• Congress returns from its Fourth of July holiday this week and attention again will turn to health care reform. The San Francisco Chronicle has provided a useful chart comparing the House Tri-Committee proposal, the Senate Health Education Labor and Pensions Committee proposal, which was updated on July 1, and the Senate Finance Committee proposal, which is the only one of the three to seek bi-partisanship. The Senate HELP Committee touted its new “low cost” proposal which features a public option and an employer mandate. Last week, Wal-Mart Stores joined the Service Employees International Union in endorsing an employer mandate. Business Insurance reports that
  

  Under the latest proposal, unveiled Thursday, employers would be required to pay 60% of the health insurance premium. Those that did not would have to pay an annual assessment of $750 for each full-time employee not covered and $375 for each part-time employee not covered.The so-called “play-or-pay” mandate would not apply to employers with 25 or fewer employees.

  Considering the fact that health insurance coverage costs employers thousands of dollars per employee annually, what prudent employer would decline to make this modest assessment? There has to be a catch.

• Two Senate Finance Committee members, Sen. Chuck Schumer (D NY) and Sen. Charles Grassley (R Iowa) disagreed over the public option issue on the Sunday morning news shows, according to CQ Politics.com. Interestingly, “[b]oth Grassley and Schumer said they believed that legislation could be completed by President Obama’s October deadline.”
• Government HIT News reports that many health care organizations urged the Government in public comments to be more flexible when defining “meaningful use” of health information technology, which is the key that opens the door to the $30 billion of health information technology funds that the the recovery act makes available to health care providers. Those organizations also want more time to put the meaningful systems in place.

• Today’s New York Times offered an engaging portrait of Wellpoint’s CEO Angela Braly.

• CMS announced proposed Medicare Part B physician reimbursements changes for the 2010 calendar year. The principal change is that physician administered drug costs will be pulled out of the RBRVS reimbursement (I’m not sure how those expenses will be reimbursed). According to the Hill, While legislation is needed to prevent a [Medicare] cut [in Part B physician reimbursement] in next year’s rates, “the Medicare agency notes that excluding the cost of drugs from the payment formula would ‘reduce the number of years in which physicians are projected to experience a negative rate.'” Primary care physicians will be paid six to eight percent more but specialists will be paid less. Medicare also would pay less for imaging services provided in a doctor’s office. The battle lines have been drawn. The Wall Street Journal reports that
  

  Ted Epperly, president of the American Academy of Family Physicians, said the Medicare proposal would help reduce the income gap among doctors — specialists make two to five times as much as primary-care physicians — and attract more medical students to primary care. He called the change “long overdue.”

  Groups representing cardiologists, radiologists and other specialists said they will lobby lawmakers to stop the cuts. Dr. Bove warned that “cutting back like this certainly threatens the successes we have had over the years with reducing heart disease.”

• CMS also proposed 2010 changes to its hospital outpatient care prospective payment system and to its Physician Quality Improvement Program and e-prescribing initiative. CMS is accepting public comment on all of these proposed changes until August 31, 2009, and it intends to publish final rules by November 30, 2009.
• In May, the American Medical Association expressed concern about the creation of a public option. Today, its new president, J. James Rohack, according to CNN, “suggested Wednesday that the Federal Employee Health Benefit Program available to Congress members and other federal employees could be expanded as a public option. That would avoid having to create a new program from scratch, he said.” However, the FEHBP is not a public program like Medicaid; it’s a well managed employee benefit program for federal and postal employees and annuitants. The FEHBP certainly could be a model for a health insurance exchange but opening the FEHBP to all comers would be harmful to the Program and the people it serves.

According to an Institute of Medicine press release,

A new report from the Institute of Medicine recommends 100 health topics that should get priority attention and funding from a new national research effort to identify which health care services work best. It also spells out actions and resources needed to ensure that this comparative effectiveness research
initiative will be a sustained effort with a continuous process for updating
priorities as needed and that the results are put into clinical practice.

This report was required by the Recovery Act, which set aside $1.1 billion for government studies of health care cost effectiveness. Here are a few examples of the recommended health topics:

Compare the effectiveness of treatment strategies for atrial fibrillation
including surgery, catheter ablation, and pharmacologic treatment.

Compare the effectiveness of the different treatments (e.g., assistive listening
devices, cochlear implants,electric-acoustic devices, habilitation and
rehabilitation methods [auditory/oral, sign language, and total communication]) for hearing loss in children and adults, especially individuals with diverse cultural, language, medical, and developmental backgrounds.

Compare the effectiveness of primary prevention methods, such as exercise and balance training, versusclinical treatments in preventing falls
in older adults at varying degrees of risk.

Compare the effectiveness of upper endoscopy utilization and frequency for patients with gastroesophageal reflux disease on morbidity, quality of life, and diagnosis of esophageal adenocarcinoma

Rather arcane. A more direct point was made in a commentary of the Journal of the National Cancer Institute. AFP reports that

According to study authors Tito Fojo, an oncologist at the National Cancer Institute, and Christine Grady, an NIH bioethicist, an 18-week course of cetuximab [manufactured by Merck under the Erbitux trade name] for a lung cancer patient would cost about 80,000 dollars and extend the patient’s life by an average of 1.2 months.

Using the drug to extend a patient’s life by a year could cost 800,000 dollars, the authors wrote.

It would cost 440 billion dollars annually, a figure 100 times more than the National Cancer Institute’s budget, to extend by one year the lives of the 550,000 Americans who die of cancer each year.

The authors recommend that studies geared towards treatments that will extend patients’ lives by two months or less only consider interventions that will cost 20,000 dollars or less.

That’s a hard decision.

• Reuters reports that The White House weighed in last week on the competing legislative proposals to create a regulatory pathway for bio-similar (or bio-generic drugs). The White House recommended to the House leadership that a seven year period of patent protection for brand name biologic drugs would provide an adequate return on the invested capital. The biologic drug manufacturers have been arguing for 12 to 14 years of patent protection (H.R. 1548).and Rep. Henry Waxman (D Cal), whose name is linked to the 1984 law that created that regulatory pathway for generic versions of chemically based drugs, has proposed five years (H.R. 1427). Pharmtimes reports that “Rep Waxman said in a statement that the Administration “has made clear that the President does not support the lengthy monopoly periods sought by the drug industry and instead wants a bill, as I do, that will bring real competition and will not unduly prolong the monopolies on biotech drugs.”
• The Commonwealth Fund issued a report with recommendations on how to implement the medical home concept in the Medicaid and Children’s Health Insurance Program. The report is based on the experiences of ten states which have experimented with this concept.
• The Agency for Healthcare Research and Quality announced on Friday its “annual release of State-by-State quality data continues to give States mixed reviews for the quality of care they provide. As in previous years, AHRQ’s 2008 State Snapshots show that no State does well or poorly on all quality measures.” The states in the upper Midwest, e.g., Wisconsin, Minnesota, North Dakota, continue to receive high marks. The states along the Gulf Coast, e.g., Texas, Louisiana. Mississippi, continue to receive low marks. Interestingly, Massachusetts moved to a “strong rating” from high average. Rhode Island and New Hampshire also have that high marks in New England. Massachusetts of course has been implementing universal health insurance.The AHRQ press release explains that
  

  The State Snapshots are an invaluable resource for State officials, health
  care providers and purchasers to help them better understand the extent of
  health care quality and disparities in their States,” said AHRQ Director Carolyn
  M. Clancy, M.D. “With this information, they can take the necessary steps to
  improve health care quality and address persistent gaps in access to health
  care.”The 2008 State Snapshots summarize health care quality in three dimensions:
  type of care (preventive, acute and chronic care), setting of care (hospitals,
  ambulatory, nursing homes and home health care) and by clinical areas (cancer, diabetes, heart disease, maternal and child health and respiratory disease). The 2008 State Snapshots allow users to explore whether a State has improved or
  worsened compared with other States in several areas of health care
  delivery.

• Rep. Danny Davis (D Ill) has reintroduced his bill (HR 2978) to increase the maximum age for dependent children under the FEHBP from 22 to 25. The bill has been referred to the House Oversight and Government Reform Committee.
• The Federal Workforce Subcommittee of that House Committee has scheduled a hearing for July 8, at 2 p.m., on the bill (HR 2517) that would extend FEHBP coverage, among other federal employee benefits, to same sex domestic partners of federal employees.
• Business Insurance reports that “Senate Finance Committee Chairman Max Baucus said Thursday the panel had agreed to trim the cost of its health care overhaul plan to $1 trillion and could pay for it without increasing the budget deficit.” The Senate Finance Committee also issued the following press release:
  

  Senate Finance Committee Chairman Max Baucus (D‐Mont.), Ranking
  Member Chuck Grassley (R‐Iowa) and committee members Orrin Hatch (R‐Utah), Jeff Bingaman (D‐NM), Kent Conrad (D‐ND), Olympia Snowe (R‐Maine) and Mike Enzi (R‐Wyo.) issued the following statement today regarding the committee’s efforts to craft a health care reform bill:

  “Reforming America’s health care system is a tremendous challenge, but it’s a
  challenge we simply have to face. The issues facing reform are difficult and complex, but over the past several months, we’ve made progress toward workable solutions. As we have been for the last several weeks, we are committed to continuing our work toward a bipartisan bill that will lower costs and ensure quality, affordable care for every American.”

• The Federal Workforce Subcommittee of the House Oversight & Government Reform Committee held a hearing on FEHBP prescription drug benefits this afternoon. I had expected the hearing to focus on a recent GAO report on the cost of specialty drugs to FEHBP members. Instead, the Chairman, Stephen Lynch (D MA) was interested in exploring the transparency of prescription benefit manager contracts and the ability of the Inspector General to audit those contracts, as noted in this Dow Jones newswire report.
• Senate Commerce Committee Chairman Jay Rockefeller (D WV) released a report by his Committee’s investigators on alleged insurer misuse of the Ingenix “usual reasonable and customary” databases. Senator Rockefeller held an impromtu Committee hearing to showcase the report and flog health insurers as discussed in this AP report. The Committee activities appear timed to support the Obama Administration’s support for a public health plan option in the universal health care reform scheme.
• Roll Call reports on the work of the Senate Finance and Health Employment Labor and Pensions (“HELP”) Committees on health care reform:
  

  Optimism about a bipartisan outcome appears high among key Democrats and
  Republicans who serve on Finance, even as the GOP Members of the HELP Committee complain that their markup has devolved into a partisan exercise. The process for approving health care reform in the Senate calls for merging the Finance and HELP bills into a single measure. Finance is set to begin its markup after the July Fourth recess.

  Business Insurance reports on the health care reform push and its potential impact on employer sponsored health coverage.

• House Federal Workforce Subcommittee Chairman Stephen Lynch announced last week that on June 24 at 10 am, his subcommittee will hold a hearing on the cost of specialty drugs in the FEHB Program. The GAO recently issued a report on this topic. Specialty drugs are typically injected biologics rather than chemicals in pill form. The Pharmacy Times reported on February 1, 2009, that
  

  Looking ahead, the introduction of [generic versions of specialty drugs or]biogenerics could result in even more substantial savings for patients, with estimates ranging from $14 billion to as much as $67 billion within the first decade of competition. Given these estimates, it is clear that competition from biogenerics will create savings that dwarf those generated by traditional generic pharmaceuticals for both patients and government since 1984.

  However, Congress first should pass a law creating an FDA regulatory pathway for biogenerics. Earlier this month, Congressman Henry Waxman, for whom the 1984 chemical drug generic law is named, asked the President this month to have the FDA investigate ways to create this pathway without legislation according the Fierce Biotech.com. “Waxman also reminded Obama of his pledge to bring down the cost of biologics, which has helped fuel healthcare costs.”

• Speaking of drug costs, the pharmaceutical manufacturers trade association Phrma announced a deal with Senate Finance Committee Max Baucus to work cooperatively to reduce the so-call donut hole in Medicare drug coverage. This reminds me of the savings that retail stores were able to create for everyone by charging a few dollars for generic drugs.
• The Hill reports that
  

  Health policy analyst Alec Vachon on Saturday said, “The real question is — how is this ‘deal’ [between Sen. Baucus and Phrma] a positive for the pharmaceutical industry? Given the sketchy facts, two speculations: First, the deal may allow industry to dodge new drug rebates that the Finance Committee had proposed, which are profit transfers to government. Even better, given that many seniors aren’t filling prescriptions in the ‘donut hole,’ new ‘donut hole’ sales are likely very profitable — even at discount prices because of the low marginal cost of drug manufacturing.”

• The Hill further reports that
  

  Cost issues continue to dog Democrats on healthcare reform. Obama has repeatedly vowed to enact a healthcare reform bill that is completely paid for. That would mean that the $634 billion he has called for healthcare reform would be paid for by tax increases or cuts to healthcare providers.

  Covering even most of the uninsured, however, will cost well over $1 trillion and finding the offsets to completely pay for the bill are nearly politically impossible.

  The CBO numbers released last week suggest Democrats have two choices: 1. Scale back their massive plans to cover most of the 47 million uninsured and seek coverage in incremental steps; or 2. backtrack on promises to pass a healthcare reform bill that will not add to the federal deficit.

  Similarly the AP reports this afternoon that

  A Republican senator seeking a bipartisan health deal spoke Sunday of “dialing down” expectations while one of President Barack Obama’s Democratic allies questioned whether the White House had the votes necessary for a such a costly and comprehensive plan during a recession.

• Finally, last week, New York Attorney General Andrew Cuomo announced a usual reasonable and customary (“UCR”) database with HealthNet.
  

  With Health Net signing on today [June 18], we have reached our goal of covering every single insured New Yorker with our reform efforts,” said Attorney General Cuomo. “I’m also pleased to have partnered with Governor Paterson and Insurance Superintendent Dinallo and created this new regulation to codify the reforms that the entire health insurance industry has now embraced. It will eliminate the conflicts of interest that infected the industry in the past, and ensure that New York healthcare consumers are never subjected to these kind of abuses again.

  Cuomo still must name the qualified university that will run the conflict free database. I understand that Ingenix will stop offering its UCR databases sixty days after the conflict free database is operationsl.

• Taking his cue from Secretary of State Hillary Clinton, the President extended certain non-statutory fringe benefits to same sex domestic partners, including voluntary long term care insurance and allowing employees to use sick leave to care for those domestic partners and their children. The President also reiterated his call for the repeal of the federal Defense of Marriage Act which prohibits the extension of FEHB Program coverage to same sex domestic partners. Senator Lieberman, who chairs the Senate Homeland Security and Government Operations Committee, has reintroduced his Domestic Partnership and Obligations bill (S. 1102 / HR 2517) which would achieve the President’s goal.
• OPM posted on the web its FY 2010 budget justification / performance budget document which makes the following statement about the FEHB Program:
  

  The ever-increasing cost of health care is a national challenge. OPM, through
  tough contract negotiations and extensive program oversight, has had remarkable success. Annual average premium increases were only about 2 % in both 2007 and 2008 contracts but the 2009 contract increase was 7.0%.

  OPM is committed to expanding the use of health information technology (HIT) within the FEHBP. Included among these initiatives are electronic personnel health records, e-Prescriptions, and disease management programs. OPM believes that these and other HIT initiatives will improve the quality of care and reduce the cost of health care by eliminating manual tasks, improving the coordinated quality of care and reducing medical errors. OPM’s major challenges to expanding the use of HIT within the FEHBP will be managing considerable implementation costs and ensuring that participant data is secure and safe from unauthorized access.

• Here’s the AMA House of Delegate’s approval resolution on health care reform –“Resolved, That our AMA support health system reform alternatives that are consistent with AMA principles of pluralism, freedom of choice, freedom of practice, and universal access for patient.” According to Modern Healthcare, the AMA is keeping its options open.

• Senate Finance Committee Chairman Max Baucus is holding off on the release of his healthcare reform bill until he can get his funding problems straightened out according to the Politico. Business Insurance similarly reports that House Democrats are struggling to find a way to fund this initiative. Meanwhile, Congressional Republicans, according to CNN.com, continue to pitch their more modest reform bill.
• Meanwhile, Modern Healthcare reports that the American Medical Association’s House of Delegates is debating a resolution on the public option. After the current AMA President Nancy Nielsen spoke against the health insurance industry, the House voted to remove from the resolution a line reading that the AMA “oppose[s] those alternatives that would risk the elimination of a healthy competitive market for private health insurance.” I expect that the AMA President might steal the line of the ALPA president who reportedly remarked that “We don’t want to kill the golden goose. We just want to choke it by the neck until it gives us every last egg.”
• The Wall Street Journal reports today that “The [Senate Finance] committee is close to settling on a plan that would create state-run marketplaces where private health-insurance companies would compete to offer coverage. To answer demands from Democrats including Mr. Obama that a public plan be offered as well, the committee is heavily favoring nonprofit cooperatives that would be governed by their members and would compete inside the new insurance exchanges, people familiar with the matter said.”
• Government HIT News reports that the new HHS Health Information Technology Policy Committee is setting an aggressive schedule for implementing a program — required by the 2009 recovery act — to pay doctors and other health care providers bonuses for their “meaningful use” of health information technology.

• The OPM Inspector General’s semi-annual report to Congress for the period ending March 31, 2009, is posted here. This report discusses the Inspector General’s audits of FEHB plans and his anti-fraud efforts against providers and others.
• OPM published in the June 11 Federal Register its list of medically underserved states for 2010. There was no change from 2009. This action is required in order to implement Section 890(m)(2) of the FEHB Act which established special coverage rules in those states.
• Vangent Inc. announced on June 9 that it was awarded a contract from the U.S. Office of Personnel Management to provide Open Season Services as part of the Federal Employee Health Benefits (FEHB) Program.
• Congress enacted a law to permit the Food and Drug Administration to regulate tobacco products. The House passed the Senate version thereby by-passing the need for a conference committee which might have considered various federal retirement policy changes discussed in this Govexec.com article. The tobacco regulation law does include “several measures expanding federal employees’ options under the Thrift Savings Plan.”
• The President will give a major health care reform speech before the American Medical Association tomorrow. In yesterday’s radio address, the President proposed $313 billion in Medicare and Medicaid cuts over 10 years. This proposal elicited howls from affected provider groups, including hospitals, prescription benefits managers, and medical device manufacturers according to the AP.