Friday, November 13, 2015


Around this time of the year, OPM issues its annual Performance and Accountability Report. The report includes, among other items, the agency's financials statements and the Inspector General's management recommendations.  This year the Inspector General released those recommendations separately. Several pages of recommendations beginning on page 3 concern the FEHB Program. 

The Inspector reiterates his ill advised recommendation to carve out prescription drug benefits and place PBM contracting under OPM's control.  This recommendation is 180 degrees contrary to the ACA's push for coordinated care.  A recent BCBSA study illustrates the common sense fact the carve in arrangements are less costly than carve out arrangements: 
This large national sample study found that carve-in pharmacy benefits were associated
with 11 percent lower PMPY medical costs, nine percent lower hospitalization events and four percent lower emergency department visits.
• Our findings are similar to those of smaller in region plan studies conducted by Premera, Independence Blue and Highmark. In their studies, the carve-in groups were found to have six to seven percent lower allowed PMPY medical costs.
• Pharmacy and medical data integration occurs within a carve-in services model resulting in pharmacy formulary coverage and benefit design decisions being made with a holistic examination of the medical cost impact.
• Carved in pharmacy benefits allow for improved health plan care coordination
through integrated data resulting in more timely and targeted health interventions
including enhancing care management and disease management programs.
Speaking of prescription drugs, Business Insurance recently published an interesting overview of the PBM market, which notes the United Healthcare's Optum unit closed on its acquistion of the Catamaran PBM in July.

Aon released its annual study of the employer health care market yesterday. Aon points out that  "the average amount that employees need to contribute toward their health care has increased more than 134 percent over the past decade. According to Aon's analysis, employees contributed $2,490 toward the premium and another $2,208 in out-of-pocket costs, such as copayments, coinsurance and deductibles in 2015. In contrast, the amount of employees' premium and out-of-pocket costs combined in 2005 was just $2,001."

Let's wrap up with a few population health items

  • Adult obesity in the U.S continues to climb according to this Modern Healthcare article. "Obesity rates for white men and white women remain very close. But for blacks, the female obesity rate has soared to 57%, far above the male rate of 38%. The gender gap is widening among Hispanics, too—46% for women, 39% for men."
  • Adult smoking continues to drop according to HealthDay, "Over the last 50 years, the rate of adult men and women who have smoked has declined more than half,"and
  • The child autism rate varies based on how the question is asked again according to Healthday.

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