Sunday, May 21, 2017

Weekend update

Congress remains in session on Capitol Hill this week. On Tuesday, according to Reuters, the President will release his complete FY 2018 budget proposal. The House and Senate Budget committees each will hold hearing on the proposal on Wednesday morning.

Federal News Radio reports on a federal employee compensation hearing that the House Oversight and Government Reform Committee held last Thursday. OPM did not present testimony at this hearing. The Congressional Budget Office ("CBO") did testify.
Overall, CBO found that government  spends about 17 percent more compensating federal employees  compared to their counterparts in the private sector.  In total, federal employees with a high school diploma or less earn on average 53 percent more than their counterparts in the private sector, while federal workers with a bachelor’s degrees received 21 percent more in compensation. In contrast, total compensation costs for employees with a professional degree or doctorate were 18 percent lower than workers in the private sector, CBO said.
The CBO report (p. 13) finds similar but exaggerated differences when you consider fringe benefit costs.
As with wages, differences in the cost of benefits in the federal government and the private sector varied by employees’ highest level of education. For example, CBO estimates that, relative to costs for similar workers in the private sector, bene t costs were about:
  • 93 percent higher, on average, for federal workers with a high school diploma or less education;
  • 52 percent higher, on average, for federal workers whose highest level of education was a bachelor’s degree; and 
  • Roughly the same, on average, for federal workers with a professional degree or doctorate.
On average for workers at all education levels, benefits for federal employees cost about $26 per hour worked, whereas benefits for private-sector employees with certain similar observable characteristics cost $18, CBO estimates. 
The Government Accountability Office also testified.  According to the Federal News Radio report,
“Pay is not the only thing,” said Robert Goldenkoff, director of strategic issues at GAO. “Even if we could assume for the moment that we could come up with the ideal pay system, it still does no good if your on-boarding processes are inadequate, if you don’t make effective use of their talents, if you don’t aggressively recruit them, if once they do come on board you don’t develop them [and] they’re not given effective supervision. It’s also a matter of work-life balance programs, and it needs to be tailored to individual labor markets. It needs to be tailored to individual occupations. We’re just not doing that effectively right now.”
The GAO report (p. 3) also reminds Congress that "government-wide more than 34 percent of federal employees on-board by the end of fiscal year 2015 [September 30, 2015] will be eligible to retire by 2020" At the OPM AHIP carrier conference, an OPM statistician observed that the federal government retirement tsunami that was predicted ten years ago has not happened yet.  He attributed it to the great recession and the fact that the FEHBlog's own Baby Boomer generation is working longer than anticipated. Giving the government more time to adjust is a good thing, but as sure as time marches on, the retirement wave will hit before long.

Friday, May 19, 2017


Here's a link to the Week in Congress's report on this week's activities on Capitol Hill. It's worth noting that the Senate confirmed the President's nomination of Scott Gottlieb to be Food and Drug Commissioner, which is an important role in the health care industry.

Yesterday, Congressman Jason Chaffetz (R Utah) announced that he is leaving Congress at the end of June. Rep. Chaffetz has done a good job chairing the House Oversight and Government Reform Committee since the beginning of 2016. He has lead the bipartisan charge on the Postal reform act (H.R. 756).  The Washington Post reports that Congressman Trey Gowdy (R SC), a well know figure on Capitol Hill, is favored to take the gavel from Rep. Chaffetz.

Health Data Management reports that few U.S. healthcare organizations were affected by the WannaCry worm.
Lee Kim, director of privacy and security for HIMSS North America, contends that there have been anecdotal reports by healthcare providers around the world—including the U.S.—of infections affecting their computers and medical devices. And, she says because there are multiple variants of the WannaCry ransomware, it is still a very serious international cyber threat.
The ransomware is rapidly changing, and there are multiple variants—at least 65 variants of the WannaCry ransomware have been confirmed at this time,” according to Kim, who says it is likely
Kim calls WannaCry the world’s first ransomworm—ransomware with the ability to self-propagate without user intervention or interaction. At the same time, she notes that the “success” of the WannaCry ransomware is “based upon one tried and true fact—many individuals and organizations do not patch their systems in a timely manner.”
It makes sense to use good email hygiene, timely patch and continuously back-up computerized data.  

Wednesday, May 17, 2017

Mid-week update

Fierce Healthcare reports that the Trump Administration is taking steps to permit other private-sector oriented approaches to purchasing health insurance under the Affordable Care Act. The ACA as developed by the Obama Administration requires consumers to purchase the insurance on a government website such as  Indeed, subsidized coverage is available only through those websites. The American Health Reform Act would give consumers tax credits that they could use to help buy insurance on or off the health insurance exchanges.

The FEHBlog attempted to purchase insurance coverage for his firm through the DC Health Link site. Even though his expertise is in health benefits, he was flumoxxed. His life insurance agent directed him to a good health insurance agent. The agent guided him through the standardly priced options which allowed the FEHBlog to pull the computerized trigger.  (DC requires small businesses to use Health Link.)  The Trump Administration is making changes to the health insurance selection process that encourages the use of brokes and agents. That's a good move.

In another encouraging development, the budget act that Congress passed last month permits the Department of Health and Human Services to to "consult private-sector groups trying to develop patient identification and patient matching solutions" for health transaction and electronic health record purposes according to Modern Healthcare.  HIPAA which enacted in 1996 required HHS to create a patient identifer.  Two or three years later, Congress defunded any patient identifier initiative and that ban has held until this year, thereby impeding the development of electronic health record networks as well as creating patient safety issues. The FEHBlog continues to believe that Congress should allow the private sector to manage the electronic transaction side of HIPAA.

The Milliman actuarial consulting firm has issued is 2017 Milliman Index. "In 2017, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $26,944," according to that Index.  More interesting tidbits can be found in the report.

On the health care provider front, Crain's Chicago Business reports that the urgent care business is booming to such a degree that hospitals are becoming interested in getting a piece of the pie.  Telehealth providers who compete with the urgent care centers got a good news this week when the Texas legislature passed a law clearing the way for telehealth vendors to operate in that large state.  Here's a link to the mhealthintelligence report.  Texas was the last large state to restrict the use of telehealth. Only a few states with restrictions are left.  Here's a good site to access that info.

Following up on a few FEHBlog posts --

  • Health IT Security gives us the latest on the WannaCry worm. 
  • Drug Channels discusses the Express Scripts' Inside Rx program that the FEHBlog mentioned last week. The FEHBlog discovered from reading the article that CVS has a similar program. In a development that must chill the spines of PBMs, reports that Amazon is considering breaking into the PBM business. 
  • The FEHBlog recalls discussing a while back a United Healthcare initiative called Harken Health. The subsidiary which operates around Chicago and in Georgia, "offered free primary care visits and wellness programs as well as 24/7 access to physicians through phone, email or video chat." Healthcare Dive tells us that UHC decided to wind down the experiment by year end. 

Sunday, May 14, 2017

Happy Mothers' Day

Happy Mothers' Day to the FEHBlog's readers.

Congress returns to work on Capitol Hill this week.

FEHBP carriers have until May 31 to submit their 2018 benefit and rate proposals.

Last week, according to a Federal News Radio report, as the Postal Service reported its first quarter of 2017 financial results and the Postmaster General, among others, asked Congress to move forward with the Postal reform bill (H.R. 756), which would create a separate Postal Service Health Benefits Program within the FEHBP.

Also last week, the President issued a cybersecurity-related executive order.  Tech Crunch explains why the order was a good first step.

On Friday, following the TGIF posts, news broke on a ransomware worm called WannaCry which was engaged in a world wide attack on Microsoft Windows XP systems which had not been patched since mid-March 2017.  The worm has struck at least 3,330 times in the U.S. and over 24,000 times in Russia, which are among the 153 countries that were hit.  Federal Express was hit in the U.S. The Wall Street Journal reports
The outbreak was slowed over the weekend by the actions of a private security researcher who found a “kill switch”inside the worm, halting its spread from one infected computer to a network. But experts warned Sunday that the hackers could release another version of the worm with no kill switch, and that more computers could become infected as people returning to work turned on devices Monday morning. 
The outbreak illustrates the importance of routine vulnerability testing on IT systems, among other testing processes.  A Washington Post blog discusses the political difficulties in preventing these problems.  Here is a link to the U.S. CERT alert on the worm.

Friday, May 12, 2017

TGIF update

Healthcare Dive reports that this morning Anthem notified Cigna that their merger agreement has been terminated.  This is not the end of the Delaware state court litigation between the two companies over the failed merger. But the tail end of the litigation just concerns money.


The FEHBlog is outside the Beltway this weekend.  It's a lovely day in Chicago.

The Delaware chancery court judge denied Anthem's motion for a 60 day long extension of its merger agreement with Cigna late yesterday afternoon. The judge allowed Anthem until Monday to notice an appeal to the higher state court according to this Bloomberg article.

HHS Office for Civil Rights added another scalp to its belt this week.  This one is worth bearing in mind. A large Texas hospital system is paying a $2.4 million settlement and entering into a compliance plan because the hospital publicized the fact that a patient was arrested for presenting a fraudulent identification. It was OK under HIPAA to blow the whistle to the police but not to name the patient in its press release. Expensive lesson.

In an interesting development, the Blue Cross Blue Shield Association announced a nationwide partnership with Lyft to transport certain members to medical appointments at no additional cost to the members. It looks like the arrangement will be an additional tool in the case manager's toolbox.

Wednesday, May 10, 2017

Midweek update

Fierce Healthcare reports on last Monday's Delaware chancery court hearing concerning the Anthem - Cigna merger agreement.  Anthem has asked for a 60 day preliminary injunction barring Cigna from terminating the merger agreement while Anthem seeks U.S. Supreme Court review of last week's D.C. Circuit decision against the merger. The Delaware judge promised a quick decision on this request.

CBS News reports on a new initiative called Inside Rx that was announced on Monday. The initiative involves Express Scripts, several drug manufacturers, and Good Rx. Inside Rx allows people to pay the PBMs price for many brand name chronic care drugs.  Because of anti-kickback laws, the program can't be used with insurance, but may be used with flexible spending accounts. People on Medicare, Tricare, etc. can't use the product. It's a useful gap filler.

Studies and reports --

  • CAQH which does a good job attempting to streamline health benefits, issued its annual report
  • Health Affairs published a study on affordable care organizations. Fierce Healthcare discusses the study which has some useful findings. 
  • TechTarget tells us about BitGlass's 2016 report on healthcare data breaches. The trend is finally moving in the right direction. 

Sunday, May 07, 2017

Weekend update

Congress is out of town this coming week. Here's a link to the Week in Congress report on last week's actions on Capitol Hill.

Forbes columnist Avik Roy has a valuable column with three recommendations on changes that the Senate should make to the House of Representative's American Health Reform Act.

The Wall Street Journal reports that the opioid crisis also has struck college campuses.
Colleges around the U.S., spurred by fatal student overdoses and grieving families, are distributing lifesaving medication and adding on-campus recovery programs as the nation’s opioid epidemic worsens.
Some 33,000 people in the U.S. died of opioid overdoses in 2015, according to the Centers for Disease Control and Prevention. College students are as likely as others to abuse the narcotics, according to a survey of 1,200 college-aged adults commissioned that same year by the Hazelden Betty Ford Institute for Recovery Advocacy and the Christie Foundation.
Last week,  the IRS issued Rev Proc 2017-37 with the inflation adjusted 2018 minimums and maximums for high deductible plans with health savings accounts.  The ACA OOP maximums for all non-grandfathered plans for 2018 are $7,350 for self only coverage (up $200 over 2017 and $14,700 for other than self only coverage (up $400 over 2017).

Friday, May 05, 2017

Happy Cinco de Mayo

For weekend reading --

  • The Congressional Research Service's May 4 report on the American Health Care Act. The report is filled with easy to comprehend tables and timelines. No mention of our beloved FEHBP. Thanks CRS.
  • An HHS task force on healthcare cybersecurity issued its report this week. The report specifies six imperatives. 
The FEHBlog has been following Anthem's decision to put its prescription benefit management contract ("PBM") out to bid for 2020. Forbes notes that while United Healthcare continues to build its own Optum Rx PBM, "Aetna is looking at potentially closer ties to CVS Health CVS -0.63% and its pharmacy benefit management business amid concerns about transparency and the future of the PBM industry." Aetna's contract with CVS is renewable in 2019. 

mHealth Intelligence reports that slightly over 70% of physicians use telemedicine. 
The HIMSS analytics research, presented in two separate studies that analyzed inpatient and outpatient telemedicine, highlighted a jump in growth of usage over a three-year period. “Adoption of telemedicine solutions or services has surged since this study was first conducted in 2014 from roughly 54 percent in 2014 to 71 percent in 2017,” said the reports. “After consistently growing 3.5 percent annually, based on study results adoption has increased roughly 9 percent since 2016.”
It looks like we are now past the tipping point for telemedicine.

Finally, Reuters tells us about a recent U.S. Centers for Disease Control study on American death rates over the period 1999 to 2015.  
"The disparity in deaths between the white and black populations is closing. Even so, critical disparities remain," Leandris Liburd, associate director of CDC's Office of Minority Health and Health Equity, said in a conference call.
 The death rate, which is usually calculated as deaths per 1,000 people per year, fell 25 percent for African-Americans during the 17-year period, mostly for those aged 65 and older, the CDC said.
In 2014, life expectancy was 75.6 years for blacks and 79 years for whites, which was an increase since 2000 of 3.8 years for blacks and 1.7 years for whites, the CDC said.
However, the study also said "blacks have the highest death rate and shorter survival rate for all cancers combined compared with whites in the United States."

Thursday, May 04, 2017

AHCA Update

The Washington Examiner reports that the Senate Republican majority is working on its own repeal and replace bill that may incorporate parts of the American Health Care Act bill that the House passed this afternoon.  A 12 member work group including members of the three Senate Committees with jurisdiction over healthcare are leading the drafting effort. The group has been meeting for a few weeks and its work has been spurred by the House action. The Wall Street Journal offered a concurring report this evening.

According to the Journal and this comes as no surprise, the Senate will work at its own pace. Of course, both the House and the Senate ultimately must agree to the same bill language in order for the bill to become law. Frequently, a conference committee of the two bodies can resolve disputes on sticky legislation like this in order to push the bill over the finish line. But the Senate has to act next.

Day of Action

The Senate today followed the House of Representatives by passing the $1.1 trillion omnibus appropriations bill that funds the federal government through the end of the current fiscal year on September 30, 2017. The BNA report on the action is here. The President is expected to sign the bill.

Speaker of the House Paul Ryan (R Wisc) finally had the votes today for the House to pass the American Health Care Act (H.R. 1628) by a narrow 217-213 margin.  All of the Democrats and 20 Republicans voted against the bill. (The Republicans have a 22 seat majority in the House; four House seats currently are vacant.) The House Energy and Commerce Committee's section by section analysis of the bill (only 15 pages) is here.

If this were a Medicaid blog the AHCA discussion would continue at length. But this is the FEHBlog and in the FEHBlog's view the law would not have a significant effect on the FEHBP.

The bill focuses on reforming Medicaid and attempting to stabilizing the individual market, both heavy lifts. It also lifts the individual and employer mandates and virtually all of the ACA taxes. (The Cadillac tax effective date is pushed back to 2026).  The law leaves the large group market alone. It's up to the Administration to inject more flexibility in the group market by sensibly loosening ACA regulations and sub-regulatory guidance.

The bill goes over to the Senate now. The bill is structured as a reconciliation measure so that it can be enacted with 51 votes. The Senate Parliamentarian plays a role in determining reconciliation status but the Parliamentarian must report to the Senate leadership. The Republicans have a two seat majority in the Senate so the Republicans could afford to lose two of its own assuming that the Democrats and independents who caucus with the Democrats remain united against the bill. Of course, Vice President Pence is the Senate President who can cast a tie breaking vote.  

Tuesday, May 02, 2017

Tuesday Tidbits

Notwithstanding the fact that federal courts blocked two health insurer mega-mergers, hospitals system mega-mergers continue apace according to Modern Healthcare
Hospitals saw a year's worth of mega-mergers in the first quarter, four in all, as big systems looked to partners to conserve capital, manage populations, tie up referrals and find efficiencies.  The trend that gave rise to the large health system deals through March is more likely to accelerate than not, said Anu Singh, managing director at healthcare financial advisory firm Kaufman Hall.  Hospital companies want regional, if not national, reach, to be attractive to patients and insurers, Singh said.
 Cost curve up.

Medcity News has an encouraging article about a new primary care provider in Chicago called Oak Street Health that treats Medicare Advantage patients usually in lower income neighborhoods.
The company’s first center opened in the Edgewater neighborhood of Chicago in 2013. Today Oak Street has 20 centers in Chicago and Rockford in Illinois; Detroit, as well as Indianapolis, Fort Wayne, Hammond, and Gary in Indiana. It has 800 employees, including physicians, nurse practitioners, and clinical informatics specialists. In sum, all of its clinics see about 28,000 patients annually.
The company’s model of care focuses on the Medicare patient population, typically in low-income neighborhoods. Their physicians oversee fewer patients (about 500, compared to between 2,000 and 2,500, according to Pykosz) and spend more time with each patient (about 30 minutes) than the average physician (who sees patients for about 13 to 16 min).
“We’re a fully value-based practice,” Myers said in an interview. “We have a unique way to invest in preventive care in a way that keeps people healthy.”
That unique approach involves looking at patients’ lives beyond their particular malady. And that’s the raison d’ĂȘtre for the community centers, regular events for patients, and remote monitoring services. There’s also a van service for patients who can’t make it to an Oak Street facility on their own. Oak Street’s Medicare counselors can assist patients who have questions about their insurance coverage.  * * * According to NEJM Catalyst, thecompany has reduced the hospitalization rate of managed care patients by more than 40 percent.
Speaking of hospitalization, a study in Health Affairs points out that the ACA's program to reduce unnecessary hospital readmissions via financial penalties isn't working properly.
The penalty burden was greater in hospitals that were urban, major teaching, large, or for-profit and that treated larger shares of Medicare or socioeconomically disadvantaged patients. Surprisingly, hospitals treating greater proportions of medically complex Medicare patients had a lower cumulative penalty burden compared to those treating fewer proportions of these patients. Lastly, we found that hospitals with high baseline penalties in the first year continued to receive significantly higher penalties in subsequent years. For many hospitals, the HRRP leads to persistent penalization and limited capacity to reduce penalty burden. Alternative structures might avoid persistent penalization, while still motivating reductions in hospital readmissions.
 Ya think? 

Monday, May 01, 2017

Funding deal reached

Last night, the Congressional leadership announced a funding deal for the last five months of the current federal government fiscal year.  Here's a link to the Washington Post's report.

Sunday, April 30, 2017

Weekend update

Congress continues its work on Capitol Hill this week. Here's a link to the Week in Congress report on last week's efforts.  The short term continuing resolution funding the federal government expires on Friday May 5.  The House also may vote on the American Health Care Act this week.

The FEHBlog ran across a couple of articles from last week's Health DataPalooza.  The first article from concerns a speech by HHS Secretary Tom Price, and the other from Healthcare IT News concerns a speech by HHS Office for Civil Rights Director Roger Servino. These were their first speeches to the healthcare IT community.

The Wall Street Journal reports that large prescription drug manufacturers are ripping a page out of the Hollywood producer's playbook by arranging for third party financing of the expensive final stage of their new drug projects -- the clinical trials required for FDA approval.  "The drawback: sharing risk also involves sharing the rewards. Such collaborations involve the company in question agreeing to relinquish some of the drug’s profit to its partners."   This innovation may add more new drugs to the pipeline but the FEHBlog doubts that it will lower the cost curve.