I’m going to go play pool.

I invite questions about dentistry

An article titled “Doctor-patient relationship compromised by Facebook,” written by Kate Taylor for TGDaily.com was posted recently.

http://www.tgdaily.com/software-features/53075-doctor-patient-relationship-compromised-by-facebook

“Doctors on Facebook risk compromising the doctor-patient relationship because many don’t use tight enough privacy settings. Researchers surveyed the Facebook activities of 405 postgraduate trainee doctors at Rouen University Hospital in France and found that almost three out of four had a Facebook profile. One in four logged on to the site several times a day, and half logged on several times a week.

Almost half believed that the doctor-patient relationship would be changed if patients discovered their doctor held a Facebook account, but three out of four said this would only happen if the patient was able to access their profile.”

For those with questions they are afraid to ask, I want to make this clear to my friends: That is so not me.

Recently, a few of my Facebook friends have privately asked me dental questions, and seemed to almost apologize for “bothering me.” It pleases me greatly to be able to help anyone. I’m from West Texas, not France .

 Darrell K. Pruitt DDS

darrelldk@tx.rr.com

Accountable Care Organizations – ACO’s To Replace PPO’s?

 Show Promise in Reducing Health Costs for Self-Funded Employers

MyHealthGuide Source:  Marla Durben Hirsch, Todd Leeuwenburgh, Editor, Employer Health Benefits, Thompson Publishing Group, 12/21/2010, www.thompson.com

As the U.S. consumers of health care try to control costs while improving health quality, some experts are turning to the Accountable Care Organization (ACO) as the delivery model with the potential to meet both objectives.

ACOs are designed to provide financial incentives for providers to improve quality, eliminate waste and control the cost of health care. Under the ACO model, spending targets are set to reflect the expected costs of caring for the patients, and quality-of-care targets are set. When the ACO meets or exceeds the targets, stakeholders share in the savings.

After passage of the Patient Protection and Affordable Care Act (PPACA) which endorsed the ACO model for the Medicare program (called the Medicare Shared Savings Program), the number of providers and payers developing ACOs has risen substantially.

Louisville, Ky.-based Norton Healthcare and insurance giant Humana launched the Louisville region’s first commercial ACO in November 2010, according to Kenneth Wilson, Norton’s vice president for clinical effectiveness and quality.

Employers Can Reap Gains From ACOs

Many different forms of ACO have been created, often depending on the local provider market. As a result, whether employers can get in on the shared savings depends on:

  1. whether they’re self funded or fully insured;
  2. what kind of models are being offered in their area; and
  3. what kind of business the employer is in.

Some of the different opportunities for employers include:

  • Creation of an ACO for one’s own employees. Some employers have created ACOs for their own employees, much in the way that they’ve created health plans or on-site clinics. Methodist Health, a hospital system in Memphis, is one such employer, according to Christie Travis, CEO of the Memphis Business Group on Health.
  • Direct contracting with an ACO. Some employers may have the opportunity to directly contract with the provider system that is forming an ACO. Under this model, the employer will not need to use a health plan as a middle man to offer the provider network, says Travis. The ACO will directly provide the continuum of care through its own provider network.
  • Creation/sponsorship of the employer’s own ACO. A self-funded employer could sponsor and organize its own ACO. Some employers may even help a new ACO get off the ground by investing funds to assist it, perhaps for a piece of the projected shared savings, says Blau. “Employers can play an important role in the formation of ACOs. They bring expertise to the table [as to what is effective] and have been incentivizing their employees to take care of themselves,” says Wilson.
  • Creation/sponsorship of an ACO using independent payers and providers. Some employers may be interested in creating and supporting an ACO for their own employee/retiree population. For example, the California Public Employees’ Retirement System (CalPERS) launched an ACO in January 2010 for its 40,000 CalPERS members in the Sacramento, Calif., area. The ACO is comprised of Blue Shield of California, Catholic Healthcare West, and Hill Physicians Medical Group, who all agreed to accept financial risk for the success of the program. The ACO has guaranteed CalPERS 5% in savings, about $15.5 million, and it appears that the ACO will meet its targets for 2010, says Ken Perez, senior vice president of marketing for MedeAnalytics, a health information technology company based in Emeryville, Calif.
  • Employer accesses ACO(s) in its payer’s provider network, and is entitled to some of the shared savings. This is the model contemplated by Norton and Humana. The pilot ACO program will initially cover only employees of Norton and Humana, but will eventually cover all employers in town, says Wilson. It is anticipated that the participating employers, as well as Norton and Humana, will receive some of the shared savings.
  • Obtaining health benefits from a commercial health insurance payer that includes one or more ACOs in its provider network, but no shared savings. In this model, the employer doesn’t directly share in the savings of the ACO. However, if employees are using the ACO, their services should be less expensive and they should be healthier because the ACO is working to meet quality and cost targets, notes Jordan Bazinsky, vice president for science and technology at Verisk Health, a health data analytics company based in Waltham, Mass.

When considering working with an ACO, employers should consider whether they should create or sponsor an ACO, directly contract with one, or access one via a health insurer. Determine their options.

ACO Downsides

Of course, there are some drawbacks to using an ACO. The National Committee for Quality Assurance, the private non-profit accrediting organization for health care organizations, hasn’t even finalized the criteria it intends to use to accredit ACOs. Several legal issues still need to be resolved, such as how an ACO can incentivize its providers to keep costs down and share savings without running afoul of federal anti-kickback, antitrust and other laws. Some ACO models may turn out to be less effective. “An ACO that’s just glorified capitation and under incentivized to provide good quality care won’t be good,” warns Bazinsky.

Some ACOs may also not succeed for financial reasons. There’s a tremendous amount of expense in forming an ACO, including creation of the infrastructure to collect data, coordinate care, and measure performance, the provision of clinical integration to reduce waste and inefficiencies, and installation of health information technology, which may doom many nascent ACOs, notes attorney Daniel Mulholland with Horty Springer in Pittsburgh.

There’s also a concern about the long-term viability of ACOs, which in the first few years may successfully reduce costs by increasing efficiencies and reducing expensive care but after a while may have hit the limit and can’t cut more to keep up the profits.

But the risks are minimal for most employers, since they won’t be financially on the hook, notes Wilson.

  1. Look at ACO design. Determine which ACO best meets the company’s operational needs. For instance, some companies may allow patients to go out of network for care; others may not. Some may assign employees to a particular ACO, while others will let employees choose which ACO to be affiliated with, says Travis. A good ACO will have sufficient numbers of primary care providers engaged in leadership and management, and the major physician and hospital partners should have a track record of working together effectively says Wilson.
  2. Make sure the ACO meets applicable criteria. For example, it needs to have a network of providers that is adequate for employee populations, and articulated quality goals. Ask what providers are in the ACO, and if your workforce has established relationships with them, says Wilson. “If 70% of your employees go to hospital A, you may want to use the ACO that hospital A is part of,” he suggests.
  3. Ask if employers will be involved and/or will see any shared savings. If the employer is not creating its own ACO, it can still receive some of the shared savings, and should ask how savings will be shared if the ACO is successful. If you don’t ask who benefits from the generated savings, the insurer will benefit. At the very least, employers should ask payers how premiums might be affected if the employees use the payers’ ACO.
  4. Make sure there’s a robust measurement system to see if the ACO is really improving quality and reducing costs. Clearly this is important if the employer is a stakeholder in the ACO. However, it’s also important even if the employer’s workforce uses an ACO simply because the ACO is part of a payer’s provider network. “You need to know which ACOs are better, so you can drive employees to providers that provide better care,” explains Bazinsky.

Marketing Scheme Costs Employers Millions

January 1, 2011

By ANDREW POLLACK

EXECUTIVES of a small insurance company in Albany were mystified when, almost overnight, its payments for a certain class of antibiotics nearly doubled, threatening to add about a half-million dollars annually in costs.

The reason, it turned out, was that patients were using a card distributed by the maker of an expensive antibiotic used to treat acne, sharply reducing their insurance co-payments. With their out-of-pocket costs much lower, consumers had switched from generic alternatives to the more expensive drug.

With drug prices rising and many people out of work, pharmaceutical companies are increasingly helping patients with their co-payments. The use of such co-payment cards and coupons and other types of discounts has more than tripled since mid-2006, according to IMS Health, an information company that tracks the pharmaceutical industry.

Last month, for instance, Pfizer introduced a new card that can reduce the co-pay on its blockbuster drug Lipitor to $4 a month, a savings of up to $50. That brings the out-of-pocket cost in line with what consumers might pay at Wal-Mart for a generic version of a competing cholesterol-lowering drug.

Drug companies say the plans help some patients afford medicines that they otherwise could not.

But health insurers and some consumer groups say that in many cases, the coupons are just marketing gimmicks that are leading to an overall increase in health care costs. That is because they circumvent the system of higher co-pays on costlier drugs that insurers use to encourage consumers to use less expensive products.

“The member is somewhat insulated from the cost of the prescription,” said Kevin Slavik, senior director of pharmacy at the Health Care Service Corporation, which runs Blue Cross and Blue Shield plans in Illinois and three other states. “In essence, it drives up the total cost of providing the prescription benefit.”

The Food and Drug Administration, meanwhile, is studying the effect of the discounts on consumer perceptions, concerned that the coupons will make consumers believe that a drug is safer or better than it really is.

The acne drug that produced higher costs in 2008 for the Albany insurance company was Solodyn, a once-a-day formulation of an antibiotic called minocycline. A month’s supply of Solodyn sells for more than $700 on drugstore.com, compared with about $40 a month for capsules of generic minocycline, which are generally taken twice a day.

Executives at Medicis, the company that sells Solodyn, have told investors that the co-payment card is used by an “overwhelming majority” of patients, and is largely responsible for doubling use of the drug, to 26,000 prescriptions a week.

Co-payment coupons and cards are distributed by drug company sales representatives to doctors, and are also often available directly to patients over the Internet. Patients present them at the drugstore when paying for their prescriptions.

Any shift to brand-name drugs can have a big impact on health care costs.

At District Council 37, a union representing public employees in New York City, 59 percent of claims for statins in the year ended in June 2009 were for brand-name products that cost the plan $17.3 million. The other 41 percent of claims were for generic statins, which cost only $179,000. A year ago, the health plan eliminated the co-pay on generic statins to encourage more use of them.

For very expensive drugs, co-pay assistance is almost de rigueur, because in some cases co-payments can be up to 20 percent of the price of the drug. Novartis’s new pill for multiple sclerosis, Gilenya, costs $48,000 a year, compared with $30,000 to $40,000 for rival drugs, which are injected. Novartis is offering to cover the entire co-pay, up to $800 a month, which is 20 percent of the drug’s monthly cost.

“It seems the best strategy for a pharmaceutical company is to price their drug as high as they possibly can and offer that co-pay assistance broadly” to insulate consumers, said Joshua Schimmer, biotechnology analyst at Leerink Swann, an investment bank.

Jazz Pharmaceuticals has quadrupled the price of its narcolepsy drug Xyrem, to about $30,000 a year, over the last five years, according to a recent report from the securities firm Jefferies & Company. To cushion patients, the company recently increased its co-pay assistance to as much as $1,200 a month.

“We do want to avoid big jumps in price, abrupt changes in price, which can have a negative impact on payers, physicians and, most importantly, patients,” Robert M. Myers, Jazz’s president, told analysts in November, as the company increased Xyrem’s price by 22 percent. He added: “The coupon program, I will point out, does help patients get low monthly out-of-pocket costs, and this is a program that we are definitely committed to.”

Drug companies defend the coupons, saying they are helpful to consumers and allow patients and doctors to make decisions based on medical reasons, not costs. In many cases, such as with Lipitor and Solodyn, the rival drugs are not exact generics.

Jonah Shacknai, the chief executive of Medicis, said Solodyn’s once-a-day formulation reduces side effects and makes it easier for people to take their medicine. He also said many insurers paid far less for the drug than the price on drugstore.com.

“No one is forcing anyone to prescribe Solodyn,” he said. “We think the public wins because we have facilitated access to a product that dermatologists are eager to prescribe.”

Amgen is offering to defray co-payments in excess of $25 per month for its new drug Xgeva, which helps prevent fractures caused by cancer that has spread to bones. In some clinical trials sponsored by Amgen, Xgeva proved more effective than its competitor, Zometa from Novartis, but at $1,650 a month, Xgeva’s wholesale price is twice as much.

The co-pay assistance is aimed at ensuring that differences in co-payments between the two drugs “aren’t driving medical decisions,” said Joshua J. Ofman, vice president for reimbursement and payment policy at Amgen.

Companies also say that lower co-payments help patients stay on their medicines. Studies have shown that patients are more likely to quit taking their drugs when the co-pay is high.

Drug companies cannot offer co-payment assistance for patients in federal programs like Medicare because such offers are considered an inducement to use a drug and in violation of anti-kickback laws. Some companies have responded by contributing to, or even helping to set up, charitable foundations that can provide co-payment assistance legally.

Massachusetts also bars drug company coupons, and on similar grounds. It is the only state to do so.

That became an issue for Tamara Starr, 25, a graduate student in journalism, when she moved from New York to Boston in 2008. In New York, she paid only $25 for a three-month supply of Betaseron, the Bayer drug that she uses to treat multiple sclerosis.

But in Boston, her co-pay is $75 a month. She said she was taking the drug as little as once a month, instead of every other day as she was supposed to. She has been hospitalized three times in the last year with symptoms from her disease, like vision loss. “I don’t want to make the choice of paying that $75 a month or putting that $75 toward my groceries,” Ms. Starr said.

Last spring, the Massachusetts House of Representatives voted 156 to 0 to repeal the ban on coupons. The state Senate eventually passed a more narrowly worded repeal, but it came too late in the session for the two bills to be reconciled.

Editor’s Note:  EXECUTIVES at insurers and pharmacy benefit management companies say they would like to counter the cards and coupons but are not sure exactly how to do so. One problem is that the information they receive from pharmacies does not specify whether the co-pay was made by the patient or by the drug company.

“The payer doesn’t know, and the P.B.M. doesn’t know,” said F. Everett Neville, chief trade relations officer at Express Scripts, a pharmacy benefits manager. “We have no ability to stop it and no ability to prohibit it.”

THIS WAS RECEIVED BY A PBM REPRESENTITIVE: It’s ironic that I had scanned in an example of this earlier today (see attachment). Concerning XXXX coverage, we specifically excluded drugs like the one mentioned in the article below after a series of emails on 10/27/2010.  That took care of those old antibiotics that were “reformulated” and then aggressively marketed to dermatologists.  It seems dermatologists are targeted for many of these campaigns.  The difficulty is that (PBM) never knows when one of these “copay cards” are used because it acts as secondary coverage.  The pharmacy processes the prescription on the (PBM) card as primary and then runs the copay card as secondary, so as far as we can tell, the patient paid the full copay.