FEHBlog

Marilyn Tavenner, the current president of America’s Health Insurance Plans (AHIP), the health insurance industry’s trade association, is retiring at the end of May. Her successor will be AHIP Chief Operation Officer Matt Eyles. Good luck to both of them.

The New York Times Upshot column has an interesting take on U.S. health care costs based on a new study published in the AMA Journal.

The quality of health care looks pretty good, [the study] finds, while its spending on social services outside of health care, like housing and education, looked fairly typical. 

When it came to many of the measures of health system function, the United States was in the middle of the pack, not an outlier, as [Harvard’s] Dr. [Ashish] Jha had expected. Many analysts have called for the country to shift its physician training away from specialty care and toward more primary care medicine, for example. But the study found that 43 percent of U.S. doctors practice primary care medicine, about typical for the group. 

It’s often argued that patients in the United States use too much medical care. But the country was below average on measures of how often patients went to the doctor or hospital. The nation did rank near the top in its use of certain medical services, including expensive imaging tests and specific surgical procedures, like knee replacements and C-sections. 

The data are consistent with other evidence that health care systems are beginning to converge, as information and technologies spread around the world among doctors and administrators.   

Becker’s Hospital Review reports that the Blue Cross and Blue Shield Association has arranged for Lyft to transport Blue Cross members in certain zip codes to their local Walgreen’s or CVS Pharmacy.  
“CVS will fund Lyft rides to pharmacies for Blue Cross customers in Pittsburgh living within select “transportation deserts,” and in a similar pilot program in Chicago, Walgreens will pay for Lyft rides for members located far from public transportation.” Smart move.

OPM’s website issued a welcome to the new OPM Director Pon and Deputy Director Rigas.  The FEHBlog welcomes them too.

Modern Healthcare reports that HHS Secretary Azar spoke to an AHIP conference last week about the Administration’s drive toward value based payments and more consumer choice. “Azar said he would also ease up on insurers on the regulatory front. ‘We know the amount of time and money that goes into complying with well-meaning but often byzantine rules and regulations regarding consumer communications.'”  We can only hope that OPM Director Pon shares a similar message with FEHB carriers at the OPM AHIP FEHBP carrier conference on March 22 and 23.

Speaking of value based payments, Health Payer Intelligence informs us that

Value-based care helped close 50 million gaps in care between 2013 and 2017 while reducing care costs, lowering ED utilization, and increasing provider care quality, according to a new report from UnitedHealthcare (UHC). 

UHC examined data from more than 110,000 physicians and 1100 hospitals that treat people enrolled in UnitedHealthcare employer-sponsored, individual, Medicare, and Medicaid health plans. The payer found that adoption of value-based care programs in all their business segments consistently benefited payers, providers, and patients.

Similarly, Mercer consultants and the American Benefit Council offer their report on employer innovations in health care coverage.

According to Healthcare Dive,  “Shareholders for both CVS Health and Aetna voted Tuesday in New York City to approve the $69 billion merger between the pharmacy chain and the insurer.”  Both companies expect that the merger will receive necessary government approvals and close by the end of this year.

Just when the FEHBlog thought there was nothing more to stay about last week’s HIMSS conference, he noticed this Healthcare IT News report on the successful use of blockchain technology in health care.

“How do you actually guarantee that you know where the data has been throughout its lifetime, and who has touched it?” said Robert Barkovich, CEO of Health Linkages. In a blockchain-based system, manipulation or falsification of data “will not be possible because the hashes will not match – you mathematically prove the integrity of the data.” 

Similarly, blockchain is already showing big potential for helping health systems manage pharma and medical device supply chain, patient recruitment for clinical trials, security and interoperability of Internet of Things and medical device data and privacy protections for precision medicine, he said. 

Finally, the Wall Street Journal reports on a dispute among provider and other advocacy groups about proper blood sugar targets for people with diabetes type 2.

“For most patients, an A1C between 7 and 8 seems to be the right spot where you maximize benefit and minimize burden,” says Jack Ende, president of the doctors group issuing the new guidelines and an internist at the University of Pennsylvania. 

Dr. Ende says the burdens of striving for a lower number include a greater risk of low blood sugar, which can cause fainting. Patients taking medication to reach a lower A1C level may face side effects and weight gain. Studies have found that the more aggressive treatment of diabetes didn’t reduce deaths or complications, including heart attacks or strokes, he says.

Interesting. Other groups argue for a lower target. Medicine in the FEHBlog view remains as much as art as a science.

Congress will again be in session on Capitol Hill this week. Here’s a link to the Week in Congress’s summary of last week’s actions on the Hill.

Modern Healthcare informs us about the seven big announcements made at the HIMSS health care technology conference last week. The FEHBlog only mentioned one of them while the conference was happening.

The FEHBlog often forgets that as a result of the Affordable Care Act, the FEHBP offers coverage to Indian tribal employees. Tribal employees represent a small percentage of total FEHBP enrollment which is around 4 million. The percentage just got smaller because according to the Caspar Wyoming  Star Tribune “The Northern Arapaho Tribe will end its enrollment in the Federal Employee Health Benefits Program effective March 31, Northern Arapaho Business Council chairman Roy Brown advised the “tribal desk” of the U.S. Office of Personnel Management last week.”

Modern Healthcare also had an interesting article about health system efforts to stop providing low value care. For example,

When leaders at Johns Hopkins Health System [in Baltimore MD] set out to eliminate wasteful clinical practices across the organization, they started with blood transfusions.
Although the system had a number of areas it could have focused on first, unnecessary blood transfusions were on the industry’s radar back in 2012, when Johns Hopkins began its effort.  

Using a consistently applied and closely monitored set of procedures, Johns Hopkins was able to save $2 million a year and consume fewer bags of difficult-to-collect blood.
More importantly, the academic health system created a template for reducing waste across the organization, allowing its quality oversight managers to pick through other areas with a lot of potential for eliminating waste. 

Keep up the good fight.

The FEHBlog notes that following yesterday’s announcement of Cigna’s plan to acquire Express Scripts, the three largest health insurers outside of the Blue Cross Association will be linked to prescription drug managers United Healthcare lead the way with Optum Rx which has grown internally and by acquisition and CVS Health is acquiring Aetna. Several Blue Cross licensees own Prime Therapeutics and Anthem, another large Blues licensee, is looking into adding a PBM. The combined businesses have more data to explore in an effort to control costs. It’s interesting that in 2011 OPM required the nationwide FEHB plans to competitively bid their PBM contracts every three years. Before long, those carriers likely will be competitively bidding a medical network and PBM package periodically.

The FEHBlog has noted that OPM’s focus per the call letter is on controlling opioid prescriptions, The pendulum already has swung away from over prescribing those dangerous drugs. Street opioids like heroin and fentanyl remain a problem that FEHB plans can’t address. The FEHBlog’s concern is with caring for the thousands of people whom the opioid crisis has harmed. That concern was hammered home by an article in today’s Wall Street Journal about how “The [opioid] addiction crisis that is killing tens of thousands of Americans every year is also creating a financial crisis for many families, compounding the anguish caused by a loved one’s destructive illness. Families are burning through savings and amassing huge debt paying for rehab that often doesn’t work.”  The first step needs to be reaching a medical professional consensus on treatment. This is a mess.

OPM’s call letter also ask carriers to discuss in their benefit and rate proposal the “carrier’s genetic
testing strategy, scope of included testing, and any applicable vendor partnerships.”  In this regard, the Wall Street Journal reports today about the Food and Drug Administration’s March 6 decision  to authorize 23andMe to sell BRCA tests directly to consumers for $199. 23andMe’s tests looks for “three specific BRCA1/BRCA2 breast cancer gene mutations that are most common in people of Ashkenazi (Eastern European) Jewish descent.” The mutations are present in about 2% of that group. The Journal reports that

Under Commissioner Scott Gottlieb, the FDA has begun to ease the path to market of tests from an industry—called the laboratory-developed test business—that makes thousands of diagnostic tests and generates billions of dollars in annuals sales. In interviews and a policy address this week, Dr. Gottlieb laid out details of his lab-test deregulatory efforts, including the 23andMe decision.

This new direction for the FDA generally reverses course from Obama-era plans to more closely scrutinize this industry. “Lab-developed” diagnostic tests are those developed and used at hospitals and corporate labs to test blood and other cell samples sent in by doctors and hospitals. These differ from the traditional lab business, in which companies sell diagnostic equipment to hospitals. * * * 

The test worries some experts in the field. The American Cancer Society’s medical and scientific director, Otis Brawley, said these mutations are a very “incomplete picture of a person’s true cancer risk. Most doctors don’t understand this stuff, and that’s what genetic counselors are for.”

Rita Redberg, a cardiologist and editor of JAMA Internal Medicine, said she would want to see evidence that the 23andMe test is truly of benefit. “Unless this is going to save lives, we shouldn’t be rushing this out to the general public,” she said.

In any event, the Affordable Care Act requires FEHB plans and other health plans to cover with no member cost sharing “genetic counseling and BRCA testing, if appropriate [and performed in-network], for a woman as determined by her health care provider.

 Finally NPR reports that the U.S. Justice Department and 45 state attorneys general filed a lawsuit against a group of generic drug manufacturers “claiming that generic-drug prices are fixed and the alleged collusion may have cost U.S. business and consumers more than $1 billion.” The lawsuit was filed in the U.S. District Court for the Eastern District of Pennsylvania.  “In their complaint they suggest — but don’t allege — that the price-fixing conspiracy also involved drug distributors. Prosecutors are sending more subpoenas and planning a new complaint.” The FEHBlog will keep an eye on this case.

Last night by voice vote on the Senate floor

Nominations Confirmed: Senate confirmed the following nominations:

Michael Rigas, of Massachusetts, to be Deputy Director of the Office of Personnel Management.

Jeff Tien Han Pon, of Virginia, to be Director of the Office of Personnel Management for a term of four years.  Daily Congressional Record, Pages S1446, S1527

The Wall Street Journal reports this morning that “Health insurer Cigna Corp. plans to buy [prescription benefit manager] Express Scripts Holding Co. ESRX -1.56% in a cash-and-stock deal worth $52 billion, excluding debt, that the companies say will expand their health care offerings and help them control costs.”  The companies expect that the deal, which is subject to shareholder and regulatory approvals, will close this year.  Both companies are active vendors in the FEHBP space.

The FEHBlog is convinced that there is no such thing as a good surprise. Today’s surprise was Monday’s IRS bulletin which announced (p. 400) that

Annual contribution limitation. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,850.

The problem is that last May the IRS (Rev Proc. 2017-37) announced that the 2018 HSA contribution limits would be $3,450 self only (ok so far) and $6,900 for family coverage. So that IRS had dropped the family maximum by $50.

What happened? The tax reform act requires inflation adjustments to be based on the chained CPI-U which produces lower adjustments than the traditional CPI-U.

If someone has maxed out their HSA contributions for 2018, the HSA bank should be able to refund the $50 overage. It would be advisable to ask. Remember that if you are 55 or older, you can make a $1000 catch up contribution on top of the statutory maximum.

Last week, the FEHBlog noted Uber’s new venture for rides to the hospital, doctor, or dentist. Fierce Healthcare reports today that Uber’s competitor Lyft has entered into an arrangement with a major electronic health records developer, All Scripts. This new collaboration “integrates the ride-hailing company’s API with the Sunrise EHR system. The companies expect to reach roughly 7 million patients via 180,000 physicians in 2,500 hospitals and 45,000 practices.”  It follows up on a Lyft pilot program with the Blue Cross Blue Shield Association stated last summer.

The Japanese firm that makes Xofluza, Shionogi, received the fast-tracked approval from Japan’s health ministry to make and sell it there. The drug may not be available to buy in Japan until May, though, because no price has been set by the country’s national insurer. Roche, the drug manufacturer that makes Tamiflu, is already working with Shionogi and another drugmaker on trials in the U.S.

This week the Boston Globe’s STAT reports on the state of research into a universal flu vaccine.

There is a lot going on.

• Interesting perspective on the future of value based healthcare from the HHS Secretary Alex Azar as reported by Fierce Healthcare.

Azar stated unequivocally that there would be “no going back to a system that pays for procedures rather than value,” and promised that the administration has no fear of disrupting current arrangements, regardless of the special interests backing them. He also indicated a willingness to embrace “perhaps even an uncomfortable degree” of federal intervention in order to make the system work better for the stakeholders he sees as least well-served currently: patients and taxpayers.

The Secretary’s complete remarks to the Foundation of American Hospitals is available here. 

• United Healthcare announced today that

Beginning Jan. 1, 2019, and on plan renewal thereafter, people enrolled in fully insured group health benefit plans will have discounts applied to their medication cost at the point of sale. The savings will apply to plan participants who are filling a prescription for a drug where the manufacturer provides a rebate.  

The HHS Secretary complimented UHC on its announcement.  

“Today’s announcement by UnitedHealthcare is a prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing. Empowering patients and providers with the information and control to put them in the driver’s seat is a key part of our strategy at the Department of Health and Human Services to bring down the price of drugs and make healthcare more affordable. We are already seeing clear momentum toward the type of innovation in the private sector that will be an important part of the value-based transformation that is coming to America’s healthcare system.”

The FEHBlog was struck by the Washington Post’s article’s point that the largest prescription benefit managers, Express Scripts and CVS Health, permit their health plan to choose this option.  Nationwide FEHB plans cannot implement this approach because OPM requires them to pay all rebates to the plan reserves. (This requirement does not apply to HMOs unless they opt for experience rating.)  It will be interesting to see if OPM allows nationwide FEHB plans flexibility to implement this approach that the Trump Administration has endorsed. 

• At the HIMSS conference going on this week in Las Vegas, Healthcare Dive reports that Google executive chairman Eric Schmidt discussed the role of technology in healthcare. Today, the Centers for Medicare and Medicaid Services announced the resurrection of the Blue Button app. Blue Button 2.0 will be rolled out to Medicare beneficiaries.  Blue Button 2.0 is “a new and secure way for Medicare beneficiaries to access and share their personal health data in a universal digital format. This enables patients who participate in the traditional Medicare program to connect their claims data to the secure applications, providers, services, and research programs they trust.”  CMS wants other health plans to offer Blue Button 2.0 and the FEHBlog expects an FEHBP carrier letter on the topic soon.  What perturbs the FEHBlog is that Blue Button continues to rely on health plans claims data after the government spent $32 billion on electronic medical records for health care providers. In a more perfect world, the interoperable EHRs would be feeding data to Blue Button. 

Congress remains in session on Capitol Hill this coming week. Here’s a link to The Week in Congress’s report on last week’s actions on Capitol Hill.

In 2011, the FEHBlog’s internist advised him strongly to change his diet in order to reduce the risk of diabetes. The FEHBlog took his advice, which worked. Health Payer Intelligence reports

Philadelphia-based Health Plan Partners (HPP) reduced blood glucose levels of diabetics and care utilization of other chronically ill members by implementing a healthy meal program to address food-related social determinants of health (SDOH). 

The Food-as-Medicine program targets chronically-ill Medicaid and Medicare members by working with the state’s Metropolitan Area Neighborhood Nutrition Alliance (MANNA). The targeted meals helped HPP and MANNA to reduce hospital admissions by 27 percent, ED visits by 6.9 percent, provider visits by 15.9 percent, and specialist visits by 7.9 percent. 

HPP contracted MANNA to provide members 21 meals per week for a six-month duration in 2015. HPP extended the Food-as-Medicine program into 2017 and increased the meal outreach program from 200 Medicaid diabetic members to 1900 Medicare and Medicaid beneficiaries. 

Leaders from both organizations developed the program based on MANNA’s previous research on food-related SDOH, which found that providing healthier meals can drastically improve beneficiary health and lead to lower utilization rates over a long-term period. 

HPP and MANNA hope that other payers and organizations will borrow the insights from the program to address food-related issues in their chronically-ill populations.

This SDOH coverage is a new trend in health plan coverage, and if this is what it takes to help people change their habits, the FEHBlog supports it.

OPM makes it difficult for plans to innovate on their own (as opposed to adopting OPM’s ideas). In the call letter for benefit and rate proposals, OPM routinely states (and did this year, page 6) “Except where noted, all benefit enhancements must be offset by proposed reductions so that premiums are not increased due to benefit changes.”  This is not a particular thoughtful way to control costs. Spending money on SDOH or similar innovations would add new benefit costs but can reduce overall benefit spending. OPM should be looking at merits of new benefits rather than placing focus on offsets, in the FEHBlog’s view.