BV Investment Partners Takes an Ownership Stake in Vitori Health
2 min
Consumers Paid $1.6 Billion More for 7 Drugs with No Proof of New Benefits
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2020 was a very good year for pharmaceutical manufacturers. According to an independent analysis by the Institute for Clinical and Economic Review (ICER), Americans spent an additional $1.67 billion on seven drugs whose price increases were not supported by new or improved clinical evidence. And this was after pharmaceutical rebates and other concessions!
How is this egregious behavior possible? Manufacturers continue raising prices, sometimes without clinical justification, and push higher costs to PBMs. And PBMs continue including super-expensive drugs on employer health plan formularies, pushing higher costs along to employers and plan members.
What’s an employer to do? Here are two strategies that can help control spiraling costs while ensuring a safe, clinically-effective formulary.
Build a Better Formulary
The best approach is to create a non-PBM pharmacy plan whose formulary is based on comparative effectiveness research. The only drugs that make it onto the formulary are those whose medical efficacy has been fully researched and documented.
A high-cost drug can be included, if warranted, along with lower priced alternatives that may be equally effective. Since not every drug is right for everyone, clinical management of the formulary ensures members don’t pay more than is medically necessary.
Implement Pricing Controls
Employers can achieve the lowest net cost for the plan by using non-PBM pricing controls and technology. The formula for success looks like this:
Clinical Integrity + Optimized Pricing Technology =
Lowest Net Cost & Maximum Value
In summary, PBMs can’t deliver optimal pharmacy plan performance because their revenue model is at odds with medical evidence and ethical procurement and administration practices. Employers and covered members deserve better value than PBMs can provide and the confidence that their formulary delivers the best clinical outcomes at the lowest net cost.
Vitori Health CEO Shares Market Success and Growth Plans
2 min
In an interview with Mergermarket, a leading provider of M&A data and intelligence, Tim O’Brien, CEO of Vitori Health, shared that he would consider acquisitions as part of the firm’s overall growth strategy.
Vitori’s focus for the next few years will be growing its revenue and customer base and scaling its business nationwide. According to O’Brien, “We have found strong initial success, with client plan members in 48 states. And we’ve seen strong interest from brokers and advisors looking to save costs for their self-insured client health plans.”
The firm is in talks with about 100 organizations exploring health plan options, and anticipates administering more than 100,000 lives by the end of 2022. Vitori also expects to grow its workforce in that time by a factor of five, and has been hiring an average of three people per week to handle growth. Revenue for 2022 is projected to be double what is booked for 2021, and profits will be reinvested into growth and resources to enhance member value.
The company administers fair-market prices for services, sources prescription drugs, and streamlines claims to deliver savings that Vitori backs with a monetary guarantee. Employers who sponsor their own health insurance get claims administration, pharmacy benefits and member support under one umbrella. Service providers benefit from receiving market-determined payments in a timely fashion.
With successful and continued growth, the company would consider buying smaller administrators that are unable to quickly scale up their technology to competitive standards and that could use Vitori’s platform. Although Vitori has already been approached by companies looking to sell, it plans to build what it needs internally.
“We’re really focused on growth,” said O’Brien, “and we’ve got a great trajectory.”
Patient Charged $809 for an $80 Item. Typo or Scandal?
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A woman in California received treatment for a broken foot at a reputable orthopedic facility. She was happy with their service until she looked at her bill: $809 for a plastic walking boot that costs about $80 on Amazon. She assumed it was a typo but after contacting the facility, she was shocked to learn the charge was correct.
To her credit, she raised her concerns about the astronomical 1,000% markup to senior administrators. Sure enough, there was an error: she should only have been charged $639. Really?!!
It’s no secret that the US health care system routinely gouges employers and plan members with inflated and nonsensical charges. Americans pay roughly double what those in other developed countries pay for care. But this situation demonstrates the degree to which outrageous greed has driven increases in deductibles, co-insurance payments, and ultimately, out-of-pocket costs for patients everywhere.
Since the industry won’t police itself, employers must take the lead in demanding transparent billing practices and fair market reimbursement. Employee health plans with clean contracting and pre-payment cost controls can help mitigate these abusive practices and protect employees from unexpected and outrageous charges. Employers need a plan that ensures situations like this simply cannot continue to happen.
Health System CFO is Fired for Trying to Fix Known Problems. Really?!
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Imagine you’ve been hired as the CFO of a well-known regional health system. You’re told during your interview that they’re looking for someone who can make difficult changes to address systemwide financial and accounting issues.
So, you dig into the known issues and find even more problems with inaccurate billing practices. You raise the flag about super-high error rates and the likelihood of repaying more than $5 million to correct the systemic errors. And then, BAM! You’re fired!
As crazy as this seems, it demonstrates how hard it is to change entrenched (and illegal) industry-wide practices that have thus far worked to your advantage. And give money back? Never! But there are things plan sponsors can do to start changing bad behavior.
The Value of Pre-Payment Integrity Controls
Employee health plans can directly combat egregious billing practices begin by knowing and validating care costs before paying any claim. They can eliminate price-blind buying and use transparent algorithms to establish payment rates that are fair for providers, employers, and plan members. And then they can scrutinize every claim to ensure accurate billing and reimbursement.
It’s time to change the buyer-seller relationship. We can’t rely on the industry to police itself, so buyers must align with a conflict-free health plan administrator who will fight on their behalf for transparency and payment integrity and take decisive steps to ensure they aren’t victimized by unfair billing practices.
Why Aren’t Providers Being Paid Fast, Accurately, and Fairly?
2 min
Payment disputes between insurers and providers are nothing new. Even with their secret, self-serving network contract arrangements, these relationships have been perpetually uneasy.
While insurers have billions of dollars in claims adjudication technology and staffing that should make processing and paying claims more rapid and accurate, they have always delayed payments to providers, sometimes as long as nine months or more, because every dollar they “float” for an extra day is to their shareholders’ advantage. But lately, this longstanding practice of delaying payment has worsened.
Kaiser Health News reports that the country’s two largest insurers are behind on billions of dollars in payments owed to hospitals and doctors nationwide. As of June 30, 2019, Anthem Blue Cross had not paid 43% of its medical bills. That figure has risen to 53% since the pandemic, and yet profits were $3.5 billion for the first half of 2021.
So why is this escalating? Some insurers point to the chaos driven by COVID-19. Others have introduced new and opaque reimbursement rules under the guise of cost-saving measures. Whatever the purported reason, these practices are indefensible in the face of ample resources and healthy bottom lines. More importantly, they are negatively impacting patients and providers in unprecedented ways.
According to VCU Health, an academic medical center affiliated with Virginia Commonwealth University, 52% of outstanding claims are more than 90 days old, despite a Virginia law that requires insurers to pay claims within 40 days. This delay has created “an unmanageable disruption” that threatens to undermine the financial footing of their teaching hospital in Richmond, Virginia.
Providers aren’t the only ones affected by egregious payment practices. Patients are reporting significantly more claim denials and prior-authorization hurdles than usual. The American Hospital Association asserts that insurer demands that go against the provider’s advice appear to be motivated by profit. Patients who receive recommended and routine treatments are now receiving astronomical bills when such services are deemed “experimental” and “not medically necessary.”
Doctors and hospitals appreciate knowing in advance how much they will be paid, and then getting paid quickly and accurately. Ethical health plan administrators who follow this practice, while still applying rigorous pre-payment scrutiny for billing fraud, waste, and abuse, are acting in the best interest of their clients and their clients’ members.
Welcome, Tim!
2 min
When your mission is to deliver a lower cost, better health plan that’s unsurpassed in the industry, you need a Chief Executive Officer who not only shares that mission, but has the experience and entrepreneurial mindset to shake things up and blaze a unique path.
We are therefore delighted to introduce our new CEO, Tim O’Brien, whose 25+ years of health and insurance experience will help Vitori Health continue transforming the industry.
Throughout his career, Tim has created innovative solutions that coordinate care, lower costs, and improve outcomes. He has also developed and implemented growth strategies and managed large scale operations, sales, and IT functions for global healthcare and IT organizations.
According to Tim, “The timing couldn’t be better for Vitori Health. We are uniquely positioned to deliver a comprehensive health plan that significantly lowers costs while providing members far better support than conventional health plans today. The Vitori solution has been incubated, tested, and optimized over several years with thousands of plan members. This gives us the confidence to deliver on our promise. It is a pleasure to work with such an experienced team and we are pleased to see incredibly strong market interest.”
Tim previously served as the Officer in charge of care delivery and strategic investments for Blue Cross and Blue Shield of Kansas City (BlueKC). He has developed national primary care solutions, multi-specialty surgery centers, and pioneered virtual behavioral health solutions. Tim served as the Chief Operating Officer of an integrated health care and capital management firm and delivered healthcare solutions in the UK, Middle East, and Latin America.
Tim is based in Kansas City where he will expand and strengthen our regional presence while leading the Vitori Health team to continue to serve clients nationwide. Please join us in welcoming Tim to the organization as we gear up for unprecedented growth and success.
