Business Strategy

Washington, D.C.-Medicare pays private plans too much, and the system needs to be fixed, according to a new report from the Commonwealth Fund. The study finds that the government paid Medicare Advantage plans 12.4% more in 2005 than if the same patients had been enrolled in the traditional fee-for-service program. The extra payments totaled more than $5.2 billion in 2005, or an extra $922 for each of the 5.6 million MA enrollees.

Medicaid Enrolees who suffer from expensive, chronic conditions tend to suffer from so many comorbidities and complicating social problems-such as homelessness and lack of transportation-that isolating a single disease state for intervention is ineffective. And states are beginning to recognize that.

Just like the rest of healthcare, dental and vision ancillary benefit providers are adopting cost-sharing strategies that offer options to employees but demand more skin in the game. With less financial responsibility on the shoulders of employers, ancillary benefits have become more flexible, varied and are more closely tied to the overall health of individuals, who are assuming more risk for their health.

The Supreme Court has referred to U.S. antitrust laws as the Magna Carta of free enterprise-a set of laws as important to the preservation of economic freedom as the Bill of Rights is to the protection of personal freedoms. While these laws are typically enforced by state and federal governments, i.e., the Department of Justice and state attorneys general, they also provide for a private right of action enforceable by persons who have been injured by activities that are forbidden by the antitrust laws.

The high-profile health policy issues for the new Congress are to reduce Medicare prescription drug prices and expand federal government funding for embryonic stem cell research. Congressional leaders want to enact legislation that will permit the federal government to negotiate drug prices (see Newswire), a move that eventually could alter the role of private plans in providing healthcare benefits to seniors.

The False Claims Act (FCA), 31 U.S.C. 3729, et seq., is about to become the worst-kept secret of the healthcare industry. One of the nation's oldest statutes, the FCA has allowed the government to recover more than $3.1 billion in the first nine months of 2006, including an eye-popping $900 million dollar settlement with Tenet Healthcare-the largest FCA recovery ever. And, as if these staggering numbers were not enough to garner attention, as of January 1, 2006, entities that receive $5 million or more per year in Medicaid payments will be required to inform their employees about the FCA. Because employees are the most likely whistleblowers in an FCA lawsuit, the FCA's prominence in the healthcare industry should increase over the next few years.

According to Greek legend, a poor peasant named Gordius became the king of the Asian country of Phrygia because of a rather vague prophecy. An oracle had prophesied that the nation’s future ruler would come riding into town on a wagon, so when Gordius and his wife arrived in the public square driving an ox cart, the populace named him king.

Systems integration has evolved to become much more than a technology issue

Every state will be forced to implement Medicaid cost-containment strategies in 2004.

Health plans are going to look a lot different in the future, and the transformation needs to begin today.

Individual people and circumstances have different needs, and MCOs need to be flexible enough to meet them all

Great-West eliminates confusion in the marketplace by consolidating itsplans under a single name

Despite the bad reputation from consumer publications, MCOs should be proud of their successes

Workers won't be happy about sharing the costs, but it's an opportunity to teach them the meaning of value

Despite the squabbling, everyone in healthcare wants the same thing: more effective care for patients