Drug Reimportation Compromise

Drug Reimportation Compromise

The Republican leadership in Congress reportedly has agreed on a compromise that would allow Americans to bring a 90 day supply of prescription drugs back from Canada, where retail brand name drug prices are significantly lower. Mail order and internet purchases from Canada would remain prohibited. The Food and Drug Administration will not guarantee the safety of reimported drugs (or American grown spinach, although the FDA is now considering a spinach labelling plan.).

Walmart’s generic drug pricing innovation

The blog has followed the trend of blockbluster prescription drugs that have lost their patent protection, such as Merck’s Zocor and Pfizer’s Zoloft. The leading discount store chain Walmart announced today that

Its pharmacies will make nearly 300 generic drugs available for only $4 per prescription for up to a 30-day supply at commonly prescribed dosages. The program, to be launched on Friday [Sept. 22], will be available to customers and associates of the 65 Wal-Mart, Neighborhood Market and Sam’s Club pharmacies in Tampa Bay, Fla. area, and will be expanded to the entire state in January 2007 [and to as many states as possible next year].

The program is available to all customers, whether insured or uninsured. On average, generic drugs cost consumers $10 to $30 for a month’s supply. The announcement caused drug wholesalers and drugstore company stock prices to fall.

Transparency Update

Health care provider price and quality transparency is a major Administration goal and a component of the President’s August 22, 2006, Executive Order. The U.S. Office of Personnel Management which administers the Federal Employees Health Benefits Program has explained its Executive Order implementation approach:

Transparency in pricing. OPM will work with carriers to make available to
FEHBP enrollees information about the cost of services delivered by various
providers. This information will be combined with quality information so that
enrollees can see quality and price information together in single, easy-to-use
sources.

Transparency in quality. OPM will work with carriers to make available
information on the performance of doctors, hospitals and other health care
providers. They will use quality measures that have been developed
collaboratively with the health care sector, to help ensure accuracy and
fairness.

OPM announced this week the FEHB plans which were the first to meet its transparency standards:

Aetna Health Plans, American Postal Workers Union consumer-driven, Av-Med,
Blue Choice for Ohio and Missouri, Blue HMO of Ohio, CaliforniaCare,
CareFirst BlueChoice, Foreign Service Benefit Plan, HealthNet of California,
HMO Health of Ohio, Humana Health Plans, Independent Health, Kaiser for
California, Colorado and Northwest regions, M-Care, Rural Letter Carriers
Health Plan, SuperMed HMO and United Healthcare.

New Evidence Based Medicine Payment Model Proposed

A multi-disciplinary group organized as Prometheus Payment Reform, Inc. is proposing a new health care provider payment model using “Evidence-Based Case Rates” that seek to tie the payment to compliance with evidence based medical guidelines. “The initial focus of the model is on five specific clinical areas: cancer care (starting with lung and colon cancers), chronic care (starting with diabetes, depression, hypertension and hyperlipidemia), interventional cardiology, orthopedic care (in particular joint replacements) and routine and preventive care.” The group which includes executives from Bridges to Excellence, the Leapfrog Group, the Blue Cross and Blue Shield Association, and the American Hospital Association, currently is preparing to conduct pilot tests of the model in several regions.

OPM plans E-prescribing pilot

As I earlier blogged, the U.S. Institute of Medicine strongly recommends electronic prescribing to reduce medication errors and related health care costs. In his September 1, 2006, testimony before the House Federal Workforce and Agency Organization Subcommittee, OPM Deputy Associate Director Dan Green advised the members of OPM’s plan to conduct an e-prescribing pilot program in the Federal Employees Health Benefits Program. More details are to follow.

OPM Releases 2007 FEHBP Premiums

Today is a big day in the Federal Employees Health Benefits Program (FEHBP) contract cycle, which began when OPM released its 2007 benefit and rate proposal call letter in April 2006. OPM announced 2007 FEHBP premiums!

The average premium increase is 1.8%, the lowest increase in a decade. “On average, employees will contribute 2.3 percent more to their health care, while the government contribution (roughly 72 percent) will increase by 1.6 percent.” 63% of enrollees will see no increase at all.

“The FEHBP will offer 284 plan choices in 2007, up from 279 in 2006; 29 HDHPs will be offered, an increase of two over 2006. Similarly, the number of Health Maintenance Organizations increases to 209, up from 205.”

For the first time, OPM also announced premiums for the new enrollee-pay-all supplemental dental and vision programs. “Three enrollment categories are available for dental and vision coverage: self only, self plus one, and self and family. Bi-weekly dental premiums, based on the employee’s place of residence, range from $7.29 for self coverage, to $56.77 for self and family coverage; bi-weekly vision premiums range from $2.63 for self coverage, to $16.21 for self and family coverage.”

The next step in the cycle is the Open Season.

A single Open Season for the FEHB Program, FSAFEDS Program and Dental/Vision coverage will be held governmentwide from November 13 through December 11. During this period, individuals can review printed and online materials to compare the coverage and costs of each program, as well as enroll or make changes based on their personal needs. Current FSAFEDS enrollees must re-enroll for 2007 if they wish to continue coverage. Additional information on FEDVIP benefits and costs, along with health plan brochures, will be available at agencies for review by employees; employees and retirees can view the information online at www.opm.gov/insure/health/index.asp. Information on FEDVIP can be obtained online at www.opm.gov/insure/dentalvision; information on FSAFEDS can be found at www.fsafeds.com.