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One of the strongest drivers of hospital profitability is their patient payor mix.  Simply put, commercial patients pay the most. For hospital executives seeking to maximize financial performance, sharing 340B savings in partnership with a provider-owned or other local health plan presents a strategic opportunity to increase commercial patient market share, driving profitability. The 340B Advantage and Its Strategic Use The 340B Drug Pricing Program enables eligible hospitals to acquire medications at significantly reduced costs, supporting them for their services for underserved...

Health plan reinsurance provides a safety net against excessive claims, allowing plans to stabilize their finances. One of the key aspects of reinsurance is determining individual retention levels. Here are possible approaches to consider on setting your retention level: 1. Understand Your Risk Profile Before setting individual retention levels, it's essential to evaluate the overall risk profile of the health plan. Analyze historical claims data to identify trends, high-cost conditions, and claim frequency, preferably per line of business basis. Consider demographic factors, such as age and...

For some health plans, this subject is old news. They started a level funding plan years ago to capture some of the group membership erosion they were projecting. However, for some health plans, level funding never really passed the approval process or got the endorsement of upper management. Now that the plan can see the erosion of their group market in the 25-100 EE size range, they want to start a level-funded plan. Some pitfalls to be aware of are: 1.   It is not like traditional self-funding. The landscape is littered with MGUs, carriers, and health plans that thought they could easily...

In the midst of network innovations like Reference Based Pricing, employers seem to still prefer a national PPO network solution. If you are a regional health plan, partnering with a national network is easier said than done. If you are not of a certain size, your calls may get ignored. If you are of a size to catch the attention of the big national networks – how do you choose? Choosing a network based on access fees alone is not always the right solution. In a perfect world, you could have historical claims repriced with multiple networks and add in the access fees to see which network has...

Saving Money on Specialty RxA potential solution? Specialty Rx is exploding! We've had one reinsurer saying that their clients' #1 question is, "How can you help us with Specialty Rx?" Specialty Rx is half of drug spend, and J & Q code drugs are half of specialty. Health plan administrators have responded with various strategies, including "white bagging" and "brown bagging," which are ways of sourcing infusion drugs outside the hospital and clinic channel. Another strategy is a benefit design that forces, or through benefit differentials, encourages lower cost sites-of-service, such as...

The use of weight loss drugs like Wegovy is expanding rapidly. The March 29th edition of the Wall Street Journal reported that Elevance and Kaiser Permanente are expanding their coverage for people with heart-related conditions for Medicare Advantage and commercial plans. While not a blanket approval, it may be the “nose in the tent” that leads to rapidly expanding usage. It appears some large health plans may believe it is better to pay $14k—$16k annually for Wegovy than to have a major heart event. If the major plans cover GLP-1 drugs, will smaller plans be far behind? How could this...

GENE AND CELL THERAPY: The Wave Continues, and the FDA is Gearing Up! Are you concerned about whether you're ready for the coming wave of expensive therapies? The tides have been changing, bringing new challenges and opportunities. The FDA recently received increased funding, allowing for 60 additional reviewers of proposed Gene and Cell Therapies. There are currently 694 Gene and Cell Therapies (GCT) in the trial phase, of which 48 are late-stage and five in stage III. Could the FDA be gearing up for faster-than-anticipated approvals? The target market for GCT is also expanding beyond...