FEHBlog

Doug Badger, a senior fellow at the Galen Institute, writes “Bludgeoning the opposition with CBO numbers [on the American Health Care Act] does not advance debate.  It silences it.”  Well put. Mr. Badger’s backs up his statement here.

Healthcare Dive reports that Steward Healthcare is poised to be the largest for profit hospital operator in the U.S. following the announcement of its acquisition of a competitor. Healthcare Dive explains

The merger is part of an ongoing trend that also recently included a Geisinger and Jersey Shore deal. Steward and Community Health Systems (CHS) also announced earlier this month that Boston-based Steward purchased eight CHS hospitals. These moves show Steward attempting to become a bigger player in the competitive for-profit hospital industry.
While Steward is rapidly increasing its footprints, other large for-profit hospital systems like CHS and Tenet are divesting hospitals, as they face financial issues, including flat or lost revenue in the first quarter of the year, and mounting debt.
The deal will give Steward nearly 7,500 patient beds across 10 states and about 38,000 employees, including “more than 1,800 directly employed multi-specialty physicians and several thousand aligned physicians,” according to Steward Health Care.

Of course, the “ongoing trend” was initiated by the ACA.

A truism if there ever was one — “Coordination of care among healthcare providers is the single most important criteria influencing member satisfaction with their health plan, according to the J.D. Power 2017 Member Health Plan Study.”  Of course, the statement begs the question – how?

HHS Secretary Tom Price’s response to the CBO report on the American Health Care Act is worth a gander.

The Federal Times provides additional background on the President’s nominee for the OPM Director position who appears to be a lock for Senate confirmation.

The FEHBlog found two interesting articles relating to the President’s budget proposal:

• The Federal Times identifies four winners and four losers in the proposal’s workforce estimate. It’s worth noting that OPM is one of the winners.
• Govexec.com points out 11 major agency reforms that could pass Congress independently of appropriations bills. 

Here’s a link to the anxiously awaited Congressional Budget Office report.

The Administration did release a full FY 2018 budget proposal today. Here’s a link to the OPM budget proposal.  The FEHBlog did not notice any proposed changes to the FEHBP in this document.  Federal News Radio has a story on other federal employment aspects of the proposal.

More significantly from the FEHBlog’s standpoint, the President today made a nomination to fill the open position of OPM Director. From the White House website,

George Nesterczuk of Virginia [has been nominated] to be Director of the Office of Personnel Management. Mr. Nesterczuk leads Nesterczuk and Associates in providing management consulting services to public sector institutions and private enterprises. He has over thirty years of experience as a consultant on organizational management and policy development. From 2004 to 2006, Mr. Nesterczuk was Senior Advisor to the Director of the U.S. Office of Personnel Management for the Department of Defense. In that capacity, he led OPM efforts in the establishment of the National Security Personnel System at the Department of Defense. Previously, he was Staff Director of the Subcommittee on Civil Service of the Committee on Government Reform in the U.S. House of Representatives. Mr. Nesterczuk also served as a senior official in the Reagan Administration, holding successive positions in the U.S. Office of Personnel Management, the Department of Defense, and the Department of Transportation.

The position of course requires Senate approval.  Here are links to the Federal News Radio story and the Govexec story on the nomination.  Next step a confirmation hearing before the Senate Homeland Security and Government Operations Committee.

Congress remains in session on Capitol Hill this week. On Tuesday, according to Reuters, the President will release his complete FY 2018 budget proposal. The House and Senate Budget committees each will hold hearing on the proposal on Wednesday morning.

Federal News Radio reports on a federal employee compensation hearing that the House Oversight and Government Reform Committee held last Thursday. OPM did not present testimony at this hearing. The Congressional Budget Office (“CBO”) did testify.

Overall, CBO found that government  spends about 17 percent more compensating federal employees  compared to their counterparts in the private sector.  In total, federal employees with a high school diploma or less earn on average 53 percent more than their counterparts in the private sector, while federal workers with a bachelor’s degrees received 21 percent more in compensation. In contrast, total compensation costs for employees with a professional degree or doctorate were 18 percent lower than workers in the private sector, CBO said.

The CBO report (p. 13) finds similar but exaggerated differences when you consider fringe benefit costs.

As with wages, differences in the cost of benefits in the federal government and the private sector varied by employees’ highest level of education. For example, CBO estimates that, relative to costs for similar workers in the private sector, bene t costs were about:

• 93 percent higher, on average, for federal workers with a high school diploma or less education;

• 52 percent higher, on average, for federal workers whose highest level of education was a bachelor’s degree; and 

• Roughly the same, on average, for federal workers with a professional degree or doctorate.

On average for workers at all education levels, benefits for federal employees cost about $26 per hour worked, whereas benefits for private-sector employees with certain similar observable characteristics cost $18, CBO estimates. 

The Government Accountability Office also testified.  According to the Federal News Radio report,

“Pay is not the only thing,” said Robert Goldenkoff, director of
strategic issues at GAO. “Even if we could assume for the moment that we
could come up with the ideal pay system, it still does no good if your
on-boarding processes are inadequate, if you don’t make effective use of
their talents, if you don’t aggressively recruit them, if once they do
come on board you don’t develop them [and] they’re not given effective
supervision. It’s also a matter of work-life balance programs, and it
needs to be tailored to individual labor markets. It needs to be
tailored to individual occupations. We’re just not doing that
effectively right now.”

The GAO report (p. 3) also reminds Congress that “government-wide more than 34 percent of federal employees on-board by the end of fiscal year 2015 [September 30, 2015] will be eligible to retire by 2020” At the OPM AHIP carrier conference, an OPM statistician observed that the federal government retirement tsunami that was predicted ten years ago has not happened yet.  He attributed it to the great recession and the fact that the FEHBlog’s own Baby Boomer generation is working longer than anticipated. Giving the government more time to adjust is a good thing, but as sure as time marches on, the retirement wave will hit before long.

Here’s a link to the Week in Congress’s report on this week’s activities on Capitol Hill. It’s worth noting that the Senate confirmed the President’s nomination of Scott Gottlieb to be Food and Drug Commissioner, which is an important role in the health care industry.

Yesterday, Congressman Jason Chaffetz (R Utah) announced that he is leaving Congress at the end of June. Rep. Chaffetz has done a good job chairing the House Oversight and Government Reform Committee since the beginning of 2016. He has lead the bipartisan charge on the Postal reform act (H.R. 756).  The Washington Post reports that Congressman Trey Gowdy (R SC), a well know figure on Capitol Hill, is favored to take the gavel from Rep. Chaffetz.

Health Data Management reports that few U.S. healthcare organizations were affected by the WannaCry worm.

Lee Kim, director of privacy and security for HIMSS North America, contends that there have been anecdotal reports by healthcare providers around the world—including the U.S.—of infections affecting their computers and medical devices. And, she says because there are multiple variants of the WannaCry ransomware, it is still a very serious international cyber threat.

The ransomware is rapidly changing, and there are multiple variants—at least 65 variants of the WannaCry ransomware have been confirmed at this time,” according to Kim, who says it is likely

Kim calls WannaCry the world’s first ransomworm—ransomware with the ability to self-propagate without user intervention or interaction. At the same time, she notes that the “success” of the WannaCry ransomware is “based upon one tried and true fact—many individuals and organizations do not patch their systems in a timely manner.”

It makes sense to use good email hygiene, timely patch and continuously back-up computerized data.  

Fierce Healthcare reports that the Trump Administration is taking steps to permit other private-sector oriented approaches to purchasing health insurance under the Affordable Care Act. The ACA as developed by the Obama Administration requires consumers to purchase the insurance on a government website such as healthcare.gov.  Indeed, subsidized coverage is available only through those websites. The American Health Reform Act would give consumers tax credits that they could use to help buy insurance on or off the health insurance exchanges.

The FEHBlog attempted to purchase insurance coverage for his firm through the DC Health Link site. Even though his expertise is in health benefits, he was flumoxxed. His life insurance agent directed him to a good health insurance agent. The agent guided him through the standardly priced options which allowed the FEHBlog to pull the computerized trigger.  (DC requires small businesses to use Health Link.)  The Trump Administration is making changes to the health insurance selection process that encourages the use of brokes and agents. That’s a good move.

In another encouraging development, the budget act that Congress passed last month permits the Department of Health and Human Services to to “consult private-sector groups trying to develop patient identification and patient matching solutions” for health transaction and electronic health record purposes according to Modern Healthcare.  HIPAA which http://www.bizjournals.com/stlouis/news/2017/05/17/could-amazon-be-express-scripts-next-competitor.htmlwas enacted in 1996 required HHS to create a patient identifer.  Two or three years later, Congress defunded any patient identifier initiative and that ban has held until this year, thereby impeding the development of electronic health record networks as well as creating patient safety issues. The FEHBlog continues to believe that Congress should allow the private sector to manage the electronic transaction side of HIPAA.

The Milliman actuarial consulting firm has issued is 2017 Milliman Index. “In 2017, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $26,944,” according to that Index.  More interesting tidbits can be found in the report.

On the health care provider front, Crain’s Chicago Business reports that the urgent care business is booming to such a degree that hospitals are becoming interested in getting a piece of the pie.  Telehealth providers who compete with the urgent care centers got a good news this week when the Texas legislature passed a law clearing the way for telehealth vendors to operate in that large state.  Here’s a link to the mhealthintelligence report.  Texas was the last large state to restrict the use of telehealth. Only a few states with restrictions are left.  Here’s a good site to access that info.

Following up on a few FEHBlog posts —

• Health IT Security gives us the latest on the WannaCry worm. 
• Drug Channels discusses the Express Scripts’ Inside Rx program that the FEHBlog mentioned last week. The FEHBlog discovered from reading the article that CVS has a similar program. In a development that must chill the spines of PBMs,  Bizjournals.com reports that Amazon is considering breaking into the PBM business. 
• The FEHBlog recalls discussing a while back a United Healthcare initiative called Harken Health. The subsidiary which operates around Chicago and in Georgia, “offered free primary care visits and wellness programs as well as 24/7 access to physicians through phone, email or video chat.” Healthcare Dive tells us that UHC decided to wind down the experiment by year end. 

Happy Mothers’ Day to the FEHBlog’s readers.

Congress returns to work on Capitol Hill this week.

FEHBP carriers have until May 31 to submit their 2018 benefit and rate proposals.

Last week, according to a Federal News Radio report, as the Postal Service reported its first quarter of 2017 financial results and the Postmaster General, among others, asked Congress to move forward with the Postal reform bill (H.R. 756), which would create a separate Postal Service Health Benefits Program within the FEHBP.

Also last week, the President issued a cybersecurity-related executive order.  Tech Crunch explains why the order was a good first step.

On Friday, following the TGIF posts, news broke on a ransomware worm called WannaCry which was engaged in a world wide attack on Microsoft Windows XP systems which had not been patched since mid-March 2017.  The worm has struck at least 3,330 times in the U.S. and over 24,000 times in Russia, which are among the 153 countries that were hit.  Federal Express was hit in the U.S. The Wall Street Journal reports

The outbreak was slowed over the weekend by the actions of a private security researcher who found a “kill switch”inside the worm, halting its spread from one infected computer to a network. But experts warned Sunday that the hackers could release another version of the worm with no kill switch, and that more computers could become infected as people returning to work turned on devices Monday morning. 

The outbreak illustrates the importance of routine vulnerability testing on IT systems, among other testing processes.  A Washington Post blog discusses the political difficulties in preventing these problems.  Here is a link to the U.S. CERT alert on the worm.

Healthcare Dive reports that this morning Anthem notified Cigna that their merger agreement has been terminated.  This is not the end of the Delaware state court litigation between the two companies over the failed merger. But the tail end of the litigation just concerns money.

The FEHBlog is outside the Beltway this weekend.  It’s a lovely day in Chicago.

The Delaware chancery court judge denied Anthem’s motion for a 60 day long extension of its merger agreement with Cigna late yesterday afternoon. The judge allowed Anthem until Monday to notice an appeal to the higher state court according to this Bloomberg article.

HHS Office for Civil Rights added another scalp to its belt this week.  This one is worth bearing in mind. A large Texas hospital system is paying a $2.4 million settlement and entering into a compliance plan because the hospital publicized the fact that a patient was arrested for presenting a fraudulent identification. It was OK under HIPAA to blow the whistle to the police but not to name the patient in its press release. Expensive lesson.

In an interesting development, the Blue Cross Blue Shield Association announced a nationwide partnership with Lyft to transport certain members to medical appointments at no additional cost to the members. It looks like the arrangement will be an additional tool in the case manager’s toolbox.