Friday, September 21, 2018


Earlier this week after the Senate passed HR 6, the opioid crisis relief bill, with an amendment, the FEHBlog understood that a conference report reconciling the House and Senate versions of the bill would be forthcoming this week. Not so fast. Press reports indicate that reconciliation negotiations continue. Modern Healthcare states that "Talks are likely to push into the weekend and possibly until Monday."

Yesterday, the Centers for Disease Control issued their 41st annual report on the state of the Nation's health.
Special Feature highlights [from the report]:
  • Life expectancy at birth decreased for the first time since 1993 by 0.2 years between 2014 and 2015, and then decreased another 0.1 years between 2015 and 2016.
  • Between 2000 and 2016, death rates for five of the 12 leading causes of death increased: unintentional injuries, Alzheimer’s disease, suicide, chronic liver disease, and septicemia.
  • The age-adjusted death rate for drug overdose in the U.S. increased 72 percent between 2006 and 2016 to 19.8 deaths per 100,000 population in 2016.
  • Between 2006 and 2016, the age-adjusted suicide death rate increased 23 percent, from 11.0 to 13.5 deaths per 100,000 resident population
  • Among men ages 25–34, death rates for chronic liver disease and cirrhosis increased by an average of 7.9 percent per year during 2006–2016. Among women in the same age group, this increase averaged 11.4 percent per year.
In addition to the focus on mortality, the Health, United States, 2017 Chartbook examines 10-year trends in a broad range of health measures, including:
  • Between 2006 and 2016, the birth rate among teenagers ages 15–19 fell by half, from 41.1 to 20.3 live births per 1,000 females — a record low for the United States.
  • The percentage of high school students who smoked cigarettes in the past 30 days decreased from 15.8 percent in 2011 to 8.0 percent in 2016. High school students’ use of electronic cigarettes increased more than seven-fold, from 1.5 percent to 11.3 percent.
  • In 2016, personal health care expenditures in the U.S. totaled $2.8 trillion — a 4.4 percentage increase from 2015.

HHS's Office for Civil Rights, which enforces the HIPAA Privacy and Security Rules, entered into separate settlements totaling $999,000 "with Boston Medical Center (BMC), Brigham and Women's Hospital (BWH), and Massachusetts General Hospital (MGH) for compromising the privacy of patients’ protected health information (PHI) by inviting film crews on premises to film an ABC television network documentary series, without first obtaining authorization from patients." What's more a major N.Y.C. hospital had settled a practically identical case in April 2016 for 2.2 million. 

The Massachusetts Attorney General which also can enforce these rules settled with UMass healthcare providers in Boston for $230,000 as a result of "improperly access[ing over 15,000] patients’ personal and protected health information for fraudulent purposes, such as opening cell phone accounts and credit card accounts. Whoo boy. 

Thursday, September 20, 2018

Studies and some other news

Health Affairs Blog previewed a Health Care Cost Institute study of employer sponsored heath plan costs over the period 2007 through 2016.
The authors found that total enrollee spending (not including premiums) on health care goods and services increased by 44 percent over the decade—from $3,752 to $5,394 per person—which was an average annual increase of 4.1 per cent. They also observed that growth rates slowed after 2009 but increased between 2014 and 2016.
The study also found that enrollee out of pocket spending kept pace with total spending, up 43% over the same period.

Forbes reports on Mercer consulting's preliminary projection  that large employer health plan costs will rise 4.1% next year and Avalere consulting's projection that ACA exchange plan premiums will increase 3.1% in 2019. digs into some employer sponsored plan trends identified in the Mercer report.

Becker's Hospital News summarizes a fascinating, detailed Wall Street Journal story about how big health systems use their leverage to create exclusive contracts with various payers, thereby impairing competition. According to the Journal,
Dominant hospital systems use an array of secret contract terms to protect their turf and block efforts to curb health-care costs. As part of these deals, hospitals can demand insurers include them in every plan and discourage use of less-expensive rivals. Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude health-care providers based on quality or cost.
The Wall Street Journal has identified dozens of contracts with terms that limit how insurers design plans, involving operators such as Johns Hopkins Medicine in Maryland, the 10-hospital OhioHealth system and Aurora Health Care, a major system in the Milwaukee market. National hospital operator HCA Healthcare Inc. also has restrictions in insurer contracts in certain markets.
 No bueno.

Today, the Surgeon General spotlighted government efforts to alleviate the opioid crisis.
The federal government has been working with key stakeholders to address this problem and is seeing real progress. This week, HHS disbursed more than $1 billion in opioid-specific funding for states, which includes State Opioid Response grant programs administered by SAMHSA to support a comprehensive array of prevention, treatment, and recovery services. Additional funding from the Health Resources and Services Administration (HRSA) went to community health centers to increase access to substance abuse disorder and mental health services, to increase  the number of professionals and paraprofessionals who are trained to deliver integrated behavioral health and primary care services as part of health care teams in HRSA-supported health centers as well as to rural grantees to increase services and develop plans to implement evidence-based opioid use disorder prevention, treatment and recovery interventions.  There are signs that efforts to stem the opioid crisis are having success, with the use of medication-assisted treatment growing significantly and the number of Americans initiating heroin use dropping significantly from 2016 to 2017.

Earlier this week, the Centers for Medicare and Medicaid Services announced "a proposed rule to relieve burden on healthcare providers by removing unnecessary, obsolete or excessively burdensome Medicare compliance requirements for healthcare facilities. Collectively, these updates would save healthcare providers an estimated $1.12 billion annually. Taking into account policies across rules finalized in 2017 and 2018 as well as this and other proposed rules, savings are estimated at $5.2 billion."  The FEHBlog is a big fan of deregulation and would be pleased to see OPM catch the deregulation bug.

Tuesday, September 18, 2018

Congress is looking to hit the campaign trail

Congress is on course to wrap up its work on Capitol Hill before the end of September.

Fortune reports that yesterday the Senate by a 99-1 vote has joined the House in a passing a bill (H.R. 6, as amended) responding to the opioid crisis. Congressional leaders expect to release a consolidated bill on Friday which will be enacted early next week. On a related note, Opioid Watch tells us about a recent government report finding that
The number of new heroin users fell by more than half in 2017, according to the latest national drug survey, which was unveiled Friday. “One of the most important findings,” said SAMHSA chief Elinore McCance-Katz in announcing the results in a webcast, “is the very steep decline in new users of heroin from 2016.” New initiates to that drug dropped from 170,000 to 81,000.
Progress finally.

Per Federal News Radio, the Senate today approved a minibus appropriations conference report bill for defense, health, and education functions (H.R. 6157), by a 93-7 vote. The bill also includes a continuing mop-up appropriation measure to keep the government fully funded at least until December 7, 2018. Meanwhile the House and Senate conferees continue to work on the treasury and general government minibus which includes OPM and FEHB appropriations.

In other Capitol Hill news:

  • Fierce Healthcare reports that the Senate passed a bill (S. 2554) yesterday by a 98-2 vote that "would stop contracts between pharmacy benefit managers and pharmacies from barring pharmacists from informing patients when they might pay less for a prescription out of their own pocket than if they used their insurance."
  • The Hill reports that a bipartisan group of powerful Senators has released a discussion draft of a bill to protect consumers against surprise bills in emergency care situations, e.g, the hospital is in-network but the contracted emergency care physicians group is out-of-network.  

Monday, September 17, 2018

M&A News

Forbes reports that the U.S. Justice Department today "has cleared [from an antitrust law perspective] the pending merger [ of Cigna and Express Scripts], "terminating the applicable waiting period" following a six-month review.  The Justice Department explains
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals.  PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.  
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small.  The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.  
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction. 
Forbes notes that "The Cigna-Express Scripts deal still faces scrutiny in several states. Two weeks ago, Cigna said 14 of 29 states have signed off on the merger." But this is a big boost toward closure.

The Justice Department continues to consider the CVS Health acquisition of Aetna. Fierce Healthcare reports on CVS Health Chief Executive Officer Larry Merlo's recent comments on that pending transaction.

Fierce Healthcare informs us about ongoing merger talks between Walmart and Humana.
"We continue to explore opportunities with them, we'll do that," [Humana Chief Financial Officer Brian] Kane said. "I genuinely don't know the answer to that question yet, I think we're going to learn more in relatively short order." 
The conversation on Friday also provided plenty of details about Humana's emerging partnership with Walgreens, where it plans to add providers and "health advisers" in pilot stores in Kansas City.  These providers—employed by Partners in Primary Care, which is Humana's wholly owned clinic brand—will be set up in a risk-based relationship with Humana's members so they can seek care directly at the pharmacy.

Sunday, September 16, 2018

Weekend update

Congress remains in session on Capitol Hill this week. Here's a link to the Week in Congress's report on last week's activities on the Hill.

We are halfway through the month of September.  The Medicare Advantage Open Season starts in about a month. Investment News reports on projections about the 2019 Medicare COLA (2.8%) and 2019 Medicare Part B premiums.
The latest Medicare Trustees' report projects that basic Medicare Part B premiums will increase by about $1.50 a month to $135.50 per month in 2019 [roughly 1.2%}. The official Medicare premiums will be announced in the fall. High-income retirees pay more, in some cases much more, for the same Medicare coverage.
The final Social Security COLA will be announced shortly after October 11. Next year's Medicare Part B premiums are usually announced in November.

If recent history is any guide, OPM will be announcing the 2019 FEHBP government contribution and FEHB plans wills start announcing the 2019 benefit and enrollee contributions during the week beginning September 24.

Fortune informs us that "a new report from Trust for America’s Health and Robert Wood Johnson Foundation breaks down the most recently available obesity statistics, based on Centers for Disease Control (CDC) data, on a state-wide, and sobering, basis, finding that seven U.S. states have adult obesity rates that exceed 35%."

From the underlying report

  • Over the past five years (2012 – 2017), 31 states had statistically significant increases in their obesity rate and no state had a statistically significant decrease in its obesity rate.
  • There continue to be striking racial and ethnic disparities in obesity rates. In 31 states, the adult obesity rate among Blacks is at or above 35 percent.  Latino adults have obesity at a rate at or above 35 percent in eight states.  White adults have obesity rates at or above 35 percent in one state. Nationally, the adult obesity rates for Latinos, Blacks and Whites are 47.0 percent, 46.8 percent and 37.9 percent respectively.

Health Payer Intelligence tells us that

More comprehensive coverage for mental healthcare could bring a financial return of four dollars for every one dollar spent by employers, says a report from the National Alliance of Healthcare Purchaser Coalitions (NAHPC).
One in five adults experience mental illness in a given year but only 41 percent of people with a mental illness receive treatment for their condition, said the NAHPC.  Gaps in mental healthcare insurance coverage are partly to blame for low rates of treatment.
Finally, Healthcare Dive discusses the health functions of the newly released Apple Watch. The FEHBlog wonders when you will be able to use your health savings account or flexible benefit plans to purchase one of these wonders. 

Friday, September 14, 2018


The Wall Street Journal reports that 
Lawmakers reached a bipartisan deal on Thursday to keep the government open until after the midterm elections, while also passing a first tranche of spending bills and sending them to President Trump’s desk.
The House passed the package of bills, known as a “minibus,” in a 377-20 vote Thursday afternoon, a day after the Senate passed the same package. House and Senate negotiators from both parties had hammered out an agreement on the three spending bills earlier this week, which includes funding for the Energy Department, Veterans Affairs and the legislative branch of government, and their passage puts Congress on pace to avoid the deadline dramas of the past decade.
The House and Senate conferees are meeting about two other minibus appropriations bills, one of which includes FEHBP financing.  Here's a link to's minibus report which understandably focuses on whether federal employees will receive a pay increase in 2019. The answer will be found in the same minibus the covers FEHBP financing.

Fierce Healthcare tells us that physicians expressed their great displeasure with CMS's proposed Medicare Part B fee rule for 2019.
The plan would collapse payment rates for eight office visit services for new and established patients down to two each. Doctors also offered comments. “This is a ridiculous proposal that will only be a detriment to patients and providers alike,” said one anonymous commenter.
A geriatrician who cares for patients with multiple, complicated medical issues said he could see no benefit from the proposal. “It does not make sense to assign the same payment for both a 15-minute visit for a 20-year-old with no known issues and no complaints and for a 40-minute visit for an 80-year-old with a multitude of acute and chronic illnesses,” he wrote.
The American Medical Association submitted 136 pages of comments. How was the play Mrs. Lincoln?

In other medical news, the Association of American Family Physicians announced its support for  "ACT for Better Diagnosis,( an initiative of the Society to Improve Diagnosis in Medicine (SIDM) that launched Sept. 13 and aims to improve the diagnostic process by calling on organizations to identify and spread practical steps to better ensure diagnoses are accurate, communicated and timely."

Members of the Coalition to Improve Diagnosis have collaborated for months to identify initial obstacles they think impede diagnostic accuracy, such as:

  • Incomplete communication during care transitions -- When patients are transferred between facilities, physicians or departments, there is potential for important information to slip through the cracks.
  • Lack of measures and feedback -- Unlike many other patient safety issues, there are no standardized measures through which hospitals, health systems or physicians can understand their performance in the diagnostic process to guide improvement efforts or to report diagnostic errors. Providers rarely get feedback if a diagnosis was incorrect or changed.
  • Limited support to help with clinical reasoning -- With hundreds of potential explanations for any one symptom, clinicians need timely, efficient access to tools and resources to assist in making diagnoses.
  • Limited time -- Patients and their caregivers overwhelmingly report feeling rushed by limited appointment times, which poses real risks to gathering a complete history that is essential to formulating a working diagnosis; such time constraints also allow scant opportunity to thoroughly discuss any further steps in the diagnostic process and set appropriate expectations.
  • The diagnostic process is complicated -- There is only limited information available to patients about which questions to ask, who to notify when changes in their condition occur or what constitutes serious symptoms. It's also unclear who is responsible for closing the loop on test results and referrals and how to communicate follow-up.
  • Lack of funding for research -- The impact of inaccurate or delayed diagnoses on health care costs and patient harm has not been clearly articulated, and only a limited amount of published evidence exists to aid in identifying what improves the diagnostic process.
Health Payer Intelligence reports that 

Widespread rates of poor consumer literacy within the healthcare industry creates administrative burdens for payers and contributes to an additional $4.8 billion in health plan costs, according to a new Accenture report.
Fifty-two percent of healthcare consumers in the United States do not understand how to properly navigate the healthcare system and struggle when learning about new health plan types, premium expenses, and available in-network providers. In addition, 16 percent of respondents claim to have a thorough understanding of the healthcare system while 33 percent have no experience in making healthcare decisions.

Tuesday, September 11, 2018

Tuesday's Tidbits

The Federal Times reports that OPM is conducting its third survey (since 2014) of federal agency employee wellness programs. The survey is called WellCheck. How the FEHBlog wishes that OPM would do a better job coordinating the wellness programs of federal agencies and the FEHBP.

Health IT Security reports that the Patient Centered Outcomes Research Institute, which currently is funded with health plan dollars, approved a new policy last week that "requires researchers who receive PCORI funds to share their data sets and documentation for reanalysis and reuse."  
The data sharing policy is the latest in a series of initiatives that PCORI has undertaken to support the transparency and broader availability of research results. The institute’s earlier policy on peer review and public release of research findings ensures that all results from PCORI-funded studies, whether positive or negative, undergo a review and are made publicly available on PCORI’s website in a final research report. 
PCORI noted that it also develops brief summaries of all the studies and posts them as public and professional abstracts on the website. In addition, through its public access policy, PCORI covers the costs for journals to make papers presenting the final results of PCORI-funded studies freely available to the public. 
The FEHBlog is not a fan of the ACA's bells and whistles like the PCORI. 

In other news, Fierce Healthcare informs us that "A group of healthcare organizations have teamed up to build a new payment model designed to promote long-term addiction recovery." The Addiction Recovery Medical Home (ARMH) model
includes elements of fee-for-service payment and risk-based payment, and pushes for greater integration of behavioral health services into traditional healthcare services. Integrated care, [Facing Addiction EVP Greg] Williams said, is key to promoting recovery long-term, as it ensures patients with substance abuse disorders are connected to the appropriate care, and that different providers are communicating more effectively with one another. 
Good luck with that. Treatment is where health plans serve a role in addressing the opioid crisis.

Finally Healthcare Dive reports that Walgreens, the large pharmacy chain, "is acquiring pharmacy patient prescription files and pharmacy inventory of 185 Fred's stores located across 10 Southeastern states for $165 million.  Fred's retail operations will remain at most of those locations and the company will continue to operate 162 pharmacies across nearly 600 stores. Pharmacy staff at the closing locations can apply for available positions at Walgreens, the company said. Fred's stores are heavily concentrated in the southeast. Healthcare Dive analogizes this transaction to CVS Health replacing the company pharmacies inside Target stores earlier this decade.  

Sunday, September 09, 2018

Weekend update

Congress remains in session on Capitol Hill this coming week. Here's a link to the Week in Congress's one pager on last week's actions there. The Week in Congress indicates that Congress is planning on holding a lame duck session following the mid-term elections in early November.

The Washington Post reports that the Senate will vote on its bill that responds to the opioid crisis this coming week. According to Senate Health Education Labor and Pensions ("HELP") Chairman Lamar Alexander (R TN)
  • "The proposed bill includes the STOP Act to help stop illegal drugs at the border, including stopping the shipment of synthetic opioids. It allows the FDA to require prescription opioids to be packaged in set amounts like a 3 or 7 day supply of blister packs, and spurs the development of a new non-addictive painkiller. The House has already passed its version of the act, and there is a bipartisan urgency to work with our House colleagues to get the legislation to the President’s desk.”
The Senate HELP Committee has scheduled its third hearing on reducing health care costs for a week from Tuesday (September 18) at 10 am. This hearing will examine how transparency can lower spending and empower patients. In this regard, Health Affairs offers an article on elderly patient use of information portals provided by their doctors and facilities.
Despite widespread availability of patient portals and incentives for providers to offer portals to patients, recent results from the University of Michigan’s National Poll on Healthy Aging suggest that only about half of adults ages 50–80 use them. Among older adults who reported using patient portals, most had used a portal to view tests results (84 percent). Fewer had used a portal to request a prescription refill (43 percent), schedule an appointment (37 percent), or get advice from a provider (26 percent).
The FEHBlog is aware of the interest in the new non-profit health benefits company owned by Amazon, etc. The FEHBlog is more interested in this hospital systems lead effort to launch a non-profit generic drug company. Read the latest from Fierce Healthcare here and the new company Civica Rx (based in Salt Lake City, Utah) here.

Finally, the New York Times Upshot held discussion with officials who run public health departments, academics and leaders of funding organizations about what they think we should be doing in public health, and a few themes emerged.
  • Divert a lot more dollars toward public health initiatives
  • Do more to address health care disparities among races and economic classes.
  • Improve public attitudes toward public health initiatives by trumpeting their successes.

Thursday, September 06, 2018

Thursday follow-up

The Wall Street Journal reports that the Justice Department is expected to approve from an anti-trust enforcement stand points the CVS Health - Aetna and the Cigna - Express Scripts mergers in the next few weeks.
The companies that would emerge from the two deals would mirror the industry’s trend toward bulked-up firms. UnitedHealth Group Inc. is the parent of the largest U.S. health insurer and a major pharmacy-benefit manager; it has a growing array of physician practices, urgent-care clinics and other assets.
The mergers are expected to close this year.

Modern Healthcare reports from Austin that
A federal judge today seemed skeptical of arguments that the Affordable Care Act can stand without an effective penalty for the individual mandate.  In a half-full Texas courtroom, Democratic state attorneys general Wednesday tried to persuade U.S. District Judge Reed O'Connor that Congress' zeroing out of the tax penalty should not invalidate the entire law. O'Connor, who spent more time probing the argument of Democratic lawyers than that of the GOP state attorneys general who filed the suit to invalidate the law, promised the parties that he would issue a ruling as quickly as possible.
Of course, this is all tea leaf reading, but the FEHBlog think this case is worth watching.


Wednesday, September 05, 2018

Mid-week update

Today is the big hearing in the U.S. v. Texas case which presents a renewed challenge to the Affordable Care Act's constitutionality. A trial court level decision is likely to be rendered before Election Day. In all likelihood, a decision against the ACA's constitutionality would be stayed until the case reaches the Supreme Court. It should be a catalyst for Congressional action while the case winds it way through the courts. The FEHBP will keep chugging along in the meantime.

The Energy and Commerce Health subcommittee hearing featuring a Blue Cross FEP expert, David Yoder, will be held this morning. His prepared testimony is available here.

Modern Healthcare reports on the growing trend of hospitals acquiring physician practices.
This is a ubiquitous trend in the U.S. and I can tell you that there is virtually no state less with less than a quarter of physicians that have already been purchased by now," said Richard Scheffler, University of California, Berkeley professor and the study's lead author. "The impact of these type of verticals is much more powerful when the hospital itself has a lot of market power and can jack up prices."  The national share of hospital-employed physicians increased from 30% to 48% from 2010 to 2016, researchers found.
In the FEHBlog's view, rhe government's focus on healthcare performance metrics embodied in the ACA is a primary driver of consolidation in the provider and insurance markets. Better, deeper data and control leads to better scores.  However, the negatives, like price increases outweigh the positives. 

Finally, FDA Commissioner Dr. Scott Gottlieb issued a detailed update on his agency's efforts to combat the opioid crisis last week. Here's a link.

Sunday, September 02, 2018

Happy Labor Day Weekend!

Both Houses of Congress will return to work on Capitol Hill on Tuesday. On September 5, at 10 am, the Health subcommittee of the House Energy and Commerce Committee will hold a hearing on opportunities to improve health care. One of the four witnesses is Dr. David Yoder who is in charge of Member Care and Benefits at the Blue Cross Blue Shield Federal Employees Program.

Tammy Flanagan, a federal retirement consultant, wrote a column in on whether it makes sense for federal annuitants to opt out of FEHBP in favor of enrolling in a Medicare Advantage plan. OPM's rule permit annuitants who make such an election to rejoin the FEHBP. Significantly "when [Ms. Flanagan] compared using Medicare Advantage to an FEHBP plan in combination with Medicare A and B, [she] found [she] would have much greater choice of providers both in and out of network under FEHBP.

Thanks to Twitter, the FEHBlog ran across Phrma's Catalyst which is the pharmaceutical manufacturers' trade association blog. Catalyst is "a place where [Phrma] can share ideas, provide the perspective of America's biopharmaceutical companies and, most importantly, listen to you."  This Catalyst article on prescription drug cost sharing caught the FEHBlog's eye. The article supports manufacturer use of prescription drug discount coupons, a practice which OPM criticized at the 2018 carrier conference.

A colleague of the FEHBlog called his attention to this New York State government press release which discusses an information breach settlement between a Buffalo non-profit and the State's attorney general. It should remind all those who handle protected health information that HIPAA, as modified in 2009, also permits state attorneys general to enforce the privacy and security rules.

Friday, August 31, 2018


Earlier this year, Congress appeared to be poised to enact a postal reform bill that would create a separate Postal Service Health Benefits Program within the FEHBP. The bill had a lot of other moving parts but this one concerned the FEHBlog. In April the President created a task force to offer recommendations for reforming the Postal Service. Congress put its bills on simmer while waiting for the task recommendations. The task force submitted its recommendations to the White House on August 10 as directed. The President decided to take some time to review the recommendations before making the report public. Reuters reports that the Senate Homeland Security and Governmental Affairs Committee cancelled a hearing on postal reform scheduled for next Tuesday because the task force reports remains under wraps. Govexec based on its sources indicates that the report will be kept under wraps until after the mid-term election. Time will tell. 

Mercer consulting tells us that most large group health plans offer telehealth services. That is the case with the FEHBP. Mercer goes on to identify best practices on how to get enrollees interested in using the new service. 
A closer look at our survey data shows that higher utilization is associated with lower copays. Among employers reporting utilization rates of 10% or higher, the median copay for telemedicine was $15. But in the group with below-average utilization rates -- 6% or less -- the median copay was $30. You might be surprised that a relatively small difference in cost would affect whether or not someone chooses to use telemed, given that consumers are not terribly price-sensitive when it comes to selecting a PCP (for example). But consumers know that a possible outcome of the call is being told that an office visit is necessary after all – in which case the telemed visit is an additional cost.
Interestingly, waiving the copay entirely doesn’t significantly increase utilization over a low copayment. Only 18% of large employers that offer telemed charge nothing for a telemed visits. Among this group, the average utilization is 11%.
But reducing or even waiving the copay alone won’t work if employees aren’t aware of the telemedicine benefit, don’t know how it works or what to expect, or don’t know how to access it. Here are a few tips on communication that works:
  • Testimonials.
  • Real-life examples from how a peer benefited from the service can help boost awareness and thus utilization
  • Time-specific notifications. Look at communication materials that address how the service can be utilized during specific times of the year – for example, winter communications about the flu and how the telemedicine service can be beneficial, spring communications about allergies and the pollen season, etc.
  • Utilize the employer’s existing wellbeing portal to help promote the service.  
  • If there if there is an incentive program in place, consider a way to “reward” members for completing the telemedicine pre-use application form.
Congress wisely has suspended the ACA's onerous health insurance tax for 2019. United Healthcare engaged Oliver Wyman actuarial consulting to project the impact of resurrecting that tax for 2020 and beyond.
We estimate that the tax on health insurance will increase premiums by 2.2% in 2020 and in subsequent years when the amounts collected in taxes is mandated to increase at the same level as premium growth. In 2020, this amount equates to $196 per individual in the non-group market, $154 per single contract and $479 per family contract in the small group market, $158 per single contract and $458 per family contract in the large group market, $241 per Medicare Advantage member (including Special Needs Plans and Employer Group Waiver Plans), and $157 per Medicaid managed care enrollee. Over the next ten years, this amount equates to $2,473 per individual in the non-group market, $1,873 per single contract and $5,824 per family contract in the small group market, $1,921 per single contract and $5,558 per family contract in the large group market, $3,052 per Medicare Advantage member, and $1,988 per Medicaid managed care enrollee. Furthermore, we estimate that about 142 million consumers and/or their plan sponsors (in the case of Medicaid and subsidized exchange plans) could be impacted by the tax on health insurance.
In the FEHBP, the tax impacts insurer products like Blue Cross FEP and the HMOs. The House of Representatives has passed a bill that would extend the tax suspension through 2021. We will soon find out whether the Senate takes up this bill which would make high deductible plans with health savings accounts more attractive to consumers.

Finally, here's an interesting blockchain in healthcare article from Health Data Management. The article identifies several long hanging fruit type products that could benefit from the new technology.

Tuesday, August 28, 2018

Tuesday Tidbits

The Federal Times offers a report on OPM Director Pon's speech to the NARFE conference given yesterday.  The Director described three priorities "mov[ing] paper-based systems to a digital format, moderniz[ing] the civil service, and creat[ing] an environment where people speak out to thank federal employees for their service to the nation."

Health Payer Intelligence tells us that payers are finding savings in value based coverage, e.g., accountable care organization, bundled payments, and patient centered medical homes.  For example, "[t]he BlueCross BlueShield Association’s network of ACOs and PCMHs, called the Total Care Network, reduced care costs by 32 percent during the first half of 2018," and [t]he total care costs of Humana’s value-based care programs were 15 percent less than the costs of its fee-for-service payment model." Impressive.

Forbes reports that bricks and mortar pharmacies like CVS Health and Walgreeens are trying to use face to face contact with customers as an advantage over Amazon. "Walgreens is testing myriad partnerships and this summer launched a digital marketplace that links its customers to medical care providers and their prices beyond services inside the drugstores. And CVS Health is touting its relationships with medical care providers and the potential to add more services once its acquisition of the health insurance giant Aetna is completed in the coming weeks."

Health IT Security provides an update on the use of blockchain technology in healthcare.  The update is based on a recent Deloitte survey. "Healthcare organizations believe blockchain will significantly improve visibility of value-based care payments and reduce fraud, waste, and abuse. Enterprises are also optimistic that blockchain will enhance industry collaboration and efficiency through increased data sharing." Indeed
“The only real mistake we believe organizations can make regarding blockchain right now is to do nothing,” the Deloitte report concluded.  “Even without a completely solid business case to implement, we believe that organizations should, at the very least, keep an eye on blockchain so that they can take advantage of opportunities when they present themselves.”
Speaking of surveys, Kaiser offers an interesting analysis of out of network claims in large employer health plans. Quality improvement committees take note!

Sunday, August 26, 2018

Weekend update

Although the Senate got through its appropriations work last week, it turns out the Senate remains in session this week. According to the Washington Times that the Senate Majority Leader Mitch McConnell will keep the Senate open this week to consider 110 pending Presidential nominations. Senators in tight races are bound to hit the trail regardless and the entire Senate will be in town this weekend for Senator McCain's funeral on Saturday.

On the prescription drug front --

  • Health Affairs blog reports to no one's surprise that
from January 1, 2011 through December 31, 2016, of total health care spending and per-member-per-month (PMPM) spending on prescription medications for Harvard Pilgrim Health Care (HPHC), a commercial insurer of about one million members in four New England states. Between 2011 and 2016, spending net of rebates by this commercial health plan on outpatient prescription medications, including those administered in physicians’ offices, has increased to a quarter of all health care spending, largely due to increasing prices of specialty medications. 
  •  The Wall Street Journal on Saturday offered an thought provoking interview with the FDA Commissioner, Dr. Scott Gottlieb - to wit

“It used to be that the model was to develop a drug that was going to be administered chronically over the life of a patient,” Dr. Gottlieb says in a recent interview at the FDA’s headquarters. “It was basically an annuity. And now, the model is to try to develop curative therapy,” usually a short course or a one-time treatment [e.g. the Hepatitis C cure Harvoni]. “It’s a completely different therapeutic model. It’s a completely different payment model, and our payment system isn’t adapted to that.”

  • Forbes observes that the opioid litigation against drug manufacturers may be leading to a big dollar settlement similar to the tobacco litigation settlement negotiated by state governments against the tobacco manufacturers twenty years ago.  
Fitch said credit implications should be “minimal for large diversified firms” like Johnson & Johnson, McKesson, AmerisourceBergen, Cardinal Health and retail chains such as Walgreens Boots Alliance and CVS Health because they “offer a wide array of products and generate significant cash flow,” Fitch said. “Conversely, the effect on cash flow and liquidity could be significant for smaller manufacturers with material exposure to pain killers; such as, oxycodone, hydrocodone, and meperidine under brand names OxyContin, Vicodin, and Demerol.”
Also last week the Labor Department which enforces ERISA offered informal guidance on the new Association Health Plan rules. No relevance to the FEHBP but interesting for the private employer market.