* Cancer dominates the top 10 – Based on dollar amount and percentage of total stop-loss claims, malignant neoplasms and leukemia/lymphoma/multiple myeloma (cancers) took spots 1 and 2 on the top-ten catastrophic claims list, representing more than a quarter (26.7%) of total stop-loss reimbursements from 2013-2016;
* Breast cancer prevalence – Breast cancer is the most common form of cancer in the U.S., with an estimated 247,000 new cases reported in 2016, and an average paid claim amount of $147,100;
* Transplants costs are high – Bone marrow/stem cell transplants are the costliest transplant procedures, with an average paid claim cost of about $400,000. Transplants were the most common high-dollar claim condition among 20 to 39 year-olds;
* Highest individual claim – Of the top-10 conditions, the highest claim was $3.2 million, for malignant neoplasm (cancer). The attached chart details the highest claims in each top-10 condition;
* The top three highest-cost conditions – Leukemia, lymphoma and/or multiple myeloma (cancers); congenital anomalies (conditions present at birth); and malignant neoplasm (cancers) are more likely to result in million-dollar claimants due to their frequency; and
* IV medications tracked in the study pushed up costs – When looking at data on intravenous drugs, the report showed they accounted for 48% of total paid charges on the top five highest-dollar claimants. Of the 562 claimants exceeding $1 million between 2013 and 2016, 45 generated more than $1 million in high-cost intravenous medications.

The American Medical Association issued its annual physician practice benchmark survey.

Previous research has documented the long term trend away from physicians being practice owners and toward being employees as well as toward larger practice sizes (Kane, 2015). The new Benchmark data show that this trend continued through 2016. In fact, 2016 marked the first year in which less than half of practicing physicians owned their own practice—47.1 percent. This was about 6 percentage points lower than in 2012.

This is a clear consequence of the ACA.

The Wall Street Journal today reported on another interesting physician practice survey.

It is something nine out of 10 primary-care practices have said to at least one patient in the past two years, albeit more politely. According to research published last month in the journal JAMA Internal Medicine, 67% of nearly 800 practices reported dismissing one to 20 patients over two years while 15% reported dismissing 21 to 50 patients. About 10% reported dismissing no patients over the course of two years and 8% said they dismissed 51 or more patients.

The study was inspired by worries that patient dismissals may rise because some insurers are starting to reimburse doctors for health outcomes rather than services provided. That shift has been in the works, before the Affordable Care Act became law in 2010.

“The good news is in our study we found that no, it did not have an impact,” said Ann O’Malley, the first author on the study and a senior fellow at Mathematica Policy Research, a Princeton, N.J., policy-research organization. “The providers stuck with their patients. They did not seem to be worried that just because they were in this initiative and being measured on some sort of quality metric that they needed to cherry-pick their patients.”

Finally, the FEHBlog ran across this Health Data Management article about a successful initiative to increase the number of skilled practitioners to treat autism.   Here’s a Science Daily article about the Project ECHO autism program which is based at the University of Missouri.

Launched in March 2015, ECHO Autism is a partnership between the MU Thompson Center for Autism and Neurodevelopmental Disorders, MU Health, and the Missouri Telehealth Network Show-Me ECHO program. ECHO Autism clinics are conducted using high-quality, secure video conferencing technology to connect participating primary care clinics to a panel of experts.
Initial studies of the program have found that participating primary care providers demonstrated significant improvements in confidence across all sectors of health care for children with autism, including screening and identification, assessment and treatment of medical and psychiatric conditions, and knowledge of and referral to available resources.

The project is being expanded to Alabama and Alaska among other geographic areas.

Congress is back in town this week.  On Thursday morning, the Oversight subcommittee of the House Energy and Commerce Committee will hold a hearing on the Health and Human Services Department’s role in healthcare cybersecurity.

In a bit of good news, Modern Healthcare reports

As hospitals begin to control costs more consciously in a value-based environment, they are asking staffers to be more frugal.  “There’s a paradigm shift that’s happening across the country in terms of cost of care,” said Dr. Jay Bhatt, chief medical officer for the American Hospital Association, adding that clinicians are taking an increasingly active role in fiscal responsibility—mostly as a result of uncertainties in the industry. 

Uncertainty is a common sense reason for cost control. In contrast, Business Insider discusses the case of patient who costs his ACA health exchange plan $1 million per month.   The article which interviews a Kaiser Health Foundation leader explains  

The community rating, a provision of Obamacare, obligates insurers to price premiums the same for people of the same age in the same area. This prevented people with preexisting conditions from being charged more than healthy people and getting priced out of the market.
Without that provision, an insurance company could raise premiums for a sick patient substantially to offset some of their costs, but the price could be so high that it would be financially crippling for the patient’s family.
Additionally, the ACA eliminated lifetime limits for insurance plans. Before the ACA, insurers could set a cap on how much they would pay out to a patient over the course of their life.

The FEHBlog does wonder if the cost of care significantly increased because of the certainty of third party payment.  In any event, these types of consumer protections have existed in the FEHBP since well before ACA enactment in 2010.  The article does note that the proposed American Health Care Act would include an invisible risk pool that would help individual health insurers with these outliers cases.    

AHIP writes about health insurer efforts to integrate mental health and other medical care.  That’s encouraging.

A reader expressed concern to the FEHBlog that the Postal Reform Act would be a bad deal for Postal annuitants. The FEHBlog wishes to dissuade readers from this viewpoint. The Postal Service is pushing for this aspect of the bill because it expects that fully integrating the new Postal Service Health Benefit plans with Medicare will lower FEHB premiums for all PSHB enrollees.  That’s the FEHBlog’s expectation too.

Yesterday, the Congressional Budget Office issued its report on the House Oversight and Government Reform Committee’s bipartisan postal reform bill.  “CBO estimates that enacting H.R. 756 would reduce direct spending by about $6 billion over the 2017-2027 period; therefore, pay-as-you-go procedures apply. Enacting H.R. 756 would not affect revenues.”  This appears to the FEHBlog to be the green light for Congress to continue pursuing enactment of this law which would create a separate Postal Service Health Benefits Program within the FEHBP.

Today FEHBP carriers can breathe a sigh of relief as the 2018 benefit and rate proposal submission deadline now has passed.

Drug manufacturers can’t as NPR reports the Ohio Attorney General has filed a lawsuit seeking to hold five prescription drug manufacturers financially liable for the opioid crisis in that State.  The Wall Street Journal understandably sees parallels to, and distinctions with, the State Attorneys General lawsuit against the tobacco companies which was settled in 1998.  This no doubt will be an   intensively litigated lawsuit that will prompt more.  Medicaid has spend a ton of money on this problem which still exists.

Speaking of prescription drugs, Healthcare Dive discusses new value based reimbursement models used in a recent contract between Optum and Merck.

Closing the loop, Healthcare Dive reports that the Texas Governor has signed into law the State legislatures bill that allows telehealth vendors to operate in that large, populous State.  “The relaxed restrictions allow direct-to-consumer telehealth vendors like Teladoc, American Well and Doctor On Demand to establish videoconferencing operations nationwide.”

Fierce Healthcare reports on a study showing that every reason still exists for health plans to use benefit designs that avoid unnecessary emergency room utilization.

Finally, CMS introduced on Tuesday a new Medicare enrollment card that uses “a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI), to replace the Social Security-based Health Insurance Claim Number (HICN) currently used on the Medicare card. CMS will begin mailing new cards in April 2018 and will meet the congressional deadline for replacing all Medicare cards by April 2019.”

The FEHBlog wishes his readers a Happy Memorial Day.

Congress is out of town this coming week.  The Hill identifies five important agenda items facing the Congressional leadership before the August recess.

It’s a big week for FEHBP carriers as their 2018 benefit and rate proposals must be submitted to OPM no later than Wednesday May 31.

The Wall Street Journal offered two interesting analyses this weekend:

• This first reports that rural areas of the country are now worse off than inner cities — a flip flop from the 1980s.  “[T]he total rural population—accounting for births, deaths and migration—has declined for five straight years.”  “And even after adjusting for the aging population, rural areas have become markedly less healthy than America’s cities. In 1980, they had lower rates of heart disease and cancer. By 2014, the opposite was true.”  That’s not all. 

Consolidation has shut down many rural hospitals, which have struggled from a shortage of patients with employer-sponsored insurance. At least 79 rural hospitals have closed since 2010, according to the University of North Carolina at Chapel Hill.

Rural residents say irregular care and long drives for treatment left them sicker, a shift made worse by high rates of rural obesity and smoking. “Once you have a cancer diagnosis…your probability of survival is much lower in rural areas,” said Gopal K. Singh, a senior federal health agency research analyst who has studied mortality differences. 

The opioid epidemic—and a lack of access to treatment—have compounded the damage. In Hardin County, prosecutor Brad Bailey said drug cases, which accounted for less than 20% of his criminal cases a decade ago, have surged to 80%.

• The second reports on the growing financial burden that Medicare Part D plan coverage imposes on its beneficiaries, particularly seriously ill people.   

Medicare’s drug program, which began in 2006, is unique among Medicare benefits for being administered entirely by private insurers. Lawmakers have praised the program for its popularity with seniors and for keeping spending well below initial estimates.

But spending on the drug program has soared in recent years, growing faster than all other areas of Medicare per enrollee basis, a trend that is expected to continue through 2025, according to projections by the trustees. The uptick in spending has caused concern among government officials and analysts about Part D’s sustainability and the financial burden that higher drug prices are putting on patients.

The Journal’s report is based on its review of data from the Medicare Part D claims warehouse.  

The median out-of-pocket cost for a drug purchased through Part D was $117 in 2015, up nearly half from $79 in 2011, in inflation-adjusted dollars, the Journal’s analysis found. The analysis excluded low-income patients whose copays are paid primarily by the government.

Some 220 Part D drugs had annual out-of-pocket costs of $1,000 or more in 2015, up 86% from 118 drugs in 2011. 

Factors driving the trend include sharply rising drug prices, which grew by an average 14% a year from 2011 to 2015, and the introduction of new medicines with prices that commonly exceed $50,000 annually, according to the Journal’s analysis. In addition, the complicated design of Part D requires patients to pay a percentage of their drugs’ total retail price, a particular burden for those who use expensive medicines. 

Doug Badger, a senior fellow at the Galen Institute, writes “Bludgeoning the opposition with CBO numbers [on the American Health Care Act] does not advance debate.  It silences it.”  Well put. Mr. Badger’s backs up his statement here.

Healthcare Dive reports that Steward Healthcare is poised to be the largest for profit hospital operator in the U.S. following the announcement of its acquisition of a competitor. Healthcare Dive explains

The merger is part of an ongoing trend that also recently included a Geisinger and Jersey Shore deal. Steward and Community Health Systems (CHS) also announced earlier this month that Boston-based Steward purchased eight CHS hospitals. These moves show Steward attempting to become a bigger player in the competitive for-profit hospital industry.
While Steward is rapidly increasing its footprints, other large for-profit hospital systems like CHS and Tenet are divesting hospitals, as they face financial issues, including flat or lost revenue in the first quarter of the year, and mounting debt.
The deal will give Steward nearly 7,500 patient beds across 10 states and about 38,000 employees, including “more than 1,800 directly employed multi-specialty physicians and several thousand aligned physicians,” according to Steward Health Care.

Of course, the “ongoing trend” was initiated by the ACA.

A truism if there ever was one — “Coordination of care among healthcare providers is the single most important criteria influencing member satisfaction with their health plan, according to the J.D. Power 2017 Member Health Plan Study.”  Of course, the statement begs the question – how?

HHS Secretary Tom Price’s response to the CBO report on the American Health Care Act is worth a gander.

The Federal Times provides additional background on the President’s nominee for the OPM Director position who appears to be a lock for Senate confirmation.

The FEHBlog found two interesting articles relating to the President’s budget proposal:

• The Federal Times identifies four winners and four losers in the proposal’s workforce estimate. It’s worth noting that OPM is one of the winners.
• Govexec.com points out 11 major agency reforms that could pass Congress independently of appropriations bills. 

Here’s a link to the anxiously awaited Congressional Budget Office report.

The Administration did release a full FY 2018 budget proposal today. Here’s a link to the OPM budget proposal.  The FEHBlog did not notice any proposed changes to the FEHBP in this document.  Federal News Radio has a story on other federal employment aspects of the proposal.

More significantly from the FEHBlog’s standpoint, the President today made a nomination to fill the open position of OPM Director. From the White House website,

George Nesterczuk of Virginia [has been nominated] to be Director of the Office of Personnel Management. Mr. Nesterczuk leads Nesterczuk and Associates in providing management consulting services to public sector institutions and private enterprises. He has over thirty years of experience as a consultant on organizational management and policy development. From 2004 to 2006, Mr. Nesterczuk was Senior Advisor to the Director of the U.S. Office of Personnel Management for the Department of Defense. In that capacity, he led OPM efforts in the establishment of the National Security Personnel System at the Department of Defense. Previously, he was Staff Director of the Subcommittee on Civil Service of the Committee on Government Reform in the U.S. House of Representatives. Mr. Nesterczuk also served as a senior official in the Reagan Administration, holding successive positions in the U.S. Office of Personnel Management, the Department of Defense, and the Department of Transportation.

The position of course requires Senate approval.  Here are links to the Federal News Radio story and the Govexec story on the nomination.  Next step a confirmation hearing before the Senate Homeland Security and Government Operations Committee.