Jill Weschler

CMS wants to reduce low-value plans and improve information systems to help seniors shop for the best coverage options

A new law in Maryland is creating a stir in health policy circles across the country as the debate escalates over the future of employer-based health coverage. Last month, the Maryland legislature approved a bill that basically requires Wal-Mart Stores to spend at least 8% of its payroll on employee healthcare or pay the difference to support the state Medicaid program. Union leaders and consumer advocates who backed the measure predict that it will generate similar action in many state capitols.

The Medicare Payment Advisory Commission (Medpac) is conducting a survey to find out what factors have prompted Medicare beneficiaries to join or not join a Medicare drug plan. The aim is to learn more about what information and educational strategies are most useful in choosing a specific plan—including what may influence the selection of a stand-alone prescription drug plan (PDP) or a Medicare Advantage plan (MA-PD).

One less-noticed aspect of the Medicare prescription drug program aims to control spending on medicines by paying special attention to high-use patients, something that may give Medicare managed care plans an advantage. The Medicare Modernization Act (MMA) requires prescription drug plans (PDPs) and Medicare Advantage drug plans (MA-PDs) to establish Medication Therapy Management Programs (MTMPs) for seniors with multiple chronic diseases who spend more than $4,000 a year on medicines. The goal is to ensure appropriate prescribing, boost compliance with drug regimens and reduce adverse events for those patients who take several medications.

Medical liability reform is gaining more attention as critical for ensuring access to care and spurring development of new medical treatments.

Total outlays for U.S. healthcare did not rise as fast as expected in 2004, primarily because private payers held the line on insurance premiums and outlays for prescription drugs. Overall spending on healthcare still increased by 7.9%—much faster than the rate of inflation—but below the 8% to 9% growth rates of the two previous years. Even with slower growth, though, U.S. healthcare expenditures amounted to almost $2 trillion, or more than $6,000 per person in 2004, and accounted for 16% of the nation's gross domestic product, about the same as the previous year.

For consumers to make . . . decisions, they need more information on the performance and prices of medical services and products.

Washington, d.c.—The advent of Medicare prescription drug coverage for seniors is not prompting large employers to abandon retiree drug benefits, at least not for this year. Most large businesses are accepting federal government subsidies for retiree drug coverage in 2006, although there are signs that this could change over the next five years.

The managed healthcare market has been expanding, and the trend is likely to continue as employers and government agencies struggle to rein in spiraling healthcare costs. An aging population and more costly healthcare technology will aggravate current spending trends; these developments, in turn, will spur further consolidation among health plans and providers, stymie efforts to reduce the growing number of uninsured in the United States and drive innovative efforts to make consumers more aware of treatment costs and quality options.