The BLS reports that the average drug price jumped from $22.06 (1990) to $45.79 (2000) while the average number of scripts filled per person rose from 7.3 to 11.6 during that time.

The racketeering claim against 8 HMOs was allowed to continue in federal appeals court when the HMO attempt to deny class action status was denied. The suit involves 900,000 doctors who say that HMOs conspired with each other to program their computer systems to systematically underpay physicians. Two HMOs (Cigna and Aetna) have settled.

Physicians in most specialties outside of primary care had healthy income increases in 2003 according to a survey by the American Medical Group Association and Medical Group Management Association. The median specialist income was $296,500 while primary care income was $156,900. Interventional cardiology was up 12% to over $368,000, gastroenterology was up 12.3% to $305,000 and pathology up 13.5% to $243,000. Dermatology was up 16.7% to $258,200 and urology was up 16.9% to $344,000.

Deloitte reports that the consultant driven push for consumer driven health plans is succeeding. 19% of 314 firms offered the cost shifting plans, up from 11% in 2003. The majority of adopters (62%) report that 20% or less of employees are enrolled. Having sat through several product rollouts and in talking with the vendors and brokers present, it’s amazing that the trend towards these plans continues. It appears neither the vendors or the brokers believe in the plans, but are just offering them in response to competition and pressure from the large consulting firms who have created another way to bill significant hours. The Deloitte survey showed that 52% of employers agree that the plans have complex and confusing designs. Due to the misconceptions on these plans, 46% of employers say that they will reduce trend. However, the carriers, including those offering the plans, will be raising trend. See below. High deductible plans will lower employer costs by shifting costs to employees, but the plan design itself will not lower trend.

Segal’s 2005 trend projections are out. For medical plans with Rx for active employees and retirees under age 65, indemnity trend is projected at 14.5%, PPO at 13.1%, POS at 13%, HMO at 12.4% and high deductible PPOs at 13.5%. By itself, retail Rx was 15.6%, with mail order at 15.4%. Indemnity dental is projected at 7.1%, PPO dental at 6.7% and DMO at 4.8%.

The name change game continues with Safeco Life changing their name to Symetra Financial. Why?

A BenefitNews.com survey asked about disease management. 14% said that disease management is an effective tool to lower health care costs. 19% said the programs have had no effect. 34% didn’t know and 32% said it was too early to tell.

When it comes to HSAs, the IRS has corrected earlier guidance and now says that Medicare entitlement, not eligibility, will result in HSA ineligibility.

Pacificare is buying American Medical Security for $502M to help expand offerings to small groups and individuals. We can’t believe that this company keeps finding buyers.

Aon’s Pat Ryan is stepping down as CEO. After flip-flopping his direction for the brokerage firm about as many times as Kerry has his position on Iraq, some stability may be near for the company. He will stay on as Chairman while the search begins for a new CEO.

An Employee Benefit News survey of 509 employers says that virtually all small and medium employers (10 to 500 employees) agree that a good benefit package helps to attract and retain quality employees. At least ¾ agree that a good benefit package improves employee attitudes and performance and increases productivity. 99% surveyed offered a medical plan and 80% have a PPO plan, 44% have an HMO. Half have an FSA, 3% have an HSA. The average premium percentage paid by employees is 19% for single, 34% for employee plus one and 39% for family. Twenty three percent still pay 100% for single coverage. 89% offer dental, 75% offer LTD, 69% offer STD and 92% offer life insurance. While 75% use brokers and an overlapping 30% use consultants also, 55% said that brokers need to keep them better informed on benefit trends.

BC/BS Illinois reminds that it is transitioning the PBM from the current vendor to Prime Therapeutics beginning in January 2005. Prime is owned by a number of Blue Cross plans, which increases their control and most likely their profit margins. The Blues also have rolled out their consumer driven plans in Illinois.