Wednesday, April 16, 2014

Midweek update

Following up on the Weekend Update, here's a link to the Drug Channel's analysis of the Express Scripts annual utilization report. Here are that blogger's report highlights:

  •     Drug trend for traditional drugs increased by 2.4%, a big turnaround from last year’s -1.5% decline. 
  •     Drug trend for specialty drugs increased by 14.1%, its lowest rate since 2007.
  •     Specialty drugs accounted for 27.7% of total spending, up from 24.4% in 2012.
  •     Specialty spending remains highly concentrated within four therapy classes.

Speaking of prescription drugs, a Washington Post article on Monday caught the FEHBlog's eye. The FEHBlog is familar with the struggles that health plans encounter in trying to combat opiate abuse created by popular painkillers like Oxycodone. The Commonwealth of Massachusetts banned the marketing of a  powerful opiate called Zohydro that the Food and Drug Administration had approved for marketing last fall. The manufacturer  sought an injunction from a federal court on federal preemption grounds. The Post reported that 
In a brief interview, FDA Commissioner Margaret Hamburg seemed to agree, saying that although addiction is a “huge concern” with opiate drugs, “it’s concerning when either a state, or Congress, steps in to make decisions about what drugs should be approved or what drugs should be withdrawn from the marketplace.” 
The FEHBlog was puzzled by the Commissioner's statement that Congress which created the FDA could not interfere with the FDA but that's beside the point. The FEHBlog is sympathetic with the Commonwealth's position as reported by the Post:
Massachusetts Public Health Commissioner Cheryl Bartlett said that officials didn’t take the Zohydro ban lightly. Rather, she said, the decision came out of months of discussions about ways to combat the growing number of deaths linked to heroin and prescription drug overdoses — and out of a sense that the state should take whatever measures it could to prevent more harm.  “The idea that a new drug would come on the market that would add to the problems just didn’t seem to make sense,” Bart­lett said. “We’re not denying people pain medication. There are plenty of alternatives. We’re addressing another public health crisis.”
In any event, the federal court yesterday enjoined the Commonwealth from banning the FDA approved drug according to this Post report. That outcome does not surprise the FEHBlog in the least.

The FEHBlog has been following another court case now pending before the U.S. Court of Appeals for the D.C. Circuit.  The D.C. Circuit is reviewing a district court decision upholding the position of the Labor Department's Office of Federal Contractor Compliance Programs that hospitals under network contracts with FEHBP HMO plans are federal government subcontractors that must comply with affirmative action program requirements that OFFCP enforces.  OPM's long standing regulations are contrary to that outcome. The American Hospital Association is concerned that OFCCP's aggressive efforts will disrupt FEHBP and TRICARE provider networks and related patient care.  The FEHBlog on March 14, 2014, noted that Rep. Tim Walberg (R Mich) has introduced a bill (HR 3633) to strip OFCCP of jurisdiction over FEHBP and TRICARE providers. At a hearing on his bill, Rep. Walberg explained that the Labor Department has implemented a 5 year long enforcement moratorium with respect to TRICARE but not FEHBP providers. In a letter to the DC Circuit. filed on April 10, 2014, OFCCP explained that    

The moratorium does not apply to healthcare providers that hold only FEHBP subcontracts. However, because plaintiffs hold both FEHBP subcontracts and TRICARE subcontracts, the practical effect of the moratorium is that OFCCP will not conduct compliance reviews of the plaintiffs for five years. However, the moratorium does not affect OFCCP’s jurisdiction over healthcare subcontractors, which the plaintiffs challenge in this appeal. Moreover, the moratorium specifically states that it does not affect “TRICARE subcontractors’ obligation to refrain from discrimination,” and that OFCCP will continue to investigate and redress “complaints of discrimination” that individual employees lodge with the agency.
How equitable.

The FEHBlog was an early endorser of the Choosing Wisely Campaign in which medical societies provide the public with "evidence-based recommendations that should be discussed to help make wise decisions about the most appropriate care based on a patients’ individual situation."  OPM encourages FEHB plans to utilize the fruits of this campaign. Kaiser Health News, however, reports that the some of medical societies participating in this campaign may be motivated by self interest. Ruh roh.

Finally, Government Health IT reports that the U.S. may be on the verge of a new consumer driven health economy.
In Healthcare's New Entrants: Who will be the industry's, PwC suggests that "market disruptors" -- new industries, new technologies -- will soon make a big mark on the $2.8 trillion healthcare sector. These new players are the leading edge of a what PwC calls a "new health economy" -- one that "over the next decade will see today's siloed healthcare industry become a wide open health marketplace," said Kelly Barnes, PwC's U.S. health industries leader, in a press statement. "To meet looming revenue threats, traditional healthcare companies will have to partner, innovate or can face fading away," she added. "Meanwhile, the nimble and innovative new entrants can benefit from partnerships with existing healthcare organizations, which understand the complex regulatory and reimbursement landscape."

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