According to the Wall Street Journal, “[t]he Obama administration [today] gave its strongest signal yet that it would be willing to compromise on plans to expand the government’s direct role in health-insurance coverage as it fights a growing crescendo of opposition to its effort to overhaul health care.” The Washington Post reports that

Health and Human Services Secretary Kathleen Sebelius opened the door to a
compromise on a public option, saying it is “not the essential element” of
comprehensive reform. White House press secretary Robert Gibbs said on CBS’s
“Face the Nation” that Obama “will be satisfied” if the private insurance market
has “choice and competition.”

In this regard, the Kaiser Health News published an interview with American Hospital Association President Chip Kahn who said “We are just opposed to a public option that is controlled by the HHS secretary and pays any kind of rate that is based on Medicare (fees). We see that as counterproductive … We would prefer to negotiate with a private entity.” Further, Health Leaders Media reports that

Private health plans’ administrative costs averaged 9% of premiums across
all policies sold and are well below “vastly overstated” estimates offered by
proponents of a government-run public plan, according to a new [Sherlock
Company] study paid for by the Blue Cross Blue Shield Association.

The Sherlock report also claims that private plans perform the
administrative functions that Medicare performs for $12.51 per member per month,
compared to $13.19 per month for Medicare, and that private plans perform more
administrative functions than traditional Medicare, including care coordination
and wellness programs.

Business Insurance reports that the Blue Cross and Blue Shield Association has put its healthcare bank, the Blue Healthcare Bank, up for sale. “A variety of factors contributed to the reason for the sale, said Jeff Smokler, spokesman for the Blue Cross and Blue Shield Assn. ‘The future marketplace is one of those factors,’ he said.” The leadership in Congress is not a proponent of the health savings accounts which is a service offered by the Bank.Government Health IT News reports that “The federal Health IT Policy Committee today endorsed recommendations that would leave the Certification Commission for Health IT in[August 14] the short term as the sole organization authorized to certify health IT systems that qualified for funding under the economic stimulus plan.”Drug Store News reports that “CVS/pharmacy introduced Thursday [August 13] a free program that automatically fills prescriptions for maintenance medications and calls the patient to remind them that their medication is ready to be picked up. * * * Consumers must sign up to participate in the free ReadyFill program.”OPM has posted on its website a geographic breakdown of federal employees and annuitants as of September 2008.

The Office of Personnel Management has posted Fast Facts on federal employee benefits for new federal employees on its website.

The Centers for Medicare and Medicaid Services announced today that

The majority of Medicare beneficiaries currently enrolled in Medicare drug plans will not see significant changes in their premiums in 2010, but some may need to take steps to ensure they have the coverage they need when open enrollment begins later this year. “The majority of beneficiaries enrolled in prescription drug plans should see only small changes in their Part D premiums or benefits in the coming year,” said Jonathan Blum, acting director of CMS’ Center for Health Plan Choices. “Although most Part D plans should have relatively stable premiums, all beneficiaries should compare their current coverage with the plans that will be offered in 2010 when information becomes available in October.”

In particular, some beneficiaries who receive the low-income subsidy to pay for
their premiums will need to move to a new plan to ensure that they can remain in
a zero-premium plan in 2010 because the plan’s premium will be higher than the
2010 subsidy amount. CMS, working with its partners, will notify all individuals in this situation to make sure they are aware of their options.

Based on the bids submitted by Part D plans, CMS estimates that the average monthly premium that beneficiaries will pay for standard Part D coverage in 2010 will be $30, an increase of $2 over the 2009 average premium of $28. Premiums and benefits for Medicare Advantage plans and more details about the Part D plans will be announced in September, as well as the list of plans that are not renewing their contracts with Medicare for 2010.

In encouraging news, Bloomberg reports that

A drug that can selectively target and kill the stem cells that drive the growth of tumors has been identified for the first time by scientists who searched more than 16,000 compounds to find it.

Researchers at Massachusetts Institute of Technology and the Broad Institute looked for compounds that could destroy the stem cells, which often resist conventional cancer treatment. One, salinomycin, cut the number of stem cells at least 100 times more than did Bristol-Myers Squibb Co.’s Taxol, a common chemotherapy medicine, according to a report on the findings published today in the journal Cell.

I reiterate my hope that the current health care legislation will not impair American ingenuity. Finally, the Washington Post reports tonight that “With polls showing rising concern over the government’s grim financial situation, key Republicans and a growing number of Democrats say it will be hard to push an ambitious health reform bill through Congress unless it reduces projected federal spending on medical care and begins to bring the national debt under control.” Could common sense be returning to our fair city?

The health insurance trade industry AHIP has released a report on the value of health plan networks and the role of out-of-network charges in rising health care costs. This conclusion strikes me as self-evident but these are strange times when the American Medical Association is riding high. My summer reading has become the House health care reform bill (HR 3200) and the Senate Health Education Labor and Pension Committee bill. I have been struck by the fact that the bills cap health insurer underwriting profits but not healthcare provider profits. What’s good for the goose should be good for the gander. A Washington Post article on a local school district’s efforts to control the H1NI flu suggest that it’s going to be an intense flu season. The article also provided an update on the H1N1 flu vaccine:

At the University of Maryland School of Medicine in Baltimore, 66 adult
volunteers have received the first of two doses of an H1N1 vaccine. The
university is one of 10 sites for national clinical trials of the vaccine, which
started Monday. The goal of the clinical trials is to determine how strong a dose is required to protect different age groups. To that end, researchers will test for antibodies in the volunteers’ blood to assess their immunity. Once testing is complete, the vaccine is to be given to states and local governments and administered to millions of Americans, starting with vulnerable populations such as children and young adults, pregnant women and people with weak immune systems. But there is no timeline or firm idea of how the vaccinations will be administered. The H1N1 vaccine will not be a substitute for seasonal flu
vaccine, and health officials recommended that their employees and everyone else
get both.

Congress is in recess until just after Labor Day. The Washington Post reports that “Senators headed home for their August break Thursday [August 6] amid an escalating partisan battle over health-care reform, with a small band of lawmakers [the three Democrat and three Republic Senators from the Finance Committee] hoping to keep their delicately negotiated compromise alive until Congress reconvenes in September.”

Also on August 6, the National Business Coalition on Health sent the letters to the President and Congressional leaders offering five recommendations for value based health care reform —

1) measuring the comparative effectiveness and performance of health services and providers; 2) making such information easily accessible and transparent to the public; 3) reforming the fee-for-service payment system; 4) empowering consumers to make better and more informed choices along the full spectrum of their health and health care journey; and 5) creating a failsafe mechanism and establishing an
independent entity to insure that serious cost containment measures are taken in
response to escalating health care costs.

I noticed that the Coalition’s proposals resemble recommendations made in a 2008 Blue Cross Blue Shield Association report titled the Pathway to Covering America.

Speaking of reforming the fee-for-service payment system, the American Academy of Family Physicians last week posted a web site intended to held family physicians transition to a medical home centered practice.

The Centers for Medicare and Medicaid Services announced that the agency is resurrecting a pilot program to competitively bid for Medicare durable medical equipment providers in nine regions. The “rebid” will begin in October 2009.

Top management of Microsoft and Google encouraged the Obama Administration to incorporate web based solutions such as the Microsoft Healthvault and Google Health as a key part of its health information technology plan according to a Nextgov.com article.

Eric Schmidt, chairman and chief executive officer of Google, told top health
technology officials at a meeting of the President’s Council of Advisors on Science and Technology that * * * like the Google and Microsoft applications, the national health IT system should be based on Web records that patients can control. In addition,
current electronic health record systems are proprietary and don’t interoperate,
said Richard Levin, president of Yale University. “What is out there is not very
good,” he said. “The reality is dismal.”

The New York Times offered a report today on the privacy issues affecting these services.

Companies like Google, Microsoft and WebMD see a lucrative business opportunity in assembling and holding personal health records. Patients and their doctors would be able to consult the records wherever and whenever needed. But the companies themselves recognize that they have work to do to persuade consumers and physicians that records will be safe and protected.

Although as many as one in four adult Americans are currently offered an online personal health record, by a health plan or physician’s office, most have not taken up the offer.

Google, Microsoft and WebMD all say they will not show advertising alongside a person’s health records. But visitors to WebMD, Google Health and Microsoft’s site, HealthVault, see ads for drugs for diseases like osteoporosis or acid reflux as they seek information on an array of ailments.

Technology experts say identities of viewers and their health interests are often captured at the moment they click on online ads for a drug. That provides the advertiser with a prospective customer to pursue online or by mail.

“Personal health records linked to advertising, even indirectly, put them in the hands of marketers and profilers,” said Robert Gellman, an independent privacy consultant in Washington.

I find the lack of use of personal health records interesting. I think that the lack of use is more attributable to the fact that people just aren’t that interested at this point in these online records than to privacy concerns. That could change as more features are added and demographics change. Finally, it’s worth noting that the HHS rules that will trigger the 30 day implementation period for the new nationwide health information security breach notice requirement are due to be issued within the next ten days.

The Washington Post reported this morning that the bipartisan Senate Finance Committee negotiators are making progress on their version of the health care reform bill. According to that report,

The group is closer to resolving other major questions and has already
agreed to about $500 billion in changes to existing federal health programs,
including Medicare and Medicaid. For example, negotiators would require
wealthier seniors to pay more for prescription drug coverage under Medicare, and
they would charge co-payments for clinical lab procedures. The lab co-pays are
potentially lucrative, raising about $20 billion over 10 years.

Other new sources of revenue include penalties on individuals who do not obtain health insurance, and a “free-rider” provision that would require employers that
currently offer health insurance to continue to do so, or to reimburse the
federal government for workers who switch to subsidized coverage through an
insurance exchange. Both provisions could yield about $43 billion over 10 years.

The rest of the additional revenue — about $250 billion — would come from
new taxes, primarily from an excise tax of up to 35 percent on insurance
companies that sell extremely generous policies worth at least $21,000 a year
for family coverage or $8,000 a year for individuals, according to aides
involved in the discussions. About 7 percent of taxpayers hold such policies.

The Finance Committee proposal is also likely to contain a number of much smaller tax provisions, including a $2,000 cap on flexible savings accounts — which are currently unlimited — and a plan to improve tax compliance by requiring businesses to tell the Internal Revenue Service when they pay corporations for services.

I did the math and found that the the annual premium for the FEHBP’s most popular option Blue Cross FEP Standard Option is $5872 for self only and $13,447 for self and family. The self only premium is 24% below the proposed taxation threshold of $8,000, and the self and family premium is 35% below the proposed taxation threshold of $21,000.Kaiser Health News offers an interview with AHIP President Karen Ignani. Apropros to the last point:

Q. The Senate Finance Committee has been having trouble coming up with the money for the health care bill, which is the reason they’re talking now about windfall profits taxes on insurers and taxes on companies that sell high-cost policies. Since you’re opposed to both of those, what would you propose as an alternative?

A. I think the country has to get serious about bending the cost curve…We think there needs to be incentives for things to happen over the next few years that can reduce the rate of increase in health care costs, but there should be a commission, a broad commission not simply looking at Medicare, but a broad commission to monitor the progress and to make recommendations if goals are not achieved.

Q. Should there be some kind of mechanism for an across-the-board cut [in health spending]?

A. I think we have to look at those sorts of things. It doesn’t have to happen right away, but having a commission, having a mechanism, would give every stakeholder group an incentive to create more productivity, to reduce unit costs and to create more efficiency. And those are the kinds of incentives that I think the system needs.

The Wall Street Journal posed a series of questions and answers about health care reform. The first Q and partial A was this:

How would the bills impact the health insurance of members of Congress and other federal employees? What is their coverage like?

It’s likely that the bills would affect members of Congress about as much as anyone who currently has a relatively generous plan from an employer – not a great deal, at least in the short term.

The short term would end in 2019 under the House bill.

U.S. News and World Report announced today that “U.S. scientists [at the University of North Carolina, Chapel Hill] have decoded the structure of an entire HIV genome, a breakthrough which could improve understanding of how the virus infects humans and could lead to the development of new antiviral drugs.” It’s my expectation (hopefully not a pipe dream) that the decoding of the human genome and related developments such as this will lead to major healthcare advances before long. That’s why I hope that the health care reform being shaped by Congress promotes health care innovation.

AHIP President Karen Ignani came to the defense of the health care industry today. In pertinent part she said

The country is at a critical juncture. August will be the month when the country decides whether it supports reform and what shape it should take. It is crucial that the American people understand the broad consensus that exists on the essential building blocks for bipartisan reform. “With that in mind, there are five facts we believe all Americans should know:

• Health plans have proposed comprehensive health care reform to cover all Americans, make care more affordable, and improve quality.

• Health plans proposed health insurance reform last year.

• Health plans have proposed far-reaching initiatives to bend the health cost curve and make care more affordable for individuals, families, and employers.

• Health plans are advocating and advertising in support of bipartisan reform.

• Out of every dollar the nation spends on health care, one penny goes to health plan profits.

“Our community includes thousands of dedicated, conscientious Americans who are working hard across the country to try and improve health care. They are ordinary Americans from all walks of life who are raising their families and contributing to their communities. They do not deserve to be demonized or vilified as part of a campaign to distract attention away from the sinking support for a government-run program.”

My sentiments exactly.Preferred provider network vendor Multiplan announced today that it is acquiring Viant which owns the Beech Street preferred provider network. “The transaction is expected to close before the end of the year, subject to satisfaction of closing conditions including customary regulatory approvals. Financial terms were not disclosed.”

OPM has posted on the web its proposed 2010 – 2015 strategic plan. OPM currently is soliciting public comment on the plan. The plan assumes status quo for the FEHB Program.

HHS announced today that it is transferring HIPAA Security Rule enforcement authority from the Centers for Medicare and Medicaid Services to the HHS Office for Civil Rights. OCR currently enforces the HIPAA Privacy Rule. “Through a separate delegation, CMS continues to have authority for administration and enforcement of the HIPAA Administrative Simplification regulations, other than privacy and security of health information.”

Sen. Charles Schumer (D N.Y.) told reports today that “Senate Democrats won’t hesitate to forgo [the Senate Finance Committee efforts at] bipartisanship to pass a health-overhaul bill if negotiations fail in the next month.” according to a Wall Street Journal report. The Politico reports that “internal [Finance Committee] clashes about the government insurance [or public] option have begun to spill into the open — as Sen. John Rockefeller (D-W.Va.) has gone public with his case against consumer-owned health care cooperatives . . . .” The Hill reports that Sen. Charles Grassley (R Iowa), one of the Finance Committee negotiators, is predicting a final vote on health care reform in mid November, shortly before Thanksgiving.

Finally, Business Insurance reports that Aetna is buying an employee assistance program provider from Psychiatric Solutions, Inc., for $70 million. “he Wall Street Journal, citing people familiar with the matter, reported that Aetna’s PBM was being shopped by investment banks, and potential purchasers included CVS Caremark Corp., Medco Health Solutions Inc. or Express Scripts Inc.”

On Friday, the House Energy and Commerce Committee by a 31-28 vote cleared for floor consideration its version of the House health care reform bill (HR 3200). According to Modern Healthcare,

The deal, offered in a series of amendments, would ensure that public plans compete with other plans on a level playing field, allow the CMS to negotiate drug prices with pharmaceutical companies, and help lower premiums and increase subsidies for working families.

In addition, the bill’s public plan would use a drug formulary to control prices, and pharmacy benefit managers would be subjected to additional transparency requirements. * * *

A bipartisan amendment that would establish a 12-year patent exclusivity period for follow-on biologic products was approved, although [Committee Chairman Henry] Waxman didn’t support it.

The Committee rejected also by a 31-28 vote a a Republican amendment that would have opened the Federal Employees Health Benefits Program to the general public. The Chairman declined to consider on procedural grounds a proposed amendment that would have required all elected federal officials to participate in the public option created by the bill.On the Senate side, Senate Finance Committee Chairman Max Baucus advised that September 15 is the deadline for reaching agreement on a bipartisan measure according to a Politico report. “Baucus is also working to bring several governors to Washington next week to discuss the impact of expanding Medicaid on state budgets, according to a congressional source.”
While the House has recessed for the month of August, the Senate will be in session for another week to consider Judge Sonia Sotomayor’s Supreme Court nomination and the cash for clunkers extension. Kaiser Health News reports that the House majority and minority leadership sent their respective members home with talking points. The Speaker’s talking points build on her recent attack on the health care industry. The Politico reports that

“The glory days are coming to an end for the health insurance industry in our country,” Pelosi told reporters Friday afternoon. “This is about inoculating against misrepresentations and educating about what is in the bill,” she said. “We all want bipartisanship…but you’re either with the insurance companies or you’re for something new.”

The Office of Personnel Management announced today that the next federal benefits Open Season will be held from November 9 through December 14, 2009. The next step will be for OPM to announce 2010 FEHB plan premiums in mid-September. During the Open Season, federal and postal employees and annuitants can make enrollment changes in their FEHB plan coverage, FEDVIP coverage, and more.

Govexec.com reports that the Office of Management and Budget gave contracting guidance to federal agencies. The changes do not appear to impact FEHBP contracting.

The Associated Press reports that the Blue Dog Democrats and the House leadership reached a compromise today that permits the Energy and Commerce Committee to continue its mark up of HR 3200, the House health care reform bill.>

The agreement would allow a committee vote, preserving momentum on President Barack Obama’s top domestic priority.The deal calls for exempting more small businesses from a requirement to offer coverage, trimming subsidies to help people buy health insurance, and making any government-sponsored insurance plan negotiate payment rates with medical providers — instead of dictating them.

The Politico reports that liberal Democrats are upset with the deal which is at odds with the version of the bill cleared by the House Education and Labor and Ways and Means Committees. The House Rules Committee is responsible for reconciling conflicting versions of bills approved by different standing committees. No floor vote would occur until September.
Meanwhile the Wall Street Journal reports that

In the Senate, Finance Committee Chairman Max Baucus (D., Mont.) said his effort to build a bipartisan bill is advancing. He cited an estimate by the nonpartisan Congressional Budget Office that the bill in the Senate Finance Committee would cost less than $900 billion over a decade — less than other versions of the health legislation in the House and Senate — and ensure insurance coverage for 95% of Americans. Together, the developments suggested that Democrats are likely to avoid their worst-case scenario — a breakdown of talks before the August recess. But they are still far from agreement on the final contours of the legislation.