PHARMACIST STEVE

https://www.usatoday.com/story/money/2018/01/14/health-care-deals-could-make-you-healthier-but-may-not-save-you-money/930635001/

The health care industry’s fever for consolidation has shot up with two major deals closing out 2017, but the big question is whether consumers should be feeling any better this year. 

DaVita Medical Group, which has nearly 300 medical clinics​ along with about 40 surgery centers and urgent care clinics, will become part of UnitedHealth’s prescription drug benefits division.

CVS Health’s own pharmacy benefit management (PBM) business and in-store clinics would be merged with Aetna. PBMs negotiate deals with drug makers that include rebates and other compensation to encourage certain drugs and come up with lists of drugs their insurance plans will cover.

The deals will move the industry closer to a model in which  doctors and insurers are part of the same company, in a “Kaiser Permanente-esque way,” says Craig Garthwaite, who leads the health enterprise management program at Northwestern University’s Kellogg School of Management.

Under that scenario, there would be no incentive for health care providers to perform more tests and procedures than necessary on people. Instead they would be pushed to make sure patients get the right care from the start and to keep them healthy.

Since it became law under President Obama, the Affordable Care Act’s concept of health care reform focused on “paying for better health rather than the utilization of health care services,” Garthwaite says.

Susan Hayes, founder of Pharmacy Outcomes Specialists, which audits PBM contracts for employers and unions, says the recent deals are just the first of many, and she’s worried about the effects. 

“More mergers of insurance companies, chain pharmacies and (health care) providers means less transparency and higher costs — bottom line,” she says.

PBMs are billed as a way to lower drug costs for employers and consumers, but they’ve increasingly come under fire in recent years as drug prices have soared.

PBMs’ slice of the costs and role as a middleman is little understood. 

Critics of PBMs say the companies sometimes agree to favor high-cost drugs on the lists of medicines your insurer agrees to pay for and that they agree they won’t place quantity limits — or prior authorization programs — on the drugs. That’s despite the fact doing so could help health plans save money and make medical sense, 

How these deals could affect you: 

• You might get healthier. The companies will have a strong incentive to make and keep you well. Right now, CVS’ Minute Clinics don’t have that incentive, as the more you show up there, the more money they make. Currently, Aetna, and the employers whose plans they administer, already have a strong profit motive to keep patients healthy. But without employing the doctors or owning the hospitals, they can’t truly control how many tests, prescriptions or visits you get. When the insurer and the health care provider are one and the same, you’re more likely to find things that encourage health to be covered. 

Linda Fish, who is the caregiver for her husband and brother near Albuquerque, is excited by the prospects of a CVS-Aetna deal. She has gotten good service at CVS and likes that she can get a flu shot and affordable vitamins there. She was also impressed the company took a stand against Mylan’s huge price boost on EpiPens about a year ago when it began offering a low-cost generic version of an EpiPen competitor. 

“I’m a strong supporter of wellness first,” she says.

Fish’s husband, Richard, is a retired professional chef and they “eat the right foods prepared the right way,” she says, as “you don’t have to cook things in lard and grease.” The couple also have free membership to gyms in Albuquerque, thanks to their Humana Medicare Managed Care plan, so they work out as much as possible.

Still, Fish hopes she and her family can switch to Aetna’s Medicare plan if the deal goes through. 

Dave deBronkart, a cancer survivor and patient safety advocate who blogs as e-Patient Dave, says he is “in favor of any evolution that makes it easier for people with health problems to get the care they need.” But whether that will happen, he acknowledges, is “hard to assess” at the time of a merger. 

More:

CVS buying Aetna in deal valued at $69 billion

UnitedHealth pays $4.9B for DaVita Medical Group clinics, health care services

Coordinated care with doctors and hospitals can improve health and save money

•Your care could come under one roof. Davita — best known for its dialysis centers — could help launch UnitedHealth into the movement away from high-priced hospital care. Emergency room (ER) visits are the costliest form of health care for insurers, in large part because of the higher costs involved in running a hospital and the fact that, under law, ERs have to at least stabilize all the patients who show up. With more of these clinics, and expanded versions of CVS’ clinics, these insurers will have a place to send patients where they can control most types of care. Within a few years, clinics in or outside of stores, including CVS, could consolidate vision and dental care, as well as primary and specialty care.

• You might save money — or not. If insurers save money on healthier patients, it’s far from clear whether they will pass it along as lower premiums, Garthwaite says. Even if they do, more competition will be needed among big companies such as CVS-Aetna for premiums to truly come down. If there is a worry there, he says it’s that this kind of consolidation means it will be that much harder for new entrants to enter, so prices may not come down. 

• Your insurer may still be able to game the system. Insurers have to spend a certain percentage of their premium dollars on claims and other expenses that improve the quality of the health care you receive. But Garthwaite says they still find ways to get around that, and it will be even easier if they own the health providers who treat you. If UnitedHealth is setting the price at the Davita clinics, they will have far less of incentive to make them lower than they would if they were truly negotiating. 

• You may not have as much choice. Teresa Stickler, an Arizona pharmacy owner, founded Pharmacists Unity for Truth and Transparency because of what she calls “abusive practices”  by PBMs, such as steering consumers to drugs with higher list prices. Now these insurance companies will be able to steer you to the doctors and drug stores they want you to go to, or at least make it even costlier to go elsewhere, Stickler says. 

•You may not know who’s profiting. Drugmakers have gotten the brunt of the criticism over soaring drug prices, but the pharmaceutical industry has successfully turned some of that negative attention onto PBMs due to their lack of transparency. These companies make their money on rebates and what’s known as “spread pricing,” or fees charged in addition to maintenance fees that boost drug prices. And they’re doing quite well at it if they’re buying insurance companies, as in the case of CVS’ Caremark.

“I think it is apparent that PBMs are generating so much money through rebates and spread pricing that they are now looking for ways to control the entire vertical,” Hayes says.

Hayes predicts that in the “very near future,” we will see a health care company that includes a drug manufacturer, wholesaler, retail drug chain, insurers, doctors and clinics.

“Then there will be no negotiation possible at arm’s length,” she says

Filed under: General Problems