FEHBlog

On Thursday, the Food and Drug Administration approved the use of Celgene‘s drug Revlimid to treat patients with relapsed or recurring multiple myeloma. Trial data has shown the Revlimid, which is a pill, combined with a steroid boosts the survival rate of these patients by a year or more.

According to Reuters, the manufacturer will price the drug at more than $6,000 a month for the highest, 25 milligram, dose. Today’s Wall Street Journal (subscription wall) observes an industry trend of aggressively pricing cancer drugs while creating a safety net for the uninsured. The Journal quotes a Morgan Stanley analyst Sapna Srivastava, “Every time a [cancer] drug is priced, it’s higher.” Other examples are Genentech’s Avastin and Bristol Myers Squibb/Imclone’s Erbitux. Recently Bristol Myers declined to market Eribitux in Canada because of pricing concerns. This strategy has been noted for over two years with no no end apparently in sight.

On June 29, The Human Rights Campaign, a gay advocacy organization, released a report showing that 51% of Fortune 500 companies now extend health benefits to the domestic partners of their employees — double the number since 2000. Under the Federal Employees Health Benefits Act, self and family coverage is limited to the “spouses” of employees, and pursuant to the Defense of Marriage Act, a spouse is “a person of the opposite sex who is a husband or a wife.”

A U.S. Centers for Disease Control advisory panel has approved the practice of routinely immunizing 11 and 12 year old girls with the new HPV vaccine Gardasil. The panel also recommended that girls and women aged 13 to 26 should receive the vaccination on the advice of their doctors According to Medical News Today,

“Two HPV strains are responsible for causing 70% of all cervical cancers. Gardasil protects females from these two strains. It also protects against two other strains that are responsible for most genital warts. The treatment consists of three injections, spread over six months.” The whole course costs $360, which reportedly is a high price for a vaccination.

Wellpoint, a large Blues organization, has already announced that it will begin Gardasil coverage. Gardasil is a Merck vaccine.

It’s well known that employer sponsored health insurance took off during World War II when the federal government’s wage and price controls did not extend to “non-cash” benefits. Moreover, the federal tax code has excluded employer sponsored health insurance premiums from taxation. As part of the consumer driven health care movement, a number of policymakers, including the President’s Advisory Panel on Federal Tax Reform, are recommending that the tax landscape which now continues to favor employer sponsored health insurance over individually purchased health insurance be levelled out. In fact, this in one component of the President’s recent package of health savings account improvements.

The Employee Benefit Research Institute (EBRI) recently issued a report analyzing the four major reform proposals. EBRI observes therein (p. 26) that

“The assertion that the tax subsidy of employment-based coverage distorts
the market for health insurance and therefore creates an inefficient allocation of resources is based on the assumption that the tax subsidy is the only reason the market for health care services is inefficient. If there are other factors preventing the health care financing and delivery system from performing optimally, however, the “theory of second best” suggests that removing the tax incentive may not increase social welfare. Since health insurance coverage produces a number of positive external societal benefits, withdrawing the current tax incentive implicitly would suggest that individuals would obtain less-than optimal medical care. Currently, that incentive is provided through an employment-based system that has systemic efficiencies that an individual-based system would not be able to equal. “

The stolen Veterans Affairs Department laptop and storage media with personal data on 26.5 million veterans has been recovered. The initial report is that the personal data was not accessed after the theft.

On a related note, the U.S. Office of Management and Budget issued standards for securing remotely held information, e.g., protected data stored on a laptop.

Aon Consulting and the International Society of CEBS just released the results of a survey of 434 employers on the topic of consumer driven health plans (CDHPs). 28% of the surveyed employers offer CDHPs, up from 22% in 2005. 43% of the CDHPs offer health reimbursement arrangements (HRAs) and 48% offer health savings accounts (HSAs) — a flip flop from 2005 in which 67% offered HRAs and 15% offered HSAs. Only 10% of the employers offering CDHPs gave their employees a choice of HSA or HRA down from 15% in 2005. The FEHB Program provides an HRA option for enrollees who cannot contribute to an HSA, e.g, due to Medicare eligibility.

Yesterday’s Wall Street Journal included a special section on senior living. I was intrigued by an an article by Sarah Lueck about the future of health care (subscription wall). The article described products designed to help seniors live in their homes as long as possible, such as as Accenture’s online home medicine cabinet , the Personal Watcher, a wrist watch that monitors vital signs, and Motiva, an interactive TV / health platform by Phillips Electronics. Many of these products were demonstrated at a White House aging conference last year. Ms. Lueck points out that the the manufacturers still need to prove that their products are cost effective because at this point money as well as the lack of interoperability standards are major barriers to widespread adoption.

Interestingly, the article also discusses an Orwellian aspect to these products — a theme which I find raised more frequently now in health information technology articles. That is another widespead adoption hurdle.

According to a recently released National Center for Health Statistics report, “Americans made more than 1.1 billion visits a year to doctors’ offices and hospital emergency and outpatient departments in 2004, up by 31% in the last 10 years.” The study attributes the increase, in part, to an 11% population growth and a 19% per capita utilization increase.

Other interesting tidbits from the study include:

• “One-half of the 1.1 billion visits (48.1 percent) were to primary care doctors in office-based practices. The rest were to medical specialists (18.3 percent) and surgical specialists (16.0 percent) in office-based practices and emergency departments (10.0 percent) and outpatient departments (7.7 percent) in nonfederal general and short-stay hospitals.

• “Essential hypertension was the primary diagnosis recorded most frequently (42.1 million) at ambulatory care visits. Significant increases over the last 10 years were found for most of the leading primary diagnoses at ambulatory care visits including diabetes (up by 117%) and spinal disorders (up by 94%).

• “There was no change in the average time a patient spent face-to-face with a physician in office settings. The amount of time a patient waited before seeing a physician in the emergency department increased from 38.0 minutes in 1997 (first year collected) to 47 minutes in 2004.”

On June 22, the Center for Studying Heath System Change reported that the net income of doctors dropped 7.7% on average from 1997 through 2003. “‘Flat or declining fees from both public and private payers appear to be a major factor underlying declining real incomes for physicians,'” said HSC Researcher Ha T. Tu, M.P.A, a study coauthor.” Nevertheless, according to the study, medicine remains of one of the best paid U.S. professions (thanks to third party payers). This change may provide impetus for the various pay for performance programs that third party payers are implementing to incent quality and technology improvements.

The House of Representatives had been planning to hold its own Health Week this week. The apparent centerpieces of Health Week were the HIT bill ( H.R. 4157 ) and a bill implementing the President’s HSA improvement initiatives (H.R. 5262) – bills that would directly impact the FEHB Program. According to the Kaiser Health Report, the House also will be considering several other health care system related bills that don’t directly impact the FEHB Program. As previously blogged, two House committees cleared different versions of HR 4157 and to make matters worse for proponents of HR 4157, the Congressional Budget Office has concluded that the bill, and in particular the ICD-10 mandate, would cost the Government money. Moreover, Rep. Eric Cantor (R VA) who sponsored the HSA improvement bill has now withdrawn it for retooling. Because it will take some work to resolve the issues with H.R. 4157, the House leadership has postponed its Health Week until next week.