FEHBlog

Modern Healthcare reports that

Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say. [The insurers participating in the FEHBP also get whacked too.]

On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020. 

But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don’t think it’s likely to move before insurers start setting their ACA exchange rates next year.

This development is quite disappointing to the FEHBlog. As the FEHBlog has noted from time to time, the Affordable Care Act taxed everything that moved. Its most counterproductive taxes are those imposed on healthcare services and premiums, like this one, as those taxes significantly raise the cost of healthcare for consumers. In other words, the taxes make healthcare less affordable. Why Congress simply can’t repeal them is a mystery.

On the encouraging side, Becker’s Hospital Review reports that

Limited trust has existed between payers and providers thanks to disagreements over networks, prior authorization and price variation; however, now is the time to change this dynamic, executives from UnitedHealth Group, Anthem and Permanente Medical Group wrote in a JAMA opinion piece.

“Relationships should change from being based on contracts to relationships built on a shared covenant to patients and to system improvement,” the authors concluded. “The next decade could be transformational, or it could be a missed opportunity. It is the responsibility of each person and organization in the U.S. healthcare system to make transformation real — in care delivery, in payment, and most powerfully, in relationships.”

Amen to that.

Earlier this week, the Centers for Medicare and Medicaid Services announced updates to the Hospital Compare website. Although the website suggests that the site is designed for Medicare, the information is useful for anyone who is considering hospital care.  Healthcare Dive explains why the American Hospital Association is not a fan of the Hospital Compare website. In the FEHBlog’s opinion, your best bet if possible is to speak with professionals, especially nurses, who work at local hospitals where your admitting doctor is credentialed.

Nearly nine years ago, the Democrats in Congress supported by President Obama enacted the thousand page long Affordable Care Act.  At the time the U.S. had a patchwork of programs to provide coverage to various categories of Americans. Those government programs stood alongside the reliable employer sponsored market and the troubled individual market. Instead of combining the patchwork 90s era Children’s Health Insurance Program and the 60s era Medicaid program with the new exchange or marketplace created by the ACA (Medicare was too sacrosanct to be folded in) Congress added the new individual and small business marketplaces to the existing patchwork and chose to disrupt the reliable employer sponsored market including the FEHBP with a boatload of mandates / consumer protections.

Nine years later, a large cadre of Democrats in Congress including several Senators who are running for the  Presidential nomination for the Democratic party are pushing ahead with a proposal known as Medicare for All that ironically would repeal the Affordable Care Act in favor of a single payer program known as Medicare for All. No more employer sponsored coverage, no more FEHBP, no more Medicaid, no more CHIP. The healthcare providers would be put under heavier cost controls than Medicare currently imposes.

Medicare already imposes mandatory pricing on hospitals, doctors and other Medicare providers which shifts costs onto the private sector because the Medicare payments are so low. What happens when there is no private sector to receiving the cost shift? The bill whose text is not yet available would create regional hospital price czars.

In return, Americans would receive coverage that is known to be inadequate. Medicare coverage is not comprehensive. Its traditional hospital coverage is subject to a limited number of days per spell of illness. Most Medicare beneficiaries find it necessary to supplement Medicare coverage with private Medigap plans or purchase more generous Medicare Advantage coverage. It’s not clear how the bill would address this serious problem. In all Medicare for All is in the FEHBlog’s view a half baked idea at best.

The Senate Finance Committee held a high profile hearing on prescription drug pricing today. The witnesses inclu”ded seven prescription drug manufacturer chief execs. Fierce Healthcare has a good overview of the proceedings. The FEHBlog’s upshot — the current practice of prescription drug manufacturers negotiating rebates with Rx manufacturers is on its way out. Fierce Healthcare notes that “some insurers, including big names like CVS Caremark and Aetna, are taking steps toward a direct discounting model,” rather than wait for a government mandate. Smart move.

Modern Healthcare reports that “Preliminary data from the Medicare Payment Advisory Commission shows hospitals’ Medicare margins continue to decline, reaching their lowest point in 2017 in at least a decade. Even so, hospitals’ all-payer margins continued their upward trek. In aggregate, U.S. hospitals’ Medicare margin [preliminarily] was negative 9.9% in 2017, compared with negative 9.7% in 2016, according to MedPAC.”  These facts illustrate the extent to which hospitals shift costs onto commercial health plans, including FEHB plans. In the Medicare for All scenario, with the commercial plans gone, the hospitals and other providers will have nowhere to turn.

Modern Healthcare also observes that

For many years, the battle cry of healthcare cost warriors was, “Eliminate all those wasteful services.” More recently that evolved to, “Pay providers based on value rather than volume.” But there were always those who insisted the real problem was, “It’s the high prices, stupid.”

Now policymakers and experts who favor attacking price increases have gained momentum, with both congressional Democrats and the Trump administration pushing price-setting proposals. Their arguments are buttressed by growing research showing that rising prices for hospital and physician services and drugs are a major driver of increasing healthcare spending. 

The FEHBlog is no fan of government price controls, but he can see how we got here. As noted above Medicare and Medicaid shift millions of dollars of costs onto commercial health plans. The Affordable Care Act imposed price controls on insurers (but not providers), required health plans to pay tons of lower priced services and supplies, and took away from health plans the strongest tools they had to control provider prices — most notably lifetime and annual dollar caps on benefits.

Congress is resuming its work on Capitol Hill this week following the President’s holiday state work period.
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Healthcare Dive reports that according to a new Avalere report

• The number of hospital-acquired physician practices grew from 35,700 in 2012 to more than 80,000 in January 2018, and

• A hospital or health system employed about 25% of U.S. physicians in 2012. That percentage nearly doubled to 44% in 2018.

“Opioid overdose deaths climbed fastest in the District of Columbia, more than tripling every year since 2013. Eight states — Connecticut, Illinois, Indiana, Massachusetts, Maryland, Maine, New Hampshire, and Ohio — had opioid-related mortality rates that at least doubled every 3 years. Two states — Florida and Pennsylvania — had opioid-related mortality rates that at least doubled every 2 years. The increase in mortality rates in the east seemed driven primarily by synthetic opioids, which followed a distinctive geographic pattern across the country.”

• The Providence (RI) Journal reports on a recently rolled out United Healthcare policy focused on educating oral surgeons and dentists about the epidemic. 

“Sometimes overlooked in the opioid epidemic is the role played by dentists and oral surgeons, who often prescribe opioids for pain relief after removal of wisdom teeth and other procedures. A new campaign by UnitedHealthcare aims to raise awareness of this factor in the crisis — and offer advice to healthcare professionals and patients about alternatives to addictive drugs to ease discomfort.

Happy Washington’s Birthday.

The FEHBlog found a couple of interesting articles related to the CMS protection of healthcare costs discussed in last Wednesday’s Post. The editor emeritus of Modern Healthcare asserts that CMS is full of beans.

Over the past decade, CMS actuaries have consistently overestimated future healthcare spending. They failed to foresee the great moderation [in the rate of increase] that in fact took place [this decade]. Their latest projections should be viewed in that light. As the great sage Yogi Berra once said, “It’s tough to make predictions, especially about the future.”

Researchers in Health Affairs assert that

Currently, official statistics of the medical care sector only measure the number of goods and services consumed (for example, visits and prescriptions) and associated prices, while neglecting much of the quality changes of medical care treatments. Experts agree that factoring in the quality of treatment would lead to lower quality-adjusted price growth, indicating that consumers are getting more per dollar spent in this sector than current official estimates. A complete understanding of the growth trends in the medical care sector, as well as our overall economy, hinges on properly accounting for quality alongside costs. 

The FEHBlog has been intrigued by blockchain technology application in healthcare and other sectors.  MIT Technology Review cautions that

while blockchain technology has been long touted for its security, under certain conditions it can  be quite vulnerable. Sometimes shoddy execution can be blamed, or unintentional software bugs. Other times it’s more of a gray area—the complicated result of interactions between the code, the economics of the blockchain, and human greed. That’s been known in theory since the technology’s beginning. Now that so many blockchains are out in the world, we are learning what it actually means—often the hard way.

In relevant private sector health plan news —

• Becker’s Hospital Review reports that Walmart reduced the copayment for a telehealth visit in its employee health plan from $40 to $4 effective January 1, 2019. The FEHBlog thinks that this is a good call for a gap filler service like telehealth. 
• The Wall Street Journal reports that Jack Stoddard, the chief operating officer of the Amazon/Berkshire Hathaway/J.P. Morgan Chase joint venture to establish an innovative health plan for their employees “had testified that the venture will be deploying smaller-scale tests of ideas like making primary-care access easier, or maintenance drugs cheaper. If these ideas work, they could be scaled up among the venture’s owners. One goal is to bolster the importance of primary care, he said in the newly public testimony.” Makes perfect sense to the FEHBlog.

According to Healthcare Dive,

• National spending on healthcare is projected to grow 5.5% between 2018 and 2027, according to the CMS Office of the Actuary‘s annual report. This would outpace average projected GDP growth by 0.8%.

• This forecast means the healthcare segment of the U.S. economy would climb to 19.4% by 2027, up from 17.9% just two years ago.
• “While Medicare spending is expected to accelerate the fastest among payers and contributed to the increase, growth
  in health prices and disposable personal income are also significant
  contributors,” Andrea Sisko, an Office of the Actuary economist and
  author of the Health Affairs study, said.

Of course, Medicare spending will be accelerating as the Baby Boomer generation continues to age into that program.

The FEHBlog was intrigued by the Bank Security Info analysis of public comments submitted to HHS’s Office for Civil Rights in response to that agency’s request for suggestions for potential changes to the HIPAA Privacy Rule. Check it out.

Finally, Health Payer Intelligence reports that

Blue Cross Blue Shield (BCBS) Institute and Health Care Services Corporation (HCSC) have launched a health food delivery service that will help reduce food insecurity and health disparities for plan members. 

Called foodQ, the service will bring nutritious, affordable meals directly to people living in areas that don’t have adequate access to fresh foods that are part of a healthy diet, known as food deserts. Both organizations will offer easy access to healthy food that will improve health outcomes, particularly for diet-related chronic conditions. A goal will be to reduce avoidable emergency room visits and hospital admissions.

Foodq’s website further explains

The BCBS Institute partnered with Kitchfix, a leader in fresh-prepared local meal delivery, to bring foodQSM to nutrition deserts in Chicago [based on zip code]. Kitchfix is at the forefront of providing consumers with access to proper nutrition made from high-quality ingredients. Every week, their inventive chefs prepare delicious, ready-to-heat meals, which are delivered by their team for foodQSM. 

Innovative.

Congress is on a home work period this week for Presidents’ Day. Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill.

Govexec.com updates us on when federal employees can expect their 1.9% pay increase for 2019 to kick in.  Due to red tape, “it could take weeks for federal workers to see the retroactive raise in their bank accounts.”

Federal News Network reports that new federal retirements are trending up. “Nearly 12,000 more federal employees retired in 2018 compared to 2017, according to a Federal News Network analysis of the past year’s data from the Office of Personnel Management.”  A good economy does encourage people to make job changes.

The Centers for Medicare and Medicaid Services announced a five year pilot expansion of Medicare ambulance coverage to include non-emergency transportation. The pilot scheduled to begin next year aligns with private sector health plan efforts to team up with Uber or Lyft to provide members with non-emergency transportation to urgent care centers and doctor’s offices. Healthcare Dive reports on this development here.

The President has signed into law H. Jt. Res. 31, a bill that funds the federal government through the end of this fiscal year, September 30, 2019. Because this bill covers OPM, its provisions include the standard FEHBP appropriations measures — a provision restricting abortion except in cases of rape or incest or where the life of the mother is endangered, a provision mandating coverage of female contraceptives, and a provision prohibiting the application of full Cost Accounting Standards coverage to FEHBP carriers.

Healthcare Dive provides its perspective on the now concluded HIMSS conference.  Health Data Management suggests two ways for the healthcare industry to get quick returns from blockchain.

CVS Health this week highlighted its new HealthHub store. CNBC explains the concept here.  In short,

CVS is trying to leverage its ability to provide hands-on help with a new “care concierge” in the store who helps guide customers through the new health services and provides more care coordination between the pharmacy, the clinic and the other services.

CVS opened the three HealthHUBs in the Houston area in December. The company will use those locations to test the new services. [A CVS Health representative] said CVS won’t turn all of its stores into HealthHUBs but will likely take individual pieces and roll them out across more stores if they’re successful.

StatNews reports on the moderate efficacy of this season’s flu vaccine.

Dr. Alicia Fry, head of epidemiology and prevention in the CDC’s Influenza Branch, cautioned against drawing too many comparisons at this point in the flu season. The season has been mild, Fry said, and there have been fewer infections than last year. That means there are less data on which to calculate the interim estimate.

Fry called the signs of effectiveness so far “encouraging” and said the level of protection provided by the vaccine is within the range of what one would expect during a flu season when H1N1 viruses predominate.

It’s also an improvement over last year, when the mid-season estimate of how the vaccine was working showed that about three-quarters of people who got a flu shot were not protected against H3N2 viruses, which were causing the most illness last year.

The FEHBlog has run across several interesting articles about the HIMSS heathcare IT conference:

• A Healthcare Dive article on attendee reaction to the new HHS proposed rules of data sharing and other stuff.
• A Healthcare IT News interview with Judy Faulkner, the chief exec of the largest electronic health record distributor, Epic, and
• A Healthcare IT News article concening telehealth vendor presentations at the conference. 

Healthgrades released another round of U.S. hospital ratings. The FEHBlog personally does not put a lot of stock in ratings like this. If he had to use a hospital, he would try to ask people who worked there, particularly nurses. Old school.

Speaking of which, Accenture issued a colorful chart filled report on how U.S. generations address healthcare differently. Not surprisingly, the younger generations don’t tend to have primary care providers (“PCP”) and the older generations do. The FEHBlog did not have a regular primary care provider until 2011. Now with mortality beginning to come into clearer focus, he visits his PCP regularly and religiously follows his advice. That my friends is human nature.

Nevertheless the FEHBlog thinks that it’s a good move for health plans, etc. to encourage people to pick up the PCP habit much earlier. That habit probably will involve weaving together relationships among telehealth providers, pharmacy clincics and actual doctor offices.  The effort is complicated by the ACA induced aggregation of small medical practices into large ones but the electronic health records do facilitate handing off patients among practices and providers within practices. Hope springs eternal.

It appears to the FEHBlog that the federal government is on track to avoid another partial government shutdown this week. Fingers remain crossed.

Federal News Network reports that

The Office of Personnel Management has chosen to continue its relationship with ID Experts, the company originally tasked to provide free credit monitoring and identity theft protection services to victims of the agency’s 2015 cyber breaches.
OPM awarded a follow-on contract to ID Experts under the General Services Administration’s identity protection services multiple-award blanket purchase agreement (BPA). The contract began on Jan. 1 and will continue through at least June 2020. ID Experts said the contract has an option for up to five years.
The contract is worth at least $416 million, according to USA Spending data.
Individuals currently enrolled in the MyIDCare don’t need to take action to continue their service and will be automatically covered, ID Experts said in a statement announcing the continued contract.

Speaking of data breaches,

In 2018, 15,085,302 patient records were breached, according to new data released today in the Protenus Breach Barometer. Published by Protenus, an AI-powered healthcare compliance analytics platform that protects patient data for the nation’s leading health systems, the Breach Barometer is the industry’s definitive source for health data breach reporting.  

There was a slight increase in the number of breaches, from 477 in 2017 compared to 503 in 2018. Alarmingly, the number of affected patient records almost tripled from 5.5 million in 2017 to 15 million in 2018. As first reported in 2016, a trend of at least one health data breach per day remained in 2018.

This brings us to the HIMSS conference. Here’s a link to CMS Administrator Seema Verma’s speech at the conference today. Apropos of the Administrator’s talk, HHS yesterday announced a proposed CMS rule and a proposed Office of National Health IT Coordinator rule that are intended to open existing road blocks to healthcare information sharing.

Regulatory Focus reports on today’s House Ways and Means Committee hearing on prescription drug pricing.  The Committee’s chair and ranking minority member advised that they are committed to working together “to take meaningful action to lower the cost of prescription drugs in the US health care system.”

The Health Care Cost Institute released its 2017 report on healthcare cost and utilization.  “While overall spending growth slowed in 2017 compared to 2016, the report finds that prices continued to drive rising costs.  “Health care spending growth exceeded 4 percent for the second consecutive year, outpacing per capita GDP growth,” said Niall Brennan, president and CEO of HCCI. “And for the most part, Americans aren’t using more health care services, which means we’re essentially paying more and more for the same amount of health care.”

Fierce Healthcare discusses a Deloitte Consulting report visualizing health plans of the future. “Deloitte suggests five steps insurers should be taking now as they plan for these looming changes:

• Build an internal culture that focuses on business transformation
• Make investments in technology sooner rather than later
• Being reorienting staffers to what work will look like—highly automated and electronic—compared to current processes
• Incorporate governance for data into existing policies and practices
• Keep a close eye on cybersecurity risks, and be prepared for emerging threats.”

Meanwhile, the President’s Council of Economic Advisors issued a report on the market advantages and cost savings to consumers and the government offered by the Administration’s deregulatory efforts in the healthcare market.