Category: Health Insurance

Hospitals are Pigging Out on Commercial Reimbursement and Starving on Medicare. What’s Next?

The Spring 2016 Medpac report on Medicare payments is out.  This annual report to Congress (put together by the 17 members of the Medicare Payments Advisory Committee) provides an assessment of the way Medicare pays for care, and offers recommendations for how to modify payments going forward. It’s a fascinating snapshot:

Healthcare’s Friendly Societies: What Would a Healthcare Mutual Look Like?

For a few years I’ve been fantasizing about what a healthcare insurance/ delivery mutual would look like.  I’ve yet to see one but I like the idea a lot. Here’s the idea behind a mutual:  A mutual structure means that the company is owned by its clients or policyholders.  Since a mutual’s customers are also its owners, ...

Express Scripts Undoes Turing Pharmaceuticals: Witness the Rise of the “Activist” PBM

Everyone knows the recent story of “rapscallion” Martin Shkreli: the ethically depleted CEO of Turing Pharmaceuticals who bought the rights to Daraprim, a generic anti-parasitic medicine and marked up the price of a tablet from $13.50 to $750 overnight.   As disgusting as Shkreli’s story is–  the more important and interesting tale is how Turing was subsequently undone by ...

Why Value Generation Doesn’t Grow Your Risk-Bearing Medical Group: On Being Foiled by the Middleman

Imagine that you are an electronics manufacturer who has figured out how to build a superb stereo system at a far lower cost (20% less) than your competitors. Over time you’ve perfected the system, created a reputation for high quality and have a machine that sounds great.  Your manufacturing efficiencies position you to sell at ...

Global Capitation: The Three Less-Obvious Vulnerabilities for Health Systems Considering Global Payments

I receive a fair number of emails and Linkedin messages from healthcare executives who are interested in global risk contracts and are looking for a some advice from the provider side. Here’s what I usually tell them: Global risk can be a very good thing for both patient care and for margins– but it’s a ...

Pricing Risk: What Margin Should Risk-Bearing Healthsystems Reasonably Expect?

There is an old adage in the business world: reward follows risk. In other words, in an ideal market, investors are supposed to balance the potential returns of an investment against the possibility that they’ll lose their money. I’ve thinking a lot about risk recently as our organization came to the end of our budget ...

C

Consumers are Linking Budget Airline Itineraries: Will They “Virtual Interline” Medical Services Too?

A few weeks ago, WOW Air, an Icelandic budget airline, announced that they would be flying Boston-Reykjavik at an introductory fare of $99.  Despite the growth of budget airlines in both Europe and the US, WOW is apparently the first airline to try to make a margin on trans-Atlantic routes. WOW argues that smaller planes (made possible ...