Wednesday, April 29, 2009

Mid-week Miscellany

  • I discovered today that AHIP offers dedicated web pages on value based insurance design and the medical home. These are two benefits initiatives, particularly the value based insurance designed, which OPM endorsed in its 2010 call letter for FEHB benefits and rate proposals.

  • Prescription benefit manager (PBM) Medco reported solid first quarter 2009 financial results. Express Scripts reports tomorrow and CVS Caremark reports on May 5. The National Association of Community Pharmacists has expressed concerns to the Federal Trade Commission about the announced Express Scripts acquisition of insurer Wellpoint's PBM operations. In other PBM news, AIS Drug Benefits News reports that
    Wal-Mart Stores, Inc. is rolling out a pharmacy benefit program to employers and health plans that it says will greatly simplify the drug-pricing system and eliminate up to 20% of the waste in the current pharmaceutical supply chain. Some industry observers say the new program could pressure pharmacy benefit managers (PBMs) on pricing, but others tell DBN that the jury is still out on whether the program will shake up the pharmacy benefits industry.
  • The Wall Street Journal reports on the pressure that the recession is placing on health insurer first quarter earnings, particularly Aetna.

    When people see layoffs at their employers, they apparently are accelerating their use of medical services for fear that they, too, may lose their jobs, [Aetna] CEO Williams said. Those already laid off and using the Cobra program to extend their insurance coverage also appear to be accelerating their use of services, he said. In addition, the cohort of people on Cobra has a significantly higher medical cost ratio, according to the CEO.

    An increase in benefit buydowns also is accelerating use of services, as people realize their benefits will be less "rich" in coming years, Williams said.

    This is a trend that is unlikely to impact the FEHB Program as the federal government is adding, not shedding jobs.

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