Medical Coverage Has Employers Feeling Exposed

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In a year when staff morale has been battered by layoffs and wage freezes, L.A.’s larger employers are thinking twice before jacking up the cost of employees’ health coverage. However, smaller employers may have no choice but to do so.

That’s the results of the annual survey of employer-sponsored health plans by human resources consultant Mercer LLC.

All employers expect a 9.2 percent hike next year in the cost to provide employee coverage, according to the survey. However, businesses with 500 or more employees estimate that they can reduce the increase to 6.5 percent by changing the design of their plans or switching insurers.

Larger employers are taking a closer look at programs that try to better manage chronic conditions and thus lower medical usage and costs. Such programs include diabetes management, for example, which encourages patients to exercise and control their diet to reduce hospitalizations.

“They are hoping health management programs can get to the underlying disease states that drive costs up,” said Laura Baker, a principal at Mercer’s downtown L.A. office.

Large companies can afford to take a long-term approach like this, but it’s harder for smaller employers. Indeed, the survey found smaller employers will continue to shift costs to employees by raising deductibles, co-payments, co-insurance or out-of-pocket maximums.

Nationally, employers in 2009 held the annual health-plan cost growth to the lowest increase in a decade, even though employees – possibly worried about losing jobs and coverage –consumed more health services than usual.

The average per-employee cost of health benefits nationally in 2009 rose 5.5 percent to $8,945, after four years of 6 percent increases. Similar to the L.A. survey, employers nationally predicted costs would rise about 9 percent in 2010 if they kept their current plan, but about 6 percent if they made changes.

The increase comes on top of a 7.8 percent rise in 2009 costs to an average of $8,981 per employee in Los Angeles.

Kudos for Platelets

It’s a tiny contributor to Amgen Inc.’s bottom line, but the biotech industry has taken notice of the Thousand Oaks drug maker’s blood platelet booster Nplate.

Nplate, which earned U.S. Food & Drug Administration approval in August 2008 and European approval in February, was named Best New Drug this month at the annual Scrip Awards in London. Amgen also received the programs Best Pipeline award.

The awards, sponsored by a respected international industry publication, recognizes advancements in the pharmaceutical and biotech industries. It’s the second such honor Nplate has won this year.

Nplate is approved for treating adults with chronic immune thrombocytopenic purpura, a serious but relatively rare autoimmune disorder that causes low blood platelet counts and can lead to serious bleeding. There are few treatment options for patients, and none that works the way the Amgen drug does.

Amgen plans to present clinical data on the use of Nplate in children this week at the annual meeting of the American Society of Hematology. The company also will discuss studies on the drug’s potential use in treating myelodysplastic syndrome, which occurs when blood-forming cells in bone marrow are damaged.

The company lumps Nplate sale figures in its “other products” category, which totaled $87 million worldwide in 2008 and $69 million for the first three quarters of this year.

That’s a drop in the bucket for a company whose red blood cell-boosting anemia drugs, Aranesp and Epogen, raked in nearly $5.6 billion last year, followed by white cell-boosting infection fighters Neupogen and Neulasta, with $4.5 billion in revenue.

But Amgen spokeswoman Ashleigh Koss said Nplate, which company scientists developed in-house over 15 years, fleshes out the company’s lineup of hematology therapies.

“Yes, we have our blockbuster drugs, but all along our focus has been on addressing grievous illnesses, especially where there are limited treatment options – and we saw an opportunity with Nplate,” Koss said.

IPC Expands

IPC the Hospitalist Co. said it has acquired Hospital Internists of New London, in Connecticut, and Hospital Internists of Westerly, in Rhode Island. The two practices handle about 55,000 patient visits annually.

The acquisitions are the company’s first in those states and “continues our expansion into New England and the Northeast corridor,” said Chief Executive Dr. Adam Singer. The North Hollywood company, which owns and manages hospital-based physician practices, now has operations in 21 states.

Dr. Ken Donovan, medical director of the New London practice, said that with rising costs and declining reimbursement rates, it made sense for his medical group to become part of a national company.

“Trying to build or buy all the infrastructure that IPC offers is too complicated, expensive and risky for a small group,” Donovan said.

Staff reporter Deborah Crowe can be reached at [email protected] or at (323) 549-5225, ext. 232.

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