I hope that everyone is enjoying the long holiday weekend and is looking forward to the new year.

Many years ago, I recall helping a client respond to an appeal over the medical necessity of a monitoring belt worn by women experiencing difficult pregnancies. I learned from the medical reviewer that the belt was valueless but the expectant mothers were aided by the daily contact with the monitoring nurse. That was a good lesson about the importance of human communication in the medical process. While that remains true, I learned from a report in the Oregonian that home health monitoring devices have improved dramatically over the years. Kaiser Permanente is using them successfully with chronically ill members to reduce the number of outpatient visits.

At the 2006 OPM carrier conference, Medco CEO David Snow spoke about value of personalized medicine. According to a report in the MercuryNews.com

[P]ersonalized medicine broadly represents the promise of delivering more effective, efficient medical care through genomics and other science that probes an individual’s makeup at the molecular level. The trend also includes secure Web portals that empower patients with greater knowledge.Personalized medicine, biotech pros say, is poised for dramatic progress in 2009, both in clinical practice and the lab.

Also on a tap for 2009, according to a Reuters interview with Teva North America Pharmaceutical’s CEO is a new federal law creating a regulatory pathway for biological follow-ons also known as biogenerics or biosimilars. Reuters reports that

Israel-based Teva, the world’s largest generic drug maker, has added to its biogeneric capabilities with its $7.46 billion acquisition of New Jersey-based Barr Pharmaceuticals. The deal closed on Tuesday [December 23].

These developments will lead to significant cost savings over time. FYI, the 2009 OPM AHIP carrier conference has been scheduled for March 16 – 17 at the Capital Hilton here in Washington, DC.

Fabulous weekend. UConn defeated Gonzaga 88-83 in overtime yesterday, and the Redskins pulled out a surprise 10-3 victory over the Eagles today.

The Federal Workforce subcommittee published a press release about the resolution of the Blue Cross FEP out-of-network surgery issue as did Sen Ben Cardin (D Md). The Federal Workforce Subcommittee’s chair Danny Davis (D Ill.) has been nominated to serve on the Ways and Means Committee. Rep. Davis has stated that he has requested a waiver to continue serving as the Federal Workforce subcommittee’s chair.

The Federal Workforce subcommittee is part of the Oversight and Government Reform Committee. In the next Congress, Rep. Ed Towns (D NY) and Rep. Darrell Issa (R Calif) will serve as the Committee’s chair and ranking minority member respectively.

On December 18, the Congressional Budget Office release reports on budget options for health care and key issues in analyzing major health reform proposals. The Galen Institute provided an interesting overview of these reports as did the Kaiser Foundation.

Also on December 18, CMS released quality ratings on the Nation’s 16,000 nursing homes that participate in Medicare or Medicaid.

On December 19, the Washington Post’s Federal Diary column discussed the issue of whether federal annuitants with FEHB coverage should sign up for Medicare Part B. Joe Davidson, the Federal Diary columnist, interviewed Tammy Flanagan for his report. Ms Flanagan has had three columns in Govexec.com on the same issue.

OPM announced today that Blue Cross Blue Shield FEP has modified its 2009 Standard Option out of network surgical benefit that was the subject of a December 3, 2008, Federal Workforce subcommittee hearing. According to OPM, 

Under the revised benefits provision, BCBS Standard Option enrollees will be responsible for 30 percent of the plan’s payment allowance for the surgery to be performed, plus the difference between the plan’s allowance and the amount billed by the surgeon. In addition, Blue Cross and Blue Shield will, for the first time, provide prior approval for all non-emergency, out-of-network surgeries of $5,000 or more, enabling enrollees to know in advance how much BCBS will pay for the surgery. BCBS also will provide additional information and assistance to make the patient’s costs more transparent. Enrollees must initiate this prior-approval process.  * * * With the change in benefits in Blue Cross and Blue Shield, OPM has instructed federal agencies to accept belated Open Season enrollments through the end of January 2009.

Here are OPM’s FAQs on the belated enrollment process and BCBSA FEP’s letter to Standard Option subscribers explaining the change.

It’s been a rough day for Redskins fans, but we need to push the ball forward. This is the 700th FEHBlog entry since April 2006.

• It has been my theory for many years that low Medicare and Medicaid reimbursement rates have been a major driver of increasing health insurance premiums. This week, the actuarial consulting firm Milliman issued a report finding that, according to Workforce Management, “employers pay an additional $1,115, or 10.6 percent more, for a family of four’s health insurance premium to help doctors and hospitals make up for lower payments they receive from Medicare and Medicaid.” (More information on the study can be found in this BCBSA press release.) If you think of health care costs as filling a giant balloon, pushing down on the balloon’s public sector side shifts costs to the private sector side. The solution is to reduce the size of the balloon. I think that genomic medicine will be a key component of the long term solution.
• Of course, there are other ways to reduce the size of the balloon. President Bush and President elect Obama both have a great deal of confidence in the ability electronic health records to increase efficient delivery of care and reduce costs. We have a long way to go. Reuters reports that “Just under than 40 percent of U.S. doctors use electronic medical records and many say the system they use is only minimally functional, according to federal survey results released on Thursday. Only 4 percent of the 2,000 doctors surveyed by the National Center for Health Statistics said their systems were fully functional.” A fully functional system according to the survey includes patient demographics, problem lists, clinical notes, medical history and follow-up, orders for prescriptions, orders for tests, prescription orders sent electronically, viewing laboratory and imaging results, warnings of drug interactions or contraindications, out-of-range test levels, and reminders for guideline-based interventions. As mentioned earlier this week. funding for electronic medical records will be included in the first Obama federal stimulus package.
• Medicare will begin incenting doctors to use electronic prescribing systems in 2009. “Electronic prescribing (e-prescribing) systems that allow doctors to select lower cost or generic medications can save $845,000 per 100,000 patients per year and possibly more system-wide, according to findings from a new study [released last week and] funded by Department of Health and Human Services’ (HHS) Agency for Healthcare Research and Quality (AHRQ).
• Also on the bright side, the AP reports that
  

  The ultra-low prices for generic prescriptions offered by giant retailers and drugstore chains and intense competition among the many generic drugmakers fighting for sales, according to health information firm IMS Health. (NYSE:RX)Those pricing pressures forced down dollar sales of generic drugs in the U.S. by 2.7 percent in the year ending in September, even though the number of generic prescriptions filled actually increased by 5.4 percent over the year before, IMS reported Wednesday.”We’re seeing the combination of pressure from large retailers to make generics available at ever-lower prices for their customers” and the intensified competition among generic drugmakers leading them to cut prices, said Murray Aitken, senior vice president of the Healthcare Insight unit at IMS.

• Finally the Prescription Benefit Management Institute released its annual Prescription Drug Benefit Cost and Plan Design Survey.