FEHBlog

Yesterday the House of Representatives passed the continuing resolution discussed in last Wednesday’s post. The ball is bouncing around the Senate’s court. The FEHBP will continue on course even in the unlikely event of a lengthy partial government shutdown. Negotiations are continuing over the weekend according to latest reports.

The Senate Finance Committee voted to advance to the Senate floor the President’s nomination of Alex Azar to be Health and Human Services Secretary last Wednesday according to Fierce Healthcare.

Six relevant healthcare organizations including America’s Health Insurance Plans and the Blue Cross Blue Shield Association as well as major provider groups, have issued a consensus statement intended to streamline situations in which the health plan requires prior authorization for coverage of a particular service or supply.  According to the Consensus Statement, these health care leaders will work together to:

• Reduce the number of health care professionals subject to prior authorization requirements based on their performance, adherence to evidence-based medical practices, or participation in a value-based agreement with the health insurance provider.
• Regularly review the services and medications that require prior authorization and eliminate requirements for therapies that no longer warrant them.
• Improve channels of communications between health insurance providers, health care professionals, and patients to minimize care delays and ensure clarity on prior authorization requirements, rationale, and changes.
• Protect continuity of care for patients who are on an ongoing, active treatment or a stable treatment regimen when there are changes in coverage, health insurance providers or prior authorization requirements.
• Accelerate industry adoption of national electronic standards for prior authorization and improve transparency of formulary information and coverage restrictions at the point-of-care.

Bravo on the collaborative effort to reduce red tape.

Axios reports that “Four not-for-profit hospital systems that own 10% of U.S. hospitals — Intermountain Healthcare, Ascension, SSM Health and Trinity Health — are banding together to create a new generic drug company. The Department of Veterans Affairs also is helping and has expressed interest as a purchaser.”  The FEHBlog noticed a Modern Healthcare article pooh poohing the idea but the FEHBlog applauds these hospitals banded together to try to fix a national problem — bandit drug manufacturer who hike prices on sole source generic drugs. You have to start somewhere.

In the you can’t please ’em all department, Fierce Healthcare reports that

The House bill that would continue funding the federal government from January 19 through February 16, 2018,  fully fund the Children’s Health Insurance Program for six years, and delay the medical device tax for two more years (through 2019), the high-cost employer-sponsored plan excise tax or Cadillac tax also for two more years (through 2021), and the health insurer tax for one more year (through this year). The FEHBlog being a glass half full kind of guy expects this bill to pass.

In a bit of good news, USA Today reports that “Walmart is teaming with a Southern Pines, N.C.. company called DisposeRx, on a solution that consists of a small packet with an FDA-safe chemical blend that, when emptied into a pill bottle with warm water, lets patients dispose of any leftover medications in the trash. The medications — they can be powder, pills, tablets, capsules or liquids — are converted into a non-divertible and biodegradable gel.”  Walmart is giving away DisposeRx for free.  More pharmacy chains should follow their lead as a lot of people have excess Oxycontin in their medicine cabinets.

The FEHBlog noted in last year or two the problems with the Federal Employees Long Term Care Insurance Program.  The Wall Street Journal explains today why the entire long term care insurance market in the U.S. is in “financial turmoil.”

Almost every insurer in the business badly underestimated how many claims would be filed and how long people would draw payments before dying. People are living and keeping their policies much longer than expected. 

After the financial crisis hit, nine years of ultralow interest rates also left insurers with far lower investment returns than they needed to pay those claims. 

Long-term-care insurers barreled into the business even though their actuaries didn’t have a long record of data to draw on when setting prices. Looking back now, some executives say marketing policies on a “level premium” basis also left insurers with a disastrously slim margin of error.

No bueno.

The FEHBlog finished reading Sam Quinones’ 2015 book Dreamland: The True Tale of America’s Opiate Epidemic.  The FEHBlog recommends the prize-winning book to those interested in U.S. healthcare.

Reading the book confirmed for me that while the barn door has been closed on the opioid prescription  crisis (which ran from the mid-1990s when the Food and Drug Administration approved Purdue Pharma’s Oxycontin for marketing until a few years ago when doctors, pharmacists, and state regulators restored sanity) and the large-scale heroin crisis (which depended on the opioid prescription crisis to create new customers), there still is a lot to be done to help people who were harmed during that twenty year period.  The author encourages health plan coverage for multi-disciplinary pain clinics for people suffering from chronic pain (other than cancer patients and mortally ill patients with chronic pain for whom opioid based drugs remain appropriate).

Happy King Day weekend!  Congress continues its work on Capitol Hill this week following the holiday. Here’s a link to the Week in Congress’s report on last week’s Congressional activities.

The Weekend Wall Street Journal which is the FEHBlog’s favorite newspaper published an essay offering “A Cure for Our Fixation on Metrics.” The essay was adapted from Prof. Jerry Z. Muller’s forthcoming book “The Tyranny of Metrics.”  Any reader of the FEHBlog knows that everyone and his brother/sister is trying to measure the quality of healthcare with metrics. Indeed, 65% of an FEHB carrier’s plan performance assessment is based on metrics under OPM’s recent rule. So the Professor’s book is a breath of fresh air to the FEHBlog.

These paragraphs from the essay hit home with the FEHBlog.

The more the object to be measured resembles inanimate matter, the more likely it is to be measurable: that is why measurement is indispensable in the natural sciences and in engineering. When the objects to be measured are influenced by the process of measurement, measurement becomes less reliable. Measurement becomes much less reliable the more its object is human activity, since the objects—people—are self-conscious and are capable of reacting to the process of being measured. The more rewards and punishments are involved, the more people are likely to react in a way that skews the measurement’s validity. * * *

Just because performance measures often have some negative outcomes doesn’t mean that they should be abandoned. They may still be worth using, despite their anticipatable problems. It’s a matter of trade-offs, and that too is a matter of judgment.

With measurement as with everything else, recognizing limits is often the beginning of wisdom. Not all problems are soluble, and even fewer are soluble by metrics. It’s not true, as too many people now believe, that everything can be improved by measurement, or that everything that can be measured can be improved.

If only the healthcare policymakers would take this essay to heart.

According to Health Payer Intelligence, NCQA has published a list of the top ten performing health plans in 2017 based on the various NCQA metrics.

The FEHBlog has been hearing anecdotally that this year’s flu vaccine is less effective than expected. The New York Time’s Upshot column explains why you still will benefit from the vaccine.

In 2010, researchers published a meta-analysis of all available flu shot studies. They showed that when a vaccine is considered effective, 1.2 percent of vaccinated people had the flu, while 3.9 percent of unvaccinated people had the flu. That’s an absolute risk reduction of 2.7 percentage points. This means that the number of people who needed to be treated for one person to see the benefit — a concept known as N.N.T. — was 37. Given the millions who are vulnerable to flu and the thousands of deaths each year, this is a big payoff in public health.

In studies in which the flu shot was considered ineffective, 1.1 percent of vaccinated people had the flu compared with  2.4 percent of  unvaccinated people. The absolute risk reduction was 1.3 percentage points, and the N.N.T. was 77.

Let’s say that this year’s flu vaccine is even worse than we think. Maybe the absolute risk reduction will be as low as 1 percentage point, making the N.N.T. 100. That’s still not that bad. Even at an N.N.T. of 100, for every 100 people who get a flu shot, one fewer will get the flu. That’s a pretty low N.N.T. compared with many other treatments that health experts recommend every day. * * *

The negatives of a flu shot are almost nonexistent, and significant side effects are very rare.

NBC News reports that “Cough medications that contain opioids like codeine should never be given by kids, and the medicines will now need to be labeled to make that clear, the Food and Drug Administration said Thursday. They’ll also carry bigger warnings about their dangers to adults, the FDA said.”  This reminds me of a passage from Sam Quinone’s Dreamland book where he explained that people addicted to opioids use FDA guidance like a roadmap. When the FDA warned on the Oxycodin label that the pill should be crushed, the addicted people who stole the medicine knew to crush it. Of course, the FEHBlog is not opposed to the FDA guidance which should have been issued years ago. The FEHBlog simply wants to point out how complicated this problem is.

Becker’s Hospital Review informs us that healthcare now has surpassed manufacturing and retail as the largest employer of any sector in the U.S. economy. “There were 7 million more workers in manufacturing than in healthcare in 2000. In 2007, at the start of the Great Recession, there were 2.4 million more workers in retail than in healthcare. In 2017, the number of workers in healthcare surpassed workers in both manufacturing and retail.”  This does not point to a high degree of efficiency in healthcare.

Politico reports that Alex Azar’s confirmation hearing before the Senate Finance Committee today went well today for the HHS Secretary nominee.

Here’s a link to journalist/author Sam Quinones’ testimony before the Senate Health Education Labor and Pensions Committee today. While I don’t necessarily agree with all of his points, the statement provides a valuable perspective on our opioid crisis. The FEHBlog is enjoying his book, Dreamland.

On the cybersecurity front —

• Health IT Security reports on two cyber problems that can afflict CPUs, like Intel chips, which are known as Meltdown and Spectre. The report illustrates the importance of patching software. Here are two threats with no easy fix. Prevention is the key. 
• Health Data Management considers a recent healthcare provider settlement of a HIPAA Privacy and Security Rules violation with the HHS Office for Civil Rights in the context of cybersecurity insurance. 

Congress is back in town this week. Last Wednesday, the FEHBlog erroneously posted that the Senate Health Education Labor and Pensions Committee would be holding a confirmation hearing this coming Tuesday on the President’s nominee for HHS Secretary Alex Azar. In fact, the Senate Finance Committee is holding that hearing on January 9 at 10 am.

The Senate HELP Committee, which held its confirmation hearing on Mr. Azar last year, is holding a hearing about the opioid crisis on January 9 at 10 am. The Committee’s sole witness is author / journalist Sam Quinones who wrote a book about the crisis titled Dreamland. The FEHBlog, who had not been familiar with Mr. Quinones or his book, downloaded it from Amazon (for a quite reasonable price) and found that the book is worth reading.

Last Friday, as Healthcare Dive reports HHS released a draft Trusted Exchange Framework report required by the 21st Century Cure Act that is intended to create a roadmap to electronic health record interoperability. The draft is open to public comment for 60 days. The government should have prepared this framework before shelling out $30 billion on electronic medical record systems. Quel dommage.

NPR reported on Friday that 23% of US hospitals are receiving a 1% haircut on Medicare funding in 2018 because they fell in the last quartile of patient safety measure results. The FEHBlog realizes that most readers understandably will react to this sentence with the thought “Don’t cry for me Argentina.”  The FEHBlog nevertheless is not a fan of the many, many punitive aspects of the Affordable Care Act. Too many sticks, not enough carrots.

Kaiser Health News tells us about the need for doctors to control over-screening of aged adults for cancer and other diseases.

Doctors should prioritize what they can do to help patients be healthier, said Dr. Louise Walter, chief of geriatrics at the University of California-San Francisco and a geriatrician at the San Francisco VA Medical Center. For many older patients, screening for cancer is not their most pressing need. 

“Instead of spending time and effort on things that are hurtful and never going to help them, why not direct time and energy on things that will help them live longer and better?” Walter asked. 

For example, Walter might tell a patient, “‘Right now, you have really bad heart failure and we need to get that under control,’” Walter said. 

Other key issues for many older people include preventing falls, treating depression and alleviating stress in their caregivers, Walter said. Gross said he urges patients to take steps shown to improve their health, such as getting a flu shot or exercising at least 15 minutes a day. 

“These are things that can help them feel better very quickly,” Walter said. “Screenings can take years to have a benefit, if at all.”

Following up on the President’s executive order issued following the failure of ACA repeal efforts in Congress last year, the Labor Department today released a proposed rule under ERISA that would permit small employers and sole proprietors to band together in small business health plans that could buy coverage in the large group market.  The rule is open for public comment for sixty days beginning tomorrow. Count the FEHBlog as a small business owner in favor of this change.

The FEHBlog noted yesterday that prescription drug manufacturer continue to issue periodic price increases for their products. The Wall Street Journal puts this benefit cost issue in perspective with an article reporting that

After years of surging U.S. drug prices, the two largest drugstore companies said some pricey prescription medicines are becoming more affordable. 

CVS Health Corp. and Walgreens Boots Alliance Inc.  said Thursday that their pharmacy revenues are taking a hit from an increase in generic alternatives, particularly for some expensive specialty drugs, along with slowing price inflation for name-brand medications. 

“You’re going to see continued dampening going forward as you think about the pipeline of generics coming into the markets,” said CVS finance chief Dave Denton, who didn’t discuss specific products. 

Lower prices will dent the company’s revenue, but ultimately could lead to increased profits because generics generally have a higher margin than name-brand drugs. “The introduction of generics can really dampen the top line but affect the bottom line in a positive way,” Mr. Denton said.

The Department of Health and Human Services recently issued a report on 2016 medical loss ratio results.  The ACA requires that health insurers spend at least 80% of premium dollars (85% in the large group market) on health care and quality costs. Insurers that fall below these thresholds must refund the difference to employers in the large and small group markets and consumers in the individual market. The medical loss ratio is calculated on a market basis per state. Insurers met the thresholds with respect about 95% of consumers in the employer markets and 90% in the individual market.  It’s an interesting report. The FEHBlog does think that the medical loss ratio has lead to CVS buying Aetna and not the other way around. Nevertheless, the FEHBlog is encouraged by this American Spectator piece on how the private sector can fix healthcare.

Finally Modern Healthcare reports that

Profits at the more than 4,800 U.S. community hospitals rose 3.8% in 2016, climbing to $76.1 billion, from $73.3 billion a year earlier. The trend follows years of steadily increasing profits.  

Total net revenue reached $979 billion in 2016—including nursing home results—and expenses were $903 billion, according to the 2018 edition of the American Hospital Association’s Hospital Statistics report aggregating hospital financial and utilization trends, which was released Thursday. The annual report includes data on all 4,840 registered community hospitals in the U.S.—159 fewer than in 2012.

The AHA data show community hospital profits have risen 15% since 2012, when they were $53.2 billion. 

Govexec.com reports that on December 22, 2017, Sen. Ron Johnson (R. Wisc.) in his role as Chairman of the Senate’s Homeland Security and Government Affairs Committee issues a subpoena to OPM demanding the production documents, including email messages, concerning the development and promulgation of the OPM rule granting a FEHBP level government contribution to members of Congress and their staff who were shifted from the FEHBP to the DC SHOP marketplace. The return date on the subpoena is this coming Friday, January 5, 2018. Sen. Johnson also placed a hold on the President’s nominations to the OPM Director, Deputy Director and Inspector General posts to incent OPM cooperation with this long-standing document request.  Hopefully, the subpoena will speed matters along.

In other personnel news,

• The Hill reports that the Senate Health Education Labor and Pensions Committee will hold a confirmation hearing on the President’s nominee for Health and Human Services Secretary Alex Azar next Tuesday, January 9.
• Former OPM Director Kay Cole James has become president of the Heritage Foundation.  Ms. James was OPM Director during the President George W. Bush’s first term. 
• Prof. Timothy Jost who wrote on the ACA for the Health Affairs blog is retiring. 

January 1 is the day that federal annuitants switch plans if they made an Open Season change as well as the day of the college playoff bowl games. Federal employees generally make that switch this year on January 7, which is the first day of the first pay period in 2018.  OPM transmits employee premiums every bi-weekly and annuitant premiums monthly.

Congress returns in full force to Capitol Hill on January 8. This week, the House and Senate organize this week for the second session of the current two year long Congress. In the second session, the Senate party break down will be 51 Republicans, 47 Democrats and two Independents who caucus with the Democrats. The House lineup as of December 8 was 239 Republicans, 193 Democrats, and 3 vacancies.

The Hartford Courant featured an interesting article yesterday about CVS Health’s CEO Larry Merlo, who started his career as a pharmacist.