Thomson Reuters Healthcare published a paper making recommendations on how to control waste in the U.S. health care system. The paper discusses “five proven, market-tested strategies — engaging consumers, coordinating care, managing disease and maintaining wellness, designing for patient safety and quality, and reducing opportunities for fraud.”

PriceWaterhouseCoopers published its Medical Trends Report for 2011 . Acccording to the AP, the report predicts the medical costs will rise 9% next year and that most employees will encounter calendar year deductibles of $400 or more. “Two years ago, only 25 percent of companies participating in the annual survey said they asked employees to pay deductibles of $400 or more. That grew to 43 percent in 2010 and is expected to pass 50 percent next year.”

The AHIP HiWire  published an interesting article on the development of value based insurance design, an initiative which OPM has supported in its recent benefit and rate proposal call letters to FEHB plan carriers.

“There is substantial underutilization of high-value health services,” including wellness, screening, diagnostic testing, various therapies, and monitoring, said A. Mark Fendrick, MD, codirector, Center for Value-Based Insurance Design, at the University of Michigan.

“The current approach to cost sharing is predominately based on the cost – not value – of medical services,” he said. For example, generic drugs require the lowest co-pay and non-preferred brands the highest. Yet, this “one size fits all” cost shifting does not recognize that some non-preferred brands may have high value in controlling a chronic illness

There is no logic for requiring the same co-pay for a toenail fungus drug as for a drug that controls asthma, he said.

Research has shown that high co-pays reduce adherence to appropriate medication use. Up to 60 percent of chronically ill patients have poor adherence to evidence-based treatment, with costs from poor adherence estimated to exceed $100 billion annually, Fendrick said.