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Month: February 2007

PBMs: Bob Garris on their trail again?

In Brief non HIMSS news (as I’m still having a little insomnia from jet-lag, and I took it much easier last night on Bourbon street)….

Most THCB readers know that I’m just a wee bit cynical about the “value” provided by PBMs. Much of the data for that view comes from a Creighton University professor called Robert Garis. Well, he’s back:

“We found that brand-name drugs were slightly less expensive when purchased by mail, but generic drugs were more expensive by mail. When we combine the prices for brand-name and generic prescriptions, any differences virtually disappear,’ said Robert I. Garis, M.B.A., Ph.D., associate professor at the Creighton University School of Pharmacy and Health Professions.

And don’t forget that since 2002 (when the data for this report is from) PBMs have moved towards more generics as the rebates have become less important parts of their business and they’re making way more profits on generics. Medco for example increased total profits in 2005 after having its profits from rebates fall dramatically as it passed them back to customers. Margins on generics more than made up the difference. Now Garis is clearly on the side of the retail pharmacies, but given what we know about the PBM business, especially the stories from University of Michigan, I’m inclined to believe him when he says this:

Given a continued increase in generic-drug use by both mail and retail pharmacies and the practice of high markups on generics by PBM-owned mail outlets, he added, retail pharmacies ultimately may offer the better value. He noted that recent reports show generic drugs account for more than 55 percent of all prescriptions dispensed through both mail and retail channels.“Employers need to ask PBMs more questions about their markups on generics, just as they would when purchasing ink, paper or other supplies,” Garis said. “The truth is that PBMs are racking up record profits through an increased use of generic drugs and an increased use of PBM-owned, mail-order facilities.”

POLICY: Underfunded? By Eric Novack

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Governors from around the country are in Washington D.C.this week for the annual meeting of the National Governors Association. One of
the main bones of contention at this years’ meetings has been the expansion of
federal funding for state SCHIP programs. The governors want more, and lots of it. THCB’s own Eric Novack has been following this story like a hawk. And, as usual, he’s got a question.

The State Children’s Health Insurance Program was designed
by Congress to help states have money to provide Medicaid services to, well,
kids. The intent of Congress was clear,
given the “C” in the program’s name. Now
governors are screaming that SCHIP funding proposals by the federal government
are woefully inadequate.

Except for one thing—many states use SCHIP dollars to pay
for Medicaid for adults! Using 2005 data: In Minnesota, 87% of total SCHIP
enrollees in 2005 were adults, and 66% in Wisconsin. In Arizona, 56% of those enrolled
in SCHIP were adults.

Perhaps the states ought to use the funds for what they were
intended before complaining that they are being underfunded. If a child spent his ‘snack bar’ allowance on going to the movies, and then complained he was short, we would be likely to
require guarantees that the money would be spent properly in the future before
handing over the cash.

TECH: HIMSS–Balmer, MSFT and some early thoughts

• 2

So I caught the bus outside the Ritz-Carlton (no I wasn’t staying there but a few government employees were!) which took a long roundabout route to the convention center. After the nice people in the press room gave me a tote bag I don’t want.

I staggered to the overflow room to see the video screen. Microsoft says Connect, Collaborate, Informed Decisions. We heard it from Steve Ballmer a lot. Not too sure where he was going with the talk beyond that other than to say that Microsoft rally really cares about health care, but he did have one really cool futuristic video about the future of health care technology…very reminiscent of the great AT&T “You Will” videos—not that they did the company any good!

Then he brought in some guys from Scripps to show us a very cool app for drug development. I think it lost the health care service audience totally, (including me) but it looked cool. I just had no idea why it was in his talk and why he couldn’t show a health care services app? Especially as Ballmer then said that Azyxxi (or whatever it’s spelt) is the most exciting piece of software in all of Microsoft. Not sure whether that’s a reflection of how good Azyxxi is, or of the rest of what his shops putting out!

Two announcements. First  MSFT has announced its Connected Health Framework (a software tool set for SOA in health care) One major gripe. Kaiser, Cisco, Partners, the UK NHS, now Microsoft. Can someone please come up with a name not including Connect and Health?

More interestingly for the Health2.0 crowd Ballmer also announced that they’re buying Medstory. Guess that’s why Alain Rappaport never wanted to talk to me! That’ll certainly shake up the search market in health care.

Then the lieutenant-governor of Louisiana, Mitch Landrieu came to offer his fairly genuine thanks that we actually showed up & that things are getting better—at least the tourist area of the French Quarter and the Convention Center. But he also laid into the emergency response system, and the fact that we haven’t rebuilt New Orleans. And he got a big hand when he said we don’t have the moral authority to build other nations if we don’t have the commitment to do it here.

UPDATE #1: Via Silicon Valley.com. Snip:

"Redmond’s intent regarding the booming health care industry
is reflected in the resources it’s throwing that way. The company had
six health care-focused staff members in 2000; now, its Health
Solutions Group numbers more than 600."

HEALTH PLANS: Glasscock names female successor at Wellpoint

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Larry Glasscock at Wellpoint is stepping down this summer and has named a woman, Angela Braly, as his successor. Braly, 45, is an executive vice president, with responsibility for WellPoint’s Medicare claims processing business, federal employees’ health benefits business, and public policy development, among other areas.

Is this the first major health care company with a female CEO? It’ll certainly be the biggest US Corporation with one. At any rate, I wonder if we’ll start to see some slightly “gentler” behavior from the for-profit Blues conglomerate?

As for Glasscock? Well he probably never imagined quite how well he’d do when he got into health care 10 years or so ago. Or how little he’d get criticized for the things his company’s done!

assetto corsa mods