FEHBlog

The New York Times reports that five veterans’ groups including the Vietnam Veterans of America have filed a class action against Veterans Affair Secretary Nicholson in the U.S. District Court for the District of Columbia. The veterans’ lawsuit seeks the following relief:

• A declaratory judgment that the VA’s loss of these records violated and continues to violate both the Privacy and Administrative Procedure Acts.
• A court order that the VA disclose the exact nature of its compromised records system and to individually inform each veteran of every record it maintains on him/her.
• An injunction preventing the VA from altering any data storage system and prohibiting any further use of these data until a court-appointed panel of experts determines how best to implement safeguards to prevent any further breaches.
• A judgment awarding $1,000 to each veteran who can show that he/she has been harmed by the VA’s violation of the Privacy Act.

Health plans, in accordance with the HIPAA transaction and code set standards, use the International Classification of Diseases, 9th Ed, Clinical Modification (ICD-9-CM) to code diagnoses and inpatient procedures. Rep. Nancy Johnson’s (R-CT) health information technology bill (HR 4157) would require health plans to implement the new ICD-10 code sets by October 1, 2009. This proposal has always struck me as very aggressive. Consequently, I was very pleased to read about AHIP’s recommendation — based on a detailed IBM study — to delay ICD-10 implementation until 2012. AHIP’s President explained that while AHIP’s health plan members support the eventual use of ICD-10,

“This massive effort of moving from 24,000 to 207,000 codes calls for all health care stakeholders to completely rework operations for claims processing, provider contracting, medical management, quality reporting, information technology, disease management, and other business and health care activities. Planning for an adequate implementation period will help provide a smooth transition to the new codes by allowing for pilot testing that will help minimize unintended consequences for consumers, physicians and other providers without unnecessarily increasing administrative costs.”

Let’s hope that common sense prevails as the Health subcommittee of the House Energy and Commerce Committee begins its markup of the bill on June 8.

I read with interest an op-ed in Saturday’s Wall Street Journal by the Cato Institute’s VP for Legal Affairs Roger Pilon applauding the D.C. Circuit’s opinion in the “little noticed” Abigail Alliance case (which I discussed in aMay 30 post). Mr. Pilon explains that

“If there is a fundamental right to refuse life-sustaining treatment, as the Supreme Court had found in 1990, there is, equally, a right to seek life-sustaining medication free from government interference. That’s hardly pulling a right “out of thin air,” as the Washington Post charged editorially in its defense of FDA bureaucrats. It is not the freewheeling stuff of Roe v. Wade, but rather the careful mining of Locke, Blackstone and Madison.”I don’t often find myself agreeing with the Washington Post editorial page, but I do on this issue.
My concern with the Abigail Alliance decision is a practical public health issue best framed by the National Breast Cancer Coalition in a September 3, 2003, letter to the FDA commenting on the Abigail Alliance’s petition:
“Public policy should discourage access to investigational drugs outside of clinical trials. Investigational treatments made available outside of clinical trials have the potential to undermine the clinical trials system. There is little incentive for a patient to participate in a clinical trial if she can obtain the investigational drug outside of the trial. This makes trial accrual difficult, and may significantly undermine the ability of the investigators to determine the efficacy and safety of the intervention. That was certainly the case with bone marrow transplant for breast cancer – because it was so widely available outside of clinical trials it was extremely difficult to accrue patients to trials, and it took many years longer than it should have to learn that the high-risk and expensive procedure provides no benefit to women with breast cancer. “Investigational treatments are by definition unproven; even the most promising data in earlier stages of trials often do not hold up. Further, there may be significant safety issues that do not emerge until well into a phase III trial. For example, the cardiotoxicity of Herceptin was not apparent in the phase II data, but emerged in the much larger phase III trial.”I cannot imagine how the district court on remand could not find this public health concern to be a compelling government interest.

The massive VA security breach just keeps growing. So far it has swallowed up the data analyst who lost the unencrypted data due to a home robbery and two of his superiors. According to the VA, there are no reports that the stolen information has been misused.

In today’s Washington Post, Steve Barr reports on OPM’s legislative proposal to amend the FEHB Act to permit the Service Benefit Plan to offer a third option pairing a high deductible health plan with a health savings account. On a related note, the GAO recently released a report on consumer directed health plans (06-514) finding that enrollment in high deductible plans pairedwith a health savings account or a health reimbursement account grew from 3 million to between 5 and 6 million in 2005. This small but growing share of the market is driven principally by employer interest in controlling their health care expenses and in allowing employees a little skin in the game, as they say. The report indicates that a survey of large employers (over 1000 employees) that offered HSA options along side more traditional plans had 3% average enrollment in the HSA option (Report, p. 14). What’s more five states — Alabama, California, New Jersey, Pennsylvania, and Wisconsin — still do not allow state income tax deductions for HSA contributions (p. 23). The GAO concludes that further growth in consumer directed plans will depend on many factors, such as changes in laws such as these that diminish interest in these plans, employer savings with these plans, and favorable employee experience with these plans.

As scheduled CMS yesterday started providing “Medicare payment and volume information is now available for common elective procedures and other common admissions for all hospitals. Information includes the volume and typical ranges of Medicare payments, by county, for 30 diagnostic related groups (DRGs), including heart operations and implanting cardiac defibrillators, hip and knee replacements, kidney and urinary tract operations, gallbladder operations, back and neck operations, and common non-surgical admissions. CMS expects that these and future data will be used to help consumers compare price, and with other available tools, quality, of common medical treatments.”

This is not like pulling a rabbit out of a hat because Medicare pricing is established by law, but it may be helpful to you and your members with primary Medicare coverage. As you can see, the current information is presented in a user-friendly format, but CMS has plans for a decision making tool.

The Galen Institute provides these interesting tidbits about the CMS data:

“The spreadsheet offers information for each state, each county in every state, and each hospital in every county for a variety of treatments they provided in 2005, including heart operations, hip and knee replacements, kidney and urinary tract operations, gallbladder surgery, and back and neck operations.

“One of the first things you notice is the huge discrepancy between the national averages of what the hospitals charge and what Medicare actually pays. [See yesterday’s post about spiraling health care costs.] Medicare’s payment is generally a third or less of the hospital charges. For example, Medicare’s average payment, nationally, for a heart valve operation is $38,538, but the average hospital list price is $115,221.

“There also are big price differentials when you drill down into the data. CMS lists the ranges of Medicare payments by county, but hospital-specific pricing data is not yet available. You see that the valve replacement could cost as little as $26,600 in Schenectady, NY, but more than $68,000 in Hardin County, KY.

“CMS does list the number of procedures for each hospital – which is a good indicator of the hospital’s expertise and consequently of more successful outcomes. From the data Medicare has published, you may be better off at Florida Hospital in Orange County with 177 heart valve replacements last year rather than Salina Regional Health Center in Kansas, with only 11.”

Finally, I have read that White House health care advisor Roy Ramthun is resigning his office today. Mr. Ramthun lead the HSA implementation charge at IRS, and he spoke at the FEHBP Carrier Conference in 2004. More recently, he has been working at the White House on health care policy.

Of course, the problem of spiraling health care costs in the U.S. has several sources, including aging demographics, obese population, etc. Yet I have argued that you can date the problem from 1982 when Medicare imposed price controls on inpatient hospital bills through its prospective payment / DRG system. The New York Times reports today that “Employers and consumers are paying billions of dollars more a year for medical care to compensate for imbalances in the nation’s health care system resulting from tight Medicare and Medicaid budgets, according to Blue Cross officials and independent actuaries.”

I am encouraged by the fact that

“Business leaders, health plans and groups representing hospitals and doctors plan to meet in July to review the report and make policy recommendations. “Although many state budgets are overwhelmed by rising Medicaid costs, health care reforms intended to reduce the ranks of the uninsured that were recently enacted in Massachusetts and Vermont include more state money for Medicaid. Blue Cross Blue Shield of Massachusetts and Partners Healthcare, the largest hospital group in Boston, jointly supported the Medicaid increases. “‘That was a real-world example of hospitals and insurers seeing that the had common interests,’ said Paul Ginsberg, a health economist who is president of the Center for Studying Health Systems Change, a nonprofit research group in Washington.”I hope that the medical professionals arguing for a single payer system take note of this study. There is no magic potion to cure this problem, but I have confidence that the provider and payer communities can tackle the problem if they work cooperatively. As the Health Data Management article (mentioned two posts below) points out, there are helpful elements in the payer’s consumer driven health care strategy that tie in with the medical community’s concern about chronic care expressed in the NEJM editorial mentioned one post below.

This week’s issue of the New England Journal of Medicine includes several articles on the new Medicare Part D prescription drug program, a point – counterpoint by the CMS Director Mark McClellan and Rep. Louise Slaughter (D NY) and a special study concluding that the Medicare Part D coverage donut hole kills (a bit of an exaggeration but all of these articles are freely available).

The Journal editorializes about this study in pertinent part as follows:
“The use of increased copayments or limitations on benefits in an attempt to control spending represents a misdiagnosis of what accounts for, and what is needed to address, the high and rising costs of health care. Any approach to creating better outcomes in health care must address the appropriate clinical treatment of chronically ill patients. Interventions to contain costs also need to address the rise in the prevalence of treated disease. A large component of the rise in health care spending is the increase in the rates of diabetes, back problems, and mental disorders associated with the persistent rise in obesity across virtually all age groups. Thus, controlling health care spending will require a strategy for the more effective treatment of chronically ill patients and for the slowing or halting of the increase in the prevalence of diseases such as diabetes. “Instead of an approach driven by the redesign of insurance and benefits, control of spending will require the early identification of patients at risk and the appropriate payment of physicians to manage a patient’s multiple chronic diseases according to evidence-based protocols. Providing better care for chronically ill patients under the Medicare program will require changes in policy. One approach would accelerate the use of the models of payment and delivery of care for chronic diseases that are under way in Medicare. A key unresolved issue concerning such an approach is how to get physicians to apply integrated models of chronic-disease care and how to get their patients to participate actively. “The results of the study by Hsu et al. should encourage movement toward other approaches to the management of spending in Medicare and other health insurance programs. One such approach would involve a monthly payment to physicians so that they would take the time needed to work with patients and manage their multiple chronic illnesses. Simultaneously, cost sharing for clinically recommended care (e.g., annual eye examinations or measurement of glycated hemoglobin for patients with diabetes) should be waived to ensure higher rates of compliance. Indeed, a condition-specific cost-sharing structure should be in place for clinically recommended services for chronically ill patients. We should be reducing the barriers to treatment and encouraging patients to take appropriate medications for the recommended duration, rather than increasing these barriers by limiting benefits. As the findings of Hsu et al. highlight, the use of cost sharing and limits on prescription-drug benefits to control spending is counterproductive both medically and in the immediate attempt to limit spending. “Effective strategies for reducing the level and growth of spending will need to rely on tools other than high-deductible plans and limits on benefits. With respect to the rise in spending, we need to address the rise in obesity head-on. Doing so will be neither easy nor likely to produce immediate results. However, the failure to include primary prevention and population-based approaches in the cost-containment tool kit will come at a price: a continued increase in obesity and in the prevalence of associated disease. “

I enjoyed reading this Health Care Data Management article which discusses various steps that health plans across the country are taking to improve consumer driven health care. I was impressed by Regence’s twist on the very popular myspace.com web site. Also Theresa Defino called to my attention this consumer survey on personal health records.

Check out this spoof on big law firm web sites developed by blogger Jeremy Blachman who has authored a book Anonymous Lawyer that will be published next month.