Consumer Out-Of-Pocket Drug Prices Grew Faster Than Prices Faced By Insurers After Accounting For Rebates, 2007-20.

The rising price of branded drugs has garnered considerable attention from the public and policy makers. This article investigates the complexities of pharmaceutical pricing, with an emphasis on the overlooked aspects of manufacturer rebates and out-of-pocket prices. Rebates granted by pharmaceutical manufacturers to insurers reduce the actual prices paid by insurers, causing the true prices of prescriptions to diverge from official statistics. We combined claims data on branded retail prescription drugs with estimates on rebates to provide new price index measures based on pharmacy prices, negotiated prices (after rebates), and out-of-pocket prices for the commercially insured population during the period 2007-20. We found that although retail pharmacy prices increased 9.1 percent annually, negotiated prices grew by a mere 4.3 percent, highlighting the importance of rebates in price measurement. Surprisingly, consumer out-of-pocket prices diverged from negotiated prices after 2016, growing 5.8 percent annually while negotiated prices remained flat. The concern over drug price inflation is more reflective of the rapid increase in consumer out-of-pocket expenses than the stagnated inflation of negotiated prices paid by insurers after 2016.

Cross-validation of insurer and hospital price transparency data.

Given recent congressional interest in codifying price transparency regulations, it is important to understand the extent to which newly available price transparency data capture true underlying procedure-level prices. To that end, we compared the prices for maternity services negotiated between a large payer and 26 hospitals in Mississippi across 2 separate price transparency data sources: payer and hospital. The degree of file overlap is low, with only 16.3% of hospital-billing code observations appearing in both data sources. However, for the observations that overlap, pricing concordance is high: Corresponding prices have a correlation coefficient of 0.975, 77.4% match to the penny, and 84.4% are within 10%. Exact price matching rates are greater than 90% for 3 of the 4 service lines included in this study. Taken together, these results suggest that although administrative misalignment exists between payers and hospitals, there is a measure of signal amid the price transparency noise.

Characterizing physician directory data quality: variation by specialty, state, and insurer.

BACKGROUND: As U.S. legislators are urged to combat ghost networks in behavioral health and address the provider data quality issue, it becomes important to better characterize the variation in data quality of provider directories to understand root causes and devise solutions. Therefore, this manuscript examines consistency of address, phone number, and specialty information for physician entries from 5 national health plan provider directories by insurer, physician specialty, and state. METHODS: We included all physicians in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) found in ≥ 2 health insurer physician directories across 5 large national U.S. health insurers. We examined variation in consistency of address, phone number, and specialty information among physicians by insurer, physician specialty, and state. RESULTS: Of 634,914 unique physicians in the PECOS database, 449,282 were found in ≥ 2 directories and included in our sample. Across insurers, consistency of address information varied from 16.5 to 27.9%, consistency of phone number information varied from 16.0 to 27.4%, and consistency of specialty information varied from 64.2 to 68.0%. General practice, family medicine, plastic surgery, and dermatology physicians had the highest consistency of addresses (37-42%) and phone numbers (37-43%), whereas anesthesiology, nuclear medicine, radiology, and emergency medicine had the lowest consistency of addresses (11-21%) and phone numbers (9-14%) across health insurer directories. There was marked variation in consistency of address, phone number, and specialty information by state. CONCLUSIONS: In evaluating a large national sample of U.S. physicians, we found minimal variation in provider directory consistency by insurer, suggesting that this is a systemic problem that insurers have not solved, and considerable variation by physician specialty with higher quality data among more patient-facing specialties, suggesting that physicians may respond to incentives to improve data quality. These data highlight the importance of novel policy solutions that leverage technology targeting data quality to centralize provider directories so as not to not reinforce existing data quality issues or policy solutions to create national and state-level standards that target both insurers and physician groups to maximize quality of provider information.

Trends in Common Ownership among Insurers in Medicare Part D.

BACKGROUND: Recent studies document the rising prevalence of common ownership by institutional investors in specific industries. Those investors offer products, such as mutual and index funds, to trade securities on behalf of others and often own shares of multiple firms in the same industry to diversify portfolios. However, at present, few studies focus on common ownership trends in health care. OBJECTIVES: This paper examines institutional investors' common ownership in the major insurers offering plans in the Medicare Part D stand-alone prescription drug plan (PDP) market between 2013 and 2020. RESEARCH DESIGN: Using data from the Securities and Exchange Commission (SEC) database and the Center for Research in Securities Prices, we compute the percentages of outstanding shares of each insurer owned by institutional investors. Data visualization and network analysis are employed to assess the trends in common ownership among major insurers. RESULTS: We document a high prevalence of and substantial increase in shared institutional investors in the PDP market. From 2013 to 2020, the degree of common ownership increased by 7% on average, and the common ownership network became more connected. Common ownership also varies across the 34 PDP regions depending on their reliance on listed insurers, that are traded in the stock exchange, offering stand-alone PDPs. CONCLUSIONS: High and rising common ownership in the Medicare Part D PDP market raises policy questions about potential effects on plan offerings, premiums, and quality for consumers.

Overlap In Carriers And Networks In Medicaid And The Individual Marketplaces.

As people lose Medicaid because of the end of the COVID-19 public health emergency, many states will route former Medicaid managed care enrollees into Affordable Care Act Marketplace coverage with the same carrier. In 2021, 52.1 percent of Medicaid managed care enrollees were enrolled by a carrier that also had a plan on the Marketplace in the same county.

Longitudinal Trends in Insurer Participation in Multisector Population Health Activities.

Healthcare organizations increasingly engage in activities to identify and address social determinants of health (SDOH) among their patients to improve health outcomes and reduce costs. While several studies to date have focused on the evolving role of hospitals and physicians in these types of population health activities, much less is known about the role health insurers may play. We used data from the National Longitudinal Survey of Public Health Systems for the period 2006 to 2018 to examine trends in health insurer participation in population health activities and in the multi-sector collaborative networks that support these activities. We also used a difference-in-differences approach to examine the impact of Medicaid expansion on insurer participation in population health networks. Insurer participation increased in our study period both in the delivery of population health activities and in the integration into collaborative networks that support these activities. Insurers were most likely to participate in activities focusing on community health assessment and policy development. Results from our adjusted difference-in-differences models showed variation in association between insurer participation in population health networks and Medicaid expansion (Table 2). Population health networks in expansion states experienced significant increases insurer participation in assessment (4.48 percentage points, P < .05) and policy and planning (7.66 percentage points, P < .05) activities. Encouraging insurance coverage gains through policy mechanisms like Medicaid expansion may not only improve access to healthcare services but can also act as a driver of insurer integration into population health networks.

Commercial Insurer Market Power and Medicaid Managed Care Networks.

Over 70% of Medicaid beneficiaries are enrolled in Medicaid managed care (MMC). MMC provider networks therefore represent a critical determinant of access to the Medicaid program. Many MMC insurers also participate in commercial insurance markets where prices are high, and some insurers exercise considerable market power. In this paper, we examined the relationship between commercial insurer market power and MMC physician network breadth using linked national enrollment data and provider directory data. Insurers with more commercial market power had broader Medicaid physician networks. Insurers with over 30% market share had 37.3% broader Medicaid networks than insurers in the same county that had no commercial market share. These differences were driven by greater breadth among primary care providers, as well as other specialists including OB/GYNs, surgeons, neurologists, and cardiologists. Commercial insurance market power may have spillovers on access to care for MMC beneficiaries.

Strategies for Insurers to Promote Health Among Sexual and Gender Minority People.

This Viewpoint describes strategies for payers to improve health outcomes among sexual and gender minority people.

Insurer costs of COVID-19 by disease severity and duration.

OBJECTIVES: To analyze US commercial insurance payments associated with COVID-19 as a function of severity and duration of disease. STUDY DESIGN: Retrospective database analysis. METHODS: Patients with COVID-19 between April 1, 2020, and June 30, 2021, in the Merative MarketScan Commercial database were identified and stratified as having asymptomatic, mild, moderate (with and without lower respiratory disease), or severe/critical (S/C) disease based on the severity of the acute COVID-19 infection. Duration of disease (DOD) was estimated for all patients. Patients with DOD longer than 12 weeks were defined as having post-COVID-19 condition (PCC). Outcomes were all-cause payments (ACP) and disease-specific payments (DSP) for the entire DOD. Variables included demographic and comorbidities at the time of acute disease. Adjusted payments by disease severity were estimated using generalized linear models (γ distribution with log link). RESULTS: A total of 738,339 patients were included (374,401 asymptomatic, 156,220 mild, 180,213 moderate, and 27,505 S/C cases). DSP increased from $217 (95% CI, $214-221) for asymptomatic cases to $2744 (95% CI, $2678-$2811) for moderate cases with lower respiratory disease and $28,250 (95% CI, $26,963-$29,538) for S/C cases. ACP increased from $505 (95% CI, $497-$512) for asymptomatic cases to $46,538 (95% CI, $44,096-$48,979) for S/C cases. The DSP and ACP further increased by $50,736 (95% CI, $45,337-$56,136) and $94,839 (95% CI, $88,029-$101,649), respectively, in S/C cases with PCC vs a DOD of fewer than 4 weeks. CONCLUSIONS: COVID-19 payments for S/C cases were more than 10-fold greater than those of moderate cases and further increased by nearly $95,000 in S/C cases with PCC vs a DOD of fewer than 4 weeks.

Comparison of prior authorization across insurers: cross sectional evidence from Medicare Advantage.

OBJECTIVE: To measure and compare the scope of US insurers' policies for prior authorization (PA), a process by which insurers assess the necessity of planned medical care, and to quantify differences in PA across insurers, physician specialties, and clinical service categories. DESIGN: Cross sectional analysis. SETTING: PA policies for five insurers serving most of the beneficiaries covered by privately administered Medicare Advantage in the US, 2021, as applied to utilization patterns observed in Medicare Part B. PARTICIPANTS: 30 540 086 beneficiaries in traditional Medicare Part B. MAIN OUTCOME MEASURES: Proportions of government administered traditional Medicare Part B spending and utilization that would have required PA according to Medicare Advantage insurer rules. RESULTS: The insurers required PA for 944 to 2971 of the 14 130 clinical services (median 1899; weighted mean 1429) constituting 17% to 33% of Part B spending (median 28%; weighted mean 23%) and 9% to 41% of Part B utilization (median 22%; weighted mean 18%). 40% of spending ($57bn; £45bn; €53bn) and 48% of service utilization would have required PA by at least one insurer; 12% of spending and 6% of utilization would have required PA by all insurers. 93% of Part B medication spending, or 74% of medication use, would have required PA by at least one Medicare Advantage insurer. For all Medicare Advantage insurers, hematology and oncology drugs represented the largest proportion of PA spending (range 27-34%; median 33%; weighted mean 30%). PA rates varied widely across specialties. CONCLUSION: PA policies varied substantially across private insurers in the US. Despite limited consensus, all insurers required PA extensively, particularly for physician administered medications. These findings indicate substantial differences in coverage policies between government administered and privately administered Medicare. The results may inform ongoing efforts to focus PA more effectively on low value services and reduce administrative burdens for clinicians and patients.

Primary Care Physicians In Medicare Advantage Were Less Costly, Provided Similar Quality Versus Regional Average.

The use of many services is lower in Medicare Advantage (MA) compared with traditional Medicare, generating cost savings for insurers, whereas the quality of ambulatory services is higher. This study examined the role of selective contracting with providers in achieving these outcomes, focusing on primary care physicians. Assessing primary care physician costliness based on the gap between observed and predicted costs for their traditional Medicare patients, we found that the average primary care physician in MA networks was $433 less costly per patient (2.9 percent of baseline) compared with the regional mean, with less costly primary care physicians included in more networks than more costly ones. Favorable selection of patients by MA primary care physicians contributed partially to this result. The quality measures of MA primary care physicians were similar to the regional mean. In contrast, primary care physicians excluded from all MA networks were $1,617 (13.8 percent) costlier than the regional mean, with lower quality. Primary care physicians in narrow networks were $212 (1.4 percent) less costly than those in wide networks, but their quality was slightly lower. These findings highlight the potential role of selective contracting in reducing costs in the MA program.

Facts about hospital-insurer contracting.

OBJECTIVES: To use publicly available price transparency data files to establish empirical regularities about hospital-insurer contracting. STUDY DESIGN: Retrospective analysis of 10 price transparency data files from HCA Healthcare. METHODS: Cross-sectional qualitative analysis of 524 hospital-insurer contracts across 10 hospitals. RESULTS: We ascertain 4 empirical regularities in these files. First, hospitals contract with many payers, ranging from 35 to 82 across the hospitals in the sample. Second, contract structure varies significantly within and across hospitals: Of the 524 contracts in our sample, the median contract contained 9 contract elements, whereas the mean contract contained 1285 contract elements. Third, most of the contracts in our sample contained multiple contracting methodologies (eg, both fixed fee and percentage of charges). Fourth, these contracts indicated substantial variation for the same service within and across hospitals, validating findings from analyses based on claims data and hospital price transparency files. CONCLUSIONS: Hospital-insurer contracts dictate the flow and structure of a significant portion of total health care expenditure in the US. Increased attention by both researchers and policy makers would lead to a greater understanding of this vital-yet understudied-element of the market for hospital services.

[Implementing new interventions and indications: the possible role for real world data]. / De mogelijke rol van 'real world data'.

In advising the preferred therapy for the individual patient the expected results of the proposed intervention and possible side effects are the most relevant considerations. However, predicting the results of an intervention is difficult, especially when well designed randomized clinical trials (RCT's) are lacking or not conclusive. Artificial intelligence (AI) algorithms based on routine clinical data (real world data) can support clinical decision making, but in daily practice AI is still scarcely used. In this article one large radiotherapy facility and two health insurers describe their joint opinion on the possible role of AI based on real world data as an aid in clinical decision making when evidence from RCT's is not available. The introduction of proton radiotherapy in The Netherlands is being used as case model for AI model based clinical decision making.

[The relationship of mental health providers with health insurers; an exploration]. / De ggz in relatie tot zorgverzekeraars; een verkenning.

BACKGROUND: In 2020, Zorgverzekeraars Nederland (ZN), the umbrella organization of nine health insurers in The Netherlands. presented a vision of the future of mental health care in the Netherlands in ‘De GGZ in 2025. Vergezicht op de geestelijke gezondheidszorg’ (‘Outlook on mental health care’). This document can be seen as marking the fact that key stakeholders share a common vision on the future of the GGZ in the Netherlands. Contracting care is often difficult. The tension between providing quality and sufficient care and available funding leads to friction. Congruence in vision, goals and practices are important conditions for adequate relationship building. Does the vision document contribute to this? AIM: To discuss the experiences of mental health care administrators and health insurers in contracting and collaboration. METHOD: Conducting interviews with both directors of mental health institutions and the strategic (policy) advisors of health insurers. In the approach we used the salience model. RESULTS: The relationship between mental health care administrators and health insurers is perceived to be distrustful and complex, and has deteriorated slightly in 2021 compared to 2019. Perceived power, legitimacy and urgency affect the relationship. Almost all health insurers are characterized as dominant stakeholders based on the salience model. Both parties are open to improving the relationship, which requires more transparency and mutual understanding. CONCLUSION: With the supported content of the vision document, there is to some extent shared governance. The change steps (shared innovation) considered desirable will be promoted by partly granting the intended benefits to each other (shared savings).

Hospital Prices for Physician-Administered Drugs for Patients with Private Insurance.

BACKGROUND: Hospitals can leverage their position between the ultimate buyers and sellers of drugs to retain a substantial share of insurer pharmaceutical expenditures. METHODS: In this study, we used 2020-2021 national Blue Cross Blue Shield claims data regarding patients in the United States who had drug-infusion visits for oncologic conditions, inflammatory conditions, or blood-cell deficiency disorders. Markups of the reimbursement prices were measured in terms of amounts paid by Blue Cross Blue Shield plans to hospitals and physician practices relative to the amounts paid by these providers to drug manufacturers. Acquisition-price reductions in hospital payments to drug manufacturers were measured in terms of discounts under the federal 340B Drug Pricing Program. We estimated the percentage of Blue Cross Blue Shield drug spending that was received by drug manufacturers and the percentage retained by provider organizations. RESULTS: The study included 404,443 patients in the United States who had 4,727,189 drug-infusion visits. The median price markup (defined as the ratio of the reimbursement price to the acquisition price) for hospitals eligible for 340B discounts was 3.08 (interquartile range, 1.87 to 6.38). After adjustment for drug, patient, and geographic factors, price markups at hospitals eligible for 340B discounts were 6.59 times (95% confidence interval [CI], 6.02 to 7.16) as high as those in independent physician practices, and price markups at noneligible hospitals were 4.34 times (95% CI, 3.77 to 4.90) as high as those in physician practices. Hospitals eligible for 340B discounts retained 64.3% of insurer drug expenditures, whereas hospitals not eligible for 340B discounts retained 44.8% and independent physician practices retained 19.1%. CONCLUSIONS: This study showed that hospitals imposed large price markups and retained a substantial share of total insurer spending on physician-administered drugs for patients with private insurance. The effects were especially large for hospitals eligible for discounts under the federal 340B Drug Pricing Program on acquisition costs paid to manufacturers. (Funded by Arnold Ventures and the National Institute for Health Care Management.).

Is Arthroscopic Meniscectomy Associated With an Increased Risk of Total Knee Arthroplasty for Claimants in the Workers' Compensation System? A 10-Year Study of Workers' Compensation Claims From a Large Nationwide Workers' Compensation Insurance Carrier.

BACKGROUND: Total knee arthroplasty (TKA) is a commonly performed knee surgery and prior arthroscopic meniscectomy (AM) has been linked to an increased risk of TKA in the general population. OBJECTIVE: To study the relationship between AM and TKA among injured workers whose medical care is paid for under workers' compensation (WC). METHOD: A total of 17,247 lost-time claims depicting all arthroscopic knee surgical procedures performed from 2007 to 2017 were followed to the end of 2022 and analyzed. RESULTS: The odds ratio of undergoing a TKA for those with a preceding AM is 2.20, controlling for age, sex, and attorney involvement. CONCLUSIONS: Undergoing an AM is associated with an increased risk of TKA in WC claimants.

Scope and Incentives for Risk Selection in Health Insurance Markets With Regulated Competition: A Conceptual Framework and International Comparison.

In health insurance markets with regulated competition, regulators face the challenge of preventing risk selection. This paper provides a framework for analyzing the scope (i.e., potential actions by insurers and consumers) and incentives for risk selection in such markets. Our approach consists of three steps. First, we describe four types of risk selection: (a) selection by consumers in and out of the market, (b) selection by consumers between high- and low-value plans, (c) selection by insurers via plan design, and (d) selection by insurers via other channels such as marketing, customer service, and supplementary insurance. In a second step, we develop a conceptual framework of how regulation and features of health insurance markets affect the scope and incentives for risk selection along these four dimensions. In a third step, we use this framework to compare nine health insurance markets with regulated competition in Australia, Europe, Israel, and the United States.

Do Insurers With Greater Market Power Negotiate Consistently Lower Prices for Hospital Care? Evidence From Hospital Price Transparency Data.

This study examined if greater insurer market power was associated with consistently lower negotiated prices within each hospital for 44 shoppable and emergency procedures, using price transparency data disclosed by 1,506 hospitals in metropolitan areas. We used multi-level fixed effects models to estimate the within-hospital variation in plan-level insurer-negotiated prices (from the largest insurer, the second largest insurer, other major insurers, and nonmajor insurers) and cash-pay prices as a function of insurer market power. For shoppable services, relative to nonmajor insurers, the largest, second largest, and other major insurers negotiated 23%, 16%, and 3% lower prices, respectively, while cash prices were 17% higher. For emergency room visits, while the largest insurers paid 5% less than nonmajor insurers, the second largest and other major insurers did not pay lower prices. Stratified analyses by type of shoppable services found varying magnitudes and patterns of price discounts associated with insurer market power.

Price setting in the Brazilian private health insurance sector.

Brazil's private health insurance market is the second largest in the world, behind only the United States, making it a valuable source of real-world evidence. This paper documents how physicians' inpatient reimbursement fees vary in the country and explores the relationship between these fees and the market share of health providers and health insurance companies. We implement a fixed-effects panel regression and take advantage of an unprecedented database that contains national administrative records of inpatient procedures paid by health insurance companies in 2016. We find a positive correlation between reimbursement for ICU procedures and provider market share. Conversely, we observe a negative correlation with insurers' market share. Additionally, we document substantial variation in procedure prices, both across and within Brazilian states, and observe that more competitive markets in Brazil tend to have higher population and GDP levels. Overall, our research enhances our understanding of the price setting dynamics of physician reimbursement fees in the context of a developing country. The insights gained from this study can assist policymakers in formulating appropriate regulations to ensure appropriate access to healthcare services.