Weekend Update

Congress remains out until after Labor Day. The FEHBlog has enjoyed a very pleasant weekend with his family in Chicago.

Fedsmith has a blog entry on the upcoming Federal Benefits Open Season. Fedsmith suggests that FEHBP premium increases for 2015 will be in line with 2013 (3.4%) and this year (3.7%) because federal employees are not directly impacted by the Affordable Care Act. Au contraire, the FEHBlog is afraid. FEHB plans do have a relatively stable but aging risk pool in contrast to the new ACA plans on the exchanges. Nevertheless, the FEHBP are subject to all of the same ACA mandates as private sector health plans and the insured FEHBP plans must struggle with the ACA’s onerous health insurer fee just like the plans on exchanges. It’s a mixed bag, but on the whole, cost curve up.

The FEHBlog has been writing about rapid increases in prescription drug costs, even generics. The FEHBlog nevertheless was surprised to read in the Wall Street Journal that Walgreen’s chief financial officer has lost his job because “Walgreen hadn’t factored in, among other things, a spike in the price of some generic drugs that it sells as part of annual [Medicare Part D] contracts” and lost $1 billion in revenue forecasted for 2016. In view of the cloudy crystal ball, perhaps the FEHBlog’s hunch that Gilead Sciences’ Solvaldi pricing decision embolden the generic drug manufacturers to jack up their prices is correct. Bad precedent.

Reuters reports that the FBI has issued a warning to healthcare companies the hackers are targeting them for their protected health information.  The FBI did so in the wake of a successful attack on Community Health Systems’ network that resulted in the disclosure of millions of patient records. CHS is a Fortune 500 company that operates acute care hospitals. CHS’s breach notice states the company’s belief that

the attacker was an “Advanced Persistent Threat” group originating from China, which used highly sophisticated malware technology to attack CHSPSC’s systems.  The intruder was able to bypass the company’s security measures and successfully copy and transfer some data existing on CHSPSC’s systems. 

The FEHBlog hopes that HHS Office for Civil Rights does not hammer CHS with a multi million dollar HIPAA civil penalty as the company is cooperating with the government and even the federal government’s own systems have been hacked by these Chinese groups. Ihealthbeat discusses legislator reactions to the CHS breach.

Finally, it’s worth noting that the Bipartisan Policy Institute last week issued an interesting white paper on transitioning healthcare from volume to quality. Good luck with that.