Business Strategy

As the abundance of cliches would indicate, incentives are a powerful force. Health incentives, however, are becoming more sophisticated, and stakeholders need to adopt programs that work.

National Reports-The handful of health plans that represent the largest number of enrollees are publicly traded and therefore likely to have reported salaries and bonuses at the high end of the scale. However the majority of HMO chief executives are not part of these plans, industry experts say.

Washington, D.C.-In the latest salvo against private health plans, Congressional leaders claim that the Medicare Part D drug benefit raised costs for taxpayers and seniors some $15 billion this year due to higher administrative and sales costs and lower rebates from drug companies.

Today's standard of care has morphed from comprehensive to catastrophic care. As the number of uninsured Americans has increased, so has the percentage of emergency room cases that aren't emergencies. As many as one-half of ER patients are there for routine treatment because they have nowhere else to go.

Consumers tend to seek the best combination of price, features and quality when shopping for medical services, just as in other market transactions. Today, employers are relying on health plans to fill the value-information void with Web-based decision support tools.

As patients take more ownership of their disease management regimens, hospitals are beginning to re-evaluate their processes-clinically, administratively and culturally.

If you ask David Hyman, Cato Institute adjunct scholar and University of Illinois professor of health law and medicine, what's on the horizon for healthcare, he'll tell you he'd rather share his empirical view of what we've learned from the past instead.

Managed Healthcare Executive recently surveyed readers and gathered your predictions for some of managed care's biggest issues in 2008, including drug safety, technology integration and competition. Answers from the more than 500 respondents indicate that an increasing number of you are uncertain about what the next year will bring, but you remain optimistic about your opportunities and your core capabilities. Comprehensive indicators suggest that the industry is becoming more granular, that is, more customized and more focused on one-off strategies, further stratified populations and differentiation in the market. Preparing for another year of regulatory changes, political influence and industry self-governance will clearly call for greater collaboration, which is another recurring theme throughout this Special Report. We've also included in-depth analysis from an authoritative panel of experts to help you forecast the turning points for 2008.

There has been a lot of good news about the Medicare drug benefit lately. Surveys show a substantial increase in coverage, particularly among low-income seniors. Costs are less than expected; employers continue to offer retiree benefits; major insurers are sticking with the program; and product coverage remains fairly broad. Beneficiaries seem generally satisfied with the program, and the much-feared "donut hole" appears less lethal than anticipated.

Every time I look through the sales fliers in the Sunday newspaper, I'm amazed by all the stuff we can buy. Toys, such as satellite radios and video game systems, are just the beginning. Today, you can even buy high-end cleaning products for your bath or shower at more than 10 times the price of a simple sponge and some cleanser.

Washington, D.C-Employer-sponsored health-insurance plan premiums increased only 6% in 2007, less than the last four years. However, insurance costs are rising much faster than inflation and wages, according to a leading survey of employer health benefits. Premiums now average more than $12,000 for family coverage (almost $4,500 for individuals), pricing many workers out of the market.

WASHINGTON, D.C.-Instead of going back to academia, former FDA Commissioner and Medicare Administrator Mark McClellan, MD, is setting up his own shop to tackle health reform and drug safety more actively. Dr. McClellan will head the Engelberg Center for Health Care Reform at the Brookings Institution, starting with $20 million in funding from Alfred Engelberg and Leonard Schaeffer.

Leaders of Medicare Advantage (MA) organizations are concerned about maintaining the profitability of their MA products. To be successful, organizations should develop internal profitability best practices.

Healthcare reform has surfaced as a national topic. Intel co-founder Andy Grove outlined some noteworthy ideas on healthcare reform during a national speaking tour, and California Governor Arnold Schwarzenegger recently proposed a plan to cover the citizens of his state. Getting a head start on the 2008 Presidential race, Mitt Rommey is weighing in with proposals based on his experience as former Governor of Massachusetts. While all these ideas are coming from different sources, they all share a few basic themes: healthcare should be easy to find, to buy, and to understand.

WASHINGTON, D.C.-Instead of going back to academia, former FDA Commissioner and Medicare Administrator Mark McClellan, MD, is setting up his own shop to tackle health reform and drug safety more actively. Dr. McClellan will head the Engelberg Center for Health Care Reform at the Brookings Institution, starting with $20 million in funding from Alfred Engelberg and Leonard Schaeffer.

Probably never before in the history of managed care have health plans tolerated a bigger gap between actual and potential reimbursement than in Hierarchical Condition Coding (HCC) for Medicare Advantage (MA).

IN THE WORLD OF professional sports, the competition isn't only on the gridiron, the court or the diamond. Just ask an MCO.

Medicare Advantage (MA) plans are increasingly under financial scrutiny. Some fear they might suffer the same fate as Medicare + Choice in the late 1990s when MCOs pulled the plug on plans because of low payments.

Pat Ford-Roegner, MSW, RN, FAAN, CEO of the American Academy of Nursing (AAN), seems a natural fit for her latest appointment as a member of the new Washington, D.C.-based Partnership to Fight Chronic Disease (PFCD) Advisory Board. The board, led by Richard H. Carmona, MD, MPH, FACS, former U.S. Surgeon General, is comprised of 40 high-profile CEOs and presidents from the public and private sector.

Providing patients with safe, effective and affordable prescription drugs is a continuous challenge for health plans and insurers. These efforts rely heavily on the decisions made by the Food and Drug Administration (FDA) in determining which new drugs come to market and how those medicines perform when used in real-world healthcare settings.

Ahearing before a federal district court this summer will most likely conclude the 14-year Texas class action case of Frew v. Hawkins. This class action suit was filed in 1993 by a group of mothers who were dissatisfied with the medical treatment that their children received-children who qualified for, but allegedly did not receive, full preventive care and treatment under Medicaid laws. As states enact changes to ensure full compliance with these laws, MCOs will see the effects on Medicaid provider networks, reimbursement rates and reporting requirements.

The landmark Massachusetts healthcare reform plan requires all adults in the state to have purchased health insurance by July 1, and policy makers are scrutinizing whether the combination of "carrots" and "sticks" has spurred compliance. The legislation, adopted in April 2006, aims to establish universal coverage by subsidizing insurance for lower-income individuals and penalizing those with higher incomes who fail to sign up. Employers with more than 10 workers have to play or pay: provide coverage to employees or pay an annual fee.

Recently, there has been a slight decline in HMO enrollment, according to industry experts. PPOs are gaining share.

WASHINGTON, D.C.-As expected, the Centers for Medicare and Medicaid Services (CMS) has proposed a nearly 10% reduction in Medicare physician fees for 2008. The cut reflects the physician payment formula approved by Congress in 1998 that has long been the subject of criticism and debate.

As the concern about the long-term fiscal viability of Medicare continues to grow, so has the recognition that some of the services ordered by physicians-and subsequently billed to Medicare-might not be warranted.