Weekend update / Miscellany

It’s been a rough day for Redskins fans, but we need to push the ball forward. This is the 700th FEHBlog entry since April 2006.

  • It has been my theory for many years that low Medicare and Medicaid reimbursement rates have been a major driver of increasing health insurance premiums. This week, the actuarial consulting firm Milliman issued a report finding that, according to Workforce Management, “employers pay an additional $1,115, or 10.6 percent more, for a family of four’s health insurance premium to help doctors and hospitals make up for lower payments they receive from Medicare and Medicaid.” (More information on the study can be found in this BCBSA press release.) If you think of health care costs as filling a giant balloon, pushing down on the balloon’s public sector side shifts costs to the private sector side. The solution is to reduce the size of the balloon. I think that genomic medicine will be a key component of the long term solution.
  • Of course, there are other ways to reduce the size of the balloon. President Bush and President elect Obama both have a great deal of confidence in the ability electronic health records to increase efficient delivery of care and reduce costs. We have a long way to go. Reuters reports that “Just under than 40 percent of U.S. doctors use electronic medical records and many say the system they use is only minimally functional, according to federal survey results released on Thursday. Only 4 percent of the 2,000 doctors surveyed by the National Center for Health Statistics said their systems were fully functional.” A fully functional system according to the survey includes patient demographics, problem lists, clinical notes, medical history and follow-up, orders for prescriptions, orders for tests, prescription orders sent electronically, viewing laboratory and imaging results, warnings of drug interactions or contraindications, out-of-range test levels, and reminders for guideline-based interventions. As mentioned earlier this week. funding for electronic medical records will be included in the first Obama federal stimulus package.
  • Medicare will begin incenting doctors to use electronic prescribing systems in 2009. “Electronic prescribing (e-prescribing) systems that allow doctors to select lower cost or generic medications can save $845,000 per 100,000 patients per year and possibly more system-wide, according to findings from a new study [released last week and] funded by Department of Health and Human Services’ (HHS) Agency for Healthcare Research and Quality (AHRQ).
  • Also on the bright side, the AP reports that

    The ultra-low prices for generic prescriptions offered by giant retailers and drugstore chains and intense competition among the many generic drugmakers fighting for sales, according to health information firm IMS Health. (NYSE:RX)Those pricing pressures forced down dollar sales of generic drugs in the U.S. by 2.7 percent in the year ending in September, even though the number of generic prescriptions filled actually increased by 5.4 percent over the year before, IMS reported Wednesday.”We’re seeing the combination of pressure from large retailers to make generics available at ever-lower prices for their customers” and the intensified competition among generic drugmakers leading them to cut prices, said Murray Aitken, senior vice president of the Healthcare Insight unit at IMS.

  • Finally the Prescription Benefit Management Institute released its annual Prescription Drug Benefit Cost and Plan Design Survey.