• OPM released its annual federal employee survey results for 2007. The FEHB Program was well received by about 2/3s of respondents.
• HHS unveiled an upgrade to its Hospital Compare website.  According to the HHS press release,  “In addition to adding the new information from Medicare patients about their hospital stays [from the HCAHPS survey], CMS is adding information about the number of certain elective hospital procedures provided to those patients and what Medicare pays for those services.  For the first time, consumers have the three critical elements — quality information, patient satisfaction survey information, and pricing information for specific procedures — they need to make effective decisions about the quality and value of the health care available to them through local hospitals.  It’s important to know that Hospital Care reports quality results on hospital care to all of its patients and not just Medicare patients.
• Business Week reports that Blue Cross of South Carolina is contracting with foreign hospitals such as the Bumrungrad Hospital in Thailand in order to serve American health plan members who engage in medical tourism.  Business Week further reports that “Last year, “65,000 Americans went to Bumrungrad for in-patient or outpatient treatment, up from just 10,000 in 2001. And of those 65,000, about half of them were U.S. residents who flew across the Pacific to Thailand for medical care. (The others were American expatriates living in Thailand or other parts of Southeast Asia.)”
•  Govexec.com reported that “The Office of the Coordinator of Health Information Technology “plans to integrate the [National Health Information Network] with the health care databases that Google and Microsoft launched last year, on which individuals can store their health records.  [ONCHIT]  plans this year to expand its Nationwide Health Information Network to also include electronic health records stored in networks operated by the departments of Defense and Veterans Affairs, and the Indian Health Service, and integrated health care systems that span numerous communities.” 

• Modern Healthcare.com reports that AHRQ released its 2007 State Snapshots “which are individual looks at every state and the District of Columbia, include 149 separate measures of quality, 20 more than last year’s 129 measures. The analysis also has a new feature to track state progress on meeting federal goals through the Healthy People 2010 initiative.” Minnesota and Wisconsin lead the pack.
• The Medicare Trustees issued another dire report about Medicare Program funding or the lack thereof as reported in the New York Times. The Secretary of HHS blogs about the issue here. Medicare Part A funds are expected to run out in 2019 just before I become eligible for Medicare. USA Today reports that Pete Stark, D-Calif. said: “Reports of Medicare’s death have been greatly exaggerated.”

Happy Easter!

• OPM has published the 2009 call letter here. The Federal Times and Govexec.com both featured articles on the call letter last week. NARFE issued a press release about the call letter’s request for FEHB plan proposals for sub-options to cover Medicare eligible annuitants. In the press release, NARFE’s President Margaret Baptiste states that
  

  “While OPM says that enrollees in the Medicare pilot “sub-option” would pay the same premiums set for their counterpart FEHBP plans, we are troubled that a plan specifically created for Medicare-eligible federal annuitants could open the door for separately rated retiree plans in the future with substantially higher premiums than other FEHBP plans,” . “In the 48 year history of the program, there has never been a separate FEHBP plan based on retirement status or age.”

  In fact all FEHB fee for service plans offer Medicare eligible annuitants reductions in deductibles, coinsurance, and copayments if they are enrolled in Medicare. Consequently, in my opinion, OPM’s request is not a sea change and it simply seeks to take advantage of Medicare and tax law provisions that can benefit annuitants who are enrolled in both the FEHB Program and Medicare.

• Modern Healthcare.com featured an article written by an executive of the Depository Trust and Clearinghouse Co. He explains that
  

  The National Securities Clearing Corp. and Depository Trust Co. were created in the 1970s to fulfill the vision of an industry-owned and industry-governed utility to fully automate the back-office environment for the post-trade processing of securities transactions and settlement of money owed. The Depository Trust & Clearing Corp., the corporate parent of NSCC and DTC last year settled in excess of $1.8 quadrillion in securities transactions.

  Since the Depository Trust & Clearing Corp. operates solely for the benefit of its users on an “at cost” basis—fees are charged only to cover the cost of running its operations and any profit gained through centralized processing is returned to customers ($984 million in 2007).

  Creating something called the Health Care Clearing Corp., or HCCC, modeled on the successful experience of the financial services industry could be a significant step forward in cutting healthcare costs. * * * An HCCC would operate like the hub of a wheel with spokes electronically linking all medical-service providers and all health insurance companies to a central point where data can be processed and exchanged. The HCCC would eliminate the need for medical-service providers and insurance companies to manage separate procedures and processes to submit claims. And, by bringing about standardization in data exchange and record-keeping, you would speed the payment of claims.

• The OPM AHIP carrier conference featured presentations on health disparities. The New York Times published a story on a recent federal government report finding a growing gap in life expectancy in the U.S. between high and low income groups.
  

  Robert E. Moffit, director of the Center for Health Policy Studies at the conservative Heritage Foundation, said one reason for the growing disparities might be “a very significant gap in health literacy” — what people know about diet, exercise and healthy lifestyles. Middle-class and upper-income people have greater access to the huge amounts of health information on the Internet, Mr. Moffit said.Thomas P. Miller, a health economist at the American Enterprise Institute, agreed.“People with more education tend to have a longer time horizon,” Mr. Miller said. “They are more likely to look at the long-term consequences of their health behavior. They are more assertive in seeking out treatments and more likely to adhere to treatment advice from physicians.” [Mr. Miller’s article on reducing health disparities is here.]
  A recent study by Ellen R. Meara, a health economist at Harvard Medical School, found that in the 1980s and 1990s, “virtually all gains in life expectancy occurred among highly educated groups.” [The New York Times also published an article this week on the public health risks created by growing number of parents who refuse to have their children vaccinated.]
  Trends in smoking explain a large part of the widening gap, she said in an article this month in the journal Health Affairs.

OPM kicked off the new FEHB Program year by publicly issuing its call letter for 2009benefit and rate proposals at the annual carrier conference this week. Steve Barr of the Washington Post published a column about the call letter today. My partner Scott Jamison was at the carrier conference today. Scott summarized the comments of OPM representatives about the call letter, which has not yet been posted on OPM’s web site

• OPM wants plans to incent their enrollees to seek clinically effective care. OPM singled out disease managements programs as a good example of the kind of thing it was looking for. OPM expects carriers in their benefit and rate proposals to project the return on investments they expect from such design change, which I understand to be easier said than done.
• OPM is asking plans to design “suboptions” for Medicare eligible annuitants that are simple, transparent and, voluntary. The suboptions should to incent annuitants to enroll in Medicare Parts B, C, and/or D.
• OPM generally will not accept benefit increases without offsetting reductions. However, OPM will accept, within reason, additional costs for plans to enhance their coverage of hearing-related services for adults (item 3).
• OPM also asked plans to consider durable medical equipment coverage for hi-tech assistive devices that would facilitate communication, but expects any such enhancements in this area to be cost-neutral.
• OPM will continue to “reward” carriers for their health information technology efforts by publicizing the ones making the greatest strides in this area on its website, and indicated that, as in past years, a carrier letter requesting information on this initiative would be forthcoming.

Carriers must submit their 2009 benefit and rate proposals by the end of May 2008. Negotiations then ensue over the proposals. Those negotiations conclude in mid-August 2008, followed by the production of 2009 plan brochures and the Open Season for 2009 enrollment which runs from early November through early December 2008.

The plaintiffs and First Databank presented a revised class action settlement agreement to the court yesterday in the Average Wholesale Price (AWP)-fixing case. The agreement, if approved by the court, would require First Databank to pay $1 million into a settlement fund for injured consumers. The third party payer (TPP) class, which paid most of the freight, would get bumpkus. The agreement also would require First Databank to adjust the AWP on 1356 national drug codes (NDC) listed in Exhibit A to the third amended complaint. The original settlement agreement provided for a reduction to 8400 NDCs and no settlement fund. First Databank also will pay $160,000 of the plaintiff’s expert expenses plus up to $985,000 in plaintiffs’ attorneys fees.The court also certified a class action against McKesson, the non-settling party in this case. According to the allegations of the complaint, McKesson and First Databank unlawfully agreed to increase the wholesale average cost to AWP markup from 1.20 to 1.25. The court certified a TPP class and a consumer class. The TPP class is certified for damages from 8/1/2001 through 12/31/2003 for the purpose of damages and from 8/1/2001 through 5/15/2005 for the purposes of liability and equitable relief. The consumer class is certified from 8/1/2001 through 5/15/2005 for all purposes. The Court will hear McKesson’s dispositive motion next month.

• The Las Vegas Sun featured a roundtable discussion on the public health care crisis caused by the Endoscopy Center of Southern Nevada.
• The Houston Chronicle reported on the dispute between insurers and the doctors who practice concierge care after United Healthcare dropped several of those doctors from its network.
• The Chicago Tribune reported on the shuttering of a chain of physician staffed retail clinics called Medical Marts. “Unlike the burgeoning number of retail clinics that are largely staffed by advanced-degree nurses known as nurse practitioners, Medical Marts staffed its clinics with two full-time primary-care physicians, as well as two full-time medical assistants or licensed practical nurses. In contrast, the nurse physician model retail clinics are expanding like hotcakes. According to the Tribune, “CVS Caremark Corp. subsidiary MinuteClinic, for example, said last week it recently opened its 500th clinic. Meanwhile, Deerfield-based Walgreens said it has nearly 150 of its Take Care brand clinics and plans to have 400 in its stores by the end of this year.”
• The New York Times reported on the debate over the proper dosage of an expensive prescription drug —
  

  The drug in question, Cerezyme, is used to treat a rare inherited enzyme deficiency called Gaucher disease. Some experts say that for most patients, as little as one-fourth the standard top dose would work, saving the health care system more than $200,000 a year per Gaucher patient. “It is economic malpractice to give a much higher dose of an expensive drug than is required,” said Dr. Ernest Beutler, an authority on Gaucher disease at the Scripps Research Institute. Some other Gaucher specialists argue otherwise, saying that skimping on the medicine could endanger patients.

  Meanwhile, Wal-Mart announced last week that its $4 generic drug program has saved Americans over $1 billion since it was introduced in 2006.

• Finally, the House and Senate passed their fiscal year 2009 budget resolutions last week. According to the Federal Times,

  The House bill was approved on a 212-207 partisan vote late Thursday. It adds $22 billion above the administration’s request for domestic programs like education and veterans benefits. But it would allow some of the Bush tax cuts to expire in 2010. Republicans claim that amounts to a $683 billion tax increase over the next five years.

  The Senate version, which passed 51-44, makes fewer changes to domestic programs, but adds money for Iraq reconstruction and global AIDS initiatives. Senators overwhelmingly approved an amendment to extend some of the president’s tax cuts, including one for low-income earners.

  The White House has threatened to veto any spending bills that go above the president’s domestic spending request.

• The Hill newspaper featured a report on a U.S. Chamber of Commerce conference on electronic health information technology (HIT). Rep. Jon Porter (R Nev.) announced there that he is “devising legislation to test electronic medical records in the Federal Employees Health Benefits Program.”

• The New York Times reported on a new HIT product called SmartSource that Aetna is beginning to roll out to its health plan members after testing the product on its 35,000 employees. The report explains that
  

  Using a medical search engine developed by Healthline, a medical database software developer, Aetna is piecing together medical profiles that are based on records of each insured member’s illnesses and diagnostic tests and that also make assumptions about their health concerns as reflected in their search topics. Andrea Rosenberg, a quality supervisor in an Aetna call center in Phoenix, said she had used the system to conduct research about her 5-year-old daughter Hayley’s ear infections and her own allergy symptoms. Like the millions of working mothers — a segment who are major online searchers for health information — Ms. Rosenberg said she had searched other health Web sites but found that the Aetna site provided information that was “more specific” to her situation. After looking it over, she took Hayley to see the family pediatrician. As for her allergies, she decided to stick with nonprescription medicines from the drugstore.Health plan members have been slow to add their information to personal health records offered by many insurers, at least until a family member gets sick. But Aetna and some other health insurers, including UnitedHealth and WellPoint, have made an end run around this obstacle by creating rudimentary health profiles based on medical claims data. Aetna says it has gone further by using the profile to help tailor the SmartSource searches.

• The Washington Post reports that a European study recommends against prescribing antibiotics for sinus infections because doctors have a difficult time distinguishing between bacterial infections that can be treated with antibiotics and viral infections that can’t. I have had a sinus condition throughout my life, and I can distinguish between a bacterial and sinus infection in myself, without HIT. I think this illustrates my opinion that medicine remains as much an art as a science and efforts to remove the art from the practice of medicine may be counterproductive. It also points out why it is so difficult to control health care costs.

• And speaking of costs, the AP reported that
  

  Sales growth in the U.S. prescription drug market slowed to the lowest rate in 46 years in 2007 as more brand-name drugs lost their exclusivity to generics and new product approvals declined, according to a report issued Wednesday. Sales came to $286.5 billion in 2007, up 3.8 percent, IMS Health said in its annual U.S. Pharmaceutical Market Performance Review. The rate of growth was the lowest since 1961, when sales increased by 3.3 percent.

  The IMS Health press release describes the “Primary Factors Contributing to 2007 Market Slowdown”

  • Loss of exclusivity – Branded drugs representing $17 billion in sales lost exclusivity in 2007, helping to drive prescription volume growth of 10 percent for unbranded generics. In 2007, generics continued to replace branded prescriptions in the major therapeutic classes, increasing their share of total dispensed prescriptions to 67.3 percent.
  • Uptake of new products – Uptake of new, innovative medicines represented just $441 million of total sales in 2007, reflecting both the fewest new product launches in the past three decades and slower adoption by physicians of these products.
  • Medicare Part D contribution – Prescriptions dispensed through the Medicare Part D program accounted for 19 percent of retail prescriptions at the end of last year, a modest increase over 2006, and reflective of a maturing program. Today, 65 percent of U.S. citizens age 65 and older are enrolled in the Medicare Part D program.
  • Safety issues – Sales growth in 2007 also was affected by a significant number of “black box” warnings and product withdrawals, as well as safety concerns raised by the FDA for products in the erythropoietins, diabetes and antidepressant therapy classes. Safety issues contributed to significantly lower- than-expected sales for products accounting for approximately 10 percent of the total prescription market.

The Southern Nevada Health District (SNHD) recently notified 40,000 people that the unsafe syringe handling practices of the Endoscopy Center of Southern Nevada may have infected them with bloodborne pathogens. The Health District advised these people to undergo testing for Hepatitis B and C and HIV.

Since the beginning of the investigation in January 2008, the U.S. Centers for Disease Control Since beginning the investigation, CDC and SNHD “have identified a total of six cases of HCV infection among patients who had undergone procedures at the clinic in the 35–90 days prior to onset of symptoms. These patients did not have other risks for HCV infection.”

The Las Vegas Sun reported on the “assembly line” colonoscopy procedures at the clinic:

The Endoscopy Center of Southern Nevada opened in March 2004 in a medical building at 700 Shadow Lane, between two of the city’s largest hospitals — and across the street from the offices of the Southern Nevada Health District, which launched its surprise inspections of the facility in January. The business complements Desai’s Gastroenterology Center of Nevada, which has six valley locations. Although other doctors worked at the high-volume facility, it was Desai’s domain. Appointments were frequently double-booked, leading to two-hour waits in a standing-room-only waiting room, said a nurse who worked there in 2007. In assembly-line fashion, patients were hurried among nurses who would admit them, start an IV in their arm, take them to the room for the procedure, and then walk them to a recovery area before sending them out the door. “He would always say, ‘Time is money,’ ” the nurse said of Desai. “The faster we would go, the happier he was.” The flow of patients sounds impossibly fast, said Phyllis McGregor, a nurse who for 20 years directed the gastroenterology department at Centinela Hospital Medical Center in Inglewood, Calif. She ran three rooms where a total of 30 procedures a day were done, at the most. Desai was doing 60 procedures in two rooms — a pace that McGregor said compromised patient safety.

The Las Vegas Review Journal features a hot topics page on the sad story.

The Endoscopy Center has been shut down by the City of Las Vegas except for administrative activities. The owner has agreed to stop practicing medicine at least until the investigation is completed. Snap inspections by Nevada health authorities and the CDC have disclosed unsafe procedures at other ambulatory surgicial centers in the state. A local columnist opined that “no matter how the Endoscopy Center of Southern Nevada saga plays out, it’s going to be a long time before the Las Vegas community gets back to feeling good about health care here.”

• NY Attorney General Andrew Cuomo expanded his investigation of the Ingenix usual reasonable and customary fee database last week by issuing new subpoenas to Aetna, Cigna, United Healthcare (which owns Ingenix), Wellpoint and other major managed care companies. Modern Healthcare.com reports that
  

  Cuomo is seeking all e-mail correspondence involving the companies’ CEOs, chief operating officers, chief fiscal officers, presidents and employees supervising claims. He also wants any records that might question the accuracy of reimbursements that he says are too low.

  Cuomo also is interested in taking testimony from the CEOs of these companies. The Dow Jones newswires reported on Thursday that “Empire Blue Cross Blue Shield said it hasn’t found any evidence that its use of data from UnitedHealth Group Inc.’s (UNH) Ingenix was defective as it cooperates with the New York Attorney General’s office.” The Wall Street Journal reports today that “UnitedHealth spokesman Tyler Mason says, “We are in the midst of talks with the attorney general’s office, and we will continue to fully cooperate.” The managed care trade association AHIP “decried” the expansion of the investigation according to Modern Healthcare.com
  

• There are two Average Wholesale Price class actions pending in the U.S. District Court for the District of Massachusetts — one is an action against several prescription drug manufacturers who allegedly improperly inflated the AWP and the other is an action against First Databank and McKesson who allegedly conspired to inflate an AWP factor. On Friday a settlement in the first case was announced by plaintiffs’ counsel:
  

  Today eleven major pharmaceutical companies, including Abbott Laboratories (NYSE: ABT) and Watson Pharmaceuticals (NYSE: WPI), agreed to a $125 million nationwide settlement in the average wholesale price (AWP) litigation filed in 2002 by consumers and insurance companies, which claimed the defendants intentionally inflated reports of the average wholesale prices on certain prescription drugs. The defendants included in today’s settlement are Abbott Laboratories, Amgen Inc., Aventis Pharmaceuticals Inc., Hoechst Marion Roussel, Baxter Healthcare Corp., Baxter International Inc., Bayer Corporation, Dey, Inc., Fujisawa Healthcare, Inc., Fujisawa USA, Inc., Immunex Corporation, Pharmacia Corporation, Pharmacia & Upjohn LLC, Sicor, Inc., Gensia, Inc., Gensia Sicor Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc., and ZLB Behring, L.L.C. Drugs covered in this settlement include Aranesp, Epogen, Neupogen, Neulasta, Anzemet, Ferrlecit and Infed. Two major defendants — AstraZeneca and Bristol-Myers Squib – not part of settlement.

  Plaintiffs’ counsel in the second action asked the Court last week to schedule a status conference at which the plaintiffs and First Databank will present a revised settlement agreement as directed by the Court at a January 22, 2008, hearing. The Court scheduled the hearing for March 19.

• Modern Healthcare.com reports that “The CMS is heading in the right direction on value-based purchasing, but it should not be used as a vehicle to reduce Medicare spending, hospital leaders said during a roundtable hosted by the Senate Finance Committee.”

• OPM submitted a short term disability program bill to Congress on Friday. According to OPM’s press release, “Under the proposal, participation would be voluntary and insurance premiums would be fully paid by the policy holder.” Thursday’s House Federal Workforce subcommittee hearing indicates that this proposal will not be well received on Capitol Hill. OPM’s Capitol Hill problems are illustrated in this Federal Times article about OPM’s legislative proposal to rehire more annuitants (S 2003 and HR 3579).

• The House Subcommitee on Federal Workforce, Postal Service, and the District of Columbia, which has responsibility for FEHB Program oversight, held a hearing today on a bill (HR 3799) introduced by Rep. Carolyn Maloney (D NY) that would provide federal employees with eight weeks of full pay and benefits for leave taken for the birth or adoption of a child. Subcommittee chairman Danny Davis (D Ill.) announced his support for the bill. He also stated that he is introducing a bill that would increase the maximum age for FEHB Program dependent coverage from 22 to 25.
• Yesterday, the House passed its version of the mental health parity bill (HR 1424) as anticipated. The vote was 268 to 148 with 47 Republicans supporting the bill and 3 Democrats opposed it. The legislation now moves to a conference committee. Interestingly, the House tagged onto this bill its genetic non-discrimination bill which has been bottled up in the Senate. The White House favors the Senate bill.