Mid-week miscellany

The FEHBlog levitated in his breakfast nook this morning when he read in the Washington Post that the local prescription benefit manager Catalyst Rx had been purchased by a competitor PBM SXC Health Solutions for $4.4 billion. According to the SXC press release, "Upon completion of the transaction [expected in the current quarter following regulatory approval], the combined  company will be an organization with $13 billion in revenue, which will be headquartered in Lisle, Illinois and will maintain a presence in Rockville, Maryland." Clearly the parties assume that the Federal Trade Commission's green light to the Medco merger into Express Scripts portends regulatory approval for this deal. These developments must be creating Defcon 4 for the drug store trade associations and others that oppose PBM mergers.

Standard and Poors released the February 2012 healthcare costs indices today. Healthcare costs covered by commercial health plans increased by 7.73% over the 12 month period ending that month as compared to a 7.03% increase reported for the 12 month period ending in January 2012. Hospital costs rose a much higher rate than physician office costs. Medicare claim costs increased by 2.73% up from 2.39% reported for January 2012.

“We observed further acceleration in healthcare costs annual growth rates in February,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “In keeping with the trends seen since the second half of 2011, February data signaled a general upward trend in healthcare costs, as measured by annual rates of change. Last month’s data, which was through January 2012, had shown a slight deceleration in most types of healthcare costs, but this was likely an anomaly in the actual trend. Over the past eight months or so, annual rates of change in per capita healthcare costs have generally been rising.

OPM gave testimony on the Federal Long Term Care Insurance Program before the Senate Special Committee on Aging today.  OPM reported that enrollment in this voluntary employee pay all program increased from 224,000 to 270,000 enrollees in the 2011 open season.