The FEHBlog was out of town for a couple of days. A lot of controversy has arisen over the Affordable Care Act rollout but that controversy does not impact the FEHBP.
A study was published Tuesday in the AMA Journal that finds that medical “price increases, not an aging population, are responsible for 91% of the hike in medical spending the U.S. has experienced since 2000.” This is not that surprising to the FEHBlog because Medicare, the health care program for the elderly, relies on statutory price controls. The article further explains that
[I]nsurers are bearing not only the increase in costs but a greater proportion of health-care spending. Personal spending on health care has dropped 83% since 1980, the study says, while either government or commercial insurers are paying more than 90% of hospital and doctor costs and 80% of drugs and care for the aged. It also found that chronic illnesses for all age groups, not just those of the elderly, are responsible for 84% of all medical costs.
A UPI article on the study adds that “the analysis found personal out-of-pocket spending on insurance premiums and co-payments declined from 23 percent to 11 percent since 1980, contradicting the conventional wisdom that out-of-pocket spending has increased.”
FierceHealthFinance reports that three states are implementing programs to provide greater transparency on health care prices. The article concludes that New Hampshire and North Carolina, which place the transparency burden on the provider, are having better implementation success than Massachusetts which, as Kaiser Health News explains, chose to place the burden on the insurer.
Speaking of chronic illnesses, Reuters reports that employers are using the Affordable Care Act’s wellness program provisions to crack down financially on their employees’ unhealthy behaviors. OPM advised Congress last Spring that wellness penalties cannot imposed in the FEHBP without a statutory amendment to the government contribution formula.
Last month, the FEHBlog noted CVS Caremark’s third quarter earnings report. It’s only fair to provide a link to the Express Scripts third quarter report.