Uncategorized
Weekend Update / Miscellany
- OPM has launched its new employee benefits website just in time for Open Season which begins on November 10.
- The Leapfrog Group announced that 63% of the 1220 hospitals participating in the Group’s patient safety survey have adopted the Group’s never events policy.
- USA Today reports that Medicare Part D expenses fell by $6 billion in the last federal fiscal year which ended September 30, 2008. According to the paper,
Big reasons for the savings:• Generic drugs. The use of generic drugs has grown sharply, especially among seniors. Norvasc, for high blood pressure, and Fosamax, for osteoporosis, are among expensive drugs now available in generic form. Generics account for 64% of Medicare prescriptions compared with 61% in the private sector, Medicare says. • Fewer enrollees. The program has 2 million fewer participants than originally forecast. Some seniors decided to keep existing drug coverage, Medicare says. Also, fewer poor people enrolled than expected. • Doughnut hole. Seniors have cut costs to avoid falling into the “doughnut hole” — a coverage gap in which drug expenses between $2,510 and $4,050 a year are not insured.
- Speaking of generic drugs, CVS Caremark announced that starting November 9, you can pay $10 for a Health Savings Pass that will allow you to buy a 90-day prescription for one of more than 400 common generic maintenance medications for $9.99 at your local CVS pharmacy. The Pass also provides a 10% discount to cash paying customers at MinuteClinics. CVS is relatively late to the game of offering low cost generics.
HHS Notes
- Modern Healthcare.com reports that “The CMS set the annual inflation update for hospital outpatient departments at 3.6% starting Jan. 1, but it will keep ambulatory surgical centers at this year’s rates. The federal agency also put outpatient departments on notice, saying that it will eventually adjust payments to reflect the quality of care that’s delivered in the more than 4,000 hospital outpatient departments across the country.”
- CMS also announced that payment rates for physician fee schedule services will be increased by 1.1 percent in 2009″ as required by a law that Congress enacted last summer. CMS also announced that
Physicians and other eligible professionals who adopt and use qualified electronic prescribing (e-prescribing) systems to transmit prescriptions to pharmacies may earn an incentive payment of 2.0 percent of their total Medicare allowed charges during 2009. This incentive is in addition to a 2.0 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI), and both incentive payments are in addition to the 1.1 percent fee schedule update required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Thus, a physician who successfully reports under both the e-prescribing and PQRI initiatives could receive up to a 5.1 percent pay boost for 2009.
- Renal Business Today reports on a Health and Human Services (HHS) Inspector General letter to the CMS Administrator criticizing CMS for lax enforcement of the HIPAA Security Rule. The Inspector General recommended that CMS establish policies and procedures for conducting HIPAA Security Rule compliance reviews of covered entities. The Inspector General based this recommendation on its hospital audit program. According to the letter, “After we completed our fieldwork but before we issued our report, CMS executed a contract to conduct compliance reviews at covered entities.”
- Finally, I found it interesting that according to BNA, the American Hospital Association, a vocal supporter of aggressive implementation of the ICD-10 coding system, commented to HHS that the HHS proposed October 1, 2011, implementation date should be pushed back one year. Health plans, the American Medical Association, and others have backed the NCVHS-recommended implementation date, which would be October 1, 2013.
Prescription Drug Sales Slowing
The Wall Street Journal reports today that “U.S. drug sales this year are expected to rise just 1% to 2%, to as much as $297 billion, according to IMS Health Inc.” This is described as a “dramatic slowdown.”
Insurers also are hurting sales by not quickly covering new drugs and by pushing consumers and doctors toward low-cost generic drugs, Murray Aitken, senior vice president of Healthcare Insight at IMS said. Novartis’s Tekturna for high blood pressure, for example, has been a weak starter because there are many good generic drugs for hypertension on the market. That said, IMS also expects a slowdown in generic drug sales. Intense competition among generic-drug makers in the U.S. and Europe is driving down prices. IMS predicted the global generic market will grow by 5% to 7% next year, to more than $68 billion, down from double-digit growth in the past.
Similarly, Michelle Andrews from U.S. News and World Report noted today
How fitting that in these cost-conscious times, some experts are questioning whether pricey new diabetes drugs like Actos and Byetta actually provide more bang for the buck than older, cheaper ones. Their research dovetails nicely with new diabetes treatment guidelines that support trying less expensive drugs to lower blood sugar levels first and only moving on to more expensive drugs if the cheaper ones don’t do the trick.
AFP reports that “The cost of diabetes treatments rose from 6.7 billion dollars in 2001 to 12.5 billion dollars in 2007.”
OPM Associate Director Nancy Kichak Honored
According to an announcement made yesterday,
The American Academy of Actuaries honored Nancy Kichak with the 2008 Robert J. Myers Award for Public Service yesterday during its annual meeting. Kichak, the associate director for the Strategic Human Resources Policy Division of the U.S. Office of Personnel Management (OPM), was selected in recognition of her major contributions to the common good through service to government. * * *The annual award is named after Robert J. Myers, who helped structure and fund the nation’s largest social insurance program in history during his tenure as the chief actuary of the Social Security Administration from 1947 to 1970.
The award is certainly well deserved.
OPM's 2008 HIT Report
OPM has posted on the web its 2008 report on health information technology and transparency initiatives in the FEHB Program. These are the findings:
• 95 percent of FEHB plans have taken steps to educate their members on the value of HIT.• 75 percent of plans, representing 96 percent of total FEHB enrollment, will have PHRs available for their members in 2009. In 2007, only 51 percent of plans reported offering PHRs.
• Although the majority of FEHB plans continue to report that less the 5 percent of their members have actually used their PHRs to conduct one or more sessions, 16 percent of plans reported over 75% of their members used PHRs.
• Types of personal health records vary; 22 percent of plans report their PHRs are populated by members; 30 percent report they are populated with health plan claims data with the option for members to add personal information; 8 percent are populated by electronic medical records, with the ability to add information, and 15 percent allow members to view their personal health information with no ability for the member to up-date the information.
• 69 percent of plans report they have online physician or hospital cost estimators or comparison tools on their web sites.
• 77 percent of plans report they have online tools which compare physician or hospital quality.
• 26 percent of health plans state they provide financial incentives to providers for e-Prescribing.
• All FEHB plans are required to comply with Federal law and policy requirements to protect the privacy of individually identifiable health information. All indicate they provide members with access to privacy policies describing their compliance with the Health Insurance Portability and Accountability Act (HIPAA).
Weekend Wrap-Up / Miscellany
- Health Grades announced that Yahoo will post Health Grades hospital and physician rankings on its Yahoo Health portal. According to Washington Post.com, “Yahoo will integrate [this information] into a new, searchable physician database along with related Yahoo Answers and Yahoo Group discussions.
- I really enjoyed reading the inside baseball book Moneyball which focused on the Oakland A’s general manager Billy Beane. Interestingly, Billy Beane, Newt Gingrich, and Sen. John Kerry wrote a New York Times op-ed encouraging health care providers to take a page out of baseball’s playbook.
Look at what’s happened in baseball. For decades, executives, managers and scouts built their teams and managed games based on their personal experiences and a handful of dubious statistics. This romantic approach has been replaced with a statistics-based creed called sabermetrics. . . . Similarly, a health care system that is driven by robust comparative clinical evidence will save lives and money. . . . Working closely with doctors, the federal government and the private sector should create a new institute for evidence-based medicine.
Interesting analogy.
- The Chicago Tribune reports that
Treatment with placebos is far more common than you might think, according to a new national survey in which 46 percent to 58 percent of U.S. physicians admitted using placebos regularly. . . . Only 5 percent said they tell patients explicitly that they are doing so. the physicians surveyed were far more likely to use active agents as placebos, including over-the-counter painkillers, vitamins, sedatives and antibiotics. . . . . What classifies them as placebos is the context. If the recommended treatment hasn’t been shown, physiologically, to work for the condition in question, that’s a placebo.
No wonder health care costs are high.
- The National Journal’s website features an interesting blog which allows health care policy experts from across the spectrum to post answers on thought provoking questions, such as What will reform look like in 2009? and Should lawmakers look to Massachusetts as a model? Check it out.
Interesting Developments
- HIPAA requires HHS to create a national patient identifier. Congress has blocked funding this initiative based on privacy concerns. Now according to Healthimaging.com, the RAND Corp. has issued a study concluding that “Creating a unique patient identification number for every person in the United States would facilitate a reduction in medical errors, simplify the use of EMRs and help protect patient privacy.” I can’t see how the National Health Information Network can succeed without a patient identifier.
- Aetna will begin next month to permit its members to transfer their electronic personal health records to Microsoft’s Healthvault. According to an AP report, Aetna believes that this option will reassure members that their personal health records are portable. “About 40 companies currently allow customers to store information on it, a list that includes hospitals and CVS (NYSE:CVS) Caremark’s Minute Clinic. Aetna would be the first health benefits company to do so, according to Microsoft.”
- The Blue Cross Blue Shield Association has released its annual report on consumer driven health plans (“CDHP”). The report finds that “CDHP enrollment is up 25 percent and consumers enrolled in CDHPs were 30 percent more likely to track their health expenses than consumers in more traditional health insurance plans.”
- The National Conference of State Legislatures released a report comparing individual and family health insurance premiums nationally and by state over the years 2004 – 2008. “In 2008 the average fully insured individual faced an employee share of $725 for 1-person coverage (out of a total premium of $4704) and a $3,983 annual share for family coverage (out of a total premium of $12,680).” Those employee shares represent 15.1% of the self only premium and 31.4% of the family premium. In the FEHB Program, civil service employees (5 U.S.C. § 8906) by statute pay at last 25% of the total premium.
Studies galore!
The Robert Wood Johnson Foundation recently issued a study concerning “Demystifying U.S. Health Care Spending.” According this study,
Technology—not demographics or medical malpractice—is the key driver of health spending, accounting for an estimated half to two-thirds of spending growth. Other important drivers of health care spending include health status (particularly obesity) and low productivity gains in the health care sector.
The Wall Street Journal offered its take on health care technology in today’s paper, suggesting that healthcare technology has been an investment that soon may pay dividends:
IT security will eventually meet the expectations of the health-care industry, just as has happened in other sectors, like banking. And when it does, powerful IT networks crisscrossing the globe will change the way much of health care is delivered: Outsourcing and offshoring of medical and nonmedical services will increase, providing more efficient health care at the most cost-effective rates; systems integrations will allow more medical records to be transferred swiftly and securely; efforts to monitor the safety of medicines will gain global access to data; and professionals and patients will find authoritative and up-to-date information on every specialty online.
The Center for Studying Health Policy Change published a report on patient activation or rather the level of patient involvement in their own health care. According to the Center,
“[b]ecause activation levels are linked to important outcomes, such as seeking care, seeking information and health behaviors, and because it is a changeable attribute, it is a potentially important lever for change. * * * Because activation is changeable and provider support appears to be a factor, incentivizing or holding health care delivery systems and providers accountable for patient gains in activation is a possible policy direction.”
In this regard, it’s worth noting a Kaiser Family Foundation poll surprisingly finding that
three in 10 (30%) Americans say they have seen health care quality comparisons of health insurance plans, hospitals, or doctors in the past year. Not all people make health care choices or decisions in a given year that would call for the use of quality information, but this is a downward trend from surveys in 2006 (36%) and 2004 (35%) and roughly equivalent to the level in 2000 (27%). Further, just one in seven (14%) Americans report that they “saw” and “used” comparative health quality information for health insurance plans, hospitals, or doctors in the past year, again down from roughly one in five in both 2006 (20%) and 2004 (19%).