Thursday tidbits

• Govexec.com reports on OPM Director John Berry's official swearing in ceremony which was held today in the presence of the First Lady. The artcle notes that the new OPM Deputy Director will be former Equal Employment Opportunity Commission Vice Chairwoman Christine Griffin. Ms. Griffin is a labor lawyer who became an EEOC commissioner in 2005. According to her bio, "she served as the Executive Director of the Disability Law Center in Boston from 1996 to 2005. Prior to that, Ms. Griffin served from 1995 to 1996 as an Attorney Advisor to the former Vice Chair of the EEOC, Paul M. Igasaki, advising him on legal matters and policy issues."

• GAO released its annual report on Improper Payments Information Act. The FEHB Program's improper payments rated dropped from .05% in 2007 to .02% in 2008. The Medicare Program's improper payments rate is in the stratosphere. GAO reports that

  Medicare and Medicaid comprise 50 percent of reported governmentwide improper payments in fiscal year 2008. HHS reported improper payment amounts of $10.4 billion in Medicare Fee-for-Service and $6.8 billion in Medicare Advantage. HHS also reported in its agency financial report that it issued its first full-year Medicaid improper payment rate estimate of 10.5 percent, or $18.6 billion for the federal share of expenditures for fiscal year 2008. This Medicaid improper payment estimate represents the largest amount that any federal agency reported for a program in fiscal year 2008. While CMS has taken steps to enhance its program integrity efforts, further work remains to put in place the internal controls necessary to effectively identify and detect improper payments

  These important facts seem to get lose when people tout Medicare as a model and suggest the need for a public health plan option.

• The AIS Specialty Pharmacy Report featured an interesting story on the legislative effort to bring bi0-generic (or bio-similar) drugs to market in the U.S. According to the experts whom I have heard including Medco's CEO David Snow, this development offers huge savings to the U.S. health care economy. The struggle is over the patent exclusivity period for the original manufacturer. The Obama Administration favors seven years and the manufacturers want at least 12. A shorter period could kill the golden goose of creativity. A law is expected next year.

• In Tuesday's post I touched on the topic of value based insurance design. The New York Times reports today on a value based initiative between Cigna and Merck, the manufacturer of the Type 2 diabetes drugs Januvia and Janumet. According to the article,

  Rather than getting paid more for good results, Merck will actually give Cigna
  bigger discounts on Januvia and Janumet. Some discounts will be granted if more people diligently take the drugs as prescribed. This helps both Cigna, because people who take their pills are likely to have fewer complications from the disease, and Merck, because it sells more pills. The assumption is that Cigna will push for patient-compliance programs that urge people to take their
  medicine at the right times and in the proper doses.
  
  In effect, though, Merck is betting not only that its drugs prove superior but that Cigna’s incentives to reap the benefits of the deeper Januvia and Janumet discounts will prompt the insurer to try to keep patients on those drugs.