FEHBlog

Congress remains in session on Capitol Hill this coming week. Here’s a link to the Week in Congress’s one pager on last week’s actions there. The Week in Congress indicates that Congress is planning on holding a lame duck session following the mid-term elections in early November.

The Washington Post reports that the Senate will vote on its bill that responds to the opioid crisis this coming week. According to Senate Health Education Labor and Pensions (“HELP”) Chairman Lamar Alexander (R TN)

• “The proposed bill includes the STOP Act to help stop illegal drugs at the border, including stopping the shipment of synthetic opioids. It allows the FDA to require prescription opioids to be packaged in set amounts like a 3 or 7 day supply of blister packs, and spurs the development of a new non-addictive painkiller. The House has already passed its version of the act, and there is a bipartisan urgency to work with our House colleagues to get the legislation to the President’s desk.”

The Senate HELP Committee has scheduled its third hearing on reducing health care costs for a week from Tuesday (September 18) at 10 am. This hearing will examine how transparency can lower spending and empower patients. In this regard, Health Affairs offers an article on elderly patient use of information portals provided by their doctors and facilities.

Despite widespread availability of patient portals and incentives for providers to offer portals to patients, recent results from the University of Michigan’s National Poll on Healthy Aging suggest that only about half of adults ages 50–80 use them. Among older adults who reported using patient portals, most had used a portal to view tests results (84 percent). Fewer had used a portal to request a prescription refill (43 percent), schedule an appointment (37 percent), or get advice from a provider (26 percent).

The FEHBlog is aware of the interest in the new non-profit health benefits company owned by Amazon, etc. The FEHBlog is more interested in this hospital systems lead effort to launch a non-profit generic drug company. Read the latest from Fierce Healthcare here and the new company Civica Rx (based in Salt Lake City, Utah) here.

Finally, the New York Times Upshot held discussion with officials who run public health departments, academics and leaders of funding organizations about what they think we should be doing in public health, and a few themes emerged.

• Divert a lot more dollars toward public health initiatives
• Do more to address health care disparities among races and economic classes.
• Improve public attitudes toward public health initiatives by trumpeting their successes.

The Wall Street Journal reports that the Justice Department is expected to approve from an anti-trust enforcement stand points the CVS Health – Aetna and the Cigna – Express Scripts mergers in the next few weeks.

The companies that would emerge from the two deals would mirror the industry’s trend toward bulked-up firms. UnitedHealth Group Inc. is the parent of the largest U.S. health insurer and a major pharmacy-benefit manager; it has a growing array of physician practices, urgent-care clinics and other assets.

The mergers are expected to close this year.

Modern Healthcare reports from Austin that

A federal judge today seemed skeptical of arguments that the Affordable Care Act can stand without an effective penalty for the individual mandate.  In a half-full Texas courtroom, Democratic state attorneys general Wednesday tried to persuade U.S. District Judge Reed O’Connor that Congress’ zeroing out of the tax penalty should not invalidate the entire law. O’Connor, who spent more time probing the argument of Democratic lawyers than that of the GOP state attorneys general who filed the suit to invalidate the law, promised the parties that he would issue a ruling as quickly as possible.

Of course, this is all tea leaf reading, but the FEHBlog think this case is worth watching.

Today is the big hearing in the U.S. v. Texas case which presents a renewed challenge to the Affordable Care Act’s constitutionality. A trial court level decision is likely to be rendered before Election Day. In all likelihood, a decision against the ACA’s constitutionality would be stayed until the case reaches the Supreme Court. It should be a catalyst for Congressional action while the case winds it way through the courts. The FEHBP will keep chugging along in the meantime.

The Energy and Commerce Health subcommittee hearing featuring a Blue Cross FEP expert, David Yoder, will be held this morning. His prepared testimony is available here.

Modern Healthcare reports on the growing trend of hospitals acquiring physician practices.

This is a ubiquitous trend in the U.S. and I can tell you that there is virtually no state less with less than a quarter of physicians that have already been purchased by now,” said Richard Scheffler, University of California, Berkeley professor and the study’s lead author. “The impact of these type of verticals is much more powerful when the hospital itself has a lot of market power and can jack up prices.”  The national share of hospital-employed physicians increased from 30% to 48% from 2010 to 2016, researchers found.

Both Houses of Congress will return to work on Capitol Hill on Tuesday. On September 5, at 10 am, the Health subcommittee of the House Energy and Commerce Committee will hold a hearing on opportunities to improve health care. One of the four witnesses is Dr. David Yoder who is in charge of Member Care and Benefits at the Blue Cross Blue Shield Federal Employees Program.

Tammy Flanagan, a federal retirement consultant, wrote a column in govexec.com on whether it makes sense for federal annuitants to opt out of FEHBP in favor of enrolling in a Medicare Advantage plan. OPM’s rule permit annuitants who make such an election to rejoin the FEHBP. Significantly “when [Ms. Flanagan] compared using Medicare Advantage to an FEHBP plan in combination with Medicare A and B, [she] found [she] would have much greater choice of providers both in and out of network under FEHBP.

Thanks to Twitter, the FEHBlog ran across Phrma’s Catalyst which is the pharmaceutical manufacturers’ trade association blog. Catalyst is “a place where [Phrma] can share ideas, provide the perspective of America’s biopharmaceutical companies and, most importantly, listen to you.”  This Catalyst article on prescription drug cost sharing caught the FEHBlog’s eye. The article supports manufacturer use of prescription drug discount coupons, a practice which OPM criticized at the 2018 carrier conference.

A colleague of the FEHBlog called his attention to this New York State government press release which discusses an information breach settlement between a Buffalo non-profit and the State’s attorney general. It should remind all those who handle protected health information that HIPAA, as modified in 2009, also permits state attorneys general to enforce the privacy and security rules.

Earlier this year, Congress appeared to be poised to enact a postal reform bill that would create a separate Postal Service Health Benefits Program within the FEHBP. The bill had a lot of other moving parts but this one concerned the FEHBlog. In April the President created a task force to offer recommendations for reforming the Postal Service. Congress put its bills on simmer while waiting for the task recommendations. The task force submitted its recommendations to the White House on August 10 as directed. The President decided to take some time to review the recommendations before making the report public. Reuters reports that the Senate Homeland Security and Governmental Affairs Committee cancelled a hearing on postal reform scheduled for next Tuesday because the task force reports remains under wraps. Govexec based on its sources indicates that the report will be kept under wraps until after the mid-term election. Time will tell. 

The Federal Times offers a report on OPM Director Pon’s speech to the NARFE conference given yesterday.  The Director described three priorities “mov[ing] paper-based systems to a digital format, moderniz[ing] the civil service, and creat[ing] an environment where people speak out to thank federal employees for their service to the nation.”

Health Payer Intelligence tells us that payers are finding savings in value based coverage, e.g., accountable care organization, bundled payments, and patient centered medical homes.  For example, “[t]he BlueCross BlueShield Association’s network of ACOs and PCMHs, called the Total Care Network, reduced care costs by 32 percent during the first half of 2018,” and [t]he total care costs of Humana’s value-based care programs were 15 percent less than the costs of its fee-for-service payment model.” Impressive.

Forbes reports that bricks and mortar pharmacies like CVS Health and Walgreeens are trying to use face to face contact with customers as an advantage over Amazon. “Walgreens is testing myriad partnerships and this summer launched a digital marketplace that links its customers to medical care providers and their prices beyond services inside the drugstores. And CVS Health is touting its relationships with medical care providers and the potential to add more services once its acquisition of the health insurance giant Aetna is completed in the coming weeks.”

Health IT Security provides an update on the use of blockchain technology in healthcare.  The update is based on a recent Deloitte survey. “Healthcare organizations believe blockchain will significantly improve visibility of value-based care payments and reduce fraud, waste, and abuse. Enterprises are also optimistic that blockchain will enhance industry collaboration and efficiency through increased data sharing.” Indeed

“The only real mistake we believe organizations can make regarding blockchain right now is to do nothing,” the Deloitte report concluded.  “Even without a completely solid business case to implement, we believe that organizations should, at the very least, keep an eye on blockchain so that they can take advantage of opportunities when they present themselves.”

Speaking of surveys, Kaiser offers an interesting analysis of out of network claims in large employer health plans. Quality improvement committees take note!

Although the Senate got through its appropriations work last week, it turns out the Senate remains in session this week. According to the Washington Times that the Senate Majority Leader Mitch McConnell will keep the Senate open this week to consider 110 pending Presidential nominations. Senators in tight races are bound to hit the trail regardless and the entire Senate will be in town this weekend for Senator McCain’s funeral on Saturday.

On the prescription drug front —

• Health Affairs blog reports to no one’s surprise that

from January 1, 2011 through December 31, 2016, of total health care spending and per-member-per-month (PMPM) spending on prescription medications for Harvard Pilgrim Health Care (HPHC), a commercial insurer of about one million members in four New England states. Between 2011 and 2016, spending net of rebates by this commercial health plan on outpatient prescription medications, including those administered in physicians’ offices, has increased to a quarter of all health care spending, largely due to increasing prices of specialty medications. 

•  The Wall Street Journal on Saturday offered an thought provoking interview with the FDA Commissioner, Dr. Scott Gottlieb – to wit

“It used to be that the model was to develop a drug that was going to be administered chronically over the life of a patient,” Dr. Gottlieb says in a recent interview at the FDA’s headquarters. “It was basically an annuity. And now, the model is to try to develop curative therapy,” usually a short course or a one-time treatment [e.g. the Hepatitis C cure Harvoni]. “It’s a completely different therapeutic model. It’s a completely different payment model, and our payment system isn’t adapted to that.”

• Forbes observes that the opioid litigation against drug manufacturers may be leading to a big dollar settlement similar to the tobacco litigation settlement negotiated by state governments against the tobacco manufacturers twenty years ago.  

Fitch said credit implications should be “minimal for large diversified firms” like Johnson & Johnson, McKesson, AmerisourceBergen, Cardinal Health and retail chains such as Walgreens Boots Alliance and CVS Health because they “offer a wide array of products and generate significant cash flow,” Fitch said. “Conversely, the effect on cash flow and liquidity could be significant for smaller manufacturers with material exposure to pain killers; such as, oxycodone, hydrocodone, and meperidine under brand names OxyContin, Vicodin, and Demerol.”

Also last week the Labor Department which enforces ERISA offered informal guidance on the new Association Health Plan rules. No relevance to the FEHBP but interesting for the private employer market.

The Wall Street Journal reports that both the Cigna and the Express Script shareholders approved by wide margins their merger deal in votes announced earlier today.

The deal received the backing of about 90% of Cigna shareholders, the health insurer said Friday, citing a preliminary vote tally. Of the Express Scripts ESRX 0.21% shareholders who voted Friday, 99% approved the deal. 

The Senate made significant progress on its FY 2019 appropriations work yesterday which allowed the body to leave town today.  Roughly one third of the Senators need to hit the campaign trail. Both the Senate and the House seem on track to wrap up their FY 2019 appropriations work before the September 30 end of the government’s fiscal year, which would be quite miraculous.

The Hill reports that yesterday the Senate approved Health and Human Services funding as part of a minibus bill that must be reconciled with a House measure. That Senate bill includes a provision that would require prescription drug manufacturers to disclose their product pricing in direct to consumer advertising. Healthcare Finance tells us that AHIP supports this measure.

FedSmith reports on an OPM benefit administration letter (“BAL”) issued this week that implements a recent OPM rule explaining how an enrollee may remove an otherwise eligible family member from a self and family enrollment. “A separate BAL will provide specific guidance to agencies on the situations that allow for removal of ineligible family members and the removal process.”

The Hill reports that the President is urging the Senate to follow the House of Representative’s lead by passing an opioid crisis bill.  The Hill further reports that a group of eight health benefit organization lobbying groups, including AHIP and the Blue Cross Blue Shield Association, is pleading with the Senate leadership not to adopt the House opioid bill provision that would extend private sector primary coverage liability over Medicare from 30 to 33 months effective January 1, 2020.

Also on the opioid crisis front —

• Opioid Watch offers this interesting perspective on tackling the opioid crisis. 
• The Centers for Disease Control’s cheerfully named Morbidity and Mortality Weekly Report offers statistics on the extent to which the opioid crisis is affecting pregnant women, which is an OPM priority. 

Hospitals have been closing at a rate of about 30 a year, according to the American Hospital Association, and patients living far from major cities may be left with even fewer hospital choices as insurers push them toward online providers like Teladoc and clinics. * * * 

There are already a lot of hospitals with high negative margins, consultancy Veda Partners healthcare policy analyst Spencer Perlman says, and that’s going to become unsustainable. Rural hospitals with a smaller footprint may have less room to negotiate rates with managed care companies and are often hobbled by more older and poorer patients.

Finally, the FEHBlog’s pharmacist friend from Connecticut pointed out  this Reuters report dated August 14  —

[Prescription benefits manager] Express Scripts has built a specialty pharmaceutical business in which it gets paid to help drug companies dispense a new generation of high-priced drugs. The company is now holding discussions with biotechnology companies Biomarin Pharmaceutical, Spark Therapeutics, and Bluebird Bio to exclusively distribute their new hemophilia therapies when they are expected to become available in 2019 and 2020. Analysts project those drugs could top $1 million to $1.5 million in price. Express Scripts Chief Medical Officer Steve Miller says the potentially curative therapies will likely be worth the high cost if they supplant the hundreds of thousands of dollars in annual medical costs to treat ailments such as hemophilia. “Even if they charge $1 million, that’s a great deal,” says Miller. “So there are going to be some gene therapies where it is very clear that everyone who has that disease should get it.” To manage any potential conflicts of interest, Miller notes Express Scripts separates its benefits management and specialty pharmacy businesses.

The FEHBlog is back inside the Beltway. While up in the Nutmeg state, the FEHBlog learned from a good pharmacist friend that the FEHBlog’s font needed a larger font to help vision impaired readers. The FEHBlog consulted Google and upped the FEHBlog’s font size to 20 px and changed the font from Arial to Merriwether is supposed to be an easier read font when larger px fonts are used. You can learn something new everyday.

While driving back to DC, the FEHBlog and spouse passed through New Haven, CT. The New Haven Register reports that the K2 overdose crisis on the New Haven Green (discussed in last Friday’s post) waned after arrests were made.

While driving through New Jersey, the FEHBlog and spouse listened to the latest Econtalk podcast.  Stanford econ professor Russ Roberts interviewed Dr. David Melter, who is an MD and holds a Ph.D in economics from the University of Chicago. Dr. Meltzer runs the hospitalist program at the University of Chicago hospital. The FEHBlog has mentioned that his own internist told him that due to the common use of hospitalists, he may not even know when one of his patients is hospitalized.  With funding from the Center for Medicare and Medicaid Innovation, Dr. Meltzer conducted a study involving a cohort of 2,000 patients with Medicare. Half of the group were assigned new primary care providers from the University of Chicago who coordinated their inpatient and outpatient care. The other half was a control group although the study helped the control group members find a primary care provider to monitor outpatient care if necessary. The study was conducted over a four year period from 2012-2016. The test subgroup had higher satisfaction with their coordinating doctors, better mental health, and materially lower hospitalization rates than the control group. The study points again to the importance of primary care providers who oversee all aspects to patient care to lowering health care costs. Check out the podcast.

The Senate remains in session on Capitol Hill this coming week. The Washington Examiner reports that the Senate is making progress in passing FY 2019 appropriations measures.

Here are some tidbits from last week:

• Arstechnica reports that the Food and Drug Administration approved Teva Pharmaceuticals application to market generic adult and pediatric versions of the EpiPen self injection device for treating severe allergic reactions. 
• U.S. News and World Report came out with its 2018 list of best hospitals. 
• Modern Healthcare came out with its annual list of the 100 Americans who have the most impact on our healthcare policy. This group is lead by President Trump and twelve disrupters all ranked no. 2.