FEHBlog

On May 15, the initial open enrollment period for Medicare’s prescription drug program known as Medicare Part D ended. CMS reported a surge in enrollments before the open enrollment concluded. CMS also reported that the average Medicare Part D premium for 2006 is under $24 per month, significantly below the $36 benchmark price that CMS projected soon after the law was enacted.

Medicare Part D plans submitted their 2007 bids on June 5 (similar to FEHB plans which submitted their 2007 benefit and rate proposals on May 31). According to BNA, experts are predicting that 2007 Medicare Part D premiums will be 5% to 8% lower than 2006 premiums because the Medicare law provides for aggregate reinsurance to help Part D sponsors launch the new product. The thresholds for these “risk corridor” payments double in 2008 so plans may want to build enrollment in 2007. CMS is expected to announce the 2007 benchmark premium in August 2006.

On June 8, the Blue Cross and Blue Shield Association announced its new Blue Distinction program which, according to the Association, includes the following components:

• “Blue Distinction National Transparency Demonstration — A national transparency demonstration by 17 Blue Plans ensures that we are providing consumers with the most effective ways to learn about absolute and relative healthcare costs.
• Blue Distinction CentersSM — The Blue Distinction Centers identify quality providers of bariatric surgery, cardiac care and transplant services nationwide.
• Blue Distinction Provider Measurement and Improvement ProgramSM — The Blue Distinction Provider Measurement and Improvement Program integrates provider performance metrics from public sources into a national framework for improving healthcare quality.”

The Federal Workforce and Agency Organization subcommittee of the House Government Reform Committee held a second hearing today on H.R. 4859, the Federal Family Health Information Technology Act, which Chairman Jon Porter (R NV) and Rep. Lacey Clay (D MO) have sponsored. Chaiman Porter indicated that he plans to markup the bill soon.

Diabetes cases have been surging in the United States and around the world. Pfizer will begin marketing an inhalable form of insulin called Exubera in July 2006. The short acting treatment will not entirely replace insulin injections. Analysts have predicated a $1 billion market for this drug and insurers are expected to place it in the highest copayment tier according to the Wall Street Journal’s report (subscription wall).

Merck and Novartis meanwhile are reported close to FDA approval of a new class of drugs called a DPP-4 inhibitor to treat diabetes 2. (Diabetes 2 used to be called adult onset diabetes; except in severe cases it does not require insulin therapy. The name Diabetes 2 is now used because many younger people are contracting the disease due in part to to obesity problems. Diabetes 1 previously was called juvenile onset diabetes and always requires insulin therapy.) The DPP-4 inhibitors work to decrease blood sugar levels, rather than increase insulin production, the objective of current diabetes drugs.

Merck’s drug is called Januvia and FDA approval is anticipated in the fall. Novartis’s drug is called Galvus and FDA approval is expected next year. Both drugs could achieve annual sales over $1 billion according to the Wall Street Journal report.

What’s more, Japanese researchers have announced a possible breakthrough in Alzheimer’s Disease treatment — a gene based vaccine that has worked on mice without causing the brain swelling problem that a previous experimental vaccine caused. Next step – monkey tests and then humans.

The Veterans Affairs Department’s Secretary sent a letter to all veterans last week about the massive security breach caused by the theft of an employee’s laptop. An enclosure to the letter explains that the Department is taking the following remedial measures:

The Department of Veterans Affairs is working with the President’s Identity Theft Task Force, the Department of Justice and the Federal Trade Commission to investigate this data breach and to develop safeguards against similar incidents. The Department of Veterans Affairs has directed all VA employees to complete the “VA Cyber Security Awareness Training Course” and complete the separate “General Employee Privacy Awareness Course” by June 30, 2006. In addition, the Department of Veterans Affairs will immediately be conducting an inventory and review of all current positions requiring access to sensitive VA data and require all employees requiring access to sensitive VA data to undergo an updated National Agency Check and Inquiries (NACI) and/or a Minimum Background Investigation (MBI) depending on the level of access required by the responsibilities associated with their position. Appropriate law enforcement agencies, including the Federal Bureau of Investigation and the Inspector General of the Department of Veterans Affairs, have launched full-scale investigations into this matter.

More details on these remedial measures can be found in the testimony given before the House Government Reform Committee on June 8. Today’s Washington Post features an interesting article about the wider impact that this security breach is having on employees who work at home (telework).

OPM posts online the Inspector General’s semi-annual reports to Congress as well as the agency’s responses to these reports. If you are involved with the FEHB Program, this is always an important read.

The FDA has approved Merck’s cervical cancer vaccine Gardasil for girls and women aged 9 – 26. The vaccine is administered three times over six months at a price tag of $360. On June 29, the Centers for Disease Control will consider whether to mandate the vaccine for girls aged 11 – 12. (The vaccine needs to be administered before the person becomes sexually active and potentially exposed to the virus that causes the disease). As the father of two daughters, I am very pleased by this news.

A provision in the lengthy Medicare Modernization Act established a Citizen’s Health Care Working Group which is to make health care reform recommendations to Congress and the President. The Group just released its interim report recommending the Nation move to a universal health care financed by taxpayers by 2012. The Group is now accepting public comments on the report. I enjoyed reading the Galen Institute’s comments.

As their contribution to National Health Information Technology Week, Sen. Sam Brownback (R-KS) and Representative Paul Ryan (R-WI) are introducing in the Senate and the House of Representatives an Independent Health Record Bank Act. The IHRB — a concept created by Cerner Corp. — would be a non-profit organization, similar to a credit union, regulated by the Commerce Secretary that would receive health record “deposits” from its customers. The bank would receive fees from customers and from the researchers to whom it would sell health data with the customer’s permission.

What’s more, the Center for Studying Health System Change released a study on the change in physician use of information technology for five clinical activities over the past five years. According to the Center, “[t]he 2000-01 survey contains information on about 12,000 physicians and had a 59 percent response rate, and the 2004-05 survey includes information from more than 6,600 physicians and had a 52 percent response rate. “Between 2000-01 and 2004-05, the proportion of physicians reporting access to IT for each of the five clinical activities grew by at least 5 percentage points. Changes in the proportion of physicians with access to IT for each of the clinical activities between 2000-01 and 2004-05 are as follows:

• Obtaining treatment guidelines grew from 52.9 percent to 64.8 percent.
• Exchanging clinical data with other physicians grew from 40.6 percent to 50.1 percent.
• Accessing patient notes increased from 36.6 percent to 50.4 percent
• Generating reminders grew from 23.6 percent to 29.3 percent
• Writing prescriptions increased 11.4 percent to 21.9 percent.”

I attended the National Health Information Technology (HIT) Day festivities held today at the Renaissance Washington hotel as part of a HIMSS summit conference. I heard four policymaker speeches.

The first speaker was Dr. Carolyn Clancy, the Director of HHS’s Agency for Healthcare Research and Quality (AHRQ). Dr. Clancy believes that health care information technology will power health care transformation by increasing efficient care delivery, improving patient safety, and empowering consumers. She identified the organizing principle as quality and she said that we must use health IT to build an evidence base to tell consumers, payers, and providers which health care services and supplies work and what does not work. This should create a stronger, more transparent health care market.

Former House Speaker Newt Gingrich , who now leads the Center for Health Transformation, emphasized the need to set the right health information technology standards the first time — standards that are market oriented, and will maximize innovation and adoption. Those standards should not be command driven but rather should be recognized to work in the real world by providing true interoperability.

Dr. David Brailer, vice chair of the American Health Information Community, informed the audience that HHS Secretary approved the AHIC workgroup breakthrough objectives on May 16 and that the ANSI Health Information Technology Standards Panel (HITSP) will create standards for these objectives by September 2006. Then it will be up to the federal agencies to use its procurement leverage and encourage rapid implementation of those standards by government contractors, thereby stimulating demand in the marketplace. Also in the late summer, the Certification Commission for Health Information Technology (CCHIT) will begin certifying HIT products. Business and technical processes must move together.

Dr. Mark McClellan, the Administrator of HHS’s Center for Medicare and Medicaid Services, reported that critical mass around health information technology is coming together. He mentioned a May 23 Mathematica study on how six types of HIT are improving hospital quality of care. He is noted the health care provider community’s argument that health plans not the providers will enjoy increased profitability from the improved quality created by health informaiton technology. He reported that CMS is working hard to pay more Medicare and Medicaid benefits for better quality of care and better outcomes. CMS has created several public-private quality alliances, such as AQA and the Medicare care management demonstration project, to create valid, consensus based quality measures. He also reported that by late summer 2006 HHS will issue final Stark Act regulations to encourage donation of health information technology.