Congress returns from its district work week following Memorial Day. The Hill updates us on anticipated activities there. Sooner or later the Senate will consider the President’s nomination of Katherine Archuleta to be OPM Director. Federal News Radio reports on what can Ms. Archuleta do for federal employees? The House Federal Workforce subcommittee is holding a hearing on Wednesday at 10 am on the topic — OPM’s Revolving Fund — A Cycle of Waste?

The New York Times had a front page article today on the high cost of colonoscopies. The article which spanned two full pages inside the A section bemoans the fact that people undergo colonoscopies when there are less expensive procedures readily available. That train however has left the station because the Affordable Care Act requires health plans to cover routine colonoscopies (in-network) with no enrollee cost sharing. See ACA FAQ XII.  Indeed, the article quotes a surprised patient as follows:

Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.

The article quotes a researcher

While several cheaper and less invasive tests to screen for colon cancer are recommended as equally effective by the federal government’s expert panel on preventive care — and are commonly used in other countries — colonoscopy has become the go-to procedure in the United States. “We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

Can the genie be put back in the bottle? Unlikely. The article accurately notes that

[T]he United States health care industry is nimble at protecting profits. When Aetna tried in 2007 to disallow payment for anesthesiologists delivering propofol during colonoscopies, the insurer backed down after a barrage of attacks from anesthesiologists and endoscopy groups. 

Indeed at the time that the ACA was enacted, a federal panel of medical experts sought to pull back on routine mammograms and Congress overturned their decision.  This is the first of a series of New York Times articles basically urging regulated healthcare pricing for everyone.

Govexec.com updates us on the Postal Service’s efforts to pull out of the FEHBP.  Most interestingly, the article reports that “U.S. Comptroller General Gene Dodaro told a Senate committee in February the Government Accountability Office would issue a report on the effects of USPS withdrawing from FEHBP — both on postal workers and the rest of enrollees — in July.”

The ACA regulators today released the final employee wellness program rules with little change from the proposed rule according to this Hill article and the FEHBlog’s quick review.  This rule allows employers to discount premiums by up to 30%  to incent employees to engage in healthy behaviors (50% for tobacco cessation). The rule concentrates on providing a level playing field for all employees in order to encourage participation in these programs. OPM’s budget proposal calls for a change to the FEHB Act in order to implement such premium discount programs in the FEHBP.

The HHS Office for Civil Rights and the National Institute of Standards and Technology recently held its annual conference on HIPAA Security Rule implementation. The presentations made at that conference are available here.

Congress is not in session this week.  Following up on last week’s post, the Washington Post reports that President Obama has nominated “Katherine Archuleta, a top official in his 2012 campaign, to head the Office of Personnel Management.”

The AMA News reports on how actress Angelina Jolie’s disclosure of her preventive double mastectomy has driven patient interest in a genetic mutation test called BRCA. The article explains that

More than 90% of women with family histories not linked to increased risk of the genetic mutations will not benefit from genetic counseling or testing, according to the U.S. Preventive Services Task Force. Although the testing is not physically burdensome, for average-risk women, it often yields ambiguous results that can heighten their anxiety.

“At this point, scientific evidence only shows that BRCA1 and BRCA2 testing is beneficial for women who have reviewed their family history of breast or ovarian cancer with a primary care professional and discussed the pros and cons of the screening test with a trained genetic counselor,” task force chair Virginia Moyer, MD, MPH, said in April before the Jolie news broke.

The article also notes that the test currently costs $3000 because the originator patented the test. A challenge to the patent is pending before the U.S. Supreme Court and a decision is expected in June. CNN reviews  this and the other big cases pending a Supreme Court decision next month here. The AMA News article indicates that if the Supreme Court rules against the patent, the charge for the test could drop to $200.

OPM is asking FEHB plans to update their bariatric / obesity treatment surgery coverage for 2014. For that reason, the FEHBlog’s attention was drawn to this Kaiser Health News article reporting that several states, including Alabama, Louisiana, Texas, Arkansas, and Mississippi, will not consider bariatric surgery to be an essential health benefit that plans in the individuals and small business markets must cover in 2014. This policy may not be as short-sighted as Kaiser Health News suggests because a recent study in the AMA Journal found that

“[O]verall health care resource use among obese individuals undergoing bariatric surgery is relatively stable during the six years following surgery. When these individuals’ health care costs are compared with those of a matched comparison group, total costs are significantly greater in the surgical cohort in the second and third years following surgery, but overall costs of those undergoing surgery are not lower than those of the matched comparison group during follow-up years four through six,” the authors note.

The study results indicate that total costs were greater in the bariatric surgery group during the second and third years following surgery but were similar in the later years. But the bariatric group’s prescription and office visit costs were lower and their inpatient costs higher. The study also suggests that those undergoing laparoscopic surgery had lower costs in the first few years after surgery, but those differences did not last.

“Bariatric surgery does not reduce overall health care costs in the long term. Also, there is no evidence that any one type of surgery is more likely to reduce long-term health care costs. To assess the value of bariatric surgery, future studies should focus on the potential benefit of improved health and well-being of persons undergoing the procedure rather than on cost savings,”

The FEHBlog is not questioning OPM’s letter which of course, considers bariatric surgery to be a last resort treatment. The FEHBlog is pointing out that public health cost savings are not self-evident.

To wit, Modern Healthcare reports that

Engaging patients in their care is often touted as a surefire way to control costs and reduce utilization of services, but new research calls that assumption into question. Armed with eight years of survey data from more than 20,000 patients, researchers from the University of Chicago argue that shared decision-making may actually result in increased inpatient spending and longer lengths of stay.

While engaging patients can improve health care quality and patient satisfaction,  that qualitative improvement does not necessarily translate quantitatively into lower costs.

The Washington Post meanwhile reports this weekend that the State of Maryland plans to turn the screws on hospitals by tying total hospital spending to long term economic growth in the state. Maryland is unique among the fifty states in that Medicare allows the State to set hospital prices for individual procedures. The new aggregate caps will be placed on top of the individual caps. “State officials hope to get approval from federal officials over the next several months so they can put the new system in place by January.”  Hospitals are not happy with the proposal, and the FEHBlog is not a fan of government price fixing.

Just for fun, the FEHBlog calls attention to this LA Times article about premiums in the California health insurance exchange / marketplace next year and an AHIP analysis of that article.

ABC News and the Washington Post are reporting this morning that the President later today maynominate Katherine Archulete to succeed John Berry as director of the Office of Personnel Management which hold responsibility for managing the FEHBP.  Ms. Archuleta previously served as chief of staff to former Secretary of Labor Hilda Solis and she was national political director for the President’s re-election campaign last year according to those reports. The nomination requires Senate confirmation.

HHS announced today that “more than half of all doctors and other eligible providers have received Medicare or Medicaid incentive payments for adopting or meaningfully using electronic health records (EHRs).” Any why not as the federal government has shelled out $6 billion in this effort. Meanwhile, as a loyal reader of the AMA News, the FEHBlog is aware that doctors are not altogether happy with the situation. A Modern Healthcare article adds that

Last month, six Republican U.S. senators issued a white paper calling for a reboot of the federal efforts. The senators criticized the program as lacking a clear path toward interoperability, and they cited earlier concerns raised by the Justice Department that health information technology systems may facilitate billing fraud. They also cited an HHS inspector general’s report criticizing the CMS for a general lack of oversight of the EHR incentive payment program. More recently, in response to the senators’ call for comments, several healthcare organizations praised the federal program for boosting EHR adoption, while also noting the need for more standardization and interoperability. 

The AMA News also reports a “seismic shift” in hospital system revenues. Primary care providers rather than specialists are generating more revenue for hospital systems due to the development of accountable care organizations, health care system employment of physicians, and other ACA initiatives like “free” in-network preventive care.

In the category of specialists, noninvasive cardiology, invasive cardiology, gastroenterology, general surgery, neurology, neurosurgery, ophthalmology and pulmonology showed decreases from the 2010 survey, while hematology-oncology, nephrology, obstetrics-gynecology, orthopedic surgery, psychiatry and urology went up. Otolaryngology was added to the survey for the first time in 2013.

A few specialties had notable declines from 2010 to 2013. Ophthalmology fell from $1.7 million to $725,000. Neurology dropped from $940,000 to less than $700,000. Neurosurgery declined from $2.8 million to $1.7 million.

The New York Times reports that the Obama Administration is trying to get the cash strapped pre-existing condition plan across the December 31, 2013, finish line by issuing an interim final rule that caps provider reimbursements at Medicare rates and prohibits providers from balance billing patients enrolled in this ACA initiative.

The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. In fact, about 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.

At the end of next week, FEHB plan carriers will be submitting their 2014 benefit and rate proposals to OPM. Business Insurance reports that “The average increase in medical costs for families enrolled in employer-sponsored preferred provider organizations was just 6.3% in 2012, according to a report that Seattle-based Milliman Inc. released Wednesday ”  Of course, FEHB plans have been able to hold their rate increases on average well below this benchmark.  According to the report highlights,

• Is this pattern of lower rates of increase over the past four years a sign that America is “bending the cost curve?” It is difficult to pinpoint a single cause of the slowing rates of increase, as a number of factors may be influencing trends. Possible explanations include the economy, provider integration, and a shortage of new “blockbuster” drugs coming online.
• We expect that the emerging reforms required by the Patient Protection and Affordable Care Act (ACA) will have little impact on the cost of care for our family of four in 2013 because this family tends to be insured through a large group health plan.

Congress is in session this week in the run up to the end of the three day weekend drought which runs from President’s Day in mid-February to Memorial Day at the end of May. The Hill’s Floor Action Blog as always provides a look at the week ahead. The Hill also reports that the federal debt ceiling debate will resume in October or November when the Government’s extraordinary measures lost their efficacy. In all likelihood that debate will get wrapped in the federal budget debate that will take place in September after the August recess.

The big excitement of the coming week is the release of the psychiatrist’s bible, the Diagnostic and Statistical Manual, 5th edition or DSM 5. (The shrinks have dropped their customary use of Roman numerals to identify DSM editions.) The FEHBlog read two interesting stories about the DSM in yesterday’s Wall Street Journal (the best newspaper of the week). CBS News summarizes the controversy here. It doesn’t matter that much to health plans which use the ICD-9 for diagnostic coding purposes under HIPAA.

Standard and Poors released its March 2013 health care cost indices last week.

Data released today by S&P Dow Jones Indices for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 3.02% over the 12-months ending March 2013, decelerating from the +3.11% annual growth rate recorded in February. It posted the lowest rate of growth since January 2005.

Seven of the nine S&P Healthcare Economic Indices showed slower annual growth rates for March 2013 compared to February 2013. Annual growth rates for five of the healthcare indices hit their historic lows in March. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.46% in March, down from +4.63% reported for February. The Commercial Index rate hit its historic low in March. Annual growth rates in Medicare costs increased by 0.82%, according to the S&P Healthcare Economic Medicare Index, up from +0.78% recorded last month.

Cost curve up but not as fast as before.  The AP reports a similar outcome in a Fidelity Investments survey of retiree health care costs.

A 65-year-old couple retiring this year would need $220,000 on average to cover medical expenses, an 8 percent decrease from last year’s estimate of $240,000. The study assumes a life expectancy of 85 for women and 82 for men.  The projection assumes that a 65-year-old couple retires this year with Medicare coverage and no additional coverage from former employers.

Federal employees can thank their lucky stars that FEHBP coverage continues into their retirement with the full government contribution as long as they have five years of FEHBP coverage immediately preceding retirement.

In other ACA news, HHS announced that it will award $1 billion in health innovation awards “to provide better health care and lower costs.” The FEHBlog is not quite sure that throwing money at a problem has a good track record as a solution.

Speaking of throwing money at a problem,  Becker’s Spine Review (what a great name!) reports that 71% of U.S. physicians think that health information technology use will raise costs according to a Deloitte survey available here.

But there is good news.  Key survey findings include (according to the Becker’s article):

•    Seventy-five percent of all physicians said clinical capabilities are a major positive reason to collaborate with hospitals.
•    Seventy-three percent of all physicians believe that health IT will improve the quality of care provided in the longer term.
•    Only 31 percent of solo practitioners have an electronic health record system that meets meaningful use stage 1 requirements, compared with 82 percent of larger practices.
•    Overall, 63 percent of physicians are satisfied with their EHRs.
•    Seventy-four percent strongly agreed that faster and more accurate billing for services is the greatest benefit of EHRs.
•    Seventy-two percent of physicians in practices that do not have EHRs meeting meaningful use stage 1 requirements said the upfront financial investment is the greatest barrier to EHR adoption. 

Finally, and also on the innovation front (or perhaps more accurately old practices become new), the Philadelphia Inquirer reports a growing incidence of group medical appointments with primacy care practices for issues such as obesity:

The American Academy of Family Physicians found that 12.7 percent of family physicians held group visits in 2010, up from 5.7 percent in 2005. Some experts think that group appointments could accelerate, and help ease the doctor shortage expected as more people gain health insurance starting early next year under the Affordable Care Act. The idea behind group appointments is to give patients the tools to become their own advocates and full-fledged partners with doctors. The groups also enable physicians to treat more patients, see them more often, and practice a more personal and rewarding style of medicine.
  

This week’s AMA News reports that

HealthPocket, a website that ranks and compares health plans, asked 713 consumers if they would be willing to change physicians if it meant saving money on insurance premiums. Respondents also were asked how much money they would need to save annually to make that switch. Thirty-four percent thought keeping down out-of-pocket insurance costs was more important than retaining their doctors.

In addition, the savings wouldn’t have to be that significant — more than half of those willing to make a switch “would do so for the lowest savings amount presented by the survey, $500 to $1,000 annually,” according to a summary of the findings. This compares to the 7.5% who would change doctors only if they saved $3,000 or more per year.

Fascinating. Here’s a link to the HealthPocket survey.

Health Data Management reports that several large health insurers are requiring their business associates to implement the HITRUST Common Security Framework.  Standardization makes sense.

Fierce Healthcare reports that “A new survey from the American Hospital Association finds that most hospitals are implementing team-based care–nearly 75 percent, with 62 percent training to do so.” That’s good news.

The benefits consulting firm Towers Watson wrote about a May 3 Internal Revenue Service proposed rule that provides more guidance about the ACA’s requirement that employer sponsored plans offer “minimum value” in 2014.  The FEHBlog is willing to bet the ranch that FEHB plans meet this standard which basically requires that the enrollee cost sharing (deductibles, co-payments, coinsurance but not enrollee contributions) does not exceed 40% of standardized plan costs.  Woo boy, is the ACA a complicated law.

Happy Mothers’ Day! Congress is in session this week. The Hill’s Floor Action blog reports that the House will take another shot at repealing the Affordable Care Act.  AHIP reports that the House Small Business Committee held a hearing last Thursday to discuss the health insurer fee that takes effect in 2014. AHIP and the National Foundation of Independent Business both want this tax repealed.  NARFE has issued a membership action alert “Defend the FEHBP” in response to House Ways and Means Committee Chairman Dave Camp’s bill to boot all federal employees out of the FEHBP (HR 1780).

Speaking of the ACA, last week, the Labor Department issued Technical Release No. 2013-02 and a bunch of new notices that employers subject to the Fair Labor Standards Act a/k/a most employers, including the U.S. government and the Postal Service will be required to provide to current employees no later than October 1, 2013 — the start date for ACA’s health insurance exchanges a/k/a marketplaces — and to new employees within 14 days after hire. There is one form for employees who are covered under the employer’s health plan and another form for employees who aren’t. The forms seek to explain the relationship between employer sponsored coverage and exchange coverage.  These forms are required by the law. The Labor Department also issued a new model COBRA continuation of coverage notice which alerts the reader to the fact that more affordable continuation coverage may be available on the exchange/marketplace (as compared to COBRA).  Presumably OPM will be updating its temporary continuation of coverage notice for the same purpose (TCC is the FEHBP analog to COBRA).

The Leapfrog Group posted its latest patient safety ratings for 2500 U.S. hospitals late last week.

Key Findings
• Of the 2,514 general hospitals issued a Hospital Safety Score, 780 earned an “A,” 638 earned a “B,” 932 earned a “C,” 148 earned a “D” and 16 earned an “F.”
• A total of 1.9 percent of hospitals showed dramatic change in their Hospital Safety Score, moving two or more grade levels up or down. Approximately 73.9 percent of hospitals maintained the same Score from November 2012.
• The states with the smallest percentage of “A” hospitals include Nevada, Kansas, Oregon, West Virginia and New Mexico, which holds the lowest percentage at 6.7 percent.
• The largest change in an individual safety measure was the Computerized Physician Order Entry (CPOE) measure, which rose from 29 to 34. CPOE technology reduces the number of errors related to handwriting or transcription and provides error checking for incorrect doses and tests.
• A range of hospitals earned “A’s,” with no one class of hospitals (i.e., teaching hospitals, public hospitals, etc.) dominating among those showing the highest safety Scores. Hospitals earning an “A” include academic medical centers Brigham and Women’s Hospital in Boston and Mayo Clinic. Many rural hospitals earned an “A,” including Geisinger Medical Center and Blessing Hospital.
• Hospitals with myriad national accolades, such as Duke University Hospital, earned an “A.”
• “A” Scores were also earned by hospitals serving highly vulnerable, impoverished and/or health-challenged populations, such as Detroit Receiving Hospital.

The FEHBlog is writing today principally to make sure that his readers are aware that he made a mistake in yesterday’s post. That post indicated that new U.S. Public Service Task Force “A” or “B” recommendations must be implemented in the plan year immediately following their issuance.  In fact, the ACA regulations provide that implementation occurs in the plan year that begins one year after implementation. Consequently, the expanded HIV testing recommendation discussed yesterday will be implemented in the FEHBP in 2015, not 2014. Thanks to a friend for pointing out the FEHBlog’s error.

“Retail is for suckers.” – Kramer in The Glasses episode of Seinfeld.  The Washington Post reports that the federal government is now posting hospital retail rates for major procedures.

The hospital charges being released Wednesday — all from 2011 [in one massive excel spreadsheet] — show the hospitals’ average list prices. Adding another layer of opacity, Medicare and private insurance companies typically negotiate lower charges with hospitals. But the data shed light on fees that the uninsured could pay.

Not surprisingly to the FEHBlog the Post finds a lot of price variation.  To celebrate, “HHS made approximately $87 million available to states to enhance their [health insurance company — not hospital] rate review programs and further health care pricing transparency.” Here’s a link to AHIP’s take on the data.

The AMA News weighs in one recent studies noted in the FEHBlog that doctors become sensitive to the cost of diagnostic tests that they order when they know the price. The AMA’s concern — that price sensitivity may adversely impact quality of care. When has that ever been the case in real life? Don’t people consider price and quality when making a purchasing decision.