Health Care Costs Out of
Control: What Providers
Should Be Doing
J. Paul Martin, MD, DFASAM, FAAFP
*1. Insurance-Based Delivery
Structure
*2. Big Pharma
*3. Laboratory / Ancillary
Costs
* The company pays a premium to the insurance carrier.
* The premium rates are fixed for a year, based on the number of
employees enrolled in the plan each month.
* The monthly premium only changes during the year if the
number of enrolled employees in the plan changes.
* The insurance carrier collects the premiums and pays the health
care claims based on the coverage benefits outlined in the
policy purchased.
* The covered persons (eg: employees and dependents) are
responsible to pay any deductible amounts or co-payments
required for covered services under the policy.
Medical loss ratio – 80% (Obamacare)
* Paying Providers/Labs/Medications
* Health Management
Disease Management / Wellness Initiatives
Case Management
Precertification
Prior Authorization
* Credentialing of Providers
* Processing Claims
* Commissions
* Marketing
* Investment management
* Stockholders
*Taxes on investment products and capital gains,
regulatory fees and licensing fees are NOT included
*Your premium - $100,000
*Capital Gains Tax - $10,000
*Licensing/Regulatory Fees - $10,000
*Basis for calculation becomes - $80,000
*Required payment on medical payments
or quality initiatives = $64,000
* Medical loss ratio – 80% (Obamacare)
* Medicare – 94% / 6%
* BCBS prior to Obamacare – 76% / 24%
* Third Party Administrator of
prescription drug programs
* Develop formularies, contract with
pharmacies, negotiate discounts
and rebates from manufacturers
* 3 Major PBMs comprise 78% of Market
* Third Party Administrator of
prescription drug programs
* 2015 $72 B revenues from CVS stores
* 2015 $100 B revenues from Caremark
>20 % goes to business
transactional processes rather
than to providers
Pharmacy Benefit Management Companies
have a maize of “rebates, incentives,
refunds” that by and large are undecipherable
Even the worst slot machine payouts in the
country (WV) are 89.72%.
*1. Insurance-Based Delivery
Structure
*2. Big Pharma
*3. Laboratory / Ancillary
Costs
*1. Glumetza (long acting metformin) - $6479/mo
generic metformin ER - $4/month
*2. Duexis (famotidine/ibuprofen) - $2400/month
Pepcid/Ibuprofen - $17.20/month
*3. Donnatal - $14/tsp
*4. Opdivo(nivolumab)- $150,000 for 3 month
improved survival (not
QALY adjusted)
*1. 1 qualy = 1 year in perfect health
*2. .5 qualy = ½ year in perfect health
or
= 1 year bedridden
*3. Threshold depends on nation’s per capita income
*4. US traditionally $50,000 although $100,000+
gaining acceptance
*1. Glumetza (long acting metformin) - $6479/mo
generic metformin ER - $4/month
*2. Duexis (famotidine/ibuprofen) - $2400/month
Pepcid/Ibuprofen - $17.20/month
*3. Donnatal - $14/tsp
*4. Opdivo(novolumab)- $150,000 for 3 month
improved survival (not
QALY adjusted)
Generic Quetiapine (Seroquel)
*25 mg $123.99 / 30
*50 mg $8.86 / 30
*100 mg $230.28 / 30
*200 mg $349.99 / 30
*300 mg $381.99 / 30
*400 mg $451.99 / 30
*Naloxone – Nasal Spray $150/2
* Evizio (Naloxone auto-injector) - $4000
*Naltrexone 50 mg tablets - $36.04 / 30
*Vivitrol - $1347 / month
(Consumer driven overspending)
Jardiance (empagliflozin) - $506
Farxiga (dapgliflozin) -
$459
Invokana (canagliflozin) - $352
*1. Insurance-Based Delivery
Structure
*2. Big Pharma
*3. Laboratory / Ancillary
Costs
*Genomic Testing
*Urine Drug Testing
*Risk of Cancer - BRCA
*Genetic Disorders
*Cancer Therapy
*Drug Metabolism
*$2,700 - $15,000
*Genomic Testing
*Urine Drug Testing
* NFSMB July 13 Guidelines
* CDC March 15, 2016
* FDA March 22, 2016
* NC Medical Board CSRS Unsolicited
Reporting
Monitoring Individuals on
Controlled Substances
*Patient – pain relief, quality of life,
stressors, adherence to plan, aberrant
behaviors, physical exam
*Family monitor
*Controlled Substance Reporting System
*Pill counts
*Periodic drug screening
Screening vs Definitive Testing
Therapeutic Use of UDS
• Immediate result
• What do you expect?
• Opportunity to adjust
level of treatment
CONFIRMATION
* Second analytical procedure with higher specificity (list of
compounds detected or identified narrowed)
*Gas chromatography/mass spectrometry (GC/MS)
*Liquid chromatography/tandem mass spectrometry
(LCMSMS, HPLCMS)
* And with better sensitivity
*Cut-offs are lower
*but still NOT 0!
When to use Confirmation
* Forensic Cases
* Employment Action – for cause, post accident,
return to work, denial of employment
* If Patient Denies Use with Positive Screen
* For drugs / medications for which no dip-test is
available: e.g. tramadol, fentanyl, bath salts
Billing Jive
(Marketing driven overspending)
* We won’t charge the patient if insurance doesn’t
pay
* Which means:
“We will be shifting all our costs to someone
else’s insurance plan, thereby raising their premiums
and those of everyone else in the plan. But hey, your
uninsured patient won’t be penalized.”
*Medicaid: 80305
*Medicare: 80305
*$14.88
*1. Insurance-Based Delivery
Structure
*2. Big Pharma
*3. Laboratory / Ancillary
Costs
*1. Choose medications wisely
*2. Avoid unnecessary testing
*3. Use screening tests for
therapeutic encounters
*4. Support Healthcare Reform that
is patient centered
Health Care Costs Out of
Control: What Providers
Should Be Doing
J. Paul Martin, MD, DFASAM, FAAFP