Could the Economy of managed care influence more competetive prices on stents and of course Catheters. Check this article out of new york times:
Employer health costs zooming
New York Times
Many employers are facing double-digit increases in the cost of their health insurance next year, the highest inflation rate since 1992, when the majority of employees moved into managed care.
Insurers in early negotiations with employers about next year's rates are seeking increases for 1999 far above this year's, when most
premiums rose in single digits following four years of stability.
In perhaps the most dramatic case, Oakland-based Kaiser
Permanente, the nation's largest health maintenance organization, is
seeking a 12 percent increase from large employers in California.
With such increases, many Americans covered by
employee-sponsored health plans may see a larger share of their
paychecks go to health insurance or see their coverage cut back.
Critics of managed care say the magnitude of the increases undercuts
a basic appeal behind the success of managed care: savings from
lower costs. The steep increases sought are more reminiscent of the
double-digit rises in premiums common before managed care became
the health insurance system for most American employees in 1993.
Last year, 85 percent of employees were enrolled in managed care
plans. Some critics said managed care companies had run out of easy
savings and would now have to prove they can indeed produce
high-quality care at reasonable prices.
''The low-hanging fruit has been plucked in terms of getting savings by eliminating fat that was in the system,'' said Margaret Stanley, health care administrator of the California Public Employees Retirement System.
At least some employers in states including California, New York, New Jersey, Illinois and Minnesota are facing demands for 10 percent increases and higher. Benefits consultants estimate that the increases will average about 7 percent nationally, or five times the current 1.4 percent consumer inflation rate.
Managed care companies point out that rate increases next year are likely to be even bigger for the minority of employees covered by traditional insurance plans known as fee-for-service, in which patients pay more costs out of their own pockets and are partly reimbursed later. Some managed care insurers also are raising prices to compensate for huge losses in 1997. Others defend rate increases by arguing that their own costs are growing, especially for prescription drugs, as they bow to consumer demands for more services and fewer restrictions on access to doctors.
Kaiser and Oxford Health Plans, the big managed care company
based in Norwalk, Conn., belatedly discovered embarrassing losses for last year. Oxford, Kaiser and other big insurers are spending heavily for computer systems that they say will make their forecasts more accurate and steer physicians toward better medical decisions.
Some insurers say costs are also growing because of costly
government requirements such as two-day hospital stays for new
mothers and, for Kaiser, structural repairs to protect California
hospitals in earthquakes.
Fundamental costs for health services are rising, fueled by
advertisements for drugs like Prozac and several new cholesterol
treatments; the introduction of widely used new technology such as
stents -- tiny metal tubes that prop open clogged arteries -- and
insistence by consumers on broad choices among doctors and
hospitals. In addition, physicians' incomes are rising again, after a
one-time decline in 1996.
Managed care companies are also struggling with higher costs
generated by older patients and treatments for illnesses. The
government Medicare and Medicaid programs, meanwhile, have
taken steps to slow the growth of payments that were lucrative for
insurers in some states.
''Many health insurers didn't do a good job of managing care and
now they are bleeding red ink,'' said Blaine Bos, a principal in
Chicago with the William Mercer benefits consulting firm. ''The only
place they can go is the employer-sponsored health plans.''
Employers said many managed care companies would have to find
new ways to contain health costs. Ken Reifert, global benefits director of Merrill Lynch, said managed care had been largely limited to ''negotiating discounts and curbing access to higher-priced specialists.
We've gone almost as far as we can go in that direction,'' he said.
''Now the health care companies have to come up with the next
rabbit,'' Reifert said, ''and get serious about managing costs and
managing quality of care.''
Bos, the consultant, said big employers are likely to see rate increases of 9 percent to 14 percent in most parts of the country.
Individuals and small companies are facing even bigger increases.
Kaiser said its drug costs rose 15 percent in California and members'
hospital stays were up 4 percent, reversing a three-year decline in
hospital use there.
Jack Hudes, a Kaiser vice president, said another problem was a new government ceiling on payments for Medicare HMOs that will not
cover rising medical costs in California.
Economists said the insurance company increases, if they hold up,
could ripple through the economy.
Some employers say they may ask their workers to go without a raise in 1999 or pay a larger share of monthly insurance premiums.
Two of the biggest health care purchasers in the country, the
California Public Employees Retirement System and the Pacific
Business Group on Health, denounced the Kaiser increase last week
and said it was unacceptable. They said Kaiser had refused to
compromise and had threatened to discontinue service to 380,000
California government employees and dependents if they did not pay
up.
''When health care premiums go up, it lowers the standard of living
for employees,'' said Margaret Stanley, health care administrator of
CalPERS.
Kaiser officials said their 1999 increases would be smaller in other regions; for example, 6.9 percent for Massachusetts employees for 12 months starting in July. But the big HMO, which has 9.1 million
members across the country, expects to be recouping its losses for
''the next couple of years,'' said Kathy Swenson, a senior vice
president with Kaiser. In California, she said, that will mean increases in the '' high single digits to potentially low double digits.''
The rabbits could eventually be Medical device manufacturers too which in turn would spark a price war in stents and Catheters. This would lead to a rapid consolidation with only a handful of very competetive players in the market. the rest would be bought out or kicked out of the market (IMO).
Regards,
Sri. |
