Mid-week update

Yesterday, the Senate appropriations subcommittee for financial services and general government cleared their FY 2019 measure that funds, among other things, the FEHBP. The bill included “a pay increase for civilian federal employees of 1.9 percent in calendar year 2019, equal to the 2018 increase.”  As far as the FEHBlog can tell, it does not include OPM’s proposed appropriations law changes to the FEHBP, such as the cut in the government contribution for most plans. The full Senate Appropriations Committee will take up the measure at a markup meeting tomorrow

Earlier today, per Healthcare Dive, “Amazon, Berkshire Hathaway and J.P. Morgan named Atul Gawande as CEO of their partnership focused on disrupting U.S. employee healthcare. Gawande will join the firm July 9.”

Gawande is a noted healthcare thought leader, author and surgeon. He currently practices general and endocrine surgery at Brigham and Women’s Hospital and is a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School.
Gawande has also written four New York Times bestsellers, including Being Mortal, and is a founder of Ariadne Labs, a joint effort between Harvard and Brigham and Women’s that focuses on medical errors and health system effectiveness. 

The business will be headquartered in Boston Massachusetts.

Healthcare Dive also reports that the shift from fee for service to value based health insurance is moving rather quickly at this point. 

Change Healthcare[‘s survey of 120 payers] said nearly two-thirds of payments are now based on value, and that structure reduces unnecessary medical costs by 5.6% on average, according to survey respondents. The survey found that nearly 80% of payers reported improvements in care quality, 64% have seen provider relationship improvements and 73% said patient engagement improved.

On a related note, Employee Benefit News tells us HHS Secretary Alex Azar is advocating for “a system without [prescription drug manufacturer] rebates, where PBMs and drug companies just negotiate fixed-price contracts,” Secretary Azar made this point Tuesday in testimony before the Senate Health, Education, Labor and Pensions Committee. “Such a system’s incentives, detached from artificial list prices, would likely serve patients far better.”

Finally, yesterday, the Labor Department finalized the association health plan rule that will permit small businesses to be treated like large businesses, rather than individuals (as the ACA has required), for health benefits purposes. The final rule will be published in tomorrow’s Federal Register and is available today at this website.

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