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2010 Potpourri XXXIX

By October 23, 2010Commentary

Health information firm IMS Health released its projection of prescription drug market growth in 2011, saying the increase in revenue should be around 5-7%, with global revenue coming in around $880 billion.  Growth will be faster in emerging economies than established ones.  The US remains the largest market, accounting for almost 40% of total revenue.  Patent expirations on major sellers will contribute to the relatively low growth rate, although specialty products are driving price and revenue increases.  Third-party payors continue to push aggessively to control drug spending through a variety of means, including use of generics whenever possible.   (IMS Release)

The Visiting Nurse Service of New York performed an analysis of information about home care patients to create an algorithm that stratified their risk of hospitalization into seven categories.  The factors that caused a heightened risk included use of a catheter, respiratory symptoms and congestive heart failure.  The service then created an intervention program and took other steps to manage the care of the patients at greater risk for hospitalization.  They succeeded in reducing the hospitalization rate by 12% between 2001 and 2009.   (Home Care Story)

The governor of Tennessee, Phil Bredesen, who is a Democrat and a long-time health care executive, wrote an opinion piece carried in the Wall Street Journal in which he explained the recent “reform” bill’s perverse incentives to encourage employers to drop health insurance.  As he points out, especially as health plan premiums rise due to various provisions in the law, the rational economic choice for an employer is to drop coverage and pay the penalty.  The only problem with the piece is that there is nothing unintended about the incentives contained in the law.  The people who wrote and passed it likely hoped it would lead to a loss of private health insurance, thus justifying the need for a public option and ultimately a single-payor system run by the government.  As bad as our system is now, anyone who things about it for even a second would understand what an unmitigated disaster a bureaucratically administered system would be for providers and patients.     (Bredesen Op Ed)

The College of Health Information Management Executives issued results of a survey regarding EHRs and incentive funding for their implementation and use.  The 152 executives surveyed generally believe their organizations will qualify for federal incentives sometime before September of 2012.  Executives from smaller hospitals were less certain they would qualify.  Some of the major challenges identified by the respondents included finding certified vendors or having their current vendor become certified; implementation of computerized physician order capabilities; and capture and reporting of quality measurements.  Most felt their organization’s existing strategy was adequate to meet the incentive requirements but a significant fraction were accelerating their plans to qualify.  (CHIME Report)

The Wall Street Journal carried a story featuring data from Wolters Kluwer Pharma Solutions on the prescription abandonment rate.  That rate, which reflects prescriptions written and called in to a pharmacy but never picked up by the patient, has gone up 55% in the last four years.   Such abandonment may reflect dissatisfaction with the drug, particularly side effects, or fears about it, but usually occurs because of cost concerns.  With the spread of high-deductible plans, consumers are more often called on to pay the full cost of a drug.  The most expensive drugs are abandoned most often.  Abandonment of a necessary prescription obviously can cause quality problems.  It also imposes administrative costs on pharmacies.  Some drug companies have patient assistance programs to help low-income consumers.  And some health plans have exempted generic, chronic disease prescriptions from deductibles or copays.  It appears more may need to be done.   (WSJ Story)

The National Association of Insurance Commissioners adopted the recommendations of its committee on the calculation of the medical loss ratio for health plans with only minor technical changes.  Agents and brokers are probably not happy, since their compensation was not exempted from the calculation.  NAIC did create a working group to look at the issue.  And some health plans continue to warn that they will stop selling policies in some locations or to certain types of customers.  While it may limit “administrative expenses” the MLR limit will do nothing to control health spending.  In fact, it creates incentives going in the other direction.  The NAIC calculation proposal now goes to HHS, which can accept or modify it.   (NAIC Story)

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