Managed Care - July 2008 - (Page 12) NEWS AND COMMENTARY Flat growth in medical costs in 2009 T he growth in medical costs for commercial health plans is expected to level off in 2009 after five years of deceleration. Costs are expected to grow 9.6 percent in 2009, compared to 9.9 percent in 2008. The factors that have slowed this growth include improved medical management of high-cost patients and generic substitution. New and continued construction of health care facilities and cost-shifting from the uninsured, Medicare, and Medicaid to private payers continue to increase and will account for nearly one in every four dollars spent by private payers in 2009. Medical loss ratios — the percentage of premiums spent on medical care and treatments — have been relatively stable since 2003. A steady MLR indicates that health plans haven’t seen unexpected changes in medical costs. These findings are reported in PricewaterhouseCoopers’ Health Research Institute’s “Behind the Numbers: Medical Cost Trends for 2009.” Jeff Fusile, a partner on the health industries team at PricewaterhouseCoopers, says “Medical directors and pharmacy directors have done a good job controlling medical costs through disease management and chronic care improvements.” 87% 84% 81% Health plans’ medical loss ratio (1998–2009) Weighted Average Median 78% 75% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: PricewaterhouseCoopers. Behind the numbers: Medical cost trends for 2009. sufficient information to determine return on investment. Because many of the health and wellness activities in existence today have only been introduced recently and not yet evaluated, there is little credible evidence regarding return on investment.” Health plans are also packaging, branding, and marketing health and wellness initiatives as a way to differentiate themselves in the crowded market. Since health and wellness activities are voluntary, engaging enrollees is a challenge. Some type of incentive is needed to get employees to begin and to continue participating in the programs. Incentives include small cash payments to complete a health risk assessment, gift cards, discounts on gym memberships, and payment to participate in weight management programs. Headlines On Deadline . . . The United Kingdom’s National Health Service came under fire recently when it chose one vaccine to prevent cervical cancer over a rival. The vaccine program, which will protect young girls who might develop cervical cancer later in life, will dispense Cervarix, a vaccine that offers immunity to human papilloma virus (HPV) types 16 and 18, which are responsible for 70 percent of cases of cervical cancer. However, some experts say the agency should have chosen Gardasil, which besides protecting girls from HPV type 16 and 18, also provides protection against two other strains that can cause genital warts. A spokesperson for the NHS says, “The contract has been awarded for the vaccine that scored best overall against a number of pre-agreed criteria and offers best overall value to the NHS.”. . . Among national payers, Aetna pays providers the fastest, according to a survey conducted by Athenahealth. The survey used claims from more than 12,000 medical providers. It ranks health insurers according to specific measures of financial and administrative performance and on medical policy complexity. The five with the fastest remittance times were Aetna, Humana, Cigna, Medicare Part B, and UnitedHealth, in that order. . . . Consumer Reports is launching a health ratings service that will add ratings for hospitals and health care providers to its current ranking of health-related products, treatment options, natural medications, and drugs. The first undertaking is a Web tool created in conjunction with the Dartmouth Atlas Project (see our Plan Watch column on page 53) that will allow consumers to compare treatment approaches among hospitals for nine chronic conditions. The rankings can be found at http://www.consumerreports.org/ health/doctors-and-hospitals/ hospital-home.htm. — Tony Berberabe 12 MANAGED CARE / JULY 2008 http://www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm http://www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm http://www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
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