Congressional negotiators are attempting to fashion and pass before the weekend a major tax bill that will eliminate the 5.0 % reduction in Medicare Part B payments to doctors scheduled for January 1 by cutting funding for a Medicare Advantage stabilization fund that is intended to help insurers and HMOs offer Medicare Advantage plans in rural areas. The Washington Post reports that the bill also increases contribution limits for Health Savings Accounts. These measures are included in a bill that also extends popular tax cuts.

Applied Materials, BP America, Inc., Intel Corporation, Pitney Bowes, Inc. and Wal-Mart, which have 2.5 million employees combined, announced today their decision to fund “an independent nonprofit institute to develop ‘Dossia,’ a Web-based framework through which U.S. employees, dependents and retirees can maintain lifelong personal health records.” Information Week explains that

Dossia will have at its core a series of federated databases being developed by a member-company funded non-profit organization called the Omnimedix Institute. To begin with, Omnimedix will build between five and seven databases around the country. Once an employees joins the system and enters some personal information, the system will automatically supplement the data with records from outside sources like hospitals, insurance claims, and physicians, so one database would house insurance claims data, another lab results and so on. Once the databases are built, the cost of adding incremental patients is expected to be pennies.

Computerworld adds that

Dossia is based on the Connecting for Health Common Framework, a set of design and policy standards developed by consumer advocacy groups, physician groups, insurers and privacy organizations, [Omnimedix CEO J.D.] Kleinke said. Each of the founding members is contributing a “seven-figure” sum to Omnimedix to help set up the system, Barrett said. In the future, the group expects to add additional employers and government participants who would pay a per-user fee to participate in the program, he added. In February, the founding members plan to announce additional companies that have joined the effort, [Intel Corp. CEO Craig] Barrett said.

The United Health Foundation has released its America’s Health Rankings report for 2006. According to the Foundation, this report is “a yearly assessment of the relative healthiness of the nation, based upon analysis of comprehensive determining factors such as personal behaviors, the environment in which people live and work, the decisions made by public and elected officials and the quality of medical care delivered by health professionals.” The report compares relative U.S. healthiness among states (Minnesota is tops for the 17th year) and against other countries.

The foreword to the report warns

To our dismay, this year’s report once again documents the lack of significant progress in improving health status, a trend we first noticed in 2000. And, alarmingly, overall health in the United States continues to suffer in comparison to that of many other nations. For example, a baby girl born today in the United States has a healthy life expectancy of 71 years compared to 78 years for a baby girl born today in Japan! Our country can do better, and our children deserve better. It is our collective hope that this report will continue to stimulate action by people, communities, health professionals, policy leaders, politicians and others as we intelligently dedicate our rich national resources toward the goal of optimal health and survival for all Americans.

I scratched my head when I read that U.S. life expectancy was 71 years at birth for girls. According to the National Center on Health Statistics, the average life expectancy of a newborn girl in the U.S. was 80.1 years in 2003, which reflects quite a public health accomplishment. (It was 71.1 years in 1950.) A Japanese Aging Center website reports that the average life expectancy of 85.2 years in 2002.

I then recognized that the United Health Foundation is using a different statistic “healthy life expectancy“. According to the World Health Organization, this statistic “is based on life expectancy (LEX), but includes an adjustment for time spent in poor health. This indicator measures the equivalent number of years in full health that a newborn child can expect to live based on the current mortality rates and prevalence distribution of health states in the population.” I’m not sure if I buy this statistic, but you do learn something new everyday.

Here is a link to the World Health Organization’s World Health Statistics 2006′ and ‘The World Health Report, 2006 Edition’

A new Wall Street Journal Online / Harris Interactive poll projects that employer sponsored health plan participants will stay put during the current open season. (The FEHB Program historically has offered an Open Season during November and December and private sector employers who have introduced cafeteria plans now offer them as well. This poll was not directed at FEHB Program participants.) “About 86% of insured Americans expect to keep their current coverage next year, while 6% plan to switch or drop their plan.” Another interesting tidbit from the poll of 2,673 adults with health-care coverage is that

About 17% of those polled said they are enrolled or will enroll in flexible spending accounts, compared with 69% who said they won’t. Six percent or fewer said they will enroll in medical saving accounts, health reimbursement accounts or health savings accounts, compared with about 79% who said they will not.

Today’s New York Times offers an lengthy article on the outlook for increased regulation of health care privacy in the new Congress and the privacy issue’s relationship to the Administration’s push for widespread use of health information technology. In that regard, it should be noted that the U.S. Office of Personnel Management now features its own health information technology transparency web page.

• The Kaiser Family Foundation released a survey of participants in consumer driven health plans. Consumer driven plans have high deductibles and usually are associated with health savings accounts or health reimbursement arrangements. According to a Washington Post article, the surveyed participants are more health care cost conscious than traditional plan participants. However, many of them wish to switch back to a traditional plan. Definity Health, a unit of United Healthcare, that administers consumer driven plans offered a rebuttal.
• The New York Times offered its perspective on the first two months of Walmart’s $4 generic drug program. The article notes that
  

  Wal-Mart, declining to cite overall sales figures for the program, said that in the first seven weeks it had filled 2.1 million more prescriptions of all types — generic and name-brand — compared with prescriptions in the same stores a year ago. Those numbers would indicate that in the early going at least, Wal-Mart’s $4 prescriptions are not having a huge impact on overall sales of generic drugs in this country. Nationwide, many of the most popular generic drugs are each prescribed more than a million times in a single week, according to Wolters Kluwer Health, a drug data company. In the Tampa area, some independent druggists and a big drug wholesaler say that they have not noticed much effect on their businesses since the September rollout.

• Laura Landro of the Wall Street Journal wrote a fascinating article on steps that the medical profession is taking to prevent the “tragedy of misdiagnosis.”
  

  With growing concern about costly malpractice claims from missed, delayed or wrong diagnoses, two of nation’s largest health-care providers, the Veterans Administration and managed-care giant Kaiser Permanente, are leading new efforts to improve diagnostic accuracy. They are embarking on system-wide initiatives aimed at the most common lapses in the diagnostic process, including failure to order the right tests, create proper follow-up plans, obtain complete medical histories or perform adequate physical exams. To address such glitches, Kaiser and the VA are turning to a variety of new tools, including Web-based “decision support” programs [such as Isabel] to help doctors by offering an array of possible diagnoses they might not have considered or prompting them to perform appropriate tests on patients with certain symptoms.

The Associated Press recently ran an interesting story on the prospects for laws expanding the ability of U.S. consumers to import drugs from Canada and other countries in the new Congress. The article notes that

Senator David Vitter [R Louisiana] continues to block confirmation of Dr. Andrew von Eschenbach, President Bush’s nominee to lead the Food and Drug Administration [FDA], until federal drug import laws are further relaxed. As for the FDA, the agency says it can’t vouch for the safety or efficacy of imported drugs. This summer, the FDA said testing revealed fake versions of Lipitor and other widely used prescription drugs ordered through Web sites linked to a Canadian pharmacy but shipped from other countries.

TRICARE is a Defense Department health care program for military dependents and retirees. In 2004, TRICARE remodelled its pharmacy benefits program by subcontracting with Express Scripts for a retail pharmacy network and a mail order pharmacy. The Veteran Affairs National Acquisition Center, which administers the the Federal [Government] Supply Schedule for pharmaceuticals, sent a letter to brand name drug manufacturers ordering them to rebate to the Defense Department the difference between the retail price paid at the retail pharmacy and the “federal ceiling price” because the Express Script’s pharmacy network represented a depot contracting system.

The U.S. Court of Appeals explains in The Coalition for Government Procurement v. Secretary of Veterans’ Affairs, __ F.3d ___ (Sept. 11, 2006) that

The Veterans Health Care Act (VHCA) was enacted in 1992 to reduce the cost of prescription drugs used in the VA health care benefits programs. As seen, the VHCA is codified at scattered sections of Title 38. The VHCA includes 38 U.S.C. § 8126, which provides in relevant part:

(a) Each manufacturer of covered drugs shall enter into a master agreement with the Secretary [of the VA] under which— (1) beginning January 1, 1993, the manufacturer shall make available for procurement on the Federal Supply Schedule of the General Services Administration each covered drug of the manufacturer;
(2) with respect to each covered drug of the manufacturer procured by a Federal agency described in subsection (b) on or after January 1, 1993, that is purchased under depot contracting systems or listed on the Federal Supply Schedule, the manufacturer has entered into and has in effect a pharmaceutical pricing agreement with the Secretary . . . under which the price charged during the one-year period beginning on the date on which the agreement takes effect may not exceed 76 percent of the non-Federal average manufacturer price (less the amount of any additional discount required under subsection (c)) during the one-year period ending one month before such date (or, in the case of a covered drug for which sufficient data for determining the non-Federal average manufacturer price during such period are not available, during such period as the Secretary considers appropriate), except that such price may nominally exceed such amount if found by the Secretary to be in the best interests of the Department or such Federal agencies[.]
Thus, section 8126(a) limits the price that manufacturers of “covered drugs” may charge for drugs “procured by a Federal agency.” Section 8126(b)(2) lists DOD as a “Federal agency” to which section 8126(a) applies. Accordingly, section 8126(a) requires that manufacturers charge DOD a percentage of the non-federal average manufacturer price (“non-FAMP”) for “covered drugs.” [Fn. The non-FAMP is defined as “the weighted average price of a single form and dosage unit of the drug that is paid by wholesalers in the United States to the manufacturer, taking into account any cash discounts or similar price reductions during that period.” 38 U.S.C. § 8126(h)(5) (2000).]

This price limit is also called the federal ceiling price (“FCP”).

As seen, section 8126 limits “covered drugs” to those obtained through one of two sources: the drugs must be (1) “listed on the Federal Supply Schedule” or (2) “purchased under depot contracting systems.” The Federal Supply Schedule (“FSS”) of the General Services Administration authorizes the VA to award and manage contracts with pharmaceutical companies in order to obtain low prices. See 41 U.S.C. § 259(b)(3) (2000).

This is how the Government “negotiates” pharmaceutical prices.

Needless to say, the drug manufacturers hit the roof when they received the VA order, and they challenged its legality. The VA agreed to suspend enforcement of the order until a court ruling. In its September 11 opinion, the Federal Circuit ruled that the VA had failed to follow proper Administrative Procedure Act rules when it issued the order without first engaging in notice and comment rule making. The Court did not consider the legality of the substance of the order. The ball is back in the VA’s court.

The Federal Times reports this week on FEHB plan carrier efforts to provide their members with computerized personal health records.

The Washington Post yesterday included the obituary of H. Donald Wilson, 82, who was the president of Mead Data Central when the online legal research service Lexis was introduced. The obituary notes that

At first, many lawyers refused to use the software, regarding computer work as a secretarial job. In order to spur adoption of the product, Mr. Wilson gave law students almost free access to electronic files of court decisions, so that when they graduated, the young associates at law firms immediately asked their employers: “Where’s your Lexis?” Zurkowski said. Mr. Wilson also realized that tax lawyers and those in other specialized fields were more likely to do their own research, and he focused the company’s early efforts in those areas, said his longtime associate, Gary A. Marple, president and chief executive of Lessac Technologies Inc.

I was attending law school when Lexis was introduced at the George Washington University where I studied. I don’t remember badgering my first employer for Lexis but the online legal research services are a valuable tool along with the old fashioned books and now the free internet services.